More than three years later, the truth is finally emerging, slowly. Like the dross impurities that rise to the surface in the refinement of gold, the lies are surfacing as the heat of the furnace turns up. This heat is the result of the change of power that the mid-term elections determined, with Republicans regaining control of the House of Representatives.

The U.S. Department of Energy has just released a report that concludes that the Covid-19 virus likely leaked from a lab in Wuhan, China. The case is not described as definitive, but it is more evidence that the media and public-health groupthink about Covid was mistaken and destructive, according to the editorial board of The Wall Street Journal.

They say the salient detail is that DOE’s judgment is based on “new” but still secret intelligence. Yet DOE’s new judgment is nonetheless made with “low confidence.” The FBI has also concluded that the Wuhan Institute of Virology was the “most likely” origin of the virus, but other U.S. intelligence agencies either don’t believe they have enough evidence or believe it had a natural origin. That’s two U.S. agencies, DOE and the FBI, that have come forth to acknowledge the lab leak is the explanation that makes the most sense.

Naturally, Dr. Anthony Fauci still clings to his claim that the virus originated in a “wet market.” The White House also won’t acknowledge this additional evidence that points toward a lab leak of the virus. With this weak response, and the weak response to the Chinese spy balloon, it’s becoming very evident that President Joe Biden cannot be trusted to hold China accountable for anything. The only reason there is any doubt left is that China has done everything possible to hide their responsibility, blaming the virus pandemic on a natural origin. But the old saying is, “If it looks like a duck and walks like a duck, it’s probably a duck.” Why would anyone be skeptical of a determination that a virus that emerged from Wuhan, China, probably came from a Wuhan China laboratory studying the same virus?

Comedian Jon Stewart said it well; “If an outbreak of chocolaty goodness was discovered in Hershey, Pennsylvania, would anyone doubt it came from the Hershey chocolate factory? If a novel coronavirus is discovered in Wuhan, China, home of the Wuhan Novel Coronavirus Lab, would anyone doubt it came from the Wuhan virus laboratory?”

Yet anyone who suggested such a logical conclusion in 2020 was vilified by the media. On April 22, 2020, WSJpublished an Op-ed by Arkansas Senator Tom Cotton that pointed to the possibility of the lab leak and raised doubts about Beijing’s claim that it had originated in an animal “wet market.” The media conformity caucus immediately derided Mr. Cotton for peddling a “conspiracy theory” that had been “debunked,” as the Washington Post put it at the time. Former CDC director Dr. Robert Redfield also favored the lab leak theory, but was called a racist and received death threats for daring to disagree with the prevailing theory.

We have since learned that public-health officials wanted to hide that U.S. financial aid to the Wuhan lab from the National Institute of Health (NIH) may have contributed to the “gain-of-function” research that could have led to the leak. We know from emails released that NIH director Dr. Francis Collins and NIAID director Dr. Anthony Fauci colluded to obfuscate the research they were supporting by coordinating the scientific community response that denounced the lab leak theory. The main stream media were happy to promote this disinformation.

The WJS editors conclude: “Because of China’s refusal to cooperate in the investigation, we may never know with certainty how the virus emerged. But Americans deserve to know the facts about the relationship of the U.S. National Institutes of Health to the Wuhan lab and to promoting gain-of-function research. The early deception also needs to be exposed.”

Republicans are calling for President Biden to declassify all intelligence on this issue immediately, instead of letting it dribble out in half-hearted spurts. But Biden’s cozy relationship with the Chinese makes it unlikely he will do anything to embarrass the Chinese Communist Party.

We’re discussing the insolvency of Medicare and Medicaid and what needs to be done. Seema Verma, former administrator for the Centers for Medicare and Medicaid Services under President Trump, offers her solutions in a recent article published in The Wall Street Journal.

In Part I we discussed Verma’s solution of a value-based reimbursement model, which is often called capitation payments.  This means payment based on the number of patient lives covered by the physician provider or hospital system. After a fixed payment for each patient, no additional payments are received, regardless of the treatment provided.

