AAPS NEWS

Volume 66, no. 12, December 2010

AFTER NOVEMBER

Democrats who supported ObamaCare took a �shellacking� in the midterm elections. Nancy Pelosi will be deposed as Speaker of the House and third person in line for the U.S. presidency. Still, the main perpetrators of ObamaCare show no sign of repentance. Apparently, the grand achievement was worth a possibly temporary electoral setback. Obama talks about �working with Republicans� to �tweak� or �improve� his Plan.

We need to remember the lessons of 1994, when a Republican wave hit Congress and state and local governments, even in areas that hadn�t elected a Republican since Reconstruction, writes Greg Scandlen (CPR #245). �Peter Jennings on ABC called it a temper tantrum by voters�unruly children who didn�t understand what their betters were doing for them.� Obama is providing the narrative this year, Scandlen points out, �attributing this wave to people who can�t think because they are afraid.�

After 1994, many thought they had nothing to worry about since the Republicans had taken charge. Funding for free-market organizations such as the Council for Affordable Health Insurance (CAHI) dried up. Then we got the Kassebaum-Kennedy Act (the Health Insurance Portability and Accountability Act, HIPAA) and a huge Medicare expansion, Part D.

Organized medicine largely applauds the reform, and is moving ahead in implementation. In the official journal of the American College of Physicians (ACP), Robert Kocher, Ezekiel Emanuel, and Nancy-Ann DeParle write: �The Affordable Care Act [ACA] is a once-in-a-generation change to the U.S. health system.� Among other things it �guarantees access...for all Americans,� and along with the American Recovery and Reinvestment Act (ARRA or the �stimulus bill�) removes barriers such as �unnecessary administrative complexity� and �inaccessible clinical data.� Physicians are urged to �embrace the opportunities� (Ann Intern Med 2010;153:536-539).

In June, the AMA produced �Pathways for Physician Success Under Healthcare Payment and Delivery Reforms.� At the November interim meeting, the House of Delegates approved vague standards for �accountable care organizations� (ACOs), thus accepting the premises.

What Must Be Done
If there is a bomb under the foundations of your house, you do not propose �tweaking� it. You want it disarmed, removed, and dismantled. As its advocates openly admit, the ACA is designed to radically alter both the financing mechanism and the practice of medicine itself. It must be wholly repealed.

Reveal the damage as it is happening (see p 2). It is important to lay the groundwork for repeal by making sure that people understand the errors in the arguments raised to save the bill, notes Linda Gorman. ObamaCare partisans will try to blame problems on the market or the evil insurance/pharma/greedy physician stereotype. Union workers, hospitals, section 330 federally qualified clinics, and academic and corporate physicians will grow fat on the money shoveled in their direction. �They and their foundation-funded Astroturf networks will be powerful advocates for preserving [ObamaCare],� she writes.

Cut off funding for implementation. Advocates see this as a serious threat (Henry Aaron, NEJM 10/28/10). ACA contains 64 specific authorizations to spend up to $105.6 billion, and 51 general authorizations to spend �such sums as are necessary� over the period between 2010 and 2019. None of these sums will flow without specific appropriations. Also, the ACA-appropriated $1 billion to the Dept of Health and Human Services (HHS) is a fraction of the $5 to $10 billion that the Congressional Budget Office (CBO) estimated would be necessary for implementation. Nor is there anything extra for the Internal Revenue Service (IRS) for computing and paying subsidies. Congress could also bar the use of HHS staff time to design rules.

Obama could veto appropriations bills, leading to a partial government shut-down and setting the stage for a high-stakes game of political �chicken.� Clinton won such a game in 1994, but there is no guarantee of the outcome this time.

If repeal fails, but efforts to cripple implementation succeed, we could be left with �zombie legislation,� writes Aaron, a program that lives on but functions badly.

Principles: the Constitution, and Economics
Both parties need to remember that the Constitution does not give Congress the power to regulate either the practice of medicine or medical financing�much less to gift the health insurance industry to HHS. Executive agencies such as HHS already have enough power to trump laws written by Congress. �Congress must re-take power from unelected bureaucrats, un-vetted czars, and outside activist groups,� writes Fred Dardick (Canada Free Press 10/20/10).

