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

Volume 65, No. 1 January 2009


On Pearl Harbor Day, Dec 7, 2008, the Associated Press announced that Obama was determined not to repeat the mistakes that doomed the Clinton health care plan in 1993, such as a protracted campaign that allowed the opposition to mobilize. Instead, the Obama team plans to move fast, seize momentum, and not let go.

"We need to be on the offense," said former South Dakota senator Tom Daschle, the presumptive new Secretary of Health and Human Services (HHS).

Instead of presenting a 1,500-page target, Obama will leave details to be filled in say by Daschle's new Health Care Fed.

Unlike the exclusive Clinton health care task force, which met for months, the Obama process will be "inclusive." Anybody can express concerns and experiences, in house parties held between Dec 15 and Dec 30, and the Obama transition team will gather up the input and post it on www.change.gov. With a claim of public support, a bill can roll through Congress and be signed soon after Obama's Inauguration.

The author is likely to be Sen. Ted Kennedy (D-MA), who is holding meetings from his sickbed. He wants the final achievement of nationalized medicine beaten down in the U.S. since 1900 to be his legacy.

In his book Critical: What We Can Do About the Health Care Crisis, Daschle notes that Democrat-controlled government failed twice, under Truman and Clinton, to "guarantee health care to every American." They underestimated the strength of the "special-interest lobbyists" arrayed against them led by doctors in Truman's time, and insurance companies in Clinton's. The triumph of Republicans in the mid-term elections of 1946 and 1994 then killed their hopes.

Now the Maginot Line has been breached or circumvented; the heavy artillery is pointed in the wrong direction. The AMA has virtually endorsed the Democrats' principles. Harry and Louise, stars of the television ads that helped defeat Clinton, are on the side of "reform" this time.

In his Call to Action: Health Reform 2009, Senate Finance Committee Chairman Max Baucus (D-MT) writes: "The nation's healthcare stakeholders are signaling that they are ready and willing to engage in serious and comprehensive reform of the health system in crisis."

The AMA, soon to see its cash cow of CPT codes replaced with the ICD-10, wants to write the standards and the price-control formulas. And what could be better for the insurance industry than a federal law forcing everyone to buy its product, however overpriced or undesired?

This is not about the uninsured. This is about the $2.3 trillion that flows through the system. "Reform" controlling that money is essential "over the long haul to deal with our long-term fiscal challenges." This means using "coverage" as the lever for controlling and limiting the practice of medicine.

How Will We Pay for It?

It is obvious that rolling back tax cuts for the "rich" cannot bring in enough money for the massive "investments." Now that trillions of dollars of private assets have simply evaporated, tax revenues will plummet. Promised savings from electronic records and prevention won't occur for 10 years if ever. For now, we have borrowing and "spreading the wealth."

Obama said, "We can't worry, short term, about the budget deficit." House Majority Leader Steny Hoyer (D-MD) acknowledged that a pay-go-compliant policy is not feasible in the short term for healthcare overhaul (The Hill 11/19/08).

Total Treasury borrowing for fiscal 2009 is likely to be at least $1.5 trillion. As foreigners, representing 94% of new buyers of U.S. government bonds since 2004, at some point will stop lending to prop up a shrinking economy, Japanese economists are calling for "Obama bonds" denominated in yen. This would reduce the currency risks for Japanese and Chinese buyers, said Masaki Fukui of Mizuho Corporate Bank. It's been done before: "Carter bonds," denominated in German marks and Swiss francs, were sold in the 1970s during the oil crisis (Asia Times 11/19/08).

There are ominous signs: the Baltic Dry Index, the cost of moving raw materials by sea, plunged 98% in 2 months. Cargo is sitting on docks because finance is not available for shipping it. Thailand is planning to barter rice for oil (Daily Kos 11/12/08). In an attempt to unfreeze credit, the U.S. has pledged $7.7 trillion, half the value of everything produced in the nation in 2007 (Bloomberg.com 11/25/08). It hasn't worked.

