Volume 65, No. 7 July 2009
Once America's pride, General Motors is now Government
Motors. It is being dismantled by 31-year-old deputy car czar
Brian Deese, who had never been inside an automobile assembly
plant. Deese reportedly left law school to work on Hillary
Clinton's presidential campaign, then switched to the Obama
campaign when Clinton faltered.
By 2018, energy-starved Americans could be driving ultra-
light GM vehicles resembling a cross between a motorcycle and a
breadbox, writes Arthur Robinson (Access to Energy
The resulting higher auto fatality rate might help relieve
the stress on another GM Government Medicine, as American
medicine is disassembled by health czars. GM will replace the
patient-physician relationship with a new system in which
"healthcare providers" simply enter data electronically and
prescribe formulary drugs, guided by embedded decision aids.
The problem with medicine, concludes Atul Gawande, is that
"no one is in charge" of "managing the full complexity of medical
care" (New Yorker 6/1/09). McAllen, TX, for example,
spends much more on medical care because of the "accumulation of
individual decisions doctors make." Doctors should be in
structured practices like the Mayo Clinic, he thinks.
If the goal is to drive doctors out of independent practice,
the steamroller that accomplishes it might to force them to use -
complex, costly electronic records (NY Times 5/28/09).
In McAllen, a severe physician shortage drives more care
into the ER or hospital, notes Donna Kinney, C.P.A., of the Texas
Med Assn an effect Gawande overlooked (CPR 6/4/09).
Centrally Planned Models
While bemoaning the rate of uninsurance and high costs in
the U.S., "change" advocates neglect to mention that out-of-
pocket spending in the U.S. (13%) is lower than in any of the 20
OECD countries except France (7%), Luxembourg, and the
Netherlands. OOP spending is 15% in Canada; the OECD average is
20%. Reformers do not like decreasing demand through deductibles
and other OOP costs; they prefer to increase revenues by forcing
many individuals to pay, through premiums, for more services than
they are expected to use.
The number one foreign model, according to the vaunted World
Health Organization (WHO) rankings that placed the U.S. 37th, is
France, with per capita spending of $2,885 vs. $5,783 in the U.S.
The situation there has deteriorated since 2000, when WHO stopped
doing the ratings because of the complexity of the task. A 2004
WHO bulletin reported that problems became increasingly apparent
when 15,000 Frenchmen died in a heat wave, dwarfing the number in
neighboring countries. The French refuse to pay costs for illegal
aliens. Copayments have been increased to 30%-40% to try to
control costs. About 85% of Frenchmen purchase private
supplemental insurance (Dattilo and Racer, Your Health
The most mature system of "social solidarity" in Germany is
beset with runaway costs. Massive government regulation is
attempting to increase quality (ibid.).
Japan spends about as much as France, yet enjoys the world's
longest life expectancy and a very low infant mortality of 3.3
per 1,000 live births. Though Japan has had a form of national
health insurance since 1927, it is seldom cited as an example by
reformers. Copayments are as high as 30%; prenatal care,
childbirth, and postpartum care are not covered; and
potential exposure for costs is up to 50% of income
Single-payer advocates don't like to talk about Canada,
although it is the only country outside of North Korea that does
not allow a parallel private system. Despite substantial
increases in spending, wait times are 45% longer than in 1997. In
the red by $1.5 billion, Alberta Health Services is placing tight
restrictions on hiring of nurses, and cancelling 15% of elective
procedures. Cataract surgery is available only patients who are
nearly blind (Calgary Herald 5/09).
Reform in Massachusetts is moving in the Canadian direction.
Even though Massachusetts has more physicians per capita than any
other state, Boston has the longest waiting times for a physician
appointment: 49.6 days average wait time for 5 specialties in
Boston, compared to an average of 20.5 days and a low of 11.2
days for Atlanta (Merritt Hawkins, 2009).
Single-payer GM would by no means eliminate managed care.
Power players in Washington are ready to set the rules and hand
over the spending keys to large insurers.
