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Why I worry about a government-sponsored universal coverage system

Within the past few years the Centers for Medicare and Medicaid Services (CMS) chose to enforce a rule (casually known as the “75% rule”) that resulted in denial of services to many heart, lung, and cancer patients requiring rehabilitation therapies.

CMS was looking for a way to cut costs in rehabilitation facilities, and decided to create a rule whereby these facilities would lose their approval status if they admitted too many patients with certain conditions. The CMS arbitrarily decided that 75% of all patients admitted to inpatient rehabilitation facilities had to have one of 13 diagnoses, or else the rehab facility would not qualify for Medicare reimbursement. Many important diagnoses were not included in those 13, including cancer, heart and lung disease, and many types of orthopedic injuries.

What does this mean? It means that getting admitted to a rehabilitation facility is no longer based on need, but on diagnosis code. Because of the financial pressure exerted by CMS (Medicare is the primary payer for most facilities) these rehab centers cannot afford to be delisted. So they turn away patients in need, for patients who have the “right” diagnosis.

What has this rule done?

  1. Limited clinical decision making by doctors – a physician is no longer able to recommend patients for acute inpatient rehabilitation purely based on their need for it.
  2. Decreased choice for consumers – people recovering from heart attacks, cancer or COPD (to name a few) will generally not be offered the opportunity to be rehabilitated in an acute, inpatient setting.
  3. Reduced quality of care – rehabilitation facilities specializing in oncology or cardiopulmonary rehab will need to divest themselves of aggregated expertise. Since these centers would no longer qualify for Medicare funding, they can’t afford to remain centers of excellence in these fields of medicine. Instead, they will need to turn their attention to the 13 diagnoses that qualify for inpatient rehabilitation.
  4. Puts lives in danger – patients who are not admitted to acute rehab will be forced to recover in nursing homes (also known as “sub acute facilities”) that do not have the level of expertise to take care of them safely.

The 75% rule is one example of the kinds of decisions that a government sponsored universal healthcare system will make. When one payer (government or non-government) develops a monopoly, their decisions can single-handedly limit consumer choice, prevent physicians from exercising clinical judgment, and decrease quality and safety of care. What will Americans say when the decision to fund organ transplants for people over 65, for example, is denied across the board?

When medicine is no longer applied in a personalized (case by case) manner, and population-wide rules are in effect, we will face ethical dilemmas far surpassing those we already have. A system that serves the needs of many still fails the needs of some – and when we lose the flexibility to “bend the rules” for the exceptions we will lose the best of what American medicine has to offer.

This post originally appeared on Dr. Val’s blog at

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5 Responses to “Why I worry about a government-sponsored universal coverage system”

  1. Bradly Jacobs MD MPH says:

    You speak about choice….

    Question: Is some insurance better than no insurance? 1/3 of all children have no insurance and 40+million adults are without insurance.

    Question: What ‘choice’ does the 23 yo pregnant artist have when she has no insurance and cannot afford to pay out of pocket for her pre-natal care?

    Question: What ‘choice’ does the 1st generation immigrant working 3 part-time jobs (without insurance) have when his 3 year old is diagnosed with a rare tumor that should be referred to a tertiary care facility, but their insurance won’t cover it?

    Question: What choice does this same immigrant have when he develops fulminant liver failure from an idiosyncratic drug reaction and is denied this very organ transplant you speak of because he has no insurance? Why denied….highly competitive to become the recepient of an organ transplant, and can bill ~700K to $1M USD. Tertiary referral centers deny these folks transplants all the time….of course, it’s under the guise of one of the many criteria they need to satisfy to get a transplant but everyone knows the real story.

  2. ValJonesMD says:

    Dr. Richard Reece posted a response to this blog entry in his MedInnovationsBlog. It reads:

    I agree with Dr. Jones. She describes what Medicare does and what a universal coverage system will do – make capricious and arbitrary decisions based on diagnostic codes and numeric quotas. Government has no other choice: its functionaries are too far removed from care sites to make clinically relevant decisions based on personal needs, so it must resort to impersonal codes and quotas. Unfortunately, in the clinical trenches, patients, particularly those with multiple chronic ailments, don’t fall neatly into diagnostic niches, and care must be individualized on a case-to-case basis, regardless of the code or quota. A centralized government run system will inevitably suffer in “hardening of the categories.” A system based on universal vouchers giving caregivers latitude to do what needs to be done is more equitable, workable, and humane.

  3. Anonymous says:

    You talk about a government-sponsored system as an either/or proposition. Many OECD countries have both a government-provided safety net system and a system of supplemental private insurance. I agree with Dr. Jacobs’ posting below–too many people in this country don’t have access to care, and the system has only gotten worse over the years.

  4. Anonymous says:

    Let’s be honest, the one thing no one talks about in discussions about the cost of medical care is the money made by American doctors. We pay our doctors more than twice the pay of the next closest country — which is Germany. But we don’t get outcomes twice as good — and I don’t see Germans flocking over here for services. Medicine is not supposed to be a for profit business — it’s a non-profit service we all need. American doctors are going to overcharge this country into the poorhouse.

  5. Anonymous says:

    Before we presume that docs are the problem, let’s take a look at this fine blog post for a more balanced perspective:

    It is more likely to be the hospital administrators who take the lion’s share…

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