Volume 65, No. 8 August 2009
INQUISITOR ENDORSES OBAMACARE
Readers of Fyodor Dostoyevsky's great novel The Brothers
Karamazov may recall the Grand Inquisitor's apology for
totalitarianism. The basic concepts could well apply to radical
"healthcare reform," especially with the current tendency to
conflate morality, health, and civic duty (Orient JM, The Grand
Inquisitor and the role of the state in medical economics.
Perspect Biol Med 1981;25:20-38).
After decades of thwarted efforts to achieve a government
takeover, the Obama plan is gaining support, even from a "chorus
of presumed conservatives," writes Republican House Policy
Committee Chairman Thaddeus G. McGotter (R-MI). And the Grand
Inquisitor is "breaking his half-a-millennium media silence from
eternal damnation" to join in (American Spectator
When Jesus Christ returned for a brief visit to Seville,
where heretics were being burned by the hundreds, and went about
healing the sick and raising a dead little girl, the Inquisitor
promptly had Him arrested.
"Why hast Thou come to hinder us?" he demanded. The
inquisitors and the church were striving to correct His work:
"For fifteen centuries we have been wrestling with Thy
freedom, and now it is ended and over for good."
Freedom is too heavy a burden for the masses. McGotter
writes: "The wizened wag then subtly positioned Republicans as
the party of 'no' in the health care debate by deriding its plans
for patient-centered health care: 'They have saved but themselves
while we have saved all.'"
The Obama plan matches the Inquisitor's strategy for
subjugating weak, rebellious humans, for their own good: using
the three powers that Christ rejected when they were offered by
the Tempter: Miracle, Mystery, and Authority.
The government is to be seen as the supplier of the
necessities of life the current focus is on "health care," but
the idea is the same as in the Inquisitor's example:
"Receiving bread from us, they will see clearly that we take
the bread made by their hands from them, to give it to them,
without any miracle. They will see that we do not change the
stones to bread, but in truth they will be more thankful for
taking it from our hands than for the bread itself."
People will be glad to turn over all their secrets, and to
accept the authority's decisions, for "it will save them from the
great anxiety and terrible agony they endure at present in making
a free decision for themselves."
The Inquisitor's key tactic, McGotter reminds us, is "to
deceive them once more...for we must...never cease to lie."
While there is still much suffering to be endured on the way
to the final objective, "we shall triumph and shall be Caesars,
and then we shall plan the universal happiness of man." For only
when freedom is vanquished is it possible to begin to think of
happiness for mankind.
Lessons from the New Deal
As today's miracleworkers contemplate a New New Deal, it's
worth reviewing the history of the last one: for example, the
idea of taxing the rich, which caused enormous damage. Under the
new 1935 law, a man could see three-quarters of his profits
seized by the income tax, while he had to bear any losses
himself. Capital for new ventures dried up (Amity Shlaes, The
Forgotten Man: a New History of the Great Depression, 2007).
One difference between then and now was the serious,
heavyweight political opposition that FDR faced. When he proposed
forcing all 150,000 U.S. physicians to become officers in the
U.S. Public Health Service, the AMA took notice. "[B]y now [the
doctors] understood that once Roosevelt made a project his, he
would not give up unless someone stopped him," Shlaes writes.
Then there was the weekly magazine Social Justice,
edited by the "Radio Priest," Fr. Charles Coughlin, who recanted
his early support for FDR. He reached 40 million people a week by
radio, and had a print circulation of more than a million. His
magazine could be reprinted nearly verbatim today, changing only
a few names and dates, writes Paul Likoudis (Chronicles,
A Dec. 18, 1939, article, "Stabilization Fund Is Still a
Mystery: Who Wrote Law, or Why...," revealed that all the gold in
America, after its confiscation in 1934, had been surrendered to
the member banks of the Federal Reserve!
The magazine also showed that the New Deal made the federal
government the creator and owner of the 117 largest corporations
in America, unconstrained by basic economics.
