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Omnia pro aegroto

Volume 59, No. 12 December 2003


In the 1970s at Columbia-Presbyterian Medical Center, house staff assured that everyone who had functioning kidneys even if homeless, unconscious, and uninsured was in electrolyte balance at the time of death.

Today, it is the view of certain courts that electrolyte imbalance assures a peaceful death, even from thirst. The act of providing hydration and nutrition to a patient who allegedly cannot take it by mouth, and who has ever remarked that "I wouldn't want to live like that," can be defined as "forced feeding" and obstructed by the police.

The instant case of Terri Schindler Schiavo, who suffered brain damage in an anoxic event about 13 years ago, echoes the 1989 case of Nancy Beth Cruzan. Miss Cruzan was also said by some but not all physicians to be in a persistent vegetative state. There are complicating guardianship issues in the Schiavo case. The Cruzan case pitted the patient's parents against one physician and virtually the entire nursing staff of the Missouri Rehabilitation Center. In the Schiavo case, her parents and some physicians, who believe that she is conscious and fighting for her life, and that she could take food by mouth if given speech therapy, are opposing her husband. Mr. Schiavo, until recently her court-appointed guardian, has allegedly denied her any attempts at rehabilitation or oral feeding.

The Cruzan case reached the U.S. Supreme Court (Cruzan v. Harman). Together with former Surgeon General C. Everett Koop, AAPS filed an amicus brief arguing that the removal of simple nourishment, albeit through a gastrostomy tube, in order to cause the death of a patient who was not terminally ill, was equivalent to euthanasia. The American Medical Association and the American Academy of Neurology filed as amici on behalf of the parents, stating that the "right to die" is among the liberties protected by the Fourteenth Amendment (AAPS News Dec 1989).

The Supreme Court, while remanding the case for lack of "clear and convincing evidence" that the patient would choose death, accepted by implication that tube-supplied food and fluids constituted medical treatment and could ethically be withdrawn. When two former coworkers presented vague testimony about a conversation they had had with Miss Cruzan many years before, the Missouri court ordered an end to feedings, and Miss Cruzan was dead of dehydration in 12 days.

According to the AMA ethics and professionalism journal, "Nancy Cruzan is responsible for a Supreme Court decision that helped to empower people competent and incompetent with choices at the end of life" (Virtual Mentor, Nov 2001).

"I think this is quite an accomplishment for a 25-year-old kid," her father said, "and I'm damn proud of her" (ibid.). (Mr. Cruzan hanged himself seven years after his daughter's death.)

In 1986, the AMA Council on Ethical and Judicial Affairs issued an opinion (E-2.20) that "life-sustaining treatment may include, but is not limited to, mechanical ventilation, renal dialysis, chemotherapy, antibiotics, and artificial nutrition and hydration." At first applied only to those who were, "beyond doubt," permanently unconscious, the policy was expanded in 1994 to include patients who were neither terminally ill nor permanently unconscious, "in accordance with a proper substituted judgment or best interests analysis."

Death by starvation and dehydration is now a common option in advanced directives. The frequency with which it occurs, with or without such a directive, is unknown, and so far no studies have been done, according to Wesley J. Smith (Forced Exit, Times Books, 1997).

Hemlock Society Senior Vice President Faye Girsh may believe that dehydration is "relatively gentle and painless in most reported cases" ( www.hemlocksociety.org/starve.html), but it was the most dreaded method of execution at Auschwitz. It is too cruel for animals or convicted murderers. Fear that they or their loved ones could be subjected to this fate may have helped motivate people to send 165,000 e-mail messages to Governor Jeb Bush of Florida, pleading for a "stay of execution" for Terri Schindler Schiavo.

Groups protesting the court-ordered death of Mrs. Schiavo include the Hospice Patients Alliance, which has received numerous reports of the killing of disabled patients in certain hospices. Not Dead Yet and more than 40 other disability activist groups charge that Partnership for Caring, Last Acts, and the Robert Wood Johnson Foundation (RWJF) deliberately conflate terminal illness with disability, and promote statutes that weaken protections for disabled patients. The CEO of the hospice where Mrs. Schiavo resides is also on the board of directors of the Partnership for Caring, a recipient of part of the $150 million RWJF has invested in "end of life" projects.

