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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 63, No. 10 October 2007


The flawed assumptions underlying most "health care reform" are plainest in the plan put forth by John Edwards.

Not only does his plan require that everybody be covered. "It requires that everybody get preventive care," Edwards told a crowd in Iowa. "If you are going to be in the system, you can't choose not to go to the doctor for 20 years. You have to go in and be checked and make sure that you are OK."

His plan would cover preventive, chronic, long-term, and mental health care. "The whole idea is a continuum of care, basically from birth to death," he said (www.foxnews.com).

As Kansas Medical Society president Richard Warner, M.D., notes, "since we are all subsidizing each other's care through universal coverage, we have the right to demand... responsibility of everyone. And so the good of the whole gradually takes precedence over freedom for the individual."

Squaring the Circle

Edwards is for "strong, bold steps, not incremental steps and half measures." This appears to be an explicit rejection of the Clinton back-up plan, which began to be implemented soon after the defeat of the Clinton Health Security Act. Great chunks of this "failed" legislation were imported verbatim into "Republican" legislation at the federal and state level. We have the criminalization of medicine (HIPAA), SCHIP ("Kids First"), prescription drug coverage by Medicare, quality-reporting initiatives, a managed-competition model (the Massachusetts Connector), and more mandates to cover preventive care. Everyone seems to agree that the situation is worse than in 1993, not better. Edwards apparently believes that if each small step takes us downhill, one giant leap combining the small steps will jolt us up to a higher level.

The U.S. has fewer physicians, nurses, and hospital beds per capita than the average industrialized nation, says Edwards. Though the doctors and nurses are excellent, they render suboptimal care almost half the time, he believes, and nearly a third of patients experience medical mistakes or delayed lab results. The answer: jam the system with healthy people getting check-ups; multiply data collection duties; penalize errors or noncompliance by reduced payment or nonpayment.

Insurance and medical services are increasingly unafford- able. Even Edwards recognizes the problem with forcing people to buy something they can't afford. So he'll delay the purchasing requirements until affordability is achieved despite expanded coverage mandates. If costs go up, the only way to make a product affordable to nonaffluent people is to force somebody else to pay for it. Edwards's method is tax credits.

Although businesses can be compelled to "contribute," they cannot be forced to survive. Thus, the "single payer" total government takeover moves ever closer. Edwards's "Health Care Markets" would offer a choice of a public insurance plan modeled after Medicare: "Over time, the system may evolve toward a single-payer approach if individuals and businesses prefer the public plan." The Medicare model, writes Jacob S. Hacker of Yale and the New America Foundation, is the "not-so-secret weapon in the campaign for affordable health care for all" (N Engl J Med 2007;357:733-735). Of course, once govern-ment dictates benefits and price, and mandates purchase, all benefits of a private system are lost, and it's a very small step to a public administrator, writes Greg Scandlen.

Even Fortune magazine seems to be siding with Edwards, Obama, and Clinton. "Well, suppose I told you there was a way to square this circle, courtesy of a $500 billion tax hike that would save the economy?" That's the amount business spends each year on health benefits. Call it government, or call it something else, "what does it matter?" (Matt Miller 3/28/07).

Making the irrational number a rational one, simply by calling it such, is stunning enough. But what can be said of summing up $70 trillion in unfunded Medicare liabilities, the Medicaid expenditures that are bankrupting states, insurance costs that are sinking businesses, uncompensated care, and individual bankruptcies and getting fiscal solvency?


When someone spoke approvingly of the North Carolina system for enforcing purchase of automobile liability insurance sending a deputy with a screwdriver to remove license plates if coverage lapses Dr. Alieta Eck asked: "What will they come and unscrew if people don't get health insurance?" Shall we pass laws threatening to bankrupt or jail people who choose to buy housing, food, clothing, or transportation before they buy health insurance? Linda Gorman notes that at least we have the duty to show that such a proposal would cost less than the current system. No such analysis has been done.