In Part II, Verma discussed how to avoid rationing of care by holding providers accountable for both quality and patient outcomes. But there are drawbacks to these practices, which I discussed as well. Furthermore, she discussed how to lower the costs of drugs in the federal 340B Drug Pricing Program, which provides discounted drugs to so-called safety-net providers to help them reduce medication costs for low-income patients. She is concerned about these providers unfairly profiting from not passing along discounts they received.

In Part III, I will address these concerns and others she expresses, and then offer some solutions to the rising costs of Medicare and Medicaid. To begin, I will repeat her last concern:

Verma is concerned about the drugs provided to Medicaid enrollees. The federal 340B Drug Pricing Program provides discounted drugs to so-called safety-net providers to help them reduce medication costs for low-income patients. But she argues providers aren’t required to pass on the discounts when selling medicines to patients and can pocket the profit. To this end, 340B providers have worked to acquire physician-owned clinics and smaller hospitals, allowing them to expand their use of the program and thus their profit and monopoly power.

I would say there are simple solutions to her concerns. First, limit the amount of mark-up these providers can charge for these drugs to a reasonable amount to cover their overhead. The worker’s compensation system in Florida has limited such mark-ups to 20%. With current inflation at 6.5%, perhaps this number needs to be a bit higher, say 25%. On the other hand, physician-owned clinics and smaller for-profit hospitals have been shown to reduce overall healthcare costs, not increase them. Also, when providers can see more profit available, it makes access to healthcare more available. Limited access to healthcare is a major problem with Medicaid patients.

Verma does make a good point concerning surgery. Medicare forces seniors to get surgeries in hospitals. The “Medicare inpatient-only list” outlines the type of procedures that are reimbursable only if done in hospitals. This includes joint replacement surgeries, which are among the most frequent procedures for seniors. Many operations can be safely performed in outpatient centers where the cost is lower and the quality is even higher. Current rules make it harder for outpatient surgery centers to compete with large hospital monopolies, which perform the vast majority of surgeries for Medicare patients. Allowing these same procedures to be performed in outpatient centers would likely cut the cost in half or more.

The Trump administration tried to fix this problem by removing the inpatient-only list, making it clear that medical decisions shouldn’t be made by federal bureaucrats. Unfortunately, the Biden administration reversed this Trump decision, like so many others, with adverse results. The costs for Medicare and seniors have gone up again.

Verma also makes another good point when she says more needs to be done to enforce price-transparency regulations for both payers and hospitals. Transparency allows competition and market forces to be effective in lowering costs. She calls on the president and Congress to work to lower costs and increase quality through market competition to avoid more draconian changes like benefit cuts, increased taxes or higher beneficiary spending.

What are my solutions?

I would say there is another significant way to lower Medicare/Medicaid costs – increase the eligibility requirements. When Medicare was enacted on July 30, 1965, life expectancy was 66.8 years for men and 73.7 for women. That means the average man became eligible for Medicare only 1.8 years before his expected death. The average woman became eligible only 8.7 years before her expected death. That means the government was only picking up the tab for 1.8 and 8.7 years for men and women respectively.

Today the life expectancy of a man is 79.1 years and for women it is 81 years. That means today the government must pay the healthcare expenses of a man for an average of 14.1 years and for a woman 16 years compared to 1.8 years and 8.7 years in 1965. Congress never anticipated such a huge increase in expenses for subsidizing healthcare.

Medicaid eligibility is dependent on economics, not age. Medicaid was originally implemented to cover pregnant women, children, and the elderly and disabled. Income eligibility varied by states. The original eligibility for pregnant women and young children was household income below 133 percent of the federal poverty line (FPL). For school age children it dropped to 100 percent of FPL and for the elderly and disabled to 75 percent of FPL. For working parents, it went down to 25 percent of FPL. Able-bodied adults were ineligible.