Last Acts issued a press release urging people to execute living wills in order to avert the tragedy that befell Terri Schiavo. The "tragedy" was an order by Governor Bush, pursuant to a special act of the legislature, to reinsert her gastrostomy tube six days into the court-ordered dehydration ordeal. The patient has not died. A new guardian has been appointed, and the ultimate outcome remains undetermined.

Last Acts proclaims that everyone has the right to refuse medical treatment, and also that "none of us should be denied treatment that we do want." The questions, however, are being asked in the past tense and subjunctive mood. What Mrs. Schiavo wants now appears to be irrelevant. And Last Acts, as well as the AMA, is silent about government barriers to the use of measures not approved by the FDA, the DEA, or other bureaucracy, even by patients who have no other hope.

Once the concept of the lebensunwertes Leben is accepted, the obvious next step concerns the choice of method. If dehydration is inhumane, why not a lethal injection?

National Socialist Euthanasia Files Opened

Files related to the euthanasia program of the German Nati- onal Socialist regime, 1939-1944, are now available online in a central data base. The German Federal Archive in Berlin has gathered information from archives in Germany, Austria, Poland, and the former Czechoslovakia. Included are 70,000 files kept for decades by the secret police of the former German Democratic Republic. About 200,000 persons were killed in gas chambers, with drugs, or by starvation because they were considered handicapped, socially unacceptable, or mentally ill (BMJ 2003;327:832).

"The actual medical records indicated either a `natural death' or a `mercy killing' for the victim, many of whom were starved to death. But we all recognize now that the killings were based on a rationale that some lives were `unworthy of life'," stated Diane Coleman, President of Not Dead Yet. She fears that the final body count of nonterminally ill disabled people starved in hospice could exceed anything done by the Germans in their euthanasia program ( www.notyetdead.org ).

In Germany, doctors and nurses themselves became the zealots. Euthanasia was never officially legalized, although Hitler signed a decree permitting medicalized killing. The government never forced a doctor to kill a patient nor ever punished a doctor for not euthanizing one (Smith WJ, op. cit.).


Non-Profits and Eugenics

In a recently released book, War Against the Weak, and a Nov 9 article in the San Francisco Chronicle, Edwin Black asserts that American eugenicists influenced the National Socialist sterilization, experimentation, and extermination campaigns with funding from corporate philanthropies such as the Rockefeller Foundation and the Carnegie Institution. Josef Mengele was one of the Kaiser Wilhelm Institute doctors funded by Rockefeller.

The world recoiled in horror at the Nazi genocide, but Wesley J. Smith among others warns of the similarities between current thoughts on euthanasia and the intellectual foundations of the German experience. One may ask whether the very silence of American bioethicists testifies to a lingering, covert influence of the eugenics movement.

Mandatory reporting of birth defects, for example, was introduced in Germany in 1939. Almost all states now have a similar requirement, according to Twila Brase of the Citizens Council on Health Care.

End-of-life projects and organizations funded by the Robert Wood Johnson Foundation (RWJF) use words such as "choice" rather than "euthanasia." When the Euthanasia Society of America changed its name to the Society for the Right to Die, Choice in Dying, and then Partnership for Caring (PFC), it did not change its philosophy or agenda. It still honors its legacy of 1937, which included calls for involuntary euthanasia such as the killing of "born defectives."

German euthanasia attitudes were "hate-filled, based to a great degree on bigotry...and collectivist notions of the state as a living organism," while contemporary advocates tend to emphasize compassion, scholarly dispassion, or concepts of personal autonomy. "Yet when one cuts through the jargon, the acts that are being advocated are the same as those advocated [by Germans] more than seventy-five years ago" (Smith WJ, op. cit.).


News of the Day...in Perspective

Watch the AAPS home page, www.aapsonline.org, for frequent postings of breaking news, with links to relevant information in the AAPS archives. Recent items have covered the ongoing Medicare debate; prosecutions of pain-management physicians; the abuse of the PATRIOT Act; sham peer review; and the front-page Wall Street Journal article about the cash-based practices of AAPS members Robert Berry, M.D., and H. Todd Coulter, M.D.


Banning Low-Cost Remedies

Proposed legislation S. 722, in the name of consumer protection, would give the FDA the power to withdraw any dietary supplement from the market, including vitamin C, on the basis of a single anecdote about an adverse reaction. Prohibitively expensive testing would then be required.