The Republican �replace� pledge needs a lot of work, writes John Graham (PRI 9/32/10). It ignores the single most important problem, the tax code, which gives employers rather than individuals ownership of nontaxable medical dollars. Many �conservative� proposals increase federal power over medicine, rather than decreasing it. They display fundamental ignorance of the economic principles of insurance. Moreover, they fail to understand the pernicious role of third-party payment, Scandlen writes (op. cit.). Even the best tilt toward managed care.

The Damage

Job Destruction. The taxes, penalties, and fees levied on investors and businesses by ObamaCare are expected to kill nearly 700,000 jobs by 2020 (Lisa Cummings, InvestorsInsight.com 11/8/10). Since penalties of $2,000 per worker apply only to full-time employees, expect employers to be hiring more people to work less than 30 hours per week.

For medical device companies, the 2.3% excise tax may exceed profits, prompting them to move jobs overseas, write Sen. Tom Coburn, M.D., and Sen. John Barrasso, M.D., in an October 2010 report to the U.S. Senate.

A New Ponzi Scheme. That is how Sen. Kent Conrad (D-ND), who nonetheless voted for ObamaCare, described the Community Living Assistance Services and Supports (CLASS) program, � 8002. Everyone who does not affirmatively opt out, by a mechanism still to be determined, will be automatically enrolled by his employer in this �voluntary� long-term care insurance scheme. Premiums (payroll taxes), based on age at time of enrollment, will be collected starting in 2011. Benefits payouts will not begin until 5 years later. Although the program will be financially upside down in a short time, the $58 billion net in the first 10 years was used as a budget gimmick to �pretend that health reform is fully paid for� (Washington Post 7/10/09).

Elimination of Retiree Benefits. More than 43% of employers that offer retiree medical benefits may eliminate them, owing to new ObamaCare requirements (Cummings, op. cit.)

Budget Destruction. By 2020, ObamaCare is expected to increase annual budget deficits by an average $75 billion, increase the national debt by more than $753 billion, and increase the interest on the debt by $23 billion/y (ibid.).

�Redistribution� of Insurance. An estimated 80 to 100 million individuals will have to change coverage categories in 2015-2016, causing major disruptions, writes Grace-Marie Turner (Health Policy Matters 11/12/10). Those who lose employer coverage may move into exchanges, or end up on Medicaid.

A Nation of Outlaws. Some predict an �outlaw market� of 30 to 40 million Americans who refuse to buy insurance (ibid.).

Decreasing Access to Care. About 69% of physicians are reportedly thinking about dropping out of government health plans; 53%, out of treating insured patients; and 45%, out of medicine altogether (ibid.). If all the promised preventive care were to be done, family physicians would have no time left to care for the sick (John Goodman�s Health Policy Blog 10/13/10).

Five Losers for Every Winner. Some have already benefited from ObamaCare; for example, the 8,011 persons, nationwide, who have enrolled in a program for those with pre-existing conditions (Wall St J 11/12/10). Goodman estimates that 32 million newly insured, plus some people with high health costs, about 50 million altogether, will gain from ObamaCare. The other 250 million will lose more than they gain (Health Policy Blog 11/2/10).

MAG Votes �No Confidence� in AMA

On Oct 17, the Medical Association of Georgia (MAG) passed by overwhelming majority a resolution expressing no confidence in AMA leaders who supported ACA, a fiscally unsustainable bill that greatly expanded the federal government�s involvement in medicine, over the strong objections of many members.

Medicine Does Well in Election

Two of three Freedom of Choice in Health Care measures passed as constitutional amendments. In Oklahoma, State Question 756 won 65% to 35%. In Arizona, Proposition 106 won 55%to 45%. Phoenix orthopedic surgeon Eric Novack, M.D., helped to bring this to victory after a narrow defeat two years ago. Despite valiant efforts by Colorado�s Independence Institute, which was vastly outspent by labor unions, Amendment 63 was defeated.