In an Aug 21, 1939, essay, Minnesota Sen. Henrik Shipstead
lamented that 79% of the $3 billion doled out to the Home Owners'
Loan Corporation went to banks instead of foreclosed homeowners
and farmers. Then North Dakota Sen. Lynn Frazier explained that
Congress was to blame for financial troubles by allowing private
bankers to control the money supply. And Rep. Jerry Voorhis (D-
CA), Nixon's first political victim, wrote that an economic
system built on usury was destroying the nation.
By banning Social Justice from the mail in 1942,
the U.S. Post Office "put the hopes, beliefs, and opinions of
nearly half, perhaps more, of Americans into the dustbin of
The new Great Nationalizer is not channeling one aspect of
FDR: the "we have nothing to fear but fear itself" attitude.
Rather, in invoking fearsome crises from economic meltdown to
global climate catastrophe, he is following the Grand
"They will become timid and will look to us and huddle close
to us in fear, as chicks to the hen. They will marvel at us and
will be awestricken before us, and will be proud at our being so
powerful and clever."
Writer Turner Catledge laid out Roosevelt's pattern in
detail. First, the early "idea" period, when the President or
associates outlined a rough form of what was to be attempted.
There followed the "selling" to promote it to the others; the
"method" stage for developing the modus operandi; finally the
"publicity" stage when the idea was announced to the public and
submitted to Congress (Shlaes, op. cit., p 357).
About the AMA
In December 2008, the AMA had 236,153 members, of whom 20%
were students and 13% residents; thus, about 157,000 were
practicing physicians about 17% of some 900,000 eligible
practitioners, compared with about 22% in 2004. About 50% of
medical students were AMA members in 2008, compared with 59% in
The founder of Sermo suggests that the biggest risk to U.S.
physicians is the AMA. In an online July survey, 75% of some
4,000 respondents said they were not AMA members; 89%
said they did not believe the AMA speaks for them; 91%
said the AMA does not accurately reflect their opinion
as physicians. Only 17% said they were aware that, according to
the AMA's 2008 annual report, more than 85% of its more than $282
million annual revenue comes from sources other than membership
Competitiveness and the Tax Wedge
A major argument for a government takeover of medicine is
the contribution of employer-owned health insurance to labor
costs. However, tax funding would simply convert insurance costs
into a bigger tax wedge. The portion of employee costs that goes
directly to government to fund health and other social welfare
costs is: Germany, 52%; France, 49.3%; Italy, 46.5%; UK, 32.8%;
Canada, 31.3%; U.S., 30.1%; Japan, 29.5%; Korea, 20.3%. This
helps to explain why Europe has had higher unemployment and
slower growth for 30 years.
One way to increase competitiveness would be to cut the
corporate tax rate; the U.S. has the second highest rate in the
industrialized world (Wall St J 6/17/09).
Massachusetts Considers Universal Capitation
Although capitation was roundly rejected by physicians and
patients in the 1990s, Massachusetts is thinking of bringing it
back under a new name, "global payment." The costs of "universal
coverage" having escalated out of control, the Special Commission
on the Health Care Payment System is looking to its "most
powerful lever," payment reform. The whole nation needs the same
change, the commission thinks.
By 2015, fee-for-service payment could be a relic of the
past. All payers, including Medicare and Medicaid, would split a
per-member fee between hospitals and physicians in provider
networks, with the amount determined in part by the "quality" of
care delivered. Even self-insured employers would be required to
participate. A special commission will see that the program is
designed to avoid past problems with capitation.
"It's going to be threatening to many physicians," said
Massachusetts Medical Society president Mario Motta. A 100%
global-payment system may not be ideal, he said; there's no
reason not to adopt a hybrid (AM News 6/1/09).
Putting Doctors on a Budget
The White House also likes the capitation idea.
At the AMA meeting, Obama told doctors: "You entered this
profession to be healers. Now, that starts with reforming the way
we compensate our providers doctors and hospitals. We need to
bundle payments so you aren't paid for every single treatment you
offer a patient with a chronic condition..., but instead paid
well for how you treat the overall disease."
