Shammed Doctors Awarded Millions
A Dallas federal court awarded cardiologist Lawrence
Poliner, M.D., $366 million in damages against three physicians
and Presbyterial Hospital, which had suspended his privileges to
perform catheterizations and echocardiograms. Competitors had
accused him of poor patient care, although independent reviewers
had defended him. Dr. Poliner's practice was severely damaged by
loss of referrals and by another hospital's refusal to grant
privileges. The hospital plans to appeal.
A U.S. District Court in Northern California awarded $4.3
million to Dr. John Ulrich, Jr., who was featured in a
Pittsburgh Post-Gazette series on sham peer review as a
reprisal against outspoken physicians. Two weeks after protesting
a decision to cut staff positions, Dr. Ulrich was subjected to a
wide-ranging hospital investigation. The hospital refused to
remove a data bank report after the state medical board cleared
him. He has not been able to work in his field for six years (S.
Twedt, Pittsburgh Post-Gazette 6/24/04).
Doctors Sue Blue Cross/Blue Shield of Michigan
BC/BS of Michigan is attempting to force physicians to
accept reduced fees that automakers negotiated with United Auto
Workers, through the ploy of calling an office visit a "covered
benefit" with a "100% copayment."
The Michigan State Medical Society and the Michigan
Osteopathic Association are asking a judge to decide whether
something with a 100% "copayment" is covered.
Tip of the Month: Beware of fake patients. Possible
signs: showing up with a partner, asking for Vicodin or
OxyContin, or acting in ways that contradict their words. For
example, a patient may move as if in severe pain, but deny
pain for the benefit of the tape that will be produced in
evidence. Private insurers, such as BC/BS of Michigan, have sent
wired investigators to entrap physicians. Even if acquitted in a
jury trial, the doctor may confront the same "evidence" in a
medical board proceeding. Compact radio-frequency detectors are
available for screening patients. Be aware that even long-
standing "patients" may be wearing a wire.
AAPS Asks Court to Unseal Proceedings
In the case of William W. Backus Hospital v. Safaa
Hakim, M.D., AAPS filed a motion urging that proceedings be
unsealed and that the public be allowed access to the courtroom.
In this case, the hospital had allegedly used a peer-review
proceeding to retaliate against a whistleblower. AAPS notes that
"the confidentiality of peer review is invoked to conceal
injustices against physicians and patients alike." AAPS members
have a direct interest in being informed about cases such as
"Just as a government official has no legitimate interest in
concealing wrongdoing from the public, a community hospital lacks
a legitimate interest in wholesale denial of access by the public
it purports to serve." There is a constitutional presumption in
favor of open court proceedings, and closure of judicial records
is appropriate only where a compelling government interest
exists, only where it is likely to be effective in preserving
against the perceived harm, and only after considering less
The court read the AAPS papers but denied the motion for
leave to file an amicus brief.
"Quality" = Documentation. While visiting in a major
Buffalo hospital, I passed the office of the Quality Documen-
tation Coordinator. The flow chart on the door said: "Better
documentation leads to longer LOS [length of stay] and improved
MCMIs [medical case mix indices] which leads to better patient
outcomes." The truth, of course, is that the choice of ICD-9
codes affects the hospital's bottom line, and hospitals now hire
people to encourage, pester, and nag physicians to fabricate,
embellish, or otherwise alter diagnoses to maximize hospital
revenue. An important aspect of the job is to sell the delusional
concept that gamed documentation has something to do with better
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
Socialized Medicine Is Here and Now. Third parties and
government are controlling medicine, illegally practicing without
a license, and not accepting responsibility for any untoward
consequences. Compromise with socialists is a lost cause. It
means they have won, so they continue what they were doing
anyway, using the courts to play their game.
Milt Kamsler, M.D., St. Augustine, FL
Pre-paid "Insurance" Does Not Work. There is no long-
term security with today's prepayment schemes, which cannot work
no matter how you manipulate the pool. Real health insurance
could work, in theory, but we have never had any. As some in the
insurance industry said in the early 20th century, there is no
way to insure for medical care. The lure of third-party payment
is too irresistible for some citizens, and public welfare is a
cancer that will kill any form of government.
The key is to have more direct linkage of patients and
caregivers at the time of service, through cash. Government
should encourage behaviors of responsibility and self reliance as
a hedge against societal decay and government bankruptcy.