The model act drafted by the American Legislative Exchange Council (ALEC) has also passed as a statute in Virginia, Idaho, Georgia, Louisiana, and Missouri, and has been introduced in about 30 other states. Although called merely �symbolic� because of the federal supremacy clause (LA Times 11/3/10), the Act, according to ALEC, can provide standing to a state in litigating against the insurance mandates in ObamaCare.

Two AAPS members were elected to Congress: Rand Paul, M.D., an ophthalmologist, will be a senator from Kentucky, and Dan Benishek, M.D., a general surgeon, will fill the seat vacated by Rep. Bart Stupak of Michigan. Other winning candidates supported by AAPS-PAC include: Joe Heck, D.D.S. (CD-3, NV); Scott DesJarlais, M.D., a general practitioner (CD-4 TN); Andy Harris, M.D., an anesthesiologist (CD-1 MD); and Ben Quayle (CD-3 AZ). About 15% of the members in their freshman class in the House will be physicians.

AAPS physician members, who were supported by AAPS-PAC but didn�t win this time, are Rob Steele, Donna Campbell, and Mariannette Miller-Meeks. We thank them for fighting the good fight for our liberty.

Election Tainted by Suspicion of Fraud

Modern electoral procedures, especially widespread early voting, are vulnerable to fraud, and may have flipped the results of some races�including the reelection of Senate Majority Leader Harry Reid. In Nevada, �election day,� which by federal law was supposed to be Nov 2, lasted for 2 weeks. About 65% of the ballots were cast in October. The secretary of state posted daily reports of voter turnout by party, fueling aggressive efforts to round up voters expected to support Reid, and bus them to the early voting sites. A Reid staffer suggested that executives at Harrah�s casinos �put a headlock� on supervisors to get out the vote. Polling places were supervised by the Service Employees International Union (SEIU). Some computer screens were said to be pre-marked for Reid, and there were inadequate precautions against software that could flip a certain percentage of votes.

In Oregon, all ballots are mailed. There are no pollwatchers, and meddling is possible at several points in the process.

AAPS Calendar

Jan 21, 2011. Workshop, Dallas, TX; Jan 22 Board meeting.
Sep 28-Oct 1, 2011. 68th annual meeting, Atlanta, GA.

Penumbras and Emanations

On Feb 2, 2006, the late Joseph Sobran wrote: �You could easily get the impression that the U.S. Supreme Court has banned public displays of the Tenth Amendment.� While this hasn�t happened yet, a conspiracy of silence can be as effective as an outright ban. Most federal employees appear to have �tacitly agreed to avoid all mention of the Tenth, which encapsulates the meaning of the U.S. Constitution.�

Although often called the �states� rights amendment,� it actually concerns powers, not rights. All powers that haven�t been �delegated� to the federal government are reserved to the states, and to the people. Politicians, however, soon began their search for �implied� powers that were �necessary and proper� to carry out the explicitly enumerated powers. As Henry Jaffa explained approvingly, Lincoln discovered a huge �reservoir of constitutional power.� Later, such reservoirs were called �penumbras, formed by emanations,� as in Roe v. Wade.

The richest cache of penumbras and emanations is the Commerce Clause, Sobran writes, which is now interpreted to mean that Congress can �regulate� just about everything we do. The Tenth, according to the Supreme Court, is merely �declaratory,� a truism that states retain any powers they haven�t �surrendered.�

To call this �legislating from the bench� would be �an almost imbecilic understatement,� in Sobran�s view. �It inverts the plain meaning of the Constitution�. It�s nothing less than revolution by means of �interpretation.��

If the power to �regulate commerce...among the several states� had been as broad as the courts now say, �Congress could have abolished slavery, imposed (and repealed) Prohibition, and given women the vote by statute,� without need to bother with amending the Constitution.