The White House is looking at the Prometheus project, funded
by a $6 million Robert Wood Johnson Foundation grant, which will
calculate coverage for 80,000 workers in Rockford, IL. For
example, it might put $20,750/yr for a heart patient into the
common pot, and doctors and hospitals will efficiently
"coordinate" care. Assuming they follow the guidelines, they get
to keep the change, if any is left. No more perverse
incentives this is not like DRGs (Time
Higher U.S. infant mortality is largely a reporting
artifact. According to the WHO "Neonatal and Perinatal
Mortality Country, Regional, and Global Estimates,"
underestimation in developed countries may vary between 20% and
40%. See www.who.int/making_pregnancy_safer/publications/neonatal.pdf, especially section 4.4.
- Keirse MJ. Lancet 1984;1(8387):1166-1169.
- Cartlidge PH, Stewart JH. Lancet 1995;346:486-488.
- Howell EM, Blondel B. Am J Public Health
- Sepkowitz S. Int J Epidemiol 1995;24:583-588.
- Mueller M, et al. Swiss Med Wkly 2005;135:433-439.
- Doornbos JP, et al. Am J Obstet Gynecol
- Cihak RJ. NewsMax, Mar 10, 2005.
Nominating Committee Report
The Nominating Committee, chaired by Robert J. Cihak, M.D.,
presents the following slate:
President-elect: Lee Hieb, M.D., Logan, IA
Secretary: Charles McDowell, Jr., M.D., Johns Creek, GA
Treasurer: R. Lowell Campbell, M.D., Corsicana, TX
Directors: Richard Amerling, M.D., New York, NY; Alieta Eck,
M.D., Somerset, NJ; W. Daniel Jordan, M.D., Atlanta, GA; Tamzin
Rosenwasser, M.D., Lafayette, IN; G. Keith Smith, M.D., Oklahoma
Jul 16, Doctors' Tea Party, Wichita, KS.
Aug 7, Independent Practice Workshop, San Diego, CA.
Aug 13, Doctors declare independence, Oklahoma City,
Sep 30-Oct 3, 2009. 66th annual meeting, Nashville,
Sep 15-18, 2010. 67th annual meeting, Salt Lake City,
During the "year of prosecutions" (1934), Roosevelt sought
to establish the need for national intervention to root out
"corruption," and the constitutionality of imposing rules on
wages and the conduct of business for example, the poultry
business, which FDR wanted to transfer to the public sector.
In cases like those of former treasury secretary Mellon (a
rich capitalist), Belcher (who paid timber workers less than the
minimum), and Schechter (kosher poultry butchers), "prosecution
became easier if they revised the rules of the game." The
government tried to impose new standards on behavior that was
legal at the time (Shlaes, op. cit., p 205).
States May Try to Nullify Nationalized Medicine
The Arizona state legislature has referred to the November
2010 ballot a proposed state constitutional amendment that would
guarantee the right to pay privately for medical care, and to
choose not to participate in any health care system. The
amendment, called the Health Care Freedom Act, is a revision of a
ballot initiative that failed by just 0.5% of the vote in 2008,
after the managed-care industry spent millions to defeat it.
Apparently, there was fear that Medicaid recipients might try to
opt out; Arizona was the first state to funnel all Medicaid
through selected managed-care plans. The amendment would make it
illegal to pass an employer or individual mandate to purchase
insurance or a "single payer" plan. Nearly all Democrats voted
Indiana, Minnesota, New Mexico, North Dakota, and Wyoming
are considering similar initiatives.
If any succeed, a federalism challenge to national "health-
care reform" could result. The Tenth Amendment was the roadblock
that stopped some initial New Deal programs. Law professor Paul
Bender of Arizona State University states there is a striking
similarity between today's Supreme Court justices and the "Nine
Old Men" who stymied FDR in the 1930s. Both seem to share the
belief that the balance of power has shifted too far away from
the states (FoxNews 6/29/09).