Joseph Lee Pugh, Diamondhead, MS
Two Forms of Payment. It's not a question of FFS (fee
for service) vs. HMOs, but third-party payment vs. direct
Greg Scandlen, Hagerstown, MD
Access and First-Dollar Coverage. We were a typical
low-income family, with no insurance but plenty of access to
primary care. The pediatrician would always see us, and I'd pay
him when I could scrape up the money. A flat tire was a bigger
problem; we had no credit and nobody would give us a tire without
payment. When my employer got HMO coverage, I paid my asthmatic
daughter's allergist out of pocket. The in-network doctors
couldn't do same-day appointments, and didn't produce a reliable
outcome. I was poorer because my employer spent my money unwisely
on HMO premiums. My access would have been better with less
coverage and more dollars in my pocket.
Donna Kinney, Texas Medical Association
Access Is Available. A woman wrote that when a new
consumer-directed plan allowed her to choose her own doctors, she
got a second opinion that caused a dramatic turnaround in her
son's health. I can't imagine someone being unwilling to pay $60
for a second opinion, irrespective of the insurer's diktats, when
her son is deteriorating. There is a deeper problem in America
than absence of a consumer market. Under paternalism and
socialism, people behave like trained seals.
Craig Cantoni, Scottsdale, AZ
Cost of Third-Party Payment. Billing overhead probably
doubles the cost of providing service. The best way to determine
the cost is to look at a practice like mine in which I can charge
about half the going price and make as much net income. I don't
play games to get paid; I tell the patient the price up front
(simple throat infection, $35; pneumonia or kidney stones, $50).
Here in northeast Tennessee we have to keep everything simple.
Otherwise I would get confused and think I was treating the third
party, not the patient.
Robert Berry, M.D., Greeneville, TN
How Can Low-Income People Afford a $5,000 Deductible?
By getting patients to stop paying higher insurance premiums. Why
not pay $100 for $100 worth of services instead of $200 in
premiums, $100 of which is for paper shuffling?
Robert P. Gervais, M.D., Mesa, AZ
On Outrageous Hospital Bills. A response to the stories
of people hit with huge hospital bills: Do you vote for
politicians who promise to take care of you by forcing others to
pay the bills; forcing insurers to offer the same premiums to
all; and enacting guaranteed issue, mandated benefits,
certificates of need, minimum benefit payout ratios, etc.? If
yes, you just voted yourself a $20,000 hospital bill.
Sean Parnell, Heartland Institute
A Modest Proposal. Last fall, I received a hospital
bill showing a charge of $8,000, and a letter from Medicare
indicating a payment of $1,600. I called Medicare and was told
the hospital had agreed to accept 20% of the billed charge.... I
suggest that senators and other federal employees participate in
this practice of accepting only 20% of their salaries or wages,
in the interest of balancing the federal budget....
Don Huntoon, Medicare beneficiary
Legislative AlertThe Presidential Health
President George W. Bush and Senator John Kerry are starting
out in a very close race. And while international terrorism, war,
foreign policy, and the state of the economy are likely to
dominate the next two months, health care will still remain a
Both candidates have outlined complicated "incremental"
plans composed of a series of discrete policy initiatives. Both
would result in additional federal spending. The Bush tax-credit
program calls for an estimated $90 billion in forgone revenues
over ten years, while the cost of the Kerry plan over 10 years
ranges from $653 billion to almost $1 trillion.
To date, the Bush expedited waiver system has enabled states
to expand coverage to 2.6 million persons through Medicaid and
the State Children Health Insurance Program (S-CHIP). HHS has
also boosted support for community health centers, thereby
serving 3 million additional persons.
The enactment of Health Savings Accounts (HSAs) is Bush's
signature triumph. It has the potential to transform the health
insurance market. Already, according to ehealthinsurance, the
nation's largest internet health insurance broker, 33% of those
persons who purchased HSA policies were previously uninsured.
HSAs drive the Left crazy.
The Congress also enacted Bush's health insurance tax
credits for certain displaced workers under the Trade Adjustment
Act, which created an infrastructure for a larger tax-credit
system if Congress were to enact it.
The House of Representatives has already enacted Bush's
proposals for medical liability reform, the creation of
association health plans, and a liberalization of flexible
spending accounts (FSAs), ending the current "use it or lose it"
rule that returns unused funds to the employer. The Senate,
however, has not acted on any of these Bush initiatives.