Is it Constitutional for government to force people to buy a product from a private company or is simply being alive a privilege comparable to holding a drivers license? Governments use force to collect taxes which are supposed to be for public benefit. Those who think that insurance is supposed to provide for their private medical care need to remember that. What happens when a person's life becomes a public liability?

Politicians will give lip service to quality but they mainly mean equality, at least for the masses. There is only one way to level a Gaussian: down. Edwards states: "Fifty years after Brown v. Board of Ed, America still has two school systems, separate and unequal." Does he mean public and private? Like the AMA, he deplores "health care disparities." Is the ultimate goal to make all education, and all medicine, public?

Indeed, will every aspect of our lives be a public concern? Is there any logical limit to our duty to be healthy, or to "contribute" to the health care of others?

Truth in Taxes

If health insurance premiums are "skyrocketing," how do we describe the tax burden?

The average 1970s family with two children and a stay-at- home mom had an inflation-adjusted income of $38,700, out of which came $5,310 in mortgage payments, $5,140 in car expenses, $1,030 for health insurance, and $9,288 (24%) in income taxes, leaving $17,932 in discretionary income.

The typical 2000s family has two earners and a 75% higher income of $67,800, with higher expenses: $9,000 for mortgage payments, $8,000 for two cars, $1,650 for health insurance, $9,670 for full-time day care and $22,374 (33%) in income taxes. Discretionary income has decreased to $17,045.

The progressive tax code means that the second earner's income is taxed at a much higher marginal rate. The tax bill increased by $13,086 a whopping 140%, while the percentage of income devoted to mortgage, automobiles, and health insurance actually fell (Zywicki T, Wall St J 8/14/07).

Michael Cannon estimates, apparently by different methods, that in 2007 the average family of four will pay $25,000, or nearly 30% of its income, for health insurance: $11,000 for its own coverage, usually through an employer, and $14,000 in taxes to fund insurance for the elderly and the poor. Even the "private" spending occurs in an economy with socialist features. The government largely controls production, consumption, and the terms of exchange. Also, the government has put almost everyone in the position of spending other people's money, so there is little incentive to economize (www.tcsdaily.com 9/6/07).

What would the tax burden be for universal coverage? The plan passed by the Wisconsin senate, but blocked in the house, could have raised state taxes to 20% of the average family's income (Wall St J 7/24/07).


U.S. Senate Proposals

Two Senate bills would give refundable tax credits to people who buy insurance: S. 1874, Every American Insured Health Act, by Sen. Richard Burr (R-NC), and S. 1875, Healthy Tax Reform Act, by Sen. Jim DeMint (R-SC). Shared features: a guaranteed-issue mandate; no relief from state mandates; no purchase of insurance across state lines; price controls; continued unfair tax treatment of health insurance. The Joint Tax Committee has scored S. 1874 as an $800 billion tax increase on those who get employer-provided insurance. For a discussion of S. 334, Healthy Americans Act by Sen. Ron Wyden (D-OR), see AAPS News, February 2007.

President Bush, Sen. Jon Kyl (R-AZ), and candidates Guiliani and Romney favor a capped "standard deduction" for health insurance. While some people with gold-plated plans would see a slight tax increase, 80% of Americans insured by employers would get a tax cut before counting potential wage increases if employers got out of the health benefits business.

Refundable tax credits, on the other hand, would impose a tax increase on two-thirds of today's taxpayers, while adding as many as 12 million to the ranks of the nearly half of Americans who now pay no federal income tax. This would make future marginal tax increases politically easier to pass. This new entitlement, virtually impossible to repeal, would constitute a huge wealth transfer from middle and upper-middle-income families to subsidize insurance for low earners (Wall St J 9/5/07).


Nominating and Resolutions Committee Reports

The Nominating Committee, chaired by Lawrence Huntoon, M.D., presents the following slate:

President Elect: Mark Kellen, M.D., Rockford, IL;

Secretary: Charles McDowell, Jr., M.D., Alpharetta, GA;

Treasurer: R. Lowell Campbell, M.D., Corsicana, TX;

Directors: Claud A. Boyd, Jr., M.D., Augusta, GA; John H. (Tim) Boyles, Jr., M.D., Centerville, OH; Robert J. Cihak, M.D., Brier, WA; Richard O. Dolinar, M.D., Phoenix, AZ; and Dennis K. Gabos, M.D., Pittsburgh, PA.