In a letter to senators, AAPS stated that the bill created a double standard that could not be met by any product, and that the FDA already has a monitoring system and tools to alert consumers on safety issues.

"We are opposed to expanding the powers of the FDA, which already delays patient access to life-saving drugs and devices for many years. We are also opposed to FDA regulation of the practice of medicine. Physicians need the ability to recommend safe, natural products to patients who desire this option," stated AAPS ("testimony" at www.aapsonline.org).


HIPAA Updates

The impact of the Transaction Code Sets is still to be determined. Empire Blue Cross Blue Shield said it had made a "business decision" to accept or reject entire batches of claims. Saratoga Hospital of Saratoga Springs, NY, had several batches of 837 claims rejected because of a single digit missing in a ZIP code on a single claim (HIPAA Compliance Alert 10/13/03).

The Office of Inspector General of HHS has provisions in its 2004 work plan to review compliance at managed care organizations and university hospitals (ibid.).

From a 337-word guideline, the Privacy Rule has swelled to 101,000 words. Emergency crews reached a patient too late because they thought they couldn't mention his name and thus could not get directions to his home (USA Today 10/17/03).


AAPS Calendar

Jan. 16, 2004. Board of Directors meeting, Orlando.
Jan. 17, 2004.
Practice management seminar, Orlando.
Oct. 13-16, 2004. 61st annual meeting, Portland, Oregon.

Can the Legislature Protect Life?

Florida HB 35E, passed in record time as Terri Schindler Schiavo was beginning to experience organ failure from dehydration, gives the Governor the authority to issue a one-time stay on the withholding of nutrition and hydration, under certain circumstances. Michael Schiavo immediately filed for an injunction, which was denied. Now pending is a constitutional challenge to the law on the ground that it violates patient privacy and the separation of powers.

Johnnie B. Byrd, Jr., Speaker of The Florida House of Representatives, filed an amicus brief defending the constitu- tionality of the statute. He argues that:

"The Legislature is vested with all legislative authority except as it may be expressly limited in the state constitution.... HB 35E adds protections to the lives of certain incompetent residents.... The mere fact that interests adjudicated under previous law may be affected is a natural, expected consequence of every change in law...." He observed that the Legislature did something very similar in 2001 in a law providing for post-sentencing DNA testing.

Thus, "the fact that death has been decreed under prior law is constitutes no bar to legislative action protective of life."

Rep. Byrd noted that he could find no statute enacted to protect the lives of incompetent persons that had been voided by any court as violative of the right to privacy.

In an amicus brief in a prior unsuccessful action to continue feeding, Gov. Jeb Bush noted the "critical distinction between removing artificial life support and the deliberate killing of a human by starvation and dehydration." A patient's right to life is violated when the state, acting as her guardian, "assumes that the wish to live without artificial sustenance is the same as a wish not to be fed at all." The guardianship court had forbidden any therapy prior to the tube removal that could enable Mrs. Schiavo to safely eat by mouth.

Legal documents are posted at www.terrisfight.org.


Hung Jury in Trial of Dr. Cecil Knox

After an 8-week trial, Cecil Knox, M.D., a pain specialist in Roanoke, VA, was acquitted on about half of the 69 counts against him. The jury was unable to reach a verdict on the other counts. Federal prosecutor Rusty Fitzgerald intends to retry him on the remaining charges, including two counts of distributing narcotics outside the scope of legitimate medical practice, which led to the death or serious injury of at least one person. His office manager, Beverly Gale Boone, though acquitted of drug charges, faces retrial for racketeering, health care fraud, conspiracy, and mail fraud.

Defense attorney Tony Anderson stated that Dr. Knox may have received $5,032.85 more than he should have from government programs and insurance companies, an amount that suggests procedural errors, rather than an organized attempt to defraud (Kahn C, AP, 10/22/03).

Three of the patients testifying against Dr. Knox had been convicted of crimes related to their admitted abuse of prescription drugs, and all admitted they had lied to the doctor (McCaffery J, Roanoke Times 9/25/03).