The major policy change in the Kerry health plan is to have
the federal government serve as the payer of last resort for 75%
of all catastrophic costs in excess of $50,000 annually. In
effect, this would negate the very purpose and function of
private health insurance as it shifted the bulk of all high costs
onto taxpayers. There is no evidence that private insurance,
which is designed to spread risk among large numbers of
individuals, is incapable of providing catastrophic coverage. The
problem with private insurance is that is does not cover enough
people, not that it is unable to pay the major costs of those
whom it does cover.
Kerry's proposal would have several related consequences.
First, it would distort the incentives of virtually all sectors
of the medical economy, affecting patients, doctors, employers,
and insurers, inevitably raising costs. Second, it will fuel new
political pressures, from large corporations to union
representatives, for the government to pay 100% of costs. That,
of course, would drive costs higher still.
The basic dividing line between the candidates is
philosophical. Bush would generally expand private sector
options, while Kerry would generally expand government programs,
including Medicaid and S-CHIP. Kerry would also provide tax
credits for uninsured individuals to buy into the Federal
Employees Health Benefits Program (FEHBP).
Getting It Wrong on the Uninsured
The Census Bureau just reported that almost 45 million
Americans don't have health insurance, an increase of 1.4 million
over last year. The political spin has been predictable. Progress
for America, a left-wing think tank, says that 45 million
translates into 150 uninsured Americans for every physician;
nearly 7,500 uninsured for every hospital; and more than 84,000
uninsured citizens for each Member of Congress. The enormity of
the numbers, so the reasoning goes, calls for an enormous
Many Americans do indeed suffer high anxiety over health
insurance. Those who have it are afraid of losing it. Those
without it worry about paying their medical bills. The problem is
rooted in the structure of the employment-based health insurance
market, which is almost exclusively favored by the tax code. More
than three-quarters of the uninsured work for firms where the
employer doesn't offer them coverage.
The Census Bureau numbers are a "snapshot," but they are
inadequate for an understanding of the problem. A look at the
government Survey of Income and Program Participation (SIPP)
provides a much better focused picture than the standard Census
numbers. But the SIPP numbers are almost never cited by
politicians or the media. According to the SIPP data, the typical
family without insurance coverage suffers a spell of un-insurance
for only about 5.6 months on average. Moreover, according to
SIPP data, very few 3.3% of Americans lack insurance for four
years or more. So, there is no evidence of any significant
number of permanently uninsured people: we have a dynamic
population, where people are in or out of coverage, largely based
on their employment. What is wrong, once again, is tying the ease
of a person's access to health insurance by law and
regulation to a person's employment. If Congress doesn't change
these dynamics, we can expect to be having the same conversations
Getting It Wrong on Stem Cell Research
Ron Reagan, Jr., brought the Democratic Convention to a
wild ovation with his appeal for federal support for embryonic
stem cell research, arguing that medical progress, and cures for
Alzheimer's and other terrible diseases, should not be impeded by
those who put "narrow ideology" ahead of "science." Ron Reagan's
cavalier dismissal of the serious ethical and philosophical
misgivings over embryonic stem cell research was just the sort of
anti-intellectual rant of which the Left used to accuse the old
Right. Big issues, particularly those dealing with the meaning
and destiny of human life itself, should be dealt with seriously,
and not dismissively. A pragmatic rejection of the traditional
respect for human life may be crucial to the mental and moral
self-esteem of the abortion lobby, but it doesn't constitute a
serious philosophical argument. But then high-mindedness is not
to be expected at political conventions. In any case, what
Ron Reagan did not tell the Democratic Convention in prime time
is that only adult stem cells (derived from bone marrow) and
neonatal stem cells (derived from placental cord blood) have been
used to save or improve the lives of patients. Embryonic stem
cells have never yet been used in this fashion, and there are
enormous clinical obstacles to doing so that have little to do
with "narrow ideology."
Limited work has been done with adult stem cells. There is
an adult bone marrow registry of 5 million potential donors, but
the General Accountability Office (GAO) reported in October 2002
that fewer than 25% of the patients in need of a bone marrow
transplant were able to get a suitable match.
In the case of neonatal cells, the situation is much more
promising. But Ron Reagan did not even touch upon that subject.