To be considered, Resolutions must be submitted to AAPS in writing no later than September 28.


Historical Note: Organizing Principle for Reform

The Clinton Plan and much of its progeny in both national and state proposals was based on an ingenious 1930s idea called "corporatism," which was highly praised even in Britain and America. Features include a National Health Board; regional alliances; centrally planned budgets, prices, and "collaboration...between the various categories of producers in each branch of productive activity." All "selfish interests" had to be subordinated to the national interest. One advisor to the model plan was Fausto Pitigliani apologist for Mussolini.

Did the trains run on time? The system was actually an "unmitigated economic disaster" (DiLorenzo TJ, Wall St J 10/26/93). In 1935, The Economist characterized the system as a "new and costly bureaucracy from which...industrialists ...put into practice the worst kind of monopolistic practices at the expense of the little fellow who is squeezed out...."

In the 1930s, it was "as if everyone just assumed that we had to have either fascism or socialism, and that the one option that was ruled out was laissez-faire." FDR, "who imagined himself capable of astonishing feats of price settings and economy boosting" applied the old tricks of printing money and threatening people with guns, writes Llewellyn Rockwell. "It was the old despotism brought back in pseudoscientific guise" (Free Market July/August 2007). Have we learned yet?


Verner S. Waite, M.D., R.I.P.

A tireless advocate for justice in peer review, Verner S. Waite, M.D., died Aug 17. Dr. Waite, a general surgeon, was a member of AAPS since 1987. He spoke personally to more than 10,000 physicians who had been targets of sham peer review. The $559,000 judgment he was awarded for slander was used to found the Semmelweis Society, under the guiding principle that peer review should be done with clean hands.


AAPS Calendar

Oct 10-13. 64th annual meeting, Cherry Hill, NJ.
Sep 9-13, 2008. 65th annual meeting, Phoenix, AZ.

Doctor Can Sue for Retaliation and Libel

Nearly 10 years after government harassment began, neurologist Taj Becker, M.D., of St. George, UT, has won a remarkable victory in the U.S. Circuit Court of Appeals for the Tenth Circuit (Becker v. Kroll et al. 05-4070, 05-4096).

Starting in 1998, Becker was investigated by the Medicaid Fraud Control Unit (AAPS News, July 2005). In an interview in Salt Lake City (300 mi from home) that turned into an impromptu settlement conference, Utah Assistant Attorney General J. Denis Kroll demanded $107,000 to avoid criminal prosecution for upcoding. Becker maintained her innocence and refused to settle. After an independent expert reviewed Becker's records without her knowledge and determined that her coding was appropriate, Kroll reduced the demand to $49,605 and showed her a draft criminal complaint seeking $646,000. When Becker stood firm, Kroll filed a civil complaint asking for $25,000 plus investigative costs, dropping it 2 weeks later.

Becker then complained to state officials about MFCU's unprofessional conduct and bullying tactics. Felony charges were filed against Becker on the same day that her husband testified before a state legislative committee about the alleged prosecutorial abuses. Shortly before this, oversight of MFCU had been transferred from the Dept. of Public Safety to the Attorney General because of political pressure from rural doctors complaining of mistreatment by MFCU.

In 2002, Becker sued Kroll and other officials in federal district court, which granted summary judgment in favor of all defendants. Becker appealed.

In its July 19 ruling, the Court recognized that prosecutorial tactics such as withholding exculpatory evidence, failure to document interviews, and publishing statements on the internet worded so as to make Becker appear guilty although found innocent would, if true as alleged, "fail the most obvious standards of proper conduct." Still, they weren't egregious enough to violate substantive due process or to constitute malicious prosecution:

The conduct alleged "must do more than show that the government actor intentionally or recklessly caused injury to the plaintiff by abusing or misusing government power...[I]t must demonstrate a degree of outrageousness and a magnitude of potential or actual harm that is truly conscience shocking."

