Volume 55, No. 10 October 1999

THE MEANING OF UNIVERSAL COVERAGE

Seven of the largest American medical associations have joined together in a national campaign for universal coverage: AMA, ACP/ASIM, AAFP, AAP, ACOG, ACEP, and ACS. As Oklahoma family physician Glenn Dewberry, Jr., M.D., notes (see p. 2), this does not mean that the members of these organizations concur.

The forces that attempted to bring about universal coverage all at once through the Clinton Health Security Act of 1993 have learned the danger of presenting a specific plan that can be criticized. It is the broad concept that will be advanced as a major campaign issue in the 2000 elections.

Superficially, the concept sounds appealing, of course. But what does it really mean?

The word "universal" is derived from unus (one) plus versus, pp. of vertere (to turn). It denotes something applicable to every individual without exception: one size fits all. In a universal system, there is uniformity and unanimity ("one voice"). Another word for universal government regulatory coverage of all actions is totalitarianism.

The proposed coverage is to be "basic." Operationally, this means services that are common, probably used by everyone at some point, and relatively inexpensive-not those that are rare, catastrophic, and expensive. And as long as some lack the former, all could be denied access to the latter.

What would the system look like? It would probably be a grand extrapolation of current policies favored or brought about by members and supporters of the National Coalition on Health Care. This includes most of the organizations above and is funded by grants from the W.K. Kellogg, Henry J. Kaiser Family, and Robert Wood Johnson Foundations (see www.americashealth.org). The trend is to make all "health care" interventions either compulsory (such as immunizations) or forbidden (such as new devices). Extensive data systems (like OASIS and immunization registries, which are meant to be linked to "other preventive health databases to ensure comprehensive care for children") will be needed for enforcement. The rationale, at least at first, will probably be quality assurance, where quality means compliance for physicians and quality of life (worthiness) for patients. Noncompliant physicians will be forced out of the system; unworthy patients will be urged to make use of a dignified life-exiting mechanism rather than demand "futile care."

Proponents of universal coverage generally deny that they favor socialized medicine or government ownership of the means of production. Rather, they favor a public-private partnership (corporate socialism), in which they envision themselves as a private partner. Some favor "pluralism" (more than one, but very few payers, all offering essentially the same product), and some favor a "single payer" (universal payment by taxpayers and a single, governmental disbursement agency, perhaps HCFA or its clone).

Some of the methods proposed, or actually in use, to bring people "voluntarily" onto the Animal Farm:

Outreach. Only 1.3 million children have been enrolled in KidCare (CHIP) programs of the 6 million believed to be eligible. On Aug. 9, the DOE sent letters to 42,700 school officials, prodding them to help enroll students at registration or through the school lunch program. Clinton is "bypassing governors to turn schools into welfare induction centers" (CAHI Monday Memo 8/9/99). Some tobacco settlement funds, and $500 million from a welfare reform fund, are available for outreach (BNA's HCPR 8/16/99). (Also see AAPS News June, 1999.) In fact, an Outreach program may perform most of the data collection/psychological profiling function, and even nurses in school-based clinics may not be privy to this aspect.

Tax "incentives." It is widely believed that if a worker got his full paycheck, he might not buy all the insurance that he should. One proposal is to tax income that should have been spent on insurance, but wasn't, at 100%! (Tax credit proposals are not always worded that clearly.)

Mandates. The main effect of insurance mandates (such as those proposed in "Patients' Rights" legislation) is to increase costs and decrease the affordability and availability of insurance. The [possibly] unintended consequence: to increase the clamor for government to step in. The latest example of politician-made disaster in slow motion, set off by the passage of the 1993 Health Services Act in Washington: Meltdown in the individual insurance market. The departure of Regence Blue Shield leaves 25 counties in the state without a single carrier willing to write a new individual medical policy. A single-payer initiative will probably be on the ballot: the state medical association will consider a resolution to endorse it.

The outlook for private medicine is probably worse than in 1993, now that the Republican Congress is engaged in bipartisan efforts to achieve universal coverage, in collusion with Organized Medicine. It is time to study what David Horowitz (a featured speaker at the 56th annual meeting) calls "the art of political war" (see noleft.com).

