Ignored by most politicians, David Walker, who heads the Government Accountability Office (GAO), is taking his message on tour. His presentation on the unsustainability of the U.S. economy can be viewed on YouTube.

The biggest contributor to the coming fiscal meltdown is the Medicare prescription drug benefit.

Boston University professor Laurence Kotlikoff asks the question “Is the United States Bankrupt?” in a paper published in the Federal Reserve Bank of St. Louis Review, July/August 2006.

“[W]e have a country at the end of its resources. It’s exhausted, stripped bear (sic), destitute, bereft, wanting in property, and wrecked (at least in terms of its consumption and borrowing capacity) in consequence of failure to pay its creditors,” Kotlikoff writes, paraphrasing the Oxford English Dictionary. “In short, the country is bankrupt and is forced to reorganize its operations by paying its creditors (the oldsters) less than they were promised.”

Mike Adams predicts that the United States will play the Ace up the sleeve. “It’s the Ace that all governments eventually play on their way to bankruptcy and collapse”: hyperinflation (NewsTarget.com 7/17/06).

Massive tax increases are likely to trigger major supply-side responses of the type that have not yet arisen in this country, Kotlikoff notes. For example, Uruguay, with very high net tax rates, has lost more than 500,000 young and middle-aged workers, largely from the nation’s best educated citizens, to Spain and other countries in recent years.

The longer Washington persists in denial, the worse the ultimate outcome, Walker warns.

Additional information:

• “The Eve of Destruction?” Civil Defense Perspectives, January 2008.
• “Bankruptcy,” AAPS News, March 2005.
• Medicare Prescription Drug Benefit.
• “Medicare and Patient Freedom,” AAPS News, July 1996.

The New York State health department has plans: to control the cost of hospital care, and to rescue the state’s malpractice insurance carriers.

In 2006, the “Berger Commission” (the Commission on Health Care Facilities in the 21st Century) decided that certain hospitals must close and others must merge, backing up its decrees with threats to withhold a certificate of operation.

The Berger Commission was appointed by Gov. Pataki to fix problems that began in the early 1980s, when New York tried to control costs by fixing the price of every procedure performed by every hospital in the state. Rates varied, as the state awarded higher rates to financially troubled hospitals. Hospitals and workers joined together in a powerful political alliance to lobby for increased state subsidies. As a result, New York now pays for about half of all personal health care, compared to 40 percent on average in other states, writes Steven Malanga (City Journal 12/20/07).

The Commission called for the elimination of about 20 percent of excess hospital and nursing-home capacity. Few closures have happened, as hospitals have gone to court to block them, but other hospitals have expanded to take advantage of the potential closure of others. So far, mergers have also failed to occur.

The most recent Medicaid spending data (from 2006) shows that New York continues to hike spending, even as 22 other states have lowered outlays. With 6 percent of the U.S. population, New York accounts for 15 percent of nationwide Medicaid spending on hospitals, and 19 percent of spending on home health care (ibid.).

The Commission basically appears to believe that competition between free and private entities is bad and needs to be eliminated, as by creating a system with fewer, government-controlled entities, writes Dr. Lawrence Huntoon of New York.

If successful, the formation of a new nonprofit entity from Kaleida Health and Erie County Medical Center, including the University of Buffalo and a new heart and vascular center, would control 40 percent of the regional hospital market and create the region’s largest nongovernment employer. It would likely result in a strike, as workers would no longer be public employees and are expected to resist the elimination of retiree health benefits for new hires. Such benefits are considered an unsustainable burden.

The “arranged marriage between competitors” is stalled, partly for want of $250 million from a state facing a $4.3 billion budget deficit (Henry L. Davis, Buffalo News 12/5/07 and 12/29/07).

Gov. Eliot Spitzer plans to help solve the problem by awarding $106 million this year for advancing adoption of electronic health records (EHRs), which are the “key to [his] healthcare agenda” (Joseph Conn, www.modernhealthcare.com 1/11/08)

Dr. Huntoon notes that merged and consolidated hospitals would need to convert to a single EHR system in order to function. As the Berger Commission can set whatever conditions it likes for hospitals’ continued operation, a state-mandated EHR may not be far in the future.

The stated rationale for EHRs is to improve quality and efficiency while reducing costs and errors. As Spitzer states, “our best tool [for making care affordable] is to change reimbursement rates….[W]e must start paying for the right care in the right setting at the right price” (Conn, ibid.).

Even as physicians’ revenues plummet, they face a 14 percent increase in professional liability insurance premiums. And to offset the debt that has been incurred by insurance carriers, state insurance superintendent Eric Dinallo may impose, over several years, a cumulative $50,000 surcharge on every physician, and/or a $230,000 surcharge on every physician in the state-regulated high-risk Medical Malpractice Insurance Plan.