"This is the definition of fascism," writes David McKalip,
M.D. "The state decides what corporations will do, and the
corporations do their bidding while making a profit.... [And] the
very corporations making the profit also control the government."
The organizational mainstay is "integrated delivery systems" such
as Geisinger Health System, with "new, population-based payment
models" and without anti-kickback rules or the proscription of
gainsharing (Fisher ES, et al. N Engl J Med
Meanwhile, 6 years of real-world testing have shown that
taking money from third-party payers and putting it in the hands
of patient actually lowers costs. Consumer-driven health (CDH)
plans cost 25% to 40% less than HMOs or PPOs, writes Greg
Scandlen. The CDC found that 20% of the under-65 population has
some form of CDH.
If free-market methods are rejected, medical facilities,
like car manufacturing, may leave the U.S. In 2007, more than
750,000 Americans were treated off-shore (Reuters 7/30/08).
Free Americans rejected the Yugo. But GM could keep them
from ever having cars that also fly and block stunning
breakthroughs in medicine.
Has China Already Dumped the Dollar?
As the Fed prints more money and uses it to buy U.S.
government bonds, a process compared to a snake swallowing its
tail, the Chinese have made derogatory statements about the
dollar. Why would they do this, and risk provoking a panic that
would jeopardize the value of their $1.3 trillion stash, asks
Richard Maybury (Early Warning Report, June-July 2009).
In the 1990s, the Chinese were working very hard to produce
valuable goods, and sell them to a counterfeiter, he writes.
Perhaps, realizing that they'd been had, they created a lot of
front companies to buy assets in foreign lands, and paid for them
in long-term dollar contracts.
Maybury has heard many reports of Chinese signs on big
buildings in out-of-the-way places. Do they say, "A Bush-Whack-
the-Federal-Reserve Project by the Chinese Dragon"?
A Czar Epidemic
The U.S. now has about 20 "czars," exceeding the number of
Romanov Czars (18) over the 300-year history of Imperial Russia.
Senator Byrd writes: "The rapid and easy accumulation of power by
White House staff can threaten the Constitutional system of
checks and balances."
Medical Bankruptcies Hyped
A new study by well-known single-payer advocates blames
medical factors for 62% of U.S. bankruptcies, up from 54% in 2001
(Himmelstein D, et al., Am J Med, in press). Coauthor
Steffie Woolhandler claims that most people in the study would
have been saved from bankruptcy by single-payer GM, although only
29% of debtors blamed medical bills for their bankruptcy (Hogberg
D, IBD 6/5/09). The mean net worth for "medically
bankrupt" households was -$44,622, and average out-of-pocket
medical expenses for such households was $17,943.
The actual number of medical bankruptcies
fell by 220,000 between 2001 and 2007 a fact ignored or
deliberately obscured by the authors (Megan McArdle,
Particularly troubling, writes McArdle, is that coauthor
Elizabeth Warren is in charge of the congressional oversight
panel for the TARP bailout fund.
Medicare Is Draining General Fund
According to the 2009 annual report of the Medicare board of
trustees, Part A is expected to pay out more this year in
hospital benefits than it receives in payroll taxes and other
dedicated revenues, and thus will be redeeming trust fund
"assets" (IOUs for funds already spent on other government
projects). For the third successive year, a "Medicare funding
warning" is being triggered, as general revenues will soon
account for more than 45% of all Medicare outlays.
As Mark Pauly notes, "there is no evidence that Medicare has
been successful at controlling spending growth." Victor Fuchs
points out that "Medicare, despite its assured market and huge
buying power, is headed for insolvency; thus, it is a poor model
for a new program that would be dependent on voluntary enrollment
in a competitive marketplace" (N Engl J Med
"The only thing that can control health care costs is
rationing," writes Lawton Burns of the Wharton Center. [At least
as long as we rely on third-party payment.]
HIT Gets Huge Boost, Value Unproved
Without any demonstration of either safety or efficacy, or
any public debate, health information technology (HIT) got a huge
bailout of tens of billions of dollars in the "stimulus" bill.