We need to seize the initiative in the War of the Words. The idea of universal coverage is not liberal (as in John Locke); it is left-wing (as in Marx and Lenin). Managed care is not a market-based system; it is corporate socialism. Managed cooperation amounts to coercion and conscription. An entitlement is a tax and a forced redistribution of wealth. Data collection for research may really be for surveillance. Health insurance generally means prepayment. Cost containment means cost increases and care restriction. Advocates of a single payer mean to outlaw all other purchasers.

Universal coverage means no exceptions, no way out, and no way back to individual autonomy and professionalism.

Fraud

"The biggest fraud ever committed during the 20th century is by [liberal leftist] politicians who ... are encouraging universal health care," writes Ernest J. White (War Report Number 37-1999). Some actual results:

Queues. Many patients in Ontario and Quebec have trouble finding a general practitioner to treat minor ailments. They flock to emergency rooms that are on the brink of collapse. Said one man, holding the hand of his 73-year-old wife, who had been in the ER with respiratory distress for 16 hours, "There hasn't been an earthquake or horrible explosion. This is just an ordinary day in an ordinary hospital in one of the richest ... societies on earth" (War Report 38-1999).

In Britain, there is the official waiting list (1.12 million members), and the waiting list to get on the waiting list (WR 37-1999). At the end of the line, the range of treatments is becoming steadily more restricted. Voters consider that the NHS model is in its death throes (Pfizer Forum, ad in The Economist based on A Question of Health by Stephen Pollard.)

Outreach. In the 1940s and 1950s, Quebec could obtain more federal funds for health-care facilities than for schools or orphanages. Some orphanages run by religious orders were transformed into health-care facilities, and some orphans were transferred to existing hospitals. Many were wrongfully labeled "mentally deficient." When no more financial gain could be achieved by keeping them, they were released, with no education and false medical records. Some 3,000 of "Duplessis' orphans," named for the provincial premier, survived and are seeking compensation for the physical and sexual abuse that they reportedly suffered, including excessive medication and even lobotomies ( members.tripod.com/~rootsunknown).

Reproductive Rights. The provincial government refused to compensate persons sterilized at the Provincial Training School for the mentally deficient in Red Deer, Alberta. Virtually everyone who entered there (say because of parental abandonment) was deemed to have inferior genes; 3000 young persons were forcibly sterilized under the Sexual Sterilization Act, not repealed until 1972 (World Press Review, June 1997).

Duplicity

Only 4,000 of the 85,000 members of the AAFP responded to a recent questionnaire that was highly slanted toward universal coverage, reports AAPS member Glenn Dewberry, M.D. He writes that in 1993, when AAFP endorsed the Clinton Plan, he conducted a random survey of one out of five Oklahoma family physicians. About 39% (69 total) responded. The majority (57%) said they did not have enough information to formulate an opinion; 36% were opposed; and 7% favored the Plan. Those who opposed the Academy's official position outnumbered the supporters 5:1 (Oklahoma County Medical Bulletin, Dec. 1993).

US Single Payer (Medicare) Survey Results

The fifth biannual AAPS survey of physician responses to Medicare suggests a decreased willingness to care for Medicare beneficiaries. Of 311 respondents, 23% are accepting no new Medicare patients (compared with 14% in 1997), whereas only 15% accept no new uninsured patients. Difficulty in finding a physician to accept a referral was reported by 34% (cf. 26% in 1997); 20% had difficulty finding an internist.

Physicians have made definite changes in the type of service that they offer to Medicare recipients, and 71% say they have made some changes because of a fear of prosecution: deliberate downcoding (38%); restricting more complex services (26%); and restricting services that HCFA might question (28%). Some physician comments: "I'm not accepting patients who need increased care." "I do not submit claims to Medicare and provide no `necessary' services to patients over the age of 65." "A sheet is posted in the office with staff instructions on what to do in case of an armed invasion by HCFA."

On the average, physicians report that Medicare benefici- aries constitute 34% of their patient load, take 70% of their time, and bring in only 28% of their receipts. Physician and staff spend 22% of their time coping with Medicare regulations.

Since 1994, 59% of physicians experienced a decrease in income, averaging about 30%.