“The deficit has to go somewhere eventually, unless we turn lead into gold or print money,” Dinallo said (E.B. Solomont, New York Sun 12/26/07). The fee might be “required by law to guarantee the solvency of the state’s medical malpractice insurers” (New York Sun 12/27/07).

A Brooklyn brain surgeon now pays $267,000 a year in professional liability insurance premiums, and a Queens obstetrician, $180,490.

Dr. Huntoon predicts that such a surcharge would drive many physicians out of business, lowering expenditures by making fewer physicians available to treat patients. The rate increase alone has caused a number of practices to close. In July, 215 New York obstetrician/gynecologists stopped delivering babies. New York has about 2,000 practicing obstetricians (ibid.).

Additional information:

• “The Medicaid Penny” by Lawrence R. Huntoon, M.D., Ph.D., J Am Phys Surg, Spring 2005.
• “High-volume New York Medicaid Providers to Get Free Software,” AAPS News of the Day 4/28/07.

The penalties for not buying insurance in Massachusetts have been set too low to “encourage” compliance, stated Jonathan Gruber, a director of the Commonwealth Health Insurance Connector.

The proposed 2008 top penalty of $912 per year is a four-fold jump from the $219 penalty people will face when filing their 2007 tax returns.

The secretary of administration and finance is trying to figure out how to “strike a balance in setting penalties that would withstand challenges to their legality and fairness,” writes Alice Dembner (Boston Globe 1/11/08).

Imposing the letter of the law would create an unwieldy schedule of 27 different penalties depending on an individual’s age, income, and place of residence.

Gruber said the proposed penalty would be less than 40 percent of the cost of insurance for younger people, and 20 percent of the cost for older people. A 50 percent penalty, some suggested, would unfairly penalize older people whose insurance premiums are twice as high as those of younger people.

A federal mandate for health insurance is advocated by presidential candidates Hillary Clinton, John Edwards, and Christopher Dodd. They would require comprehensive “insurance” that pays for routine and preventive care.

The proposed “shared responsibility” would force young people to subsidize the health tab for middle-aged and older persons, on top of their payroll tax, writes Betsy McCaughey, former lieutenant governor of New York. (Wall St J 1/4/08).

“This is contrary to a fundamental American principle. This nation has always believed in making life better for its children, not in exploiting them.”

Additional information:

• “Stupid Ideas on ‘Health Care Reform’,” and “The Evidence from Massachusetts,” AAPS News, January 2008.
• “Hillarycare, Take Two,” AAPS News, November 2007.

In 2007, more than 79 million records were compromised in the United States, a fourfold increase from 2006. Many contained Social Security and/or credit card numbers.

While government and private entities are spending more and more on firewalls, encryption, and other security measures, the fixes are often too little and too late, with hackers a step or two ahead.

With wireless data transmission more common, hackers are increasingly expected to target a major vulnerability, writes Mark Jewell for the Associated Press. Eavesdroppers are rapidly learning to bypass security safeguards (Ariz Daily Star 12/31/07).

Breaches reported by the Identity Theft Resource Center represent only a portion of those that occur.

Some are from human error, such as employees losing laptops, as opposed to hacking.

Additional information:

• “British NHS Loses Data; Physicians to Boycott Database,” AAPS News of the Day 12/17/07.
• AAPS letter opposing H.R. 4157, the Health Information Technology Promotion Act, Feb 6, 2006.
• AAPS comments on national health information infrastructure, Jan 15, 2005.

By a measure signed into law by Acting Governor Richard Codey, pregnant women will be routinely tested for human immunodeficiency virus (HIV). It also requires testing of newborns whose mothers with positive or unknown HIV status. Although women will be allowed to opt out of the testing, the American Civil Liberties Union (ACLU) and some feminist groups contend that the law deprives women of the right to make their own medical decisions.Arkansas, Michigan, Tennessee, and Texas require clinicians to test mothers for HIV, unless she asks not to be tested, while Connecticut, Illinois, and New York test all newborns, according to the Kaiser Family Foundation.

 Many highly regarded hospitals in the U.S. routinely diagnose brain death without following the guidelines promulgated in 1995 by the American Academy of Neurology (AAN), according to a survey presented at the American Neurological Association (ANA) annual meeting (Kurt Samson, Neurology Today 11/6/07).Researchers at the Massachusetts General Hospital surveyed the top 50 neurology and neurosurgery departments nationwide; 82 percent responded. Results showed that “adherence to the AAN guidelines varied widely, leading to major differences in practice, which may have consequences for the determination of death and initiation of transplant procedures,” said Dr. David Greer.