The data miners are exultant: "Finally, we're going to have
access to millions and millions of patient records online," said
Blackford Middleton of the Harvard Center for Information
Technology Leadership (O'Harrow R, Wash Post 5/16/09).
An industry-funded study quoted by Obama asserted that a
complete embrace of HIT would save nearly $80 billion annually.
The Congressional Budget Office (CBO) estimated perhaps $17
billion in savings over a decade (ibid.)
Support for the Obama health reform agenda, including HIT,
is to be linked to "every favor to a constituency," e.g.
automakers, said Zeke Emanuel (McCaughey B, "Downgrading American
Medical Care," American Spectator 6/8/09).
HIT can't fix either high costs or medical errors.
"Technology can accelerate the bad systems and you can make the
same mistakes 100 times faster," explains Richard Neill of the
University of Pennsylvania.
It can also introduce new errors. A prospective study of a
CPOE system in a tertiary care center concluded that "despite
standardization of data entry, inconsistent communication in CPOE
poses a significant risk to safety" (Singh H, et al. Arch
Intern Med 2009;169:982-989).
The most likely outcome of the HIT stimulus, writes Greg
Scandlen, is that it will all be wasted on systems that don't
work like federal attempts to upgrade technology at the IRS, FBI,
and air-traffic control, which are relatively simple challenges
(Heartland Research and Commentary 2/20/09).
Dept. of Defense officials told Congress that the military's
AHLTA electronic health records are a "disaster." AHLTA is
unreliable, time-wasting, and so frustrating that it has caused
some medical professionals to leave the military (hcrenewal.blogspot.com).
Clinicians should be aware that early adopters that have had
to switch EHRs had no option but to keep the old EHR in the back
room and print relevant information as needed. "Divorce is easy
compared with converting...to another EHR" (Modern
When a massive power surge crashed computers at Methodist
and Indiana University Hospitals, the hospitals went back to
paper, and diverted new patients (wthr.com 6/2/09).
To be considered at the annual meeting, resolutions must be
received in writing at AAPS by July 30.
Sep 30-Oct 3, 2009. 66th annual meeting, Nashville, TN.
Sep 15-18, 2010. 67th annual meeting, Salt Lake City,
Medicare Limits ABNs
The Advance Beneficiary Notice (ABN) is intended to allow a
Medicare beneficiary to pay out of pocket for services that
Medicare denies. According to an Apr 14 letter from the National
Correct Coding Initiative, the ABN can be applied only if the
initial determination on a claim results in a denial
based on lack of medical necessity. The beneficiary cannot be
billed if an appeal of a Medically Unlikely Edit (MUE)
results in a denial of some units of service (UOS) as medically
unnecessary. This limits the ability of patients to obtain
services that Medicare may decline to pay for.
Expect More Investigations
If audited by one entity, a practice is likely to face
demands from others, because Medicare, Medicaid, and private
insurers will be sharing information with each other. In
addition, providers and business associates may be required to
report on each other.
A provision in the Fraud Enforcement & Recovery Act of 2009
(FERA), aimed at preventing banking and securities fraud, would
expand the application of "reverse false claims," or failure to
refund an overpayment. It would allow the Attorney General to
delegate authority to issue Civil Investigative Demands (CIDs)
See MLN Matters number MM6081, "Private
Contracting/Opting Out of Medicare," for new information on the
consequences of failure to maintain opt-out. Among other things,
if the physician fails to demonstrate a good-faith effort to
comply within 45 days of receiving a notice of failure to
maintain opt out, he "may not attempt to once more meet the
criteria for properly opting out until the 2-year opt-out period
expires" (www.cms.hhs.gov). It also
notes that: "For a physician/practitioner who has never enrolled
in the Medicare program and wishes to opt out of Medicare, the
physician/ practitioner must provide the carrier or A/B MAC with
a National Provider Identifier (NPI)." A nonenrolled physician
might want to opt out in order to get claims denials, so that
patients might receive reimbursement from an insurer that pays
claims that Medicare denies, or to protect against patients who
attempt to file their own claims. We are not aware of any law
that forbids Medicare beneficiaries to purchase services from a
As carriers may delay answering requests, or even provide
contradictory information, start early and send all correspon-
dence certified/return receipt requested.