About 82% of respondents are aware that they can opt out of Medicare under the Balanced Budget Act of 1997, and 7% have done so. Yet 20% say they do offer, or will soon offer, care to some Medicare-eligible patients outside the program. More than two- thirds say that expanded private contracting would increase their willingness to serve Medicare patients.

[Survey results are tabulated at www.aapsonline.org.]

"Shared" [Imposed, Global, Universal] Ethics

"No shared code exists that might bring all stakeholders in health care into a more consistent moral framework," write experts Richard Smith, Howard Hiatt, and Donald Berwick (Ann Intern Med 1999;130:143-147) in an introduction to the Tavistock Group Proposal, also published in the British Medical Journal 1999;318[7178]:248-251 and at www.acponline.org.

The 15 international experts did not choose to meet in Greece or on Mount Sinai, but on Tavistock Square in London, which happens to share a name with the Tavistock Institute of Human Relations, founded in 1947 under a grant from the Rockefeller Foundation, whose medical director Alan Gregg was interested applying enemy-analysis research to civilians. The Tavistock Method of mass psychological control involves the deliberate inducement of neurosis (BK Eakman, "Scientific Coercion and the Engineering of Consent," in The Cloning of the American Mind, Huntington House, 1998).

Key tenets of the proposal include the concept of health care as a human right, with the goal of the "greatest possible health gains for groups and populations." "Cooperation" by all is "imperative." Caring for the sick being a "social obligation," the "care resulting from the application of medical skills cannot belong exclusively to individual providers or organisations."

And what does "sharing" mean? Some insight from James Ramsell, single-payer advocate: "Then we had suggestions to the facilitator that it might be easier to get our initiative passed if the stakeholders had a chance to suggest changes to it. Wish you could see me rolling on the floor with laughter. We're going to let people, that won't like the changes we're making to their world, make changes to our initiative?"

AAPS Calendar

Oct. 13-16. 56th annual meeting, Coeur D'Alene, ID.
Oct. 25-28, 2000. 57th annual meeting, St. Louis.

AAPS v. Clinton Remanded to District Court

On August 24, the U.S. Court of Appeals for the District of Columbia Circuit issued a decision concerning the award of fees to AAPS in its challenge to the operations of the Clinton Task Force on Health Care Reform. Judges noted that the government adopted the "wandering horde" theory of the case and merely "kept its options open" with respect to the "all employee" exemption to the Federal Advisory Committee Act (FACA): "Given that the government did not press the federal employee exemption, the representation [in Ira Magaziner's sworn declaration], if false, was not material and therefore cannot be characterized as made in bad faith." Moreover, "the government conceded simply that membership was not a `significant' or `operative' concept, but never that it was not meaningful." While foreclosing the award of fees on the basis initially cited by Judge Lamberth, the Court stated:

[The full decision is posted at www.aapsonline.org.]

Regulations on Private Contracting

Regulations promised last October during the oral argument in United Seniors v. Shalala, and published in the Federal Register of November 2, 1998 (now posted at www. aapsonline.org) may answer certain questions frequently asked by members. It is not necessary to opt out in order to contract privately for services for which Medicare does not make "payment on a fee schedule or reasonable charge once a claim is submitted." Nor should physicians "hesitate to furnish services...when [they believe] that those services are in accordance with accepted standards of medical care, even when those services do not meet Medicare's particular and often unique coverage requirements." Non-opted out physicians may serve beneficiaries who are enrolled in a "Medicare risk plan" provided the plan does not cover the services.

Physicians should refer to the exact wording of pertinent portions. Members may also wish to consult the AAPS Limited Legal Consultation Service for further guidance.

Dr. Huntoon Exercises Right to Free Speech

Some of Dr. Huntoon's correspondents say that the police not only violated his right to free speech but actually committed a hate crime when they forced him off a public sidewalk and into a restricted "free speech" area during Hillary Clinton's "Listening Tour" in Jamestown, NY. One writer also referred to the U.S. Criminal Code Title 18, Sec. 241: "if two or more persons conspire to injure, oppress, threaten or intimidate any citizen in the free exercise or enjoyment of any right or privilege secured by the Constitution or laws of the United States, or because of his having exercised same...they shall be fined no more than $5,000 or imprisoned not more than ten years or both." AAPS General Counsel pointed out that the Secret Service has a lot of leeway in the interest of security. Dr. Huntoon believes that the government's action just attracted more bad publicity.