Apnea testing was omitted by 27 percent; still more distressing is that many fail to even check for spontaneous respirations.

“We’re hoping to present a persuasive case for new standards,” said Dr. David Greer.

“In plain, straight talk,” writes Dr. Lawrence Huntoon, editor-in-chief of the Journal of American Physicians and Surgeons, “the survey indicates a high likelihood that some patients are being ‘harvested’ in some hospitals before they are dead! In hospitals with aggressive transplant programs (hospitals make a huge amount of money on transplant cases), making sure a patient is dead before going to the ‘harvesting suite’ may be viewed as a minor technicality/impediment.”

In another poster at the AAN conference, Dr. Eelco Wijdicks reported that the “physical deterioration of brain matter once referred to as ‘respirator brain’ has become an anomaly in today’s ‘modern transplant era’—where temperature and other variables of new cadavers must be carefully monitored and controlled to keep organs viable.”

In the past, he noted, patients had often been kept on respirators for weeks, and their brains [but apparently not their livers] had turned to liquid.

These days, microscopic analysis may be needed to detect the changes. “Variable neuronal loss was noted in the brain and brainstem samples, but total necrosis was rarely observed”—because of “earlier preservation of the brain and more efficient organ harvesting programs.”

“It’s just a matter of basic pathology that needs to be recognized in this era of transplantation,” said Dr. James Bernat, professor of neurology at Dartmouth.

Additional information:

• Brain death and organ transplantation

Although compressions-only cardiopulmonary resuscitation (CPR) was unveiled in 2003, after a decade of research, the American Heart Association still stops short of recommending it.

Two new studies, of 10,000 Swedish and 5,000 Japanese patients, who suffered a witnessed, out-of-hospital cardiac arrest, show comparable rates of survival after compressions-only or compressions with mouth-to-mouth breathing.

Previous studies have shown better survival rates with compressions only. Additionally, cardiac researcher Gordon Ewy, M.D., notes that mouth-to-mouth breathing interrupts blood flow to the brain. Thus, compressions-only CPR minimizes brain damage.

“Millions of dollars and millions of hours” have been spent to teach traditional CPR worldwide, Ewy points out, although it works no better than chest compression only, at this point rarely taught and usually done by people with no training (Carla McClain, Ariz Daily Star 12/21/07).

“It is now time to change the guidelines,” he said (Circulation 2007;116:2894-2856).

Additional information:

• “Compression-only CPR Triples Survival Rates,” AAPS News of the Day 11/18/06.

There’s a new kind of brokerage firm in our brave new world: agencies that assemble databases of young women and market their eggs to customers who want a baby and can’t produce one themselves.

Some offer photographs and information about hobbies, education, and religion, along with health screening, so customers can pick the “donor.” Some consider “donor shopping” for “designer babies” unethical, and match the donor on the basis of a few genetic traits.

The broker charges around $16,500, which includes the donor’s fee of $4,000 or more. A woman who has successfully “cycled” three or four times can command up to $8,000.

A donor must inject herself with fertility drugs every day for 6 weeks. Donor #8447 produced 16 eggs during one cycle. Some of the embryos that were created were implanted, and some frozen.

“I think it’s great,” she said. “Men have always been able to spread their genes. Now I can spread my genes” (Minneapolis Star-Tribune 10/22/07).

The outcome of these “miracles for sale” is not always happy. Some clients have held a newborn in their arms and said “I don’t feel attached to my child,” reported University of Minnesota psychologist Linda Hammer Burns. Or years after children are born, divorcing parents use the means of their conception as emotional weapons in bitter legal fights (ibid.).

An unasked question is how many years of her own potential fertility has donor #8447 sold? There is apparently no limit. Tests for infectious diseases that could be transmitted to surrogate or baby are among the few regulations governing egg and sperm donation in the U.S.

Infertile women who create frozen embryos tend to have a view of them that differs from that of donor #8447.

“Our data suggest that for most of the individuals who create embryos in hopes of having a baby, the preference is not that their remaining embryos have a chance at life, but rather that they be used in a way (research, and if not, simply destruction) that ensures that they do not,” write Anne Drapkin Lyerly of Duke University Medical Center and Ruth R. Faden of the Johns Hopkins Berman Institute of Bioethics (Science 2007;317:46-47).

More than half would donate their embryos for research, apparently believing that “scientific progress justifies the instrumental use of early human life.” Only around 20% would donate to another couple, suggesting that “there are deep responsibilities to one’s own embryos…that preclude allowing them to develop into children without the knowledge, participation, or love of those who created them.”

About 400,000 human embryos are currently cryopreserved.