"Try, try, again"

High-profile federal prosecutions have ended in hung juries in the past month, including the prosecutions of Dr. Cecil Knox and the executive Frank Quattrone. Shouldn't the Fifth Amendment prevent retrial of these defendants? After all, it says: "nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb." But courts do allow retrial after a hung jury, and even permit retrial after a conviction is reversed on appeal. Retrials are sometimes also allowed after declaration of a mistrial. At least one defendant is in federal prison now after two successive hung juries followed by a third prosecution for the same offense, which resulted in conviction.


Abortion/Breast Cancer Link Case Settled

On the eve of trial, Dr. Charles Benjamin and the Cherry Hill Women's Center in Cherry Hill, NJ, settled a case brought by a Pennsylvania woman who complained that she had not been warned of the emotional and physical risks of abortion. At the age of 17, she had been referred by a high school guidance counselor for a second-trimester abortion without her parents' knowledge. New Jersey, unlike Pennsylvania, does not require parental consent.

The settlement includes the cost of monitoring for breast cancer. It is the first in the United States to recognize a duty to warn of a possibly enhanced risk of breast cancer; there have been two such settlements in Australia (WND 10/23/03).


Absolute Immunity in Peer Review Breached

The Supreme Court of California recently ruled, in a 6:1 decision, that absolute immunity does not apply to the credentialing process when someone knowingly bears false witness (Hassan v. Mercy American River Hospital).

"Because false information of any sort has no value in evaluating a medical practitioner, the communication of information known to be false cannot be intended to help or assist in that evaluation....," ruled the Court.

Dr. Hassan won no damages because the Court found no evidence of malice and thus no grounds for his claim to proceed. However, the ruling puts a chink in the armor of Section 43.8 of a California law granting absolute immunity in peer review. The California Medical Association, which had filed an amicus brief on the side of the hospital (Waite VS, J Am Phys Surg 2003;8:83-86), stated that the ruling "could lead to an increase in lawsuits filed by aggrieved physicians, even if the information provided is true" (AM News 10/13/03).


Tricare: Trap for the Unwary

Any patient with Tricare can walk into a doctor's office, pay the bill, and then forward it to Tricare, which can claim that the physician overcharged. The physician can be forced to reimburse the patient even if he has no contract with Tricare.

Tricare manuals do not explicitly address the question of whether a physician can opt out of Medicare and still bill Tricare. Thus it is presumably permitted. In the future, Tricare may issue a "clarification," affirming or denying this.

There are three types of Tricare providers. Authorized providers include any licensed physician. A participating provider is a CHAMPUS-authorized provider who has signed an agreement or indicated "accept assignment" on a claims form. A network provider has joined the network of a Tricare Prime Managed Care Support Contractor (MCSC).

See www.tricare.osd.mil/tricaremanuals.


Insurers Advertise Doing "Nothing." The Blue Bunglers are running large ads in the Buffalo News with the pitch that "We're doing everything to make healthcare easier. Including nothing." In the ad, they spell out that "nothing" means "absolutely no copay" for pediatric primary care visits (mostly well-child visits), maternity inpatient stays (pregnancy isn't an illness), and generic oral contraceptives (attempts to prevent inpatient maternity stays that would cost the insurer more).

In other words, they are taking huge premiums for very poor value first-dollar coverage and offering to cover people who aren't sick without charge. It's a little like a thief boasting of his virtue and compassion because after taking your wallet, he didn't take your watch and jewelry as well. The ads are clearly aimed at a dumbed-down public.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Two Types of Medical Service. The first type is person- centered care, which primarily involves information exchange. This can be delivered small scale, even solo. If third-party coverage is omitted, costs diminish so significantly that such coverage is not required. In my view, third-party payment for outpatient primary care diminishes the quality of service.

The second type involves a technological event or procedure that requires institutional support. The cost is many times greater, and insurance coverage is appropriate.

Lumping the two distinct types of care together is economically wasteful and endangers quality.
M. Kelly Sutton, M.D., Keene, NH


Charity v. Entitlement. Hospitals were started by philanthropists and originally were places for caring for the poor: it was all charity. People felt good to give and thankful to receive.