"Free speech is hard for government to suppress and when they try to suppress it, that becomes a story and a certain punishment in and of itself," he wrote.

AAPS Demands Congressional Investigation

In a letter to Rep. Dan Burton (R-IN), AAPS has asked for an investigation of issues raised in the August 3 hearing on vaccine safety. In response to Rep. Burton's inquiry about when the CDC became aware of potential adverse effects of rotavirus vaccine, Surgeon General David Satcher claimed that the vaccine s withdrawal was prompted by the VAERS reports received through July 1999. But, Dr. Orient inquired, "why was the vaccine approved in the first place when the incidence of the serious complication of intussusception was far higher in prelicensure trials than in the VAERS reports?" [Letter and accompanying fact sheet are posted on the AAPS web site.] Although AAPS is not opposed to vaccines, government vaccine mandates are contrary to the 1990 AAPS statement of Patients' Freedoms, including the freedom to decline medical treatment and to refuse third-party interference in their medical care, as well as to the Nuremberg Code. CDC vaccine "recommendations" often are rapidly translated into legal or de facto mandates affecting millions of children.

In a letter to James Farrell, Director, Division of Immun- ization, Virginia Department of Health, Stephen DeGray, M.D., writes: "When I received your most recent Dear Doctor letter requiring varicella and hepatitis B immunization, I recalled the [c. 1973] opinion of my smartest medical school professor that we were immunizing children excessively....I'm aware that an occasional parent has a perhaps paranoid view of the immunization program. However, there are serious concerns expressed by reasonable, informed people...We seem to lack more than speculative evidence of benefit over risk and no information regarding long-term consequence....Your office chooses to provide physicians with edicts rather than information or evidence persuading us to subject our patients to the wishes of some remote, presumed expert."

Members' Page

Rationing Education. In the interest of promoting more government tracking, students in New York State who plan to attend college, and who are under the age of 41, and who plan to take more than six credit hours, must present their immunization record to the college or they will not be allowed to enroll. This is according to New York State Public Health Law 2165. Higher education is thus being rationed according to compliance with government immunization mandates.
Lawrence R. Huntoon, M.D., Ph.D., Jamestown, NY

Thriving Without HMOs. When my husband and I finished our residencies 10 years ago and started our practice, we began to read HMO contracts. We found that we could not in all good conscience sign them. We determined never to agree to capitation. We do not languish for lack of patients but are able to spend more time with those we do see. Our overhead is much smaller than that of our colleagues. Many patients leave us when their employer puts them in an HMO, but they come back to us as soon as they can, sometimes paying cash for a second opinion when they are unsure that their primary care doctor is doing the right thing....We love our profession, and we love to go to work every day.
Alieta Eck, M.D., Somerset, NJ

Physicians Cannot Escape Responsibility for HMOs. If managed care is such a nemesis to physicians, why don't they quit? How many physicians don't have enough savings to make it for a year without income from managed care? [Many fear] that if they acted "in concert" they would be subject to antitrust sanctions. There are two answers to that concern: (1) Don't act "in concert," but let each physician make his own decision about what is ethically and morally responsible, with some articulate leaders setting an example. (2) Go ahead and act in concert....[Such physicians] wouldn't be the first people willing to go to jail for their principles. If enough followed, there would be such a reaction that the law would be changed.
Greg Scandlen, Alexandria, VA

Opting Out Now. In a recent experience, HCFA went back to 1994, pulled out some of my documentation that did not necessarily fit with the new criteria of E&M guidelines. They decided that I owed them $850 for inappropriate coding per their ruling. The upshot is that I am going to drop out of Medicare, as you have so eloquently recommended to your membership. As a result of this very minor experience, which is certainly indicative of the severe problems in the future, I am strongly recommending that every physician drop out of the Medicare system. Everyone must realize that the system of justice these days simply requires charging person with a crime, and investigating and prosecuting until the charged individual runs out of money. From that point on, the only option is to plea bargain, which then allows the system to take away everything that the individual has left.
A.V. Anderson, M.D., Edina, MN