"This is really a question of who will control health care
decisions: patients and their doctors, or government," said
Phoenix orthopedic surgeon Eric Novack, M.D.
The Year of the Auditor
Claims to federal programs will face even more pre- and
post-payment scrutiny, with a new joint effort by HHS and the
Dept of Justice, the Health Care Fraud Prevention and Enforcement
Action team (HEAT). This team will use information collected by
others, such as Recovery Audit Contractors (RACs), to coordinate
While awaiting your first contact with RACs, you'd better
implement a comprehensive tracking system for your dealings with
them; miss a deadline, and you're done.
There may be a softer approach this year as systems are
tested, but "then it will get aggressive really fast," warns
attorney Jennifer O'Brien.
And immediately start doing due diligence to return
overpayments. "There's no need for a false statement to create a
violation [of the False Claims Act]," states Ankur Goel.
You can also be accused of fraud if you miss a rule change
by ignoring carrier updates there is no need to prove a
deliberate intent to defraud (MCA 1/29/09).
RACs are allowed to extrapolate from a sample of 30 claims
to a whole year's worth. One ambulance company was found to have
made an error in 26 of 30 claims. CMS will recoup the amount
extrapolated to 94% of claims for the year from future payments,
ensuring the company's demise.
Unlike even IRS auditors, RACs get bonuses based on how much
"Whatever you do, don't get a victim mentality," advises
Pamela Moore (Physicians Practice, June 2009). "CMS and
RACs aren't out to get you. Neither is the Obama Administration."
It's just the "bizarre system we ourselves have built." We of
course want our tax dollars to be spent well, she says.
Is This Efficiency?
The Medicare system's vaunted low "administrative" costs
apparently do not include the amount allegedly lost to fraud. A
single issue of BNA's Health Care Fraud Report contains
reports of a Phoenix physician who paid $525,000 to settle false
billing allegations; an indictment for $50 million in false
claims billed by infusion clinics and physical and occupational
therapists in Detroit; an alleged $22 million Florida scheme by -
home health agencies to bribe beneficiaries to submit false
claims; an alleged $100 million five-state scheme involving
store-front medical clinics; a $3.5 million settlement with an
Oklahoma orthopedist; and many more (HCFR 7/1/09).
Is There an Obligation to Participate in Research?
The standard view has been that being a subject in biomedi-
cal research is like donating blood: laudable but not obligatory.
G. Owen Schaefer, Ezekiel Emanuel, and Alan Wertheimer, of the
Dept. of Bioethics, National Institutes of Health, argue that
there is a prima facie obligation to participate in biomedical
research, unless there is a good reason not to. Research produces
a public good that everyone has access to. We need at least 16
million more individuals to participate in research trials each
year. Paying taxes is not enough. "The situation is in some ways
analogous to a wartime call to arms in which not just money but
Even though participation is morally obligatory, "there
should still be insistence that the participant provide informed
consent to do so." And there is still a right to withdraw from a
trial without penalty, even if withdrawal is wrong.
The right for individuals to decide what happens to their
body can be inferred from the right to privacy in the U.S.
Constitution, and is explicit in the European Convention on Human
Rights. It can justly be overridden, the authors argue, in some
circumstances, such as when society compels people to be
vaccinated. "But the need for biomedical research today does not
qualify as such an extraordinary circumstance" (JAMA
2009;302:67-72). Perhaps tomorrow it will.
And everyone of course will have to participate in
comparative effectiveness research. The new rationale is timely.
New Accounting Requirements for EHRs
The HIPAA Privacy Rule currently provides that covered
entities must provide an accounting for disclosures of protected
health information on request, except those made for treatment,
payment, or health care operations. Section 13405(c) of the new
statute removes this exception for electronic health records
(Pima County Medical Society seminar 4/22/09).