Political rhetoric now gives people an entitlement mentality, and they are angry if they are poor, even if because of their own poor choices. Charity care paid for by government to prevent revolution is a sad state of affairs. Indeed, it is not charity at all but an enticement to remain poor and dependent upon the nanny state.
Alieta Eck, M.D., Somerset, NJ


What Is "Society"? It is said that "society has decided that everyone should have medical care." When? I never had a chance to vote on it. Is "society" our elected or appointed representatives who have the power to make and enforce laws? Is it each person who resides in the U.S.? ... And why should society, however we define it, have supreme authority over individuals? Who made society God?
Joseph Lee Pugh, Diamondhead, MS


We Are All Uninsured....for Something. This being the universal condition, we need to make a decision about what we would like to insure, and what should be left uninsured. Each of us will decide differently, given our individual values, needs, and resources.
Greg Scandlen, Frederick, MD


Why Medical Care Is Different. Medical expenses have not been factored into the household budget for necessities like rent, utilities, and food, which must be paid for before beer and entertainment. With MSAs, this will have to change.
Frank Timmins, HealthBenefitsReform group


MSAs Are for the Common Folk. It's just a matter of doing the math. I've had a Medical Savings Account since 1997. I have spent about $4,000 and have about $17,000 in the account. Given this amount and my employer's continued contributions, I can never be out-of-pocket for a covered medical expense for the rest of my life. Would this be more important to a poor person, or to a wealthy person?
Art Jetter, CLU, Omaha, NE


Why a Grand Plan? What is it about a certain set of health reform experts that makes them so blind to the obvious fact that successful business arrangements adapt to the people and circumstances that exist and then improve by incremental adjustments? Instead they keep harping on a grand Plan and making everybody adjust to it.... All will be well if the data systems catch up, the culture is reset, and people are reeducated to a different mindset. What are they, French or something?
Linda Gorman, Englewood, CO


Allow Interstate Commerce in Medical Insurance. Given the obstacles placed in the way of affordable medical coverage, it's surprising that there aren't more uninsured Americans. There are more than 1,500 state mandates. In some states, mandates account for 40% of insurance costs. In New York, a 30-year-old man must pay $250 per month for medical insurance; in Connecticut, the price is one-eighth as much.

The federal government should step in and allow out-of-state medical insurance purchases. The internet provides a perfect venue. Such an action would be entirely consistent with the Commerce Clause in the Constitution.

This would be a reasonable first step in reestablishing market choice. Thanks to a barrage of regulations, businesses and individuals have limited and expensive options in most states. In Vermont, there are just three carriers offering plans to small businesses, and just two in the individual market. A Vermonter has more choice in yogurt than in insurers.
David Gratzer, M.D., Toronto, Ontario

Legislative Alert

Medicare: The Final Battle?

By the time this goes to press, the Medicare conference could be finalized. But don't bet on it. October 17th has come and gone, and the House Senate conferees, as of this writing, are still slogging through the complex provisions of the House and Senate bills, trying to meld two flawed pieces of legislation into a coherent product. October 17 was the last announced deadline for House and Senate conferees to finish their work.

Day in and day out the official lingo coming out of the conference is that they are making "progress." Well, as Bill Clinton would say, "swear to God," that's true, but it depends on how you define the word "progress." For conservatives, the "progress" is not all that attractive: Reportedly, the conferees have dropped most of the health savings account language.

On October 29, the President said: "We're applying a basic principle: seniors should be able to choose the kind of coverage that works best for them, instead of having the choice made by the government. Every member of congress get to choose a health coverage plan that makes he most sense to them [sic]. So does every federal employee. If this kind of coverage is good enough for the United States Congress, it's good enough for America's seniors."

Good sound bite, and a solid statement. But, to effect that change means to change the financing structure of Medicare and move toward a real premium support system, in which the taxpayers contribute to the premium of the plan of the person's choice including a medical savings account. The Senate bill does not do that; the House bill does, but not until 2010.

White House staff assertions to the contrary, for the most part the President continues to address the Medicare conference more as a cheerleader on the sidelines than a policy player. The rhetoric is attractive, but still platitudinous. The current White House line is predictable: the House-Senate conference is making real "progress"; seniors need drugs and new choices and new therapies; now is the time; we must support the process; and the President wants a bill. The President has yet to line up four-square behind the House conservatives and draw a line in the sand, telling the Congress what he will and will not sign.