AOA on Opting Out. Janet Horan, JD, of the AOA's Division of Socioeconomic Affairs provides osteopathic physicians with a packet of materials which includes a model contract and a model affidavit to be filed with the Medicare carrier, as well as individual assistance when requested. Ms. Horan also conducts fraud and abuse seminars, which include a discussion of how to opt out. Informally, Ms. Horan estimates that in a seminar of 50 physicians, approximately 10 indicated that they have opted out or are considering it.
Karen Nichols, DO, AOA Board of Trustees

The Price of Our Freedom. We forget or avoid history and are letting our freedom slip away, with our eyes focused on progress and gold. Where have physicians been for the past 54 years-the ones supposed to carry the banner of knowledge and foresight? Enclosed [and now posted at www.aapsonline .org] is the history of what happened to the signers of the Declaration of Independence:

"...Such were the stories and sacrifices typical of those who risked everything to sign....These men were not wild-eyed, rabble-rousing ruffians. They were soft-spoken men of means and education. They had security, but they valued liberty more. Standing tall, straight, and unwavering, they pledged: `For the support of this declaration, with a firm reliance on the protection of the Divine Providence, we mutually pledge to each other, our lives, our fortunes, and our sacred honor.' Are there any among us who would do likewise?"
A.E. Mance, M.D., Oakland, MD

A Semantic Point. From a letter to J. Edward Hill, AMA Trustee: Has an amateur accidentally misset the AMA's sail? The letterhead of the AMA reads: "Physicians dedicated to the health of America." I thought that doctors treated human beings, not the Republic. The "health of America" is financial, moral, political, etc., not bacterial, viral, or mitotic....
Curtis Caine, M.D., Brandon, MS

The Health of the Market. Our decade-old experiment of job-based managed care is a failure. This is a sick market because employers pay their workers in "health care" rather than cash. If employers also paid workers with food, clothing, and shelter, we would call it serfdom.
Bert Loftman, M.D., Atlanta, GA

Legislative Alert

When Congress returns work in September, the debate on the "patients' bill of rights" will be back at center stage. It is clear now that in response to the restrictions of managed care in employer-based health insurance, many Members of Congress back federally guaranteed "rights" for employees in private-sector plans. Competing House and Senate bills contain a variety of federal remedies, including Congressional definitions of medical necessity, shifting control over the determination of what is or is not a medically necessary procedure or treatment back to the medical profession; new federal grievance procedures; and new avenues of litigation for patients who believe they have been injured as a result of the decisions of private-sector plan officials. Three major Congressional options have emerged in the form of legislative proposals, and another is in development.

The Clinton Administration is backing a far-reaching proposal to secure a variety of new federal "rights," including the right to sue health plans, in the form of S 6/HR 358, sponsored by Senator Thomas Daschle (D-SD) and Rep. John Dingell (D-MI). Litigation is essential to the Clinton agenda, and neither the Administration nor its supporters in Congress show any signs of backing down from that position.

The Senate has already acted on the issue, and is ready for conference with the House of Representatives, if and when the House can pass a bill. The Senate has passed a Republican bill, which does not contain a right to sue health plans, but establishes a grievance and appeals process for employees enrolled in plans covered by the ERISA law. The President has vowed to veto the Senate bill in its current form.

Throughout the month of August, the House Leadership and key Republicans have been struggling to come up with a consensus bill. The major political development has been the decision of Rep. Charles Norwood (R-GA) to join forces with Rep. John Dingell (D-MI) to forge a bipartisan bill (HR 2723) that opens the door to extensive litigation. Capitol Hill observers say that Norwood is pulling at least 20 Republicans with him. In the meantime, Reps. Tom Coburn (R-OK) and John Shaddegg (R-AZ) are working to draft an alternative to be called the "Health Care Quality and Choice Act" that would expand patient choice through tax-code changes and provide a limited right of employees to sue their employer s health plans. Under the Shadegg-Coburn bill, there is specific language to protect employers who are not involved in a decision to deny care to their employees. To be subject to suit, employers would have to be directly involved in the decision. The Coburn-Shadegg proposal would also require patients to get external reviewers to certify that they had actually suffered an injury and that the injury was caused by the failure of the health plan to give them the medical treatment that they wanted to have. Moreover, Coburn-Shadegg provides a safe harbor for a health plan to include or exclude specific benefits in a plan. In the external review area, Coburn-Shadegg would make external appeals binding on any health plan decision to deny benefits worth more than $100 or any denial that would threaten a patient s life or health; reviews would have to be completed in 21 days, or 72 hours in the case of emergencies; any health plan that refused to comply with the external reviewers recommendations could be fined $1000 a day and be billed for court and lawyers costs. Like other proposals, Coburn-Shadegg would write "direct access" to certain medical treatments into federal law, specifically, "direct access" to emergency care, specialists, obstetrician-gynecologists, pediatricians, and experimental or investigational prescription drugs.