Reform = Payment Cuts. Physicians who are increasingly
being squeezed financially and coerced into becoming dependent on
hospital contracts may have another major problem if Obama gets
his way on "healthcare reform." In the past, government programs
have provided disproportionately high payments to hospitals,
while cutting physician payment to bare bones. In a weekly radio
address, Obama called for cutting $313 billion in Medicare and
Medicaid payment over 10 years, $106 billion coming specifically
from hospitals. He cleverly promised not to slow Medicare
payments to physicians. Hospitals, however, will surely cut
payments to their dependent physicians. Then, those physicians
will have lost not only their ability to practice according to
their own best judgment, but their financial well-being also.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
Chronic Disease. If patients in the U.S. are sicker
with chronic disease, what about the possibility that they
survived the initial onslaught and manage to live with the
problem thanks to good care? How do you reduce the number with
chronic disease? Don't treat them, and let them die.
Linda Gorman, Ph.D., Independence Institute, Golden,
Uninsured in Canada. Uninsured Canadians must pay cash
before treatment in an emergency room or walk-in clinic. The ER
will not refer patients to a specialist, and walk-in clinics
don't like to do that either. You are better off being uninsured
in America. The uninsured in Canada are the neediest: homeless
people and those so poor they don't pay taxes. Socialism always
hurts the neediest first.
Ralph Weber, C.L.U., Paso Robles, CA
Innovation. Without third-party payment for many
services, there would be a more tiered marketplace with varied
options and cost differences. We see this happening with blood
tests, for example, www.mymedlab.com, which offers
customer choice, with user-friendly information and data storage.
Many of my clients have gotten an MRI for $250 paid from their
HSA, instead of $1,800 using insurance, which might have cost
them much more after denials or deductibles and copayments.
Sometimes the MRI would have been deemed medically unnecessary or
outside the guidelines.
A business model that requests prepayment, has prices one-
third of conventional, and uses machines bought from facilities
that are installing a newer model, is a viable market niche. It
is unconscionable that legislators, provider lobbyists, or anyone
else would stand in the way of this model.
Janet Michaud, Manhattan Beach, CA
Health Status Insurance. In a real sense, health
insurance isn't insurance at all, but an artificial product of
unwise taxation and regulatory policies. It is different in many
ways from other forms of casualty insurance. University of
Chicago professor John Cochrane has proposed an ingenious
solution: two premiums for two types of insurance. The first is
for a year's worth of insurance for a healthy person. The second
covers the risk of a change in health status that could increase
premiums in future years it would pay the added premium.
John Goodman, Ph.D., Dallas, TX
Independence. I pray that there is a growing
intolerance of the progressive loss of our rights and freedoms.
As John Locke said, it is not only right but morally necessary to
revolt when the social contract is broken.... [We must rise up
and demand] the preservation...of...rights...that come not from
government but are an endowment from our creator.... Personal
responsibility and creativity along with a dogged insistence on
our personal freedom is the only answer.... The government has no
right to confiscate our time, work product, or property,
intellectual or other. In the end the people of America will be
much less free and much poorer and sicker if something is not
done to stop this insane socialization of America.
Carl W ("Rick") Lentz III, M.D., Daytona Beach, FL
Value-based Purchasing. Many, perhaps one-third, of the
uninsured children who are eligible for SCHIP were on the program
in the past year. People who know about the program, and know how
to enroll, fail to re-enroll because it isn't worth the trouble.
There is no value even when it is free.
Greg Scandlen, Heartland Institute
A Backwards Approach. We are approaching the problem
from the wrong direction, based on bad assumptions. Insurance is
unaffordable because of oligopolies, mandates, community rating,
and guaranteed issue. If the cost was lower, and it was a
valuable product, 90% of Americans would buy it. Sadly, many
think that affordability means someone giving them money to buy
an over-priced product, or a central planner artificially
controlling the price. Government should have no role in defining
insurance. It should be an indemnity product against financial
risk, rarely used. "Universal coverage" is a fool's errand.
Mandates will make things worse; I guarantee that a federal
mandate to buy insurance will lead to a federal mandate for
doctors to take that insurance. The answer is a true competitive
market, with 300 million Americans shopping for products they
want and can afford. That will drive down prices better than any
central planning approach.
David McKalip, M.D., St. Petersburg, FL