The Treasury is selling bills at zero interest, as traders seek a safe haven (Bloomberg.com 12/10/08). But the cost of insuring against a Treasury default went up sharply in September, suggesting that U.S. credit has a limit (Barron's 11/11/08).

The "confluence of forces" that helped pass Medicare and the Great Society in 1965, notes Daschle, included the "deepening confidence that sustained economic growth, steadily increasing affluence seemed now an enduring and irreversible reality of American life." Americans didn't need to worry about the creation of wealth, which would continue automatically, but how best to apply our riches to improve lives.

The Obama economic plan doesn't address wealth creation, only job creation such as to install computers, change lightbulbs, and insulate school buildings. Containing health "costs" (spending) is part of economic recovery.

The Other Kennedy

Daschle rewrites history in saying that Medicare was strongly supported by John F. Kennedy. In fact, Medicare was going down to defeat until Kennedy was shot. His last words on the subject, notes Dr. Edward Annis, were that Americans would be hearing from the doctors.

Are We Separate and Unequal?

The new health-care engineers want to eliminate disparities. But the dangers of nationalized, one-size-fits-all care are shown in an article about diversity science, writes Craig Cantoni (see Peter Huber, City Journal, Autumn 2008).

"Life is unfair.... Washington can't help. The Fourteenth Amendment doesn't guarantee equal protection at the pharmacy. No...discrimination-banning law, no promise that someone else will pay, will ensure that a drug that suits others will suit your genetic profile also."

Some drugs target genes that track sex, race, or ethnicity; "their FDA licenses affirm truths unmentionable in polite society and approve conduct illegal in every other sphere of commerce and public life."

Government and managed-care schemes, however, favor the cheapest drugs that serve the biochemical mainstream.

The drugs that survive clinical trials involve huge, indis- criminately assembled crowds. Or biochemical markers permit dishonest researchers to stack the deck with patients most likely to benefit from the drug being tested.

Our biochemical diversity, Huber maintains, means that patients and doctors need more discretion, not less, and that we need decentralization of information, authority, and economic interest: more diversity, disparity, and dispersion not less.


The Cost of ICD-10

The new coding system that doctors and hospitals may soon be required to use has ten times as many codes as are now in use. Instead of one code for angioplasty, there are 1,170. CMS estimates the switch will cost $1.64 billion over 15 years. Initially, it will result in a 10% increase in rejected claims (Jane Zhang, Wall St J 11/11/08).

According to an Oct 8, 2008, analysis by Nachimson Advisors, the learning curve will be steep, as the code set is not a simple substitution. The total cost impact would range from $83,000 for a small practice to $2.7 million for a large practice, including staff training, business-process analysis, changes to superbills, changes to information technology, additional documentation, and cash flow disruption.


Massachusetts Watch

Public Support. Although public support for Massachusetts reform is said to be increasing, the people most affected are the least supportive. Only 37% of those affected by the individual mandate support it, as opposed to 62% not affected. Of those directly affected, 60% say the law is hurting them, while only 22% say it is helping. While 51% say health care costs have gone up, only 14% say they have gone down (CPR #154).

Access. Since 340,000 of 600,000 uninsured patients got coverage, waits for primary-care appointment lengthened in some cases to more than a year (NY Times 4/5/08). Some practices are resorting to group appointments (AAPS News of the Day 12/3/08). While the percentage of uninsured dropped from 13% to 7% in 1 yr, the percentage reporting a usual source of care increased only from 86.5% in 2006 to 88.7% in 2007, and the number who had a doctor visit in the previous year went from 80.0% to 81.6% (Scandlen 7/9/08). Next year, the state is cutting payments to physicians and hospitals by 3%-5%, which will decrease access even more (CPR #156).


Medicare Buy-in, Anyone?