Thus far, there have been thousands of cord blood cell
transplants, and the source, of course, is easily replenished
with the birth of every baby. More than 18 peer-reviewed journal
articles have focused on neonatal or cord blood stem cell
research and its applications, and the cord blood stem cells hold
enormous potential for various conditions, including diabetes,
spinal cord damage, Parkinson's disease, leukemia, and sickle
cell anemia. Reagan also failed to mention the bipartisan Senate
bill, cosponsored by Senators Orrin Hatch (R-UT), Dianne
Feinstein (D-CA), Arlen Specter (R-PA), Christopher Dodd (D-CT),
and Sam Brownback (R-KS), that would establish a National Cord
Blood Stem Cell Bank Network with, of course, federal funding.
Federal funding, imagine that! One of the advantages of such a
network is that it would rapidly advance broad access to viable
stem cell therapy today, not tomorrow.
Ron Reagan did not tell the Democratic Convention any of
this. That is an indication of the genuine threat posed to real
science by the forces of leftist "narrow ideology." Meanwhile,
nobody will confuse Ron Reagan with Ronald W. Reagan. They were,
and are, philosophical poles apart.
Getting It Wrong on Medicare
Republican political operatives sold the line that
enactment of the Medicare drug law would be a political boon to
the fortunes of the President and the Republican majority in
Congress. Talk about getting it wrong! A recent survey by the
Kaiser Family Foundation, along with a Harvard University team,
showed that most seniors don't like the Medicare drug provisions,
a large plurality admit that they don't know much about it, and
10% want the new Medicare law repealed.
A close reading of the survey reveals that while close to a
majority of the Medicare population may have more or less strong
feelings against the law, a clear majority also concede that
after years of bitter debate and extensive discussions they don't
understand the very thing that they register fairly strong
feelings about. For example, 60% said that they don't
understand enough about the law to say how it will affect them
The Kaiser-Harvard study also found that huge majorities
want to buy "cheap" drugs from Canada, and think that Medicare
officials should "negotiate" [i.e. fix] the price of drugs, a
shorthand way of saying that the government should fix prices.
Governments have been fixing prices with the same disastrous
results for more than 4,000 years, and there is not the slightest
ground for believing that the end results shortages and
decreasing quality will be any different in the 21st century. But
politicians know that price controls are always popular at least
These recent findings are consistent with previous research
on the Medicare program as a whole. While it is enormously
popular, very few seniors understand how it operates, how it is
financed, how it will be financed in the future, or what it does
or does not cover. Thus, they are extremely susceptible to false
promises or to demagoguery.
The Kaiser Harvard report says 53% of seniors don't think
the new drug discount cards are "worth the trouble" because they
don't do enough to control costs and are "too confusing" to use.
Among the 60% of seniors who don't have a card and don't plan to
sign up for one, the main reason that the Kaiser-Harvard survey
cites is that 63% of this class of seniors already have drug
coverage or another discount card.
Critics notwithstanding, the weight of recent analyses
clearly demonstrates that seniors could expect impressive savings
from the discount cards. But left-wing critics know what right-
wing Republicans often forget: the money savings or no
savings isn't the issue. It's the structure, stupid.
Back to Real Medicare Reform?
The big policy problem is that Congress did not target
assistance simply to those who needed it, but rather created a
universal entitlement that would cover everybody. Roughly one-
third of seniors get their coverage through former employers. And
CBO estimates that 87% of these seniors will end up in the
government plan, and many of them will be paying higher out-of-
pocket costs for a government drug benefit that is inferior to
most of the plans offered by employers. The Congress anticipated
this and offered tax credits to employers to keep drug coverage.
But employers are still expected to drop or substantially cut
back their coverage. CBO and independent analysts predict that
one-third of seniors with employer-based coverage will lose
it. This will disrupt the lives of millions of seniors. It is
not necessary. In January 2005, this should be fixed.
Likewise, Medicare's entitlement cost will be a killer.
Recall that the initial ten-year cost, courtesy of CBO, was $400
billion. The Administration upped the estimate to $534 billion.
CBO then said that in the second decade the cost of the drug
bill was going to be $2 trillion. The truth is that we don't
know. We do know is that the drug benefit is not paid
for; there is no way we can finance this expansion without a
major increase in taxation. Meanwhile, the congressional
Democrats were proposing an expansion at least twice as
large as the one that passed. Congressional Republicans may
have had a fit of fiscal irresponsibility. But congressional
Democrats would plunge the country into fiscal madness.
There is a short-term solution: the 2006 drug entitlement
should at least be delayed until Congressmen can tell us how they
are going to pay for it.
Robert Moffit is Director, the Center for Health Policy
Studies at the Heritage Foundation, Washington,