Meanwhile, the White House is keenly aware that the Medicare bill is threatening seniors with unintended consequences. The universal drug entitlement, as we have noted since the beginning of this debate must must crowd out private coverage. It's inevitable. The Congressional Budget Office (CBO) says that more than one-third of seniors with employer- provided coverage are going to lose it. But the President said in his October 29 speech that he talked to a senior executive from Caterpillar Corporation, and that senior executive told him that corporations have "no intention to dump retirees into a system they don't want to be dumped into." Needless to say, a sound policy should not depend on corporate "promises" or gimmicks to encourage employers not to drop retiree drug benefits. The only option that has surfaced thus far to accomplish that objective is another set of federal subsidies.

Real Medicare Reform: A Victim of Political Crossfire?

Serious structural reform of the Medicare program for the next generation seems to be treated as a secondary item. Prescription drugs are the main agenda, and new money for doctors and hospitals, particularly in rural areas, seems to be the next major consideration. The creation of a system of competing private options, financed through a premium support system, is put off until 2010 under the House bill, one year before the baby boomers retire, and phased in over a period of 5 years. And in the House-Senate Conference, they are reportedly saving that provision for consideration last.

The conference is subject to intense cross pressures. On the one side, House conservatives, led by Rep. Paul Ryan (R-WI), have said all along that they will not support a bill without real structural reform, and that means a premium support mechanism as embodied in Section 241 of the House bill. Ryan and his House colleagues do not mean "demonstration" project or a "pilot program" in selected areas of the country, carefully designed, like the 1996 MSA experiment under the Kassebaum Kennedy bill, to make sure it fails. In his July 9 letter to President Bush, Ryan and 75 of his colleagues stated clearly: "Any Medicare legislation that includes a prescription drug benefit must contain comprehensive structural reforms that prepare Medicare for the next generation. Without the reforms needed to save Medicare, simply adding payments and benefits will accelerate the entire system's insolvency, which is currently estimated to occur in 2013." Ryan specifies, "To that end, we feel it is vitally important the conference report include both Federal Employees Health Benefit Plan model reform and tax preferred, portable savings accounts to help younger generations prepare for future health care costs in retirement as part of the final package."

In tandem with Ryan, Rep. Pat Toomey (R-PA) and ten of his colleagues reaffirmed their support for the key premium support mechanism in another letter to House Speaker Dennis Hastert. Toomey and his colleagues also said that their support for a bill coming out of conference would be conditioned on the absence of any system of price controls on drugs. Moreover, it would have to include a generous health care savings account provision, and provision to control the cost of the drug benefit, so that the price tag does not exceed $400 billion over ten years. Hastert is reportedly in favor of some sort of cost-containment provision.

On the other side, Senate Democrats are digging in and threatening a filibuster. Senators Kennedy (D-MA), Daschle (D- SD), Kent Conrad (D-ND), and, recently, Olympia Snowe (R-ME), have all said that they will not tolerate any real competition between Medicare and private plan options based premium supports. Senator Conrad, according to the New York Times, said that "The competition model doesn't work in my part of the country." (Tacit premise: only socialism or monopolies can work in North Dakota? In fact, there are 13 plans, including one HMO, available to federal employees in North Dakota under the FEHBP model). Senator Snowe refers to the premium support model an "untested, and uncharted approach": hard to explain since the premium support system in FEHBP is 43 years old, older than Medicare, Medicaid, and most of the employer-based managed care arrangements that Washington health policy wonks have championed for so long.

Conservatives fear that House conferees will cave, put some cosmetic face on the terms of a surrender to Senate pressure, and allow the Left to dodge a major threat to its future ambitions to establish a single-payer, government-run "health insurance" program for America. There is the other strong possibility that House Ways and Means Chairman Bill Thomas (R-CA) will hold the line on premium support.

The Battle in the Weeds

If the daily press accounts and leaks are correct, (and there is indeed a big if in that assumption, because so much has turned out to be inaccurate), the conference has become an adventure in how to add a universal drug entitlement to Medicare for the second time in Medicare's history (the 1988 Medicare catastrophic mess was the first), limit the collateral political damage inevitably incurred by the disruption of the lives of millions of seniors who already have good private coverage, and do extensive statutory and regulatory patch work on the creaking 60s edifice known as Medicare "provider payment" system the thing they used to call HCFA, which, despite the name change is as ugly as it always has been.