Sen. Baucus suggests "temporarily" allowing persons to buy into Medicare starting at age 55, while the proposed Exchange is being created. For those concerned about "underinsurance," consider that Medicare beneficiaries spend more than 20% of their incomes on medical care. Additionally, as Linda Gorman points out, Medicare imposes essentially unlimited financial risk on its beneficiaries; hence the need for supplemental insurance. There is no stop loss, and you are liable for 20% of everything. After 150 days in the hospital, you have to leave and are not eligible for another period of care for 60 days. If you have severe illness or injuries, too bad: days 61-90 cost $256/da; days 91- 150, $512/day; and thereafter you pay everything.


The Effects of Uninsurance

Death. The assertion that 18,000 people (recently increased to 22,000) die each year for lack of insurance is based on a series of reports funded by the Robert Wood Johnson Foundation and reported by the Institute of Medicine. The IOM conducted no original research but analysed 139 observational studies, only seven of which were adjusted for income, writes Greg Scandlen. The figure 18,000 appears only once, in Appendix D, which explains the convoluted methodology for calculating it. Relying on a single questionable study, which estimates a higher overall mortality of 25% for being uninsured, it multiplies the death rate for the insured by 125%, to get 18,000. Incidentally, Medicaid beneficiaries frequently have far worse health outcomes than uninsured patients. David Hogberg points out other flaws, including failure to consider confounding variables such as smoking and education level that affect both health and insurance status (American Spectator 9/22/08).

Cost Shifting. Debunking the free-rider myth, William Snyder notes that the uninsured paid for $30 billion of their own medical costs out of pocket in 2007. According to a California HealthCare Foundation study, of uninsured residents with income at least twice poverty, 50% received medical care in the past year for which they were charged; 80% paid in full, and another 10% were paying in installments. About 8% received pro bono care (Wall St J 11/21/08).

The increasing demand for emergency services is often blamed on the uninsured. An examination of 127 medical articles showed that six assumptions reflecting the conventional wisdom about the uninsured were either not supported by evidence, or were equally true of insured patients. Uninsured patients are under- represented in the ED for primary-care visits. The marginal cost of an ED visit is perhaps overstated and may be less than the cost of keeping a primary-care clinic open for after-hours care (Newton MF et al. JAMA 2008;300:1914-1924).


AAPS Calendar

Feb 6-7, 2009. Workshop, board meeting, Dallas, TX.

Sep 30-Oct 3, 2009. 66th annual meeting, Nashville, TN.

AAPS Asks Supreme Court to Review Poliner

In an amicus brief supporting Dr. Lawrence Poliner's Petition for Writ of Certiori, AAPS writes: "Physicians who defend life, advance innovation, or stand up for patients, are intimidated, threatened, and often destroyed by self-serving wrongdoing by administrators, competitors, and adversaries."

An error in a previous Ninth Circuit decision, argues AAPS, is permitting an epidemic of sham peer review. The courts have turned the qualified immunity under the Health Care Quality Improvement Act (HCQIA) into virtual absolute immunity, with catastrophic consequences for medicine.

A discussion of the Fifth Circuit decision in Poliner v. Texas Health Systems, and Dr. Poliner's explanation of medical issues in his case, are published in the winter issue of the Journal of American Physicians and Surgeons.


Human Rights Watch

Freedom of thought, speech, religion, and conscience are being threatened by "human rights" commissions.

In testimony before the U.S. Congress's bipartisan human rights caucus, journalist Ezra Levant asked that Canada be placed on the watch list for human rights abuses. He had been subjected to government persecution for 900 days for his political and religious views after publishing an article on the riots that followed Danish publication of a cartoon of Mohammed. Since then, Maclean's, Canada's largest news magazine, was sued in three different tribunals.

"Canada's human rights commissions secular government organizations are prosecuting religious fatwas," he writes. There are 14 such organizations in Canada, with an annual budget of $200 million. "It's an industry, and it needs social strife to stay in business." Even those who ultimately win can never recover legal costs: "The process is the punishment."