All that has changed since the Affordable Care Act (ObamaCare) of 2010. Eligibility was increased to 138 percent of FPL for all enrollees if states opted in. This includes able-bodied adults, who were never originally intended to be eligible. Today, 40 states have opted in including the District of Columbia, while 11 states remain under the old eligibility rules. Medicaid enrollment today is 82.3 million according to the Kaiser Family Foundation. In 2010, just before the passage of ObamaCare, only 54.6 million were enrolled. This huge expansion of Medicaid is a major reason why we are now over $31 trillion in debt.

The solution to the insolvency of Medicare is raising the age of eligibility. There is no reason for the federal government to be picking up most of the tab for seniors for the last 14 years or more of their lives. This was never the original intent of Congress. For Medicaid, the solution is lowering the eligibility levels to their original intent – low-income Americans, pregnant women, young children and the disabled. Covering the healthcare of abled-bodied adults was never the original intent of Congress.  These adults can get a job – there are literally millions of jobs out there looking for people to work and many will provide health insurance. It’s time we decreased the rolls of those who are dependent on the federal government.

These two solutions are simple to explain – but will require compromise by both political parties to achieve. Unfortunately, even discussing solutions has become a weapon in the arsenal of some politicians. This will only change when the American people demand changes to safeguard these important entitlements for the security of their future.

In Part I of this series, we discussed the problem of Medicare/Medicaid insolvency and what might be done to solve this problem. Seema Verma, former administrator for the Centers for Medicare and Medicaid Services under President Trump, offers her solutions in a recent article published in The Wall Street Journal.

Last post Verma suggested the solution is to convert Medicaid to a value-based reimbursement model. The more common term for this type of healthcare is capitation, or payment based on the number of patient lives covered by the physician provider or hospital system. After a fixed payment for each patient, no additional payments are received, regardless of the treatment provided. While Verma argues this will bring down costs, and it will, I argued that this provided the wrong incentives to providers – it encourages them to withhold treatment, especially if it is expensive. (For more on this argument, see Part I.)

A common problem with capitated payments is the rationing of care. Verma addresses this concern today. She argues that to ensure care isn’t rationed, part of the doctor’s reimbursement is tied to quality and patient outcomes. For example, doctors can use part of the capitated payment to cover the costs of home modifications to prevent falls, to provide medically tailored meals for diabetics, or to send a nurse to a patient’s home to administer medications. Unless this expense is in addition to the capitated payments, you can be sure doctors and hospitals are not going to pay for such luxuries.

She goes on to say value-based reimbursement can also be used to address new high-cost medications. If a patient doesn’t show meaningful improvement after taking the medication, the drug manufacturer’s reimbursement would be reduced or not paid at all. But who is going to decide how to define “meaningful improvement?” The answer is the government, not the doctor. This is just rationing by another name.

The same strategy for lowering costs is used in socialized medicine countries. If the government determines the cost of the treatment is not going to result in “meaningful improvement,” the treatment is denied. This may be due to the patient’s age, years of life expectancy, usefulness of the patient to society, or other parameters determined by the government.

Ms. Verma advocates for more competition in America, and that does make sense. Competition always lowers the cost and improves the quality of any service or manufactured product. But that only occurs when there is a level-playing field. As it stands right now, there are broken federal policies that benefit healthcare monopolies and these need to be eliminated. Where healthcare systems enjoy a monopoly, no competition can exist.

Verma says these healthcare monopolies are refusing to be held accountable for quality, to accept value-based contracts, or to negotiate prices with payers, employers and state Medicaid agencies. Perhaps she should consider a Medicaid model based on the highly successful Medicare Advantage plans that allows private insurance companies to compete for seniors in the Medicare system. The results of competition there have lowered premiums and provided additional services to those who enroll. Millions of American seniors now benefit from these plans.

Verma is also concerned about the drugs provided to Medicaid enrollees. The federal 340B Drug Pricing Program provides discounted drugs to so-called safety-net providers to help them reduce medication costs for low-income patients. But she argues providers aren’t required to pass on the discounts when selling medicines to patients, and can pocket the profit. To this end, 340B providers have worked to acquire physician-owned clinics and smaller hospitals, allowing them to expand their use of the program and thus their profit and monopoly power.

(For more on this subject, stay tuned for Part III of this series on my next blog.)