The Court, however, did rule for Becker on two key issues. It reversed the district court's dismissal of the First Amendment retaliation and related conspiracy claims, remanding it for further discovery. It also remanded the defamation claim for a jury trial.

This is a very significant victory, stated AAPS General Counsel Andrew Schlafly. Government immunity is a huge barrier to overcome. In an AAPS amicus brief, he writes:

Physicians should be able to care for indigent patients on the Medicaid program without being subjected to arbitrary and unjustified raids of their offices and baseless criminal prosecutions. It is already difficult enough to persuade physicians to accept the meager reimbursements under Medicaid without adding the risk of a baseless and vindictive prosecution. Preservation of professional integrity requires some legal accountability for retaliatory or malicious prosecutions.

Indeed, as Medicaid expands, fewer doctors are willing to accept enrollees (Wall St J 7/19/07).

[See www.aapsonline .org/judicial/becker.htm.]


Malicious Convictions

Four men who had been framed by the FBI for a 1965 murder were awarded $100 million in compensation for 30 years of wrongful imprisonment. While most coverage of the story described the case as a bizarre exception, Richard Moran contends that it is all too common (NY Times 8/2/07).

Moran's study of 124 exonerations of death row inmates in the U.S. found that 80 of the so-called wrongful convictions resulted not from good-faith errors but from intentional, willful, malicious prosecutions. Knowing use of a lying witness, failure to turn over exculpatory evidence, or the manufacture or destruction of evidence to further a prosecution are violations of the law. The convictions should be called "unlawful," Moran states.

"A crucial part of the problem lies in the hearts and souls of those whose job it is to uphold the law."


More Perjury in Rottschaefer Case

Bernard Rottschaefer, M.D., now in prison on charges related to prescribing pain medication, has filed another appeal with the U.S. Court of Appeals for the Third Circuit. Evidence that a star prosecution witness lied about his trading drugs for sex (AAPS News, March 2006) was not enough to get him a new trial. But in the civil cases filed against him by witnesses in the criminal trial, it has also been proved that all five lied in saying that they did not have a medical need for medications and that the medications did not medically benefit them.

During the trial, U.S. Attorney Mary Beth Buchanan and her subordinates played up the sex-for-drugs angle both in public and in the courtroom. Clearly, there was no financial gain as Rottschaefer was getting $6/month for three patients and $22/month for the others. When it was clear that these allegations were false, Buchanan said the trial was only about lack of a legitimate medical reason for the analgesic prescriptions. Now that those arguments have also been refuted by new evidence, her latest brief goes back to sex.

Four of the five witnesses were facing criminal charges of their own, and received reductions in charges or sentences because of their testimony. Yet the jury was explicitly told that there were no testimony-for-leniency deals.

If the prosecutors knew about this evidence, they are guilty of prosecutorial misconduct. If not, they were duped by the five women essentially the same crime for which they convicted Dr. Rottschaefer, writes Randy Balko. None of the women have been charged with perjury (Fox News 8/28/07).

What does it take to shock the American conscience?


Punitive Claims Reviews May Be Resurrected

A "quality improvement" bill introduced by Sen. Max Baucus (D-MT) and Sen. Charles Grassley (R-IA) would create a new group of largely unregulated contractors called Medicare Provider Review Organizations (MPROs). Claims review activities now carried out by Quality Improvement Organizations (QIOs) would be turned over to the MPROs, which would not be burdened with the need to maintain good working relationships with physicians.

"They used to call [the PROs] the Medicare police," said Jonathan Sugarman, M.D., M.P.H., of Qualis Health. "Now maybe it's the Medicare militia." PROs were called the "most hated program in HHS" (Glendinning D, AM News 8/27/07).