The conference has also been an arena of poisonous partisan combat, with Members desperately trying to meet arbitrary deadlines, calibrate their short-term political advantage, or position themselves for the inevitable blame game if the current effort proves to be unsuccessful.

The bitterness of the process cannot be overstated. This past week Rep. Charles Rangel (D-NY), ranking Ways and Means Member, along with 13 Democrats, crashed a scheduled meeting between Chairman Thomas and his Republican colleagues and a select group of Senate Democrats, charging that Thomas has been unfair in blocking Democratic conferees from participation in the conference. Rangel and company are sure to make a big issue out of the process, and tie it into their likely opposition to the final product. When pressed by George Stephanopolous on ABC News on October 19, Thomas said that House and Senate staff, on a bipartisan basis, have resolved more than one-third of the issues in the House-Senate conference. He added: "At some point, if you really want to resolve it, you have to have a coalition of the willing or you will never, ever get the job done. You've been in situations where people are simply fundamentally opposed to what you're doing, at some point having them in the room means you'll never, ever accomplish it."

Chairman Thomas clearly has a big point: Rangel, Kennedy, Conrad, and Daschle are fundamentally opposed to a competitive system based on choice. But there is another fundamental point: Policy failure could just as easily come with the enactment of a profoundly flawed or unworkable program as with the failure to enact any Medicare legislation at all.

So, House and Senate conferees are struggling in the weeds among a wide array of complex and contentious issues, ranging from payments to rural doctors and hospitals to the regulatory regime that is to govern private plans. Senators Grassley (R-IA) and Baucus (D-MT) want big additional payments to providers in rural areas, adding costs of $25 to $28 billion over the next ten years. The oncologists want their payments adjusted properly and are bitterly complaining about any attempt to reduce them. Officials of existing Medicare+Choice plans, one of the messier regulatory concoctions of the Balanced Budget Act of 1997, are desperate to secure higher funding to stabilize the program. This would enable it to help serve as a transition to the newly proposed Medicare Advantage system, and it appears that the conferees are going to accommodate them.

The cost of the final product is likely to be considerably greater than it was projected when House and Senate enacted these Medicare bills last June, aggravating the unfunded liabilities of the program. The conferees are debating among themselves a way to cap the entitlement spending, but they have not yet agreed on precisely how to do that. This is one of those items that will or will not be "meaningful." A paper dam against a flood of red ink is not likely to hold, and the next generation of taxpayers will be engulfed in a sea of debt, high taxes, or both. Given the regulatory passion that traditionally grips Congressional authors of Medicare legislation, it is still very possible that the response to higher-than-expected costs will be expenditure caps, price controls, or various other regulatory attempts to limit the quality or quantity of medical services to senior citizens.

Unresolved Policy Problems

Beyond the issue of overall cost and the creation of a genuinely competitive system in 2010, Medicare conferees are trying to sort out enormous policy problems. There are four big areas where these problems loom large:

Problem #1. The design of the drug benefit offered through the medium of a drug-only insurance product. The design will be both unpopular and unworkable, as it is likely to invite serious adverse selection.

Problem #2. The growing threat of patient dumping. President Bush's statements notwithstanding, the CBO and independent analysts, including Clinton's adviser Ken Thorpe of Emory University, are convinced that the economic incentives are pointing in only one direction: drop the retirees and have the taxpayers pick up the tab.

Problem #3: Additional Clinton-style federal subsidies to corporations to discourage them from patient dumping. Curiously, conferees are even now pondering an additional $75 to $80 billion in subsidies for employers to maintain their retiree drug coverage over ten years, a costly scheme designed to undo the damage of the entitlement structure they are proposing in the first place. The easiest thing would be to drop the entitlement, and target subsidies to poor seniors. Republicans whether they realize it or not are actually resurrecting some key components of the old Clinton Medicare drug policy, which ran into the same problems.

Problem # 4: Getting the transitional competitive system right. Both House and Senate bills provide for some expansion of competition in 2006, when the program would go into effect. But it is hard to imagine how a genuinely competitive system can develop under limitations such as the rigid standardization of benefits and the imposition of artificial service areas.

Robert Moffit is Director, the Center for Health Policy Studies at the Heritage Foundation, Washington, D.C.