No current legislative proposal, as noted last month, would apply patients' rights to plans under direct Congressional jurisdiction, namely Medicare and Medicaid. The curiosity of the current debate is that new federal rules are not to be applied to old federal health programs.

A Six-Point Agenda for Patient Choice

The outcome of this debate is anybody s guess. It s a mess. Either the Congress will agree, with the President s blessing, to some cobbling together of House and Senate proposals that expand litigation and regulation over the private sector of the economy, satisfying the normal interest groups-doctors and lawyers especially-or the Clinton Administration will veto the results of the Congressional effort as being insufficiently regulatory or litigious. If some version passes, it will mean that either employers or insurance companies, or both, will be faced with new lawsuits, and premiums and medical costs will increase; there will be a reduction in workers take-home pay; more employers will drop health insurance benefits; and more Americans will lose health insurance coverage. If Clinton vetoes these proposals, the problems in employment-based health insurance will fester and get worse, but at a slower pace than would be the case with more litigation and regulation.

Congress should reverse gears and tackle the fundamental problem behind the patients' rights controversy- namely an absence of plan choice. The correct policy is to avoid additional regulation of the already overregulated private health insurance and instead promote defined-contribution plans, which maximize patient choice, and also reform the tax treatment of health insurance to foster patient choice. These changes would result in personal ownership and portability of health plans, enabling patients to fire poorly performing plans. Already, under Section 106 of the Internal Revenue Code, employers can make tax-free contributions to plans of their employees choice. Congress can encourage this option. In the meantime, here are some suggestions for improving the private employer based health insurance market:

1. Give patients the right to know the value of their health benefits plan. Every dollar increase in benefits means a dollar decrease in wages and other compensation. Households, not employers, pay 100% of all medical costs. But, survey research shows that too many Americans either do not know this, or they haven t got a clue about the real cost of that package. Therefore, employers should be required to disclose the value of the health benefits package to workers, and disclose the truth that this benefit is also reducing their wages and other compensation by that amount.

2. Give patients the right to know whether the doctors in their health plans are ethically bound by traditional medical ethics. With the rapid aging of the American population, and the coming pressures imposed on the delivery of medical services, medical ethics will be at the center of the next stage of America s continuing health insurance debate. Too many patients today assume, erroneously, that their physicians are governed by traditional medical ethics as originally outlined in the Oath of Hippocrates. Under the traditional Oath, the doctor is a servant of the patient; the patient comes first over and above any other consideration, including monetary rewards or specific plan incentives or third- party interventions. Moreover, certain specific practices, such as assisted suicide and abortion, are ethically forbidden by the traditional Oath. Today, many physicians subscribe to a watered-down version of the traditional Oath, or even to a population-based ethic that is starkly incompatible with traditional medical ethics. While doctors and health plans should be free to act according to their own ethical lights, patients should at least know what, if any, formal ethical standards govern the practice of medicine in their health plans.

3. Give patients the right to become a signatory to employer-based health insurance contracts and sue for a breach of the contract that they signed. If an employer offers a defined-contribution health plan, enabling the employee to take the monetary value of his health benefits package and buy a plan of his choice, then there is no issue of grievance or litigation, except between the patient and the plan of his choice. And the basis of litigation would be breach of contract. If an employer also offers a defined-benefit plan, and the employee chooses to remain with the defined-benefit option, then the employee should be given the right to become a partner in the contract, formalizing his agreement with the terms and conditions of the health insurance contract. If the insurance company breaches the terms of that contract, then the employee, as patient and party to the contract, should have the right to sue the plan. In any case, no American should be bound by a private contract he did not sign.