Ontario is committed to a huge expansion of its kangaroo courts. An even more significant advance has been proposed by the College of Physicians and Surgeons of Ontario (CPSO), to target physicians who allow moral conscience to stand in the way of performing state- sanctioned medical procedures: abortions, helping same- sex couples produce children, etc.

"Human rights," explains David Warren, "have been ideologized, and collectivized. They now belong to groups, exclusively, and include principally the right not to be 'offended' by the existence of an individual with a mind of his own" (Ottawa Citizen 8/20/08).

To enforce political agendas, data miners in Britain have plans to acquire extensive intimate information by interrogating children. A giant new database called Contact Point is to go live in January. One suppressed University of York study found it could take a whole day to enter the data on one child.

Legitimate child protection is being hampered, while decent parents are terrorized. Already, an increasingly rigid state rejects potentially loving foster or adoptive parents because they smoke or hold politically incorrect (Christian) views. Parents are advised to teach their children to reject the questionnaire (Eileen Fairweather, Daily Mail 12/7/08).


"The budget should be balanced, the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed, lest Rome become bankrupt."
Cicero, 55 B.C.


Taking New Patients in Canada: All or None?

Because universal access to healthcare has been enshrined as a human right, a physician who accepts some patients and not others may find himself before a human- rights tribunal. And he could have a difficult time defending himself, even if a patient was declined for what seemed to be legitimate practice-management issues, said Dr. John Gray, executive director of the Canadian Medical Practice Association.

In Ontario, the primary battlefield, as few as 10% of physicians are accepting new patients. "Doctors flummoxed by the prohibition on screening may simply close their practice entirely to entrants, CPSO worried" (Medical Post 10/14/08).


Hospitals Exert Control Via ED

A very common tactic used by hospitals to gain control over a physician's office practice is to use ED mandates, writes Dr. Lawrence Huntoon, Chairman of the AAPS Committee to Combat Sham Peer Review. The hospital can put a financial squeeze on independent physicians who "stubbornly refuse" to become hospital employees by referring large numbers of nonpaying patients with minor complaints to their office for next- day follow-up. It doesn't matter how inappropriate the referrals are. The physician's career may be ended if he declines to provide care outside his area of expertise or if he does provide the care, and the hospital later cites him for providing services he wasn't qualified to perform. Always err on the side of calling in a consult in such situations, suggests Dr. Huntoon.


Tip of the Month: There is a trend in contracts allowing hospital administrators and staffing agencies to terminate physicians without due process. Physicians have been fired for raising quality of care issues. Staffing agencies call this "employment at will," and it is perfectly legal. Read your contracts, and beware! The American Academy of Emergency Medicine has posted a petition concerning this practice at www.aaem.org/dueprocess/petition/.


Surprise Visits

Train your staff how to respond if auditors or federal agents come knocking. They are under no obligation to talk; but if they do talk, they must tell the truth. Advise them to ask for the agent's ID; and tell them whom to call.


Free-Market Malpractice Alternative

Today, if you die in surgery, your heirs have two options: sue, and get compensated if and only if the court determines that malpractice occurred; or take the loss.

Suppose you could sign a contract in which you waive your right to sue, and the hospital agrees to pay $1 million if you die, no questions asked. Searching the web, you discover that another hospital offers $2 million; it can do that, for the same premium for episode-specific insurance, because your chance of dying there is only half as high. In such a system, insurers would become true monitors of safety. Bad doctors or hospitals would get priced out of the market and vanish. High quality would become the norm. Patients would get compensated, regardless of the cause of the injury. And trial lawyers would have to earn an honest living. For more details, see National Center for Policy Analysis, www.ncpa.org.


Financing Universal Coverage. Intensive mining of electronic claims will be a tool of choice in financing unsustainable government programs. Physicians who participate in these programs will never be sure the money they have earned is theirs to keep. "Data mining was a significant contributor to [the] $215 million recovery goal required by CMS contract with New York for 2008," according to a presentation at a Health Care Compliance Conference at the Univ. of Rochester.