Sobran observes that �the Tenth Amendment is one of the few passages in the Constitution in which the Federal judiciary hasn�t discovered reservoirs of penumbras and emanations.�

Lawsuits against ObamaCare, and the Freedom of Choice in Health Care Acts now being passed will force the courts to consider limits on the powers �discovered� in the Commerce Clause, and the reservoir of meaning in the Tenth Amendment.

Dr. Lakin Faces Court Martial

On Dec 14-16, Lt. Col. Terrence Lakin, M.D., an AAPS member with 18 years of service in the U.S. Army, will face court martial for refusing an order to deploy to Afghanistan for the second time. He could be sentenced to years of hard labor in prison. His deployment orders required him to produce a copy of his birth certificate. He also provided it upon his commissioning in the military and obtaining a security clearance. For the past year, he has sought, through his Army chain of command and congressional delegation, to determine the legality of his orders; that is, whether his commander in chief is Constitutionally qualified to hold his office. He cites the Principles of Nuremberg, under which military officers have a positive duty to establish the lawfulness of their orders, and a �duty to disobey� unlawful orders. He also swore an oath to uphold the U.S. Constitution. His inquiries have been met with �stonewalling and evasion,� according to his website www.SafeguardOurConstitution.com. The Army seeks to deny him the right to present witnesses from Hawaii.

Multistate Lawsuit May Proceed

On Oct 14, U.S. District Court Judge Roger Vinson ruled that Florida and other states may proceed on two major counts of their lawsuit against the ACA (ObamaCare): the insurance mandate and the required expansion of Medicaid. Vinson ruled that the mandate is a penalty, not a tax, and must be defended under the Commerce Clause:

In Michigan, U.S. District Judge George Steeh dismissed the challenge to the insurance mandate brought by Thomas More Law Center. He stated that decisions about how to pay for health services have �direct and substantial impact on the interstate health care market.� The decision to try to pay later for medical care out of pocket, rather than pay now through purchasing insurance, shifted costs of $43 billion in 2008 onto other market participants, he ruled. Because the �penalty� is incidental to Congress�s purpose of increasing the number of insureds and decreasing the cost of insurance, it is not an improperly apportioned direct tax.

Cost shifting from uninsured to privately insured is greatly exaggerated, reports Jacob Sullum. It�s $200 per family as estimated by the Henry J Kaiser Family Foundation, not the $1,100 claimed by Families USA (Health Freedom Watch, October 2010). Cost shifting from government programs is ignored.

The uninsured, after adjusting for other characteristics, consume only about half as much health care as others�and they pay for half of what they use out of their own resources. Thus the �free ride� of the average uninsured person is about one-fourth of what everybody else spends on health care, and the insurance mandate is massive �overkill,� writes John Goodman. �Free riders are a bargain,� writes Linda Gorman, �compared to the taxes that ObamaCare requires to �solve� this �problem�� (John Goodman�s Health Policy Blog 5/26/10).

HHS Warns New Doctors about �Fraud�

The HHS Office of Inspector General (OIG) is welcoming new doctors to practice with a 29-page �road map� to federal landmines (http://oig.hhs.gov/fraud/PhysicianEducation), including contact information for the tipster hotline.

Of special note is a case example of a concierge physician who paid $107,000 for allegedly violating a Medicare assignment agreement by charging an annual fee for services, some of which were also covered by Medicare.

It doesn�t mention that in today�s settlements, �a billion is the new million,� especially in FDA actions concerning promotions of off-label uses of drugs and devices. Companies can expect increased prosecutions of individuals, �even if there�s no proof they were knowledgeable based on strict liability� (HCFR 11/3/10).

Failure to promptly return Medicaid overpayments and lack of documentation of medical necessity for home health and other goods and services are new targets for aggressive actions. Huge fines and lengthy prison terms are becoming commonplace.

Correspondence

Insurer Demanding a PCP. Although I have an HSA and a high-deductible health plan (HDHP) that does not have any requirement to have a primary care physician who participates in the plan, the insurer is making every effort to �encourage� (exert control over) my choice of a primary physician. I recently received a letter informing me that they will contact me soon, and �we will try to assign the member to a primary care physician.� They assure me that subscribers whose plan does not require a PCP will have the final say in who the PCP is. It is clear, however, that they want members to have one, and they want to enter the name into their database�even though I pay for primary care visits out of my HSA and am highly unlikely to exceed the deductible in any year.