No Medicare Part A, No Social Security
The government filed a motion to dismiss in Hall v.
Leavitt (AAPS News, December
2008). In a May hearing, the government argued that
plaintiffs lacked standing and had not exhausted all
administrative remedies. Plaintiffs argue that no administrative
remedy exists. They cannot sign the Social Security application
without accepting Medicare Part A, and without signing the
application, they cannot raise an issue with the agency. The
government admitted that their only recourse would be to sign the
forms and later petition to be allowed out of Medicare Part A.
Lyme Guidelines May Violate Antitrust
In the first-ever antitrust investigation of medical
guidelines, the Connecticut Attorney General found numerous
defects in the process used by the Infectious Diseases Society of
America (IDSA) to develop Lyme disease guidelines. Although the
level of disability of patients with Lyme disease is equal to
that of patients with congestive heart failure, most Lyme
patients are excluded by the guidelines and denied treatment.
The AG found that IDSA limited the guidelines panel to
researchers known to have a bias against the diagnosis and
treatment of Lyme, selectively ignored evidence of persistent
infection or improvement with antibiotic treatment, and has
commercial conflicts of interest.
IDSA uses its monopoly power to enforce its guidelines by
providing insurers with second opinions while instigating and
testifying at unprofessional-conduct actions against doctors who
did not comply. Two broad ethical themes in the investigation
were the "growing problem of conflicts of interest among
guidelines developers" and "the increasing centralisation of
medical decisions by insurance companies, which use treatment
guidelines as a means of controlling the practices of individual
doctors and denying treatment to patients" (Johnson L, Stricker
LB. J Med Ethics 2009;35:283-288).
On-call Payments Probably OK
In an advisory opinion, the HHS Office of Inspector General
(OIG) gave conditional approval to a hospital's proposal to
provide some payment to physicians for treating uninsured
emergency patients. The hospital must take care that the payment
"is not determined in any manner that takes into account the
volume or value of referrals or other business generated between
the parties." While there are "minimal enforcement risks,"
hospital attorneys might want to review compensation arrangements
in light of the opinion (No. 09-05), especially if they pay
physicians just for being available (BNA's HCFR 6/3/09).
Geisinger P4P Model
Geisinger Health Plan, a nonprofit HMO employing some 800
physicians at about 50 practice sites, including 20 hospitals,
has developed a trademarked ProvenCare pay-for-performance model.
Patients pay a fixed price for a package of care. Compliance with
all 40 best-practice steps increased from 59% to 100%,
facilitated by the electronic health record system that got
Geisinger voted the "Most Wired" 6 years in a row. The key is to
"make the right thing to do the easiest thing to do" [and
conversely make it hard to deviate]. The fact that all physicians
are employed makes complying with federal fraud and abuse laws
easier, said legal counsel.
Incentives to physicians are subject to federal civil
monetary penalties law that prohibits inducements to restrict
care to Medicare or Medicaid beneficiaries. Seth Frazier,
Geisinger's vice president for transformation, stated that in the
system "there is no financial incentive for physicians to limit
their patients' care" (BNA's HCFR 6/3/09).
New York has gone beyond CON to outright dictation of
corporate hospital structures by the central planners. The Berger
Commission dictates which hospitals will merge, and which will
close. Millard Fillmore, the main hospital for independent
physicians in the Buffalo area, is slated to close. Central
planners hate anything that is independent. Meanwhile, the State
has punished hospitals that have surpluses for being well-managed
by forcing them to merge with debt-ridden, poorly managed
hospitals. Central planners will ensure that the punishment and
pain are "equally distributed."
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY