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Volume 58, No. 10 October 2002


In the appendix to 1984, George Orwell explained the principles of the simplified language Newspeak: "The purpose of Newspeak was not only to provide a medium of expression for the world-view and mental habits proper to the devotees of Ingsoc, but to make all other modes of thought impossible."

Many words were eliminated altogether, and all had a rigidly limited meaning. Telescoped phrases like "Recdep," "Minitrue," and "Thinkpol" echoed the mode of 20th century totalitarian regimes that coined "Gestapo" and "agitprop."

The final adoption of Newspeak was delayed until 2050 because of the huge task of translation. No book written before 1960 could actually be translated as a whole. The Declaration of Independence would be simply rendered as "crimethink."

The task of HIPAA-expressing all PHI [protected health information] in supposedly unambiguous standardized terms from a defined set-is not as difficult as translating Shakespeare or Milton into Newspeak. Nuance removal (simplification) is easily accomplished by replacing words with numbers. Thus, a shorter deadline is considered achievable: October 16, 2003.

In fact, since that task will be accomplished-for it must be, by law-the National Committee on Vital and Health Statistics (NCVHS) is moving forward on a broader front: PMRI [Patient Medical Record Information] Terminology.

The AMA, which avowedly seeks to become an essential part of every practitioner's life, is in the forefront on PMRI. On Aug. 28, Michael Beebe, Director of the AMA's CPT Editorial and Information Services, testified before NCVHS:

"[T]erminology supporting PMRI should be comprehensive and include all clinical terms used by all members of the health care team involved in record writing." Moreover, there should be "only one terminology per [discrete, nonoverlapping functional] area." Health plans and providers must not be permitted to "interpret medical data code sets as they see fit." Instead, constant AMA- approved "education" will be necessary.

As yet, there is no federal legislation mandating PMRI standards. The AMA wants the government role limited to broad recommendations, "with the specific code sets maintained by the private sector." Having achieved "market acceptance" of its CPT codes, through HCFA's forcing them on all Medicare providers, the AMA is the leading choice for this lucrative job.

A spinoff of control of the language would be effective control of medical practice, without the need for enactment of unpopular bans on nonapproved treatment or new technology. Now, a procedure that has no code might still be done; if not in the third party's lexicon, patients can pay out of pocket. As much as $40 billion is spent on "complementary and alternative" medicine each year. This drains off precious resources-as does "futile" or "unnecessary" care. The way to total control is through a "single payer" and a single integrated data base of PMRI. Such an administratively simplified system could ultimately make uncodable items or forbidden code combinations just as unthinkable as liberty in Orwell's Oceania.

For a decade, the Institute of Medicine (IOM) has advocated a computerized patient record (CPR) with "convergent reference terminology" serving as a "central knowledge structure" for "transportable decision support." The "common language" will include codes "required for administrative, financial, billing, epidemiological, or governmental reporting," to meet "the needs of society and healthcare administration."

In Oldspeak, this means that centralized PMRI will permit central control of medicine, to achieve governmental objectives.

The system is still "fragmented," and, as HHS has asserted, HIPAA in itself does not create a national data base of PMRI. It merely enables and facilitates this ultimate goal. Already, insurers have access to information on 16 million Americans through the Medical Information Bureau (see www.insure.com/health/whatknow.html).

Essential to the system's public acceptance is the pretense of protecting privacy. The AMA and its Federation continue to follow the lead of HHS in using the Newspeak, doublethink term "Privacy Rule" for what is obviously an Unprivacy Rule.

"If Enron or Worldcom executives had distorted the truth the way HHS officials have about this ... rule, they would probably be charged with false advertising," stated Sue Blevins, President of the Institute for Health Freedom.

The final final Rule, published in the Federal Register of

August 14, 2002, removes the consent pretense (AAPS News, Aug 2002), in what HHS Secretary Tommy Thompson calls a "common sense balance" of "personal privacy protections and access to high-quality care." HHS does not acknowledge that the intolerable administrative barrier to access resulted from a provision demanded by the AMA: requiring written consent to use information that had already been lawfully disclosed with patient consent ( www.aapsonline.org/confiden/boswell.htm).

While Thompson and the AMA may consider PMRI to be the key to cost-effective, high-quality care, New York attorney Robin Kaigh wants the right to "start fresh with any new doctor by simply not approving the transfer of the medical record" (WorldNetDaily 8/28/2002). A personality conflict with a prior doctor is only one possible reason. An old-fashioned physician might actually prefer to interview the patient without being biased by the old PMRI. Past diagnoses, even if printed out from a computer, can be false or misleading.

In 1984, it was possible to construct a blasphemous sentence such as "Big Brother is ungood," but Newspeak did not have the words needed to defend it.

Big Brother needs HIPAA-speak, the Unprivacy Rule, and centralized PMRI to destroy medicine. He also needs you.

Doctors have a choice: be a noncovered entity-or become an unphysician ally of the therapeutic State.

HIPAA Escape Stirs Controversy

The AAPS "country doctor escape route" was prominently featured in the Aug. 22 CMA Alert. In warning its members about AAPS "misconceptions," it is actually the California Medical Association that misrepresents both the AAPS position and the facts about HIPAA (see aaps.forums.commentary.net for CMA and AAPS statements).

"The Federation, including the CMA, is in deep denial about the costs and severe penalties of the Unprivacy Rule, as well as its destructive effect on confidentiality," stated AAPS Executive Director Jane Orient, M.D.

CMA's HIPAA experts stress that "only people intent on violating HIPAA's confidentiality requirements or who seek to profit by doing so risk incarceration." However, Congressman David Hobson (R-OH) felt the need to write to Secretary Tommy Thompson to ask for a phase-in of fines and penalties instead of hitting doctors with them on April 15, 2003.

While the CMA may be correct in asserting that "there is no ... [national computer] data base into which all patients' records will be put if their health care provider is covered by HIPAA," AAPS warns that there will be such a data base. The only way to protect your patients against having their private information included is not to file insurance claims. Each patient will have to decide whether the trade- off is worth it.

The same issue of the CMA Alert advertises a CME- accredited HIPAA compliance workshop: $495 for members/ $950 for nonmembers. A compliance kit on CD-ROM is also available for a mere $495.


IRS Violates Privacy

By law-Section 6103 of the tax code-an individual's tax return is supposed to be private. However, in July, the IRS publicly disclosed the names of hundreds of citizens engaged in what amounts to tax planning, simply because they were clients of KPMG, which is under investigation for allegedly offering illegal tax shelters. "Perhaps post-Enron, the tax man feels as if he can once again get away with anything, even harassing honest Americans" (Wall St J 7/1/02).


AAPS Members Run for Congress

We know of three AAPS members running for Congress in 2002: Drs. Ron Paul, John Cooksey, and Andre Minuth.

Ron Paul, M.D., an obstetrician who has been an AAPS member since 1966, is serving his third term representing the 14th District in Texas. Dr. Paul is the one member of the "Gang of 535" who votes no on all unconstitutional laws. See www.ronpaulforcongress.com.

After three terms in the House representing Louisiana's 5th District, John Cooksey, M.D., faces an Oct. 5 primary seeking to be the Republican candidate for the U.S. Senate. Dr. Cooksey is an eye surgeon who has been an AAPS member since 1990. See www.cookseyforsenate.com .

A nephrologist and AAPS member since 1998, Andre Minuth, M.D., of Fresno is the Republican nominee facing 6-term incumbent Calvin Dooley in the 20th District of California. Key points of his platform include accelerated regulatory relief; free choice of doctor and insurer; and full financial disclosure to patients of itemized costs including advertising, litigation, and cost shifting. Dr. Minuth does not accept PAC money. See www.minuth-for-congress.org.


HIPAA Triggers

From Section 1173(a) of HIPAA, the list of categories that trigger the application of the Privacy Rule when data are exchanged electronically comprises the following: (A) Health claims or equivalent encounter information; (B) Health claims attachments; (C) Enrollment and disenrollment in a health plan; (D) Eligibility for a health plan; (E) Health care payment and remittance advice; (F) Health plan premium payments; (G) First report of injury; (H) Health claim status; (I) Referral certification and authorization.

Note that a physician cannot avoid becoming a covered entity by delegating electronic claims filing to a billing service or clearinghouse.


National Health Information Infrastructure

From "Information for Health: a Strategy for Building the National Health Information Infrastructure," a report from the NCVHS to HHS, Nov 15, 2001 ( ncvhs.hhs.gov/nhiilayo.pdf):

"Along with the HIPAA ... transaction standards, a comprehensive set of ... (PMRI) standards can move the nation closer to a healthcare environment where clinically specific data can be captured once at the point of care with derivatives of this data available for meeting the needs of payers, healthcare administrators, clinical research, and public health....

"Some private-sector provider organizations have already made the strategic move toward fully integrated systems. For example, Kaiser Permanente is investing $2 billion for a Web- based system that includes a nationwide clinical information system,... online guidelines and protocols for providers, and all administrative functions....

"Several foundations are funding important research into areas touching the personal health dimension of NHII, including the California Healthcare Foundation [and] the Robert Wood Johnson Foundation...."


Kaiser Solicits for Doctors of Death

Although physician-assisted suicide (PAS) is legal in Oregon, many physicians are reluctant to kill their own patients. According to Wesley J. Smith, a Kaiser executive recently sent an e-mail to 800 Kaiser physicians seeking volunteers to implement PAS either for their own patients or for members who are not their patients. If PAS becomes routine, HMOs could save a lot of money (NRO 8/19/02).


AAPS Calendar

Sept. 18. Board of Directors meeting, Tucson, AZ
Sept. 18-21.
59th annual meeting, Tucson, AZ.
Sept. 24-27, 2003. 60th annual mtg, Point Clear, AL.

Psychiatrist Jailed for "Unnecessary" Treatment

After an unblemished medical practice of 30 years, Daniel F. Ward, M.D., Ph.D., age 58, will report to Leavenworth for 5 months imprisonment. His crime: providing what he calls "sensory- based therapy" to nursing home residents and billing Medicare under the code for "interactive group psychotherapy."

The prosecutor claimed that the treatment, which included sing-alongs, constituted "entertainment," for which Medicare does not pay. Dr. Ward states that Medicare had approved the code he used. "I am guilty of accepting at face value the assurances of all those involved in the process," he said (Kansas City Star 8/14/02).

With therapy, Dr. Ward observed improvements in the mood disorders that often accompany cognitive decline, and a reduction in need for medication and staff interaction. While imposing the sentence, Judge Howard Sachs stated: "I understand that you have a legitimate belief that the ... program ... was helpful to patients."

Impecunious after 6 years of investigation and character assassination, Dr. Ward entered a guilty plea when the public defender told him a jury trial would almost surely result in prison time, with a potential sentence of 60 years. After his plea agreement, he learned that the Bush Administration had quietly reversed a policy of denying service to patients with Alzheimer's disease, but he was unable to withdraw his plea.

"I was not aware of the government's prosecutorial zeal," he writes to AAPS. "The public is asleep at the wheel while my colleagues and I are being driven off to prison and ruin."

While a few colleagues are supportive one-on-one, "most have avoided me altogether. Everyone, I assume, has been intimidated by the government's endless interference."


Dr. Mitrione Granted a New Trial

On August 23, Judge Jeanne Scott vacated all but two counts of the convictions of Robert Mitrione, M.D., and his wife Marla DeVore (AAPS News June 2002) because a key government witness, Deanne Statler, gave testimony that was "false to a dramatic degree."

If the prosecution declines to retry the case, the accused will be sentenced on October 31 on the remaining counts of billing for a therapist who provided services other than the drug and alcohol counseling for which he was licensed.


Amicus Filed in Peyton Sham Peer Review

In an amicus brief filed in the case of Richard R. Peyton, M.D., v. Johnson City Medical Center, No. #E2001- 02477-COA-R3-CV (Ct. App. Wash. Co. Tenn.), AAPS opposes the application of immunity under the Health Care Quality Improvement Act (HCQIA) to "sham peer review," or peer reviews motivated by economic or other improper factors rather than genuine concern about patient care.

Out of fear of competition from a free-standing radiation therapy facility that Dr. Peyton was founding in its referral area, the hospital aggressively undertook to ruin his reputation by summarily suspending him from the staff in 1994. Dr. Peyton was not apprised of the charges against him and was even locked out of his own office so that he could not access the records necessary for his defense. The hospital's own Medical Executive Committee exonerated him in a vote of 11-3 before the hospital applied improper pressure. No credible case could be made for imminent patient danger justifying such a draconian measure. For support, the hospital relied on an allegation of "disruptive behavior," which consisted of a few oral disagreements without any hint of bodily harm, although its own bylaws do not permit summary suspension for such behavior. "Virtually no physician would still be practicing if the cited quotidian spats could justify summary suspension. This rationale is purely pretextual," writes Andrew Schlafly, General Counsel for AAPS.

In debate on HCQIA, House Subcommittee Chairman Henry Waxman (D-CA) stated: "We fully agree that we cannot tolerate abuses of the peer review system, and that H.R. 5540 [HCQIA] was never intended to protect any such abuses... whether the concern is with anti-competitive activities, with actions based on race, or any other prejudicial or discriminatory factors." Precedent, as in Brown v. Presbyterian Health Care Serv., 101 F.3d 1324 (10th Cir. 1996), cert denied, 520 U.S. 1181 (1997) established that immunity is unavailable to hospitals whenever they fail to satisfy any of the HCQIA requirements, including adequate notice and hearing procedures.

With medical costs skyrocketing, the chilling effect of retaliatory peer review on competition is unacceptable. Injurious actions against physicians like Dr. Peyton send a signal to all other potential competitors. If the hospital prevails in its argument that it should have immunity for destroying the career of a physician competitor, the casualties will include all patients who must endure inflated costs.

This brief was funded by the American Health Legal Foundation.


Tip of the Month: Every doctor facing an unfair peer review encounters the same barrier: immunity for the reviewers under the Health Care Quality Improvement Act ("HCQIA"). The federal Court of Appeals for the 1st Circuit recently emphasized limits on that immunity. "HCQIA immunity only covers liability for damages. It does not shield covered defendants from suit and other forms of relief." Singh v. Blue Cross/Blue Shield of Massachusetts, Inc., 2002 U.S. App. LEXIS 17717, *49 (Aug. 27, 2002). There is no HCQIA immunity from claims to be reinstated-hence consider including demands for injunctive relief in peer review lawsuits. Also, unlike other forms of immunity, HCQIA immunity is a purely factual issue dependent on what was objectively reasonable. The Court emphasized that "there is less reason under the HCQIA to exclude the jury entirely from involvement with the dispositive determinations" than other forms of immunity. Id. at *20.


Court Rebuffs DoJ, Citing Frequent Lies

The secretive court that oversees the Foreign Intelligence Surveillance Act and must approve spying on terror suspects refused to grant the Department of Justice broad new powers under the U.S. Patriot Act. Judge Royce Lamberth signed the decision, citing 75 misstatements and omissions in applications for wiretap authority, one signed by former FBI Director Louis Freeh. The ACLU accused the DoJ of attempting an "end run around the Fourth Amendment" (NY Times 8/23/02).


"All liberty consists ... in the preservation of an inner sphere exempt from state power. That reverence for conscience is the germ of all civil freedom, and the way in which Christianity served it. That is, liberty has grown out of the distinction (separation is a bad word) of Church and state."
Lord Acton


Self-Protection. If you had suggested to me 25 years ago the extremes to which I would be going for self protection, I would have thought you were completely crazy. But the evidence required to prove one's innocence requires extreme measures. I have been studying the law on professional misconduct to make sure I leave no openings for attack.

On more than one occasion, our hospital's medical director has warned physicians at medical staff meetings that they should be wearing their badges whenever they are in the hospital. Many doctors just brushed it off. What he did not tell them was that, according to New York Education Law (Sec. 6530 (37)), "failing to wear an identifying badge, which shall be conspiciously displayed and legible, indicating the practitioner's name and professional title ... while practicing in a hospital" is considered "unprofessional conduct" and could be grounds for delicensure. Beware of giving administrators any pretext for ridding the hospital of politically incorrect targets.
Lawrence Huntoon, M.D., Ph.D., Jamestown, NY


"End-of-Life" CME Requirement in California. Before December, 2006, all California-licensed physicians, except pathologists and radiologists, are required to have 12 hours of accredited CME on pain management and the treatment of terminally ill patients. I am a board-certified oncologist, in practice since 1982, and am already expert in pain management and terminal care. Why should I have to spend $200 to $300 on a course given by persons with less expertise than my own? I have asked the Department of Consumer Affairs of the Medical Board of California how and why such a requirement came to be. Does the Board receive a kickback or some other benefit from the expensive courses we are required to take?

The weekly journal club I already attend, sponsored by UCLA/VAH, is trying to include these new requirements.

CME requirements should be abolished. Drug companies send "CME" credit courses by mail on subjects related to their drugs. I don't mind this and appreciate the information, but doesn't that defeat the supposed purpose of the rules?
Linda W. Wilson, M.D., Culver City, CA


Criminalizing Dissent. The Federation of State Medical Boards will issue a set of standards that it will encourage each state to adopt: yet another way to persecute and criminalize physicians who "deviate" from "guidelines" to follow their own judgment.
John H. Boyles, Jr., M.D., Dayton, OH


Cost Drivers. A study by the Council for Affordable Health Insurance (CAHI) identified four key factors driving up insurance costs in the individual market. Cost-shifting increases costs by 15-50%; mandated benefits, by 5-45%; restrictions on underwriting, by up to 100%; and comprehensive instead of basic benefits, by up to 30%. Employers, consumers, and especially legislators are responsible for these pressures. See the July issue of Issues & Answers, www.cahi.org.
Ernest J. White, Alexandria, VA


The Myth that Socialism Lowers Costs. The facts on government v. private education speak for themselves. The student:administrator ratio in the Philadelphia public school system is 204,851:906 or 1:226; in the Philadelphia Archdiocese school system, it is 100,000:15 or 1:6,666. In Scottsdale, it's 1:189 for the public schools and 1:4,538 for the diocese.

The September issue of AAPS News impressed me, but I would add that the cost of private insurance is higher than it needs to be because it is not truly insurance but a prepayment plan for minor expenses. If the patient wrote the doctor a check, that would be the end of the paperwork.
Craig Cantoni, Scottsdale, AZ


Are the People Too Dumb? Many intellectuals still do not believe that citizens who are productive enough to pay for their own medical care are capable of making medical decisions in their own best interest. But I believe that empowering people, through a competitive marketplace, is the best arbiter of efficacy, quality, and price.
Roger Beauchamp, D.D.S., Escanaba, MI


Who Should Be in Charge? The system needs to be given back-not to doctors, but to patients. Doctors, nurses, chiropractors, ambulance companies, hospitals, etc., can all be efficient and responsive when provided the right incentives. All respond to the demands of the payer. If the payer is anyone other than the patient (the government, the employer, the insurance company), the patient becomes just the raw material, the puppy dog at the vet's.
Greg Scandlen, Frederick, MD


Don't Take the Bait. It is too bad that the simplicity, purity, and safety of opting out of all third-party interference is too often lost in the frantic rush to comply with absurdity. By restructuring the medical practice to be a private patient- physician encounter, in which the entire transaction takes place between the patient and the physician, we can retake our profession and live by the Oath of Hippocrates. Anything less seems to be an economically driven cop-out. That economic pressure is exactly what the government wants the doctors to feel. Once physicians fear for their cash flow, they are willing to surrender almost anything.
Michael Harris, M.D., Traverse City, MI

Legislative Alert

Fast Forward to a Feverish Fall

The August recess is over. Congress is back. Appropriations bills are stacking up, and big-ticket items like Homeland Security and welfare reform are awaiting Senate action. But medical issues are not far behind. Late in September, the Census Bureau will again release its numbers on the state of the nation, and you can bet big bucks they will show an uptick in the number of the uninsured, setting off another round of congressional reform rhetoric. Moreover, the prescription drug bills that crashed and burned in the Senate in July are likely to come roaring back in the Fall. The "patients bill of rights" legislation, enacted by the House and Senate in very different versions, continues to languish and may never recover.

Rising medical costs are likely to be accompanied by a significant increase in the uninsured. Whatever the Census Bureau number released at the end of this month turns out to be, it will pour more fuel on the debate, and the debate is going to intensify for the rest of our lives.

America is experiencing a return of double-digit medical cost increases. And within 10 years, America's total medical spending will double. This huge growth will be fueled by the intensifying demand for medical services among a rapidly aging population, the availability of advanced medical technology, new and better pharmaceuticals, and the application first fruits of a biomedical research industry. With this growth in the size of the medical sector of the economy, all of the current problems of access to care, the cost and quality of care, and the proper role of physicians and patients will take on a new urgency. The big question for Congress and the Administration is this: are the current federal tax and regulatory policies that created the existing medical insurance market any longer viable? Most conservatives on Capitol Hill and elsewhere think not.

The Senate: Back on Drugs?

It is hard to imagine how the Senate could fail to take up the issue of prescription drug coverage. The House has passed its version of the legislation. Senate Majority Leader Tom Daschle (D-SD) has said that he would enact a drug bill, though thus far he has done nothing. But there is a change in the congressional climate, more significant than the fall in the Fall temperatures. The big difference between the July session, when four Senate drug plans failed, is that at midnight on September 30 the Senate budget rules disappear. Right now, any bill that exceeds the Senate budget standards requires 60 votes to waive the budget rules and bring that bill to the floor. When the fiscal year ends in September, 51 votes on any bill will pass it. Look for conservatives to ready some changes in the tax laws, including a permanent end to the death tax. Senators will brush off their various Medicare drug bills, and go for it. All bets are off.

Readers of this column know that structure is the key issue in every facet of the medical policy debate, not money. Money really isn't everything after all. It is the structure of the policy that determines the levers of power and control. At the end of the day, either individuals and families or government officials and their contractors will have control over the levers of power. Who will manage benefits and services? Who will control the flow of dollars in the system?

The recent-and future-Congressional Medicare drug debate is once again proof of that. For example, the House of Representatives, following the leadership of House Ways and Means Committee Chairman William Thomas (R-CA), enacted The Medicare Modernization and Prescription Drug Act of 2002 (H.R. 4954), which would rely on price competition and private plans to deliver the drug benefit to senior citizens. Likewise, The 21st Century Medicare Act (S.2), also known as the Tri-partisan Plan, would establish a system of drug coverage based on private insurance companies. The Medicare Rx Drug and Discount Act of 2001 (S. 1239) would rely on pharmacy discount cards in a competitive market. In sharp contrast, leftists in Congress generally favor reliance on the traditional Medicare program as the vehicle for drug coverage. This means that the Medicare bureaucracy and its contractors would manage and enforce detailed regulations in the financing and the delivery of the prescription drug benefit.

As Washington Post reporter Helen Dewar noted, the Medicare drug debate exposed "deep philosophical and political differences" between Democrats and Republicans.

Another big policy question surfaces: If Medicare is going to manage a prescription drug benefit, isn't it fair to discuss Medicare's management of its current responsibilities? The Medicare management issue is crucial and often overlooked. The General Accounting Office (GAO), the fiscal watchdog arm of Congress, has observed that Medicare is an "inherently difficult program to manage." In size, Medicare ranks second only to Social Security. Medicare covers about 40 million beneficiaries, and has contractors that annually process about 900 million claims submitted by nearly 1 million hospitals, physicians, and other providers. Medicare's management team comes into contact with these 1 million providers; it almost never comes face to face with any of the 40 million Medicare patients. The Medicare bureaucracy drives doctors crazy, but their patients are largely insulated from the regulatory regime. That partially explains the distance in opinion between doctors and patients on the Medicare program and how it works.

Medicare, according to survey data, is enormously popular with taxpayers and senior citizens. But these data also show that the program is not broadly understood. In a comprehensive 1998 survey of public attitudes on the Medicare program, the Kaiser Family Foundation and the Harvard University School of Public Health found that only 4% of all Americans and 6% of seniors said that they knew "a lot" about the Medicare program; 50% of all Americans and 43% of all seniors conceded that they knew "only a little"; and 25% of all Americans and 20% of seniors said they knew "nothing."

Ironically, while government reform efforts since World War II have attempted, with varying degrees of success, to import private-sector management innovations into federal management, many in Congress believe that Medicare's bureaucracy would do a better job than competitive private-sector plans. But even among federal agencies that are often considered sluggish by private- sector standards, the GAO, as noted in its 2001 report on Medicare Management, ranked CMS dead last in terms of the percentage of managers who reported having key performance measures for their work. And GAO ranked CMS next to last in having a measure for customer service and for having a management team that was held accountable for results.

With drug coverage, Medicare's management is not merely a technical matter. If the government agency manages the drug benefit, in effect, the agency controls it. Medicare patients might at first think that this is just peachy keen. But any senior citizens who share Congressional leftists' faith in the superiority of the Medicare bureaucracy's management will, if leftists are successful this Fall, soon endure a test of that faith. Once again, we say, it's the structure, stupid!

The Bush Administration's Agenda on Medical Policy

The Senate has refused to act on Bush's tax credit proposals for the unemployed. But the Bush team has been busy while Congress has been out on recess.

HHS Secretary Tommy Thompson has announced 33 new private plans in 23 states to serve an estimated 11 million Medicare patients as part of a new demonstration project. Under this initiative, Preferred Provider Organizations, or PPOs, will have more flexibility than Medicare HMO plans. The new plans will include prescription drug coverage, will vary on the basis of cost sharing and deductibles, and will allow a wider choice of doctors than available under HMOs. Thompson said that if the Congress won't act on serious Medicare reform, he will take the administrative steps necessary to broaden choice and improve the program.

On the problem of the uninsured, Thompson also recently announced approval of New Mexico's request for a Health Insurance Flexibility and Accountability (HIFA) waiver to use Medicaid funds to expand private coverage to an estimated 40,000 uninsured New Mexico residents. HIFA is a Bush Administration initiative to broaden private coverage for low-income populations, rather than relying upon government programs such as Medicaid and the State Children's Health Insurance program (SCHIP). New Mexico, instead of expanding Medicaid, will use unexpended SCHIP funds to subsidize private medical insurance for low-income persons. Employers could also contribute to the plans. With a combination of government subsidies from existing government programs and employer contributions, HHS estimates that eligible low-income employees will be paying about $25 to $35 per month in insurance premiums.

The GAO, among others, has been critical of the Bush agenda on this, noting that SCHIP money is only meant to be spent on children, not adults. The Bush legal team has a different view. The ideological hostility on the Left to private insurance plans is palpable. Let's see who is ready to offer that amendment to strip the newly insured of their private coverage. Keep watch.

That Generous COBRA Option

Do not, under any circumstances, forget the bitter 2002 debate over the economic stimulus package, and Bush's proposal of refundable tax credit options for unemployed workers. Recall that on February 14, the House of Representatives passed the Bush package, with $13 billion in tax credits for unemployed individuals and families that could be used for a private medical plan of their choice. It was blocked in the Senate, the second time that a stimulus package with a medical insurance provision (enacted on December 20th) had been blocked in the Senate.

Recall that the Senate leadership had a different idea; they proposed instead that any federal subsidies for private medical insurance for the unemployed should be limited to COBRA coverage. (Under the Consolidated Omnibus Reconciliation Act of 1986, a former employee can buy into a former employer's medical insurance plan and pay 102% of the premium.) Under the Senate option, those not eligible for COBRA, which includes the employees of small businesses, would be enrolled in Medicaid and learn to like it.

Curiously, it turns out, according to a recent Commonwealth Fund study, only 23% of those workers eligible for COBRA would continue that coverage. The main reason: COBRA coverage, mostly available in large employer plans, is just too expensive. If these unemployed workers would get a 75% premium subsidy to cover the cost, the Commonwealth survey said that 59% of eligible workers would retain it. Among low-income workers, only 16% would retain COBRA coverage, and 37% would take it if they got the federal subsidies. The Commonwealth study also found that only 44% of those surveyed felt that they could get "high quality health care" from employers.

Next Time Your Publicity-Seeking Congressman Is Loading Seniors into a Bus for Canada.

Share with him the latest news from Paradise. The Fraser Institute, a prominent Canadian think tank, has just released a study that compares the performance of the Canadian system with other countries. Among the key findings: Canada is the only country in the industrialized world to outlaw private, parallel medical coverage for all of its citizens. This, in itself, is remarkable. For the ordinary Canadian, it's government care or no care, unless you travel South and escape over the Border to American doctors and clinics. (This is similar in spirit to the American Medicare policy that effectively restricts a specific class of American citizens in the spending of their own money on lawful medical services, unless their doctor opts out under the Balanced Budget Act of 1997.)

Curiously, while Canada ranks first in spending among OECD countries with government-run medicine, Canada ranks 17th in the number of doctors per 1000 population; 17th in MRI machines per million persons; and 16th in access to CT scanners. According to the Fraser Institute, only 37% of Canadian patients reported a waiting time of less than one month for non- emergency surgery, compared to 63% in the United States. Paradise has its problems.

(The Fraser Institute study is available at www.fraserinstitute.ca.)

Robert Moffit is a prominent Washington health policy analyst and Director of Domestic Policy at the Heritage Foundation.