Given the insurers� initiatives to gain power over decision-making, and the state insurance department�s rubber-stamp approach to their requests, I fear that if one refuses to identify a PCP, they may deny coverage for any expense under the HDHP. Soon one may no longer be able to spend one�s own money on one�s own medical care without telling the insurer how every penny is spent.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY

The Pre-ex Defense. I�ve heard the pre-existing conditions argument invoked like a mantra whenever I�ve spoken about Colorado Amendment 63 on health care choice [which was defeated 53% to 47%]. The medical society spokeswoman used the �we need a mandate to help the uninsured market function smoothly if we want to insure people with pre-ex� as a regular talking point. It came up less frequently after I learned to say �federal law has required that states provide coverage for people with preexisting conditions since 1966, and the Colorado insurance market has operated just fine.� Then they tried the �it costs too much for anyone� claim, so I looked up the high-risk pool premiums, and also pointed out that the ObamaCare/Massachusetts approach has produced the highest premiums and worst access in the land.

Many people who claim, in public forums, that they couldn�t get insurance seem to be unacquainted with the process, and may be lying. Pointing out that coverage has been available makes audiences wonder about their command of the facts.
Linda Gorman, Ph.D., Independence Institute, Golden, CO

Why Employer-Owned Coverage? I have belonged to the same credit union for 25 years, had the same auto policy and credit card for 10 years. People may stay in their home for 20 years and go to the same church for life. Yet they change jobs every 3 years.
Greg Scandlen, Consumers for Health Care Choices

Not Ready for Prime Time. While the idea of data exchange�such as having lab reports available on line�is legitimate, electronic health records (EHRs) are problematic. They do not capture longitudinal data well, nor do they reflect the nuances in clinical care. The computer almost insists that we document useless data, usually for money. The programs are all about collecting payment, not providing care. The templates are dangerous. When one of our hospitals installed EPIC, doctors left in droves, and patients asked not to be admitted there. Doctors should take a step back and reassess. This is a train that has already derailed.
Marcy Zwelling-Aamot, M.D., Los Alamitos, CA

Are Younger Physicians Better Educated? I surveyed two groups of physicians: 25 who graduated medical school within the last 5 years, and 25 who graduated more than 20 years ago. Pre-med majors were as follows. In the >20-year group: biology, 8; chemistry, 6; psychology, 4; physics, 2; �natural science,� 2; physiology, 1; mathematics, 1; philosophy, 1. In the <5-year group: English, 6; fine arts, 4; chemistry, 3; psychology, 3; biology, 2; physics, 2; history, 2; music, 1; speech, 1; philosophy, 1.
Rudolph Kirschner, M.D., Phoenix, AZ

Guaranteed to Fail. Insurers cannot possibly make a profit if required to pay out 80% of revenue in benefits and not allowed to limit annual or lifetime benefits. The entire Affordable Care Act is nothing more than a carefully engineered plan to strangle the current system to death. Most who voted for it don�t understand that.
Frank Timmins, Dallas, TX

The RUC. The Oct 27 Wall Street Journal has an informative article on the Relative Value Scale Update Committee (RUC), a secretive 29-member panel convened by the AMA, which meets three times a year to divvy up $60 billion in Medicare spending on doctors. The graphics in the online version explain the process, and identifies the RUC members. Though the panel has no official government standing, CMS accepts most of its recommendations on what to pay physicians for each of thousands of procedures.

It seems to me that the process allows no input from consumers and no transparency�and fosters higher costs (for example, some procedures are paid using 1994 time estimates, which are as much as 30% higher as the time it takes to do the same procedure today). A better idea is simply to pay the patients whatever is the going rate and let them work it out with the doctors, who would be free to charge whatever they wished. Many of us fear that the alternative to the AMA quagmire would be the government establishing prices and rationing services.
Kirby V. Nielsen, Delaware, OH