The Standard of Care. One of the most common tactics hospitals use in sham peer review is misrepresentation of the standard of care. A hospital frequently hires an expert witness who has a legitimate difference of opinion with the targeted physician. The expert then claims that his way of doing things is the standard of care, and the targeted physician is thus practicing substandard medicine. If sued for sham peer review, the hospital suddenly recognizes the existence of legitimate differences of professional opinion, but wants the court to defer to the defendants' view and not substitute its judgment for that of the hospital.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


The Assembly Line Model. I am troubled by frequent reference to the Toyota model as a method for improving medical care. The defective parts in the assembly line, which is made perfect by permitting "no variation," would be equivalent to the patient who refuses to get well. At Toyota, they throw out the bad parts and improve the process. But the primary care doctor is still left with the refractory patient. The Toyota model may heal the factory but not the sickest patients.
Gerald Y. Yorioka, Everett, WA


Endangered Patients. Does the federal rule saying that Medicare won't pay for mistakes mean that if the hospital makes an error and you need care, no one will pay? Sounds like the "shoot, shovel, and shut up" incentive created by the Endangered Species Act.
Linda Gorman, Independence Institute, Golden, CO


Complications. On CSPAN, former CMS head Mark McClellan and Ken Thorpe of the Partnership to Fight Chronic Disease extolled the ability of "preventative medicine" to solve our financial problems. It sounded as "complications" and "unnecessary care" were the result of not following the preventative plan. So, Doctor, if your patient gets a "compli- cation" (would that include peripheral neuropathy, nephropathy, myocardialinfarction, retinopathy?), you failed to prevent it. Why should you deserve to be paid?
David McKalip, M.D., St. Petersburg, FL


Priorities. In Europe, old people increasingly receive less care than young people do. In the U.S., the situation is the reverse. In America, the bulk of government medical expenditures goes to those over age 65, while in Europe most government expenditures are for those under 65. European doctors have warned us of "economic euthanasia."
Ernest J. White, Alexandria, VA


No Equality. The best way to improve quality in medicine is the same economic formula that has allowed Western culture to create the highest standard of living for the greatest proportion of the population in human history. We must concede that everyone is not going to get equal medical care at the margins. But as a result of those who can and do finance the extraordinary for their own benefit, everyone will eventually be better off. Call it trickle-down benefits.

If we don't admit that there will be inequality, and that that is a good thing, we will have to continue to try to defend free markets against those who claim the high ground with the presumption that any system not absolutely blind to economic reality is inherently evil. In that case, the anecdotes will defeat us, given the powerful media and the deviousness of politics.
Frank Timmins, Dallas, TX


Ruling Physicians. The steps for controlling the entire medical community: 1. Identify common-sense, frequent practices such as accepting cash payment, treating a family member or a friend, "casual" prescriptions and lab orders, "off-label" uses of medications, or respecting patient privacy. 2. Label those practices first as "unethical," then as torts, and finally crimes. 3. Enforce the rules very selectively on an "as needed" basis. Everyone without exception could be found guilty.
Walter Borg, Lafayette, LA


Gouging the Uninsured. In New Jersey, the uninsured are billed 4 to 10 times the cost of their hospital care because hospitals are making up for underpayment by Medicare (which pays 85% of the cost), Medicaid (which pays 73%), and insurers that "negotiate" for heavily discounted rates. Insurance ought to be a way to cover the real costs of care, not a way to get discounted care on the backs of those who do not have such a privilege. Expecting the uninsured to pay more sounds like Mafia talk: "You pay protection money, or you face severe consequences." The real irony is that many of the uninsured, faced with such huge bills, apply for "charity care" and pay nothing. Taxpayers bear the brunt; hospitals close.
Alieta Eck, M.D., Piscataway, NJ
excerpted from Home News Tribune Online


Counterproductive. Medicare actually encourages unnecessary care via its payment schedule while discouraging personal care, an important quality-of-life service for the elderly. It seems that Medicare has absolutely no redeeming upside from a social or economic perspective when compared with any other options. Why would anyone have a problem with providing real incentives for general physicians to opt out of Medicare? It's a horrible way for a highly qualified professional to earn a living.
Richard A. Matthews, CEBS, Royal Oak, MI