4. Give patients the right to privacy in their medical records by abolishing the patient-identifier provisions of the Health Insurance Portability and Accountability Act of 1996 and stopping HCFA intrusions into privacy. In 1993, the Clinton Health Security Act provided for the creation of a powerful National Health Board to collect and use individual patient information from health records for a variety of purposes. The Clinton health plan also required that each insured individual, employer and health plan, and doctor be given a "unique identifier" for a federal data base. Despite the political unpopularity of these and other provisions of the Clinton Health Plan, a Republican Congress insisted on enacting some of its more onerous regulatory provisions, and in the Health Insurance Portability and Accountability Act of 1996 enacted a requirement that the Secretary of HHS establish a standard for electronic transactions and the use of personally identifiable health information. Like the Clinton Plan, the Congress authorizes the assignment of a unique identifier number for each patient. In the meantime, the Health Care Financing Administration initiated, and then temporally backed away from, a remarkable program to collect detailed and sensitive personal information on Medicare patients using home health services, without their full and voluntary and informed consent. A sound patients' rights policy would eliminate any federal patient identifier and stop the collection of personal and sensitive patient information without patient consent in any public program. It is curious that even a nominally conservative majority in Congress would tolerate such a profound breach of Americans personal liberty and privacy.

5. If Congress insists on imposing another layer of regulation or litigation, establish a safe haven for plans providing patient choice. The professional literature shows beyond dispute that wherever there is increased patient choice, there is also increased patient satisfaction with health plans. Any employer who maximizes freedom of choice of plans and benefits should be treated differently in both law and regulation from employers who do not give their employees a choice of plans and benefits. If Congress persists in imposing regulations and mandates, at the very least it should exempt the following from all the mandates and procedures embodied in any patient bill of rights legislation:

• Employers who offer employees a choice of health plans, including fee-for-service, managed care, and PPO;

• Employers who give employees a defined contribution to purchase their own health insurance. These plans, personally chosen by employees, should be exempt from all mandates. And employees who get a defined contribution from their employer would be able to sue the plan to uphold their rights under their contract with the plan.

• Employers who allow their employees to participate in a privately sponsored "voluntary purchasing cooperative," under which plans are marketed to individuals and families. These cooperatives can have an "open season" each year, or every two years, when employees can choose the plans they want, or fire a plan that they feel has not lived up to its responsibilities.

6. Lift the regulatory restrictions on MSAs and give patients the right to a Section 125 Roll Over. Medical Savings Accounts-a simple idea allowing tax free funds to pay directly for medical services-have been capped in number and then regulated to death. The effect of current policy is to punish persons for paying directly for medical services and reward him for paying for medical services through insurance. As a matter of policy, this is nuts. Leftwing critics of the concept then insult our intelligence by saying the free-market proposal has not worked. Remove the caps and cut the red tape. Likewise, millions of employees today have cafeteria plans. Once again, if patients can spend their resources directly on medical services without the intrusion of third-party payment systems, federal grievance procedures or new avenues for litigation are not needed. Under current law, employees can deposit a certain amount of money in a tax-free account, called a Section 125 account. However, any money not used by the employee is forfeited to the employer. A better idea is to allow employees and employers both to contribute to such plans and to roll over their existing Section 125 accounts. If a family could roll over, say, $2000 a year tax free, this would mean that it could spend that amount for routine medical services or the services of specialists directly without going through a managed-care network. It would also mean that premiums would decrease for employers who adopted such accounts, as more of existing funds would be used for direct payment. The proposal increases the economic efficiency of employer-based insurance, promotes direct payment for routine or specialized me- dical services, and liberates employees from the restrictions of managed care or third-party payors on such services.

The best approach to the problems related to health insurance is not to expand federal regulations, but rather to expand patient choice. But until Congress makes the necessary changes in the federal tax code to accomplish that objective, it should refrain from driving up costs, increasing the power of the federal government and the trial lawyers, and reducing the number of Americans who are covered by health insurance.

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