Additional information:

• “Purchase of Human Eggs Creates Ethical Dilemma,” AAPS News of the Day 4/5/07
• AAPS Resolution Affirming the Sanctity of Human Life, 2003

William McGuire, M.D. former chief executive of UnitedHealth Group, agreed to one of the largest executive-pay givebacks in history, forfeiting $620 million in stock option gains and retirement pay, to settle civil and federal claims against stock-option backdating. The final outcome, however, remains uncertain as of Dec 28.

A year ago, McGuire was ousted from his position as one of the most successful and highest paid executives in the U.S. because of the back-dating scandal. More than 80 corporate officials lost their jobs in the scandal.

He still retains about 24 million stock options that currently could be cashed in for a gain of about $800 million, on top of the $500 million in pay he received from UnitedHealth between 1991 and 2006. A freeze on these assets was continued by U.S. District Judge James Rosenbaum in a Dec 26 ruling, pending a decision by the Minnesota Supreme Court on whether he has the power to examine the settlement beyond just rubber-stamping it. State courts give varying degrees of deference to special litigation committees.

Calling the settlement a “business judgment,” Judge Rosenbaum noted that the special litigation committee’s “lack of any findings…leaves no tracks showing why or how its business judgment can be considered reasonable.”

The committee, appointed by UnitedHealth’s board, had concluded that some of the accusations against McGuire might have merit, but the cost and risk of suing him might not be worth it. McGuire neither admitted nor denied wrongdoing.

The two former Minnesota Supreme Court justices on the committee wrote that their ability to evaluate McGuire’s potential defenses were “hampered by his unavailability for an interview.” They interviewed 50 other people over the course of a year (Joshua Reed, Chicago Sun-Times 12/7/07).

Judge Rosenbaum also expressed some thoughts about the amount of money that McGuire had claimed when he was forced out of UnitedHealth. “Words such as ‘huge,’ ‘fantastic,’ ‘astounding,’ ‘staggering,’ or ‘astronomical,’ do not describe $1 billion,” he wrote. “Such a sum can only be thought of as ‘transcendent,’ or in terms of the gross national product of smaller members of the United Nations” (Vanessa Fuhrmans and Peter Lattman, Wall St J 12/28/07).

McGuire is barred from serving as an officer or director of a public company for 10 years. He also still faces a criminal inquiry.

UnitedHealth’s current CEO, Stephen Hemsley, plans to voluntarily have his remaining options repriced, effectively forfeiting $50 million, on top of the $190 million in gains he agreed to give back last year on options with questionable grant dates (Wall St J 12/7/07).

McGuire turned UnitedHealth into one of America’s largest health-care companies through a series of mergers.

While growing into a colossus, the company has repeatedly failed to perform its basic job of paying medical bills. UnitedHealth, which covers 70 million Americans, has been sanctioned in nine states for paying claims slowly; shortchanging doctors, hospitals, or patients; or poorly handling complaints and appeals.

One Nebraska woman complained to state regulators that UnitedHealth’s computers had incorrectly rejected claims related to her son’s surgery—six times.

At one point, UnitedHealth owed Dr. George Schroedinger, an orthopedic surgeon, $600,000. He and his clinic sued UnitedHealth of the Midwest in 2004. 

Ruling in favor of the clinic, U.S. District Judge Stephen Limbaugh of Missouri declared that the company’s claims processing systems were “flawed in many ways, denying, reducing, and improperly processing claims on a regular basis. And despite innumerable requests, United was unwilling to remedy the underlying errors in its systems” (Star-Tribune 12/12/07).

Payment troubles continued after the verdict, and Dr. Schroedinger filed a second lawsuit. “These people can never get it right, which says to me that they just plain lie,” he said in an interview.

Failure to pay isn’t the only complaint. The insurer also gives incorrect information on which physicians are in its network, creating enormous problems for physicians’ staff.

The AMA said that no other insurer has prompted as many complaints as UnitedHealth about abusive and unfair payment practices. AMA officials have met with UnitedHealth executives 16 times since 2000, with little to show for it.

“They have always got a new plan to fix it,” said Dr. William G. Plested III, past president of the AMA. But “nothing ever happens.”

Additional information:

• “Doctors’ Reputations Harmed by Inaccurate Rating System,” AAPS News of the Day 8/10/07.
• “Is Medicine Ripe for the Taking?” AAPS News, July 2007.
• “AARP Signs Contracts with Aetna and UnitedHealthGroup,” AAPS News of the Day 5/5/07.
• “Physicians’ Suit Against UnitedHealth Dismissed,” AAPS News of the Day 6/22/006.
• “Industry ‘Land Grab’ Sparked by Medicare Drug Benefit,” AAPS News of the Day 2/13/06.