Data miners will be monitoring nearly everything physicians do, including off-label prescribing and "providers not meeting minimum standards." The latter include: "never events not reimbursable New York Medicaid 2008; unreported adverse events;...condition of participation failures (structure); drug outcomes in populations and facilities."

The Medicaid Office of Inspector General in NY boasts 500 employees. Medicaid Integrity Contractors, the state equivalent of RACs, will be coming in 2010. The HHS OIG Work Plan Goals for 2009 will target pain management.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


A Never Event. Heart failure, liver failure, respiratory failure, kidney failure: when organs stop working, people die. Pressure ulcers should be thought of as skin failure yet they have been defined as "never events" along with wrong-side surgery. Would you classify heart failure as a never event?

Christopher Reeve died of complications from pressure ulcers. Did he not get the best medical care money could buy?
Russell Faria, D.O., Kent, WA


Consumption Down. In the past year, hospital admissions are down 2%, physician visits down 1.5%, and prescriptions down 2%. This has never happened before. In bad economies, medical consumption goes up, as people rush to get services before they get laid off and lose their coverage. I think that with consumer- driven health care, people are choosing to preserve their own money, rather than overconsuming services they don't really need. Some commentators call this a crisis, as if every doctor's visit were essential to life.
Greg Scandlen, Heartland Institute


What Works? Researchers salivating for individual-level data from electronic records have apparently not considered that the quality of the data depends on the honesty of the coding. Never mind that the UK has all kinds of data corruption going on to fake compliance with government waiting-list targets.

The people who came up with the ICD-10 want central control over every nook and cranny of medicine.
Linda Gorman, Ph.D., Independence Institute, Golden, CO


Patients Are Stupid. Pete Stark (D-CA) said: "Individuals, without the technical knowledge needed for sound medical decision-making, could never bargain as effectively as these large buyers [CMS, DoD, unions, employers, etc.]. Shifting more cost and responsibility to the consumer as a strategy for reform or cost-containment is useless." Translation: people are too stupid to adjust, learn, and manage their own affairs. Everyone needs enlightened bureaucrats to see to their needs. This is the theme of socialist thought regardless of the issue.
Frank Timmins, Dallas, TX


Complexity. I suspect ill intent whenever a reader is supposed to be led to the conclusion that something is complicated. Einstein's writings, despite the irreducible complexity of relativity, are as easy as they can be made to be, and convey the undertone that the concept is supposed to be understandable. If health-care economics and fixed-cost allocations are hard to understand, someone wants them to be. Patchwork compli-cations permit legal retaliation by selective enforcement, and complicated balance sheets conceal things like cost shifting.
Edward Harshman, M.D., Thomaston, ME


Documentation. The implied message from bureaucrats is that medical records are to be generated, in essence, for the sake of the record. The means have become the goal or they even overshadow the goal. The record is seen as more important than the actual clinical encounter. There is a method in this madness. Those who benefit from withholding care benefit from any procedure that slows down patient flow. The incredibly labor-intense process of documentation in complex cases also encourages physicians to screen out complex cases, or to undercode and thus be underpaid.
Walter Borg, M.D., Lafayette, LA


The Myth of the Right Answer. This was one of my brief reminders to students and residents during my many years in academic medicine. Many in government believe that medicine is more like auto mechanics, leading to strong expectations of perfection. We who live in medicine know that there is often more than one right answer and that these change about every 5 years. This makes government control dangerous, and puts down the need for physician judgment.
Donald C. Whitenack, M.D., Boise, ID


A Marketing Opportunity? I haven't been able to sell much critical illness insurance, which pays a lump sum on certain diagnoses, in California, but there's a big market in Canada. If the U.S. turns to government-run healthcare, a lot of people might buy it so they can get treatment offshore.
Edward Dee Hinds, C.L.U., Paso Robles, CA