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

Volume 63, No. 6 June 2007


Consumer-directed insurance products are beginning take off. The percentage of employers offering high-deductible health plans increased by 75% between 2005 and 2006, and membership in HDHPs has shown a similar increase. About 4.5 million Americans 27% of whom were previously uninsured now own a HDHP and an HSA (AHIP).

As the laws of economics predict, the ability to benefit financially from thriftiness changes patient behavior. For patients whose employer mandated a switch to an HDHP, emergency room utilization decreased 10%, hospitalization rates 27%, and hospital length of stay 21%, compared with rates for those who remained in an HMO. The HDHP deductibles were $500 $2,000 for individuals, and $1,000 $4,000 for families (Wharam JF et al. JAMA 2007;297:1093-1102).

Alarms are sounding for advocates of centralized "universal" care. Most of the Mar 14, 2007, issue of JAMA is devoted to the consequences of self payment or cost sharing. Although Wharam et al. "did not detect adverse outcomes," they raise concerns about long-term health effects, especially in low-income populations. And several commentaries and editorials urge caution about "false solutions."

"Shopping is the wrong metaphor for health care," write Michael E. Porter, Ph.D., M.B.A., of the Harvard Business School and Elizabeth Olmsted Teisberg, Ph.D., M.Engr., M.S. "Consumers are simply not equipped to manage their own care in the current fragmented system" (JAMA 297:1103-1111). [The term "fragmented" is a Marxist designation for a free market.]

Patients without insurance are even more likely to forgo medical treatment, warns Jack Hadley, Ph.D., of the Urban Institute. He compares insured and uninsured individuals who experienced a "health shock." Not surprisingly, statistically significant differences are found. More remarkable, though unworthy of the author's comment, is the number of uninsured patients who do receive medical care. After an unintentional injury, 78.8% of the uninsured obtained some care, compared with 88.7% of the insured. After diagnosis of a new chronic condition, the figures are 81.7% and 91.5%, respectively.

About 3.5 months after the "shock," Hadley writes, the differences between proportions of the uninsured and the insured who reported "much worse health status" were "not large in absolute terms" (9.8% v. 6.7% for injuries and 12.3% v. 10.1% for chronic conditions). Still, he speculates that future medical costs from inadequate care may be much greater than these figures suggest (JAMA 2007;297:1073-1084).

Are HDHPs (true insurance plans) safe? The only rigorous study, the RAND Health Insurance Experiment (HIE) "the largest social experiment in health policy ever carried out" was conducted 30 years ago. Immediate care for some conditions is said to be more important now than it was then. "[I]t is inconceivable that high-deductible health plans will not affect the health of some patients," write Corita R. Grundzen, M.D., a Robert Wood Johnson Clinical Scholar, and Robert H. Brook, M.D., Sc.D., of RAND Corporation (JAMA 2007;297: 1126-1127). Moreover, they conclude that the findings of Wharam et al. should not be used to support HDHPs as an answer to overcrowding and long waits in emergency rooms.

The results of the HIE and the studies just published in their own journal notwithstanding, JAMA editors Phil B. Fontarosa, M.D., M.B.A.; Drummond Rennie, M.D.; and Catherine D. DeAngelis, M.D., M.P.H. conclude:

"Given the magnitude and complexity of the problem of ensuring access to health care and the need for comprehensive health system reform, it is clear that patchwork, short-term, and seemingly popular approaches will be insufficient to achieve the type of definitive, meaningful, and financially viable reform that is necessary..." (JAMA 2007;297:1128-1130).

Grundzen and Brook suggest that a "transformation... facilitated...by the use of nurse practitioners, guidelines, protocols, and standardized triage protocols for selected conditions" would bring the U.S. system "closer to meeting the needs of all of the people all of the time."

Is this what Fontarosa et al. mean by "physicians...tak[ing] back the practice and profession of medicine"?

Are expert guidelines, rationing by centralized limits on supply, and dependency on government financing safe?

The "single most important health policy tool" that central planners have for determining effectiveness and safety is performance measurement. Its effect: "what you measure improves." But much care recommended by expert committees is of "modest or unproven value." Performance measures can "mislead providers into prioritizing low-value care and can create undue incentives for getting rid of `bad' patients" (Hayward RA, N Engl J Med 2007;356:951-953).

Government-directed priorities to improve chronic-disease management, as through "coordinated care," are supposed to contain costs while improving care. The result: "no improvement...in any of the intermediate outcomes" (decrease in urgent care or hospitalization for asthma or control of glycated hemoglobin levels or blood pressure) (Landon BE et al. N Engl J Med 2007;356:921-934). A Mathematica study of the Medicare Coordinated Care Demonstration, reported Mar 21, 2007, concluded: "Overall, the programs appeared to have no consistent discernible effect across numerous measures of behaviors and outcomes except receipt of health education."

The AMA adopted a resolution authored by David McKalip, M.D., calling for government payers to publicly report morbidity and mortality from denied or delayed care and 14 other measures of access and safety.

Never mind the evidence or lack thereof, socialized medicine remains the only end conceivable to its proponents.

Will Socialism Surely Win?

Before WWI began, universal health care seemed a sure thing, writes Cynthia Crossen. "But the `professional philanthropists, busybody social workers, misguided clergymen and hysterical women,' as an opponent described them, hadn't reckoned on a mighty resistance movement of the unlikeliest political bedfellows in history." These included commercial insurers; Samuel Gompers, then president of the American Federation of Labor; assorted xenophobes; Christian Scientists; anti- Communists and doctors.

Labor groups said that compulsory insurance would lead to determining who was a good risk. "When found defective, they will, of course, be thrown on the scrap heap."

As California prepared for a referendum on the issue, just as America was entering WWI, commercial insurers published pamphlets picturing Kaiser Wilhelm II, with the caption, "Made in Germany. Do you want it in California?"

Doctors became convinced that the program would insert the government's judgment between patient and doctor, and cut their pay. AMA President Charles H. Mayo urged physicians to be wary of "anything which reduced the income of the physician," because it would "limit his training, equipment and efficiency" (Wall St J 4/30/07).

Today, notes Linda Gorman, the real constituency against national health insurance which was effectively targeted by the Harry and Louise ads is the 65% of the population that pays for its own, and everybody else's, medical care.


Insurance v. Access

As we move toward universal insurance, Frank Lobb of Pennsylvania reminds us that in essentially every state, insured persons surrender their right to access necessary medical care. "In short, they agree to allow their private insurer the right to determine what care they can receive regardless of...ability to independently pay for the care." (See AAPS News, November and December 2005; July 2006). Using the insurance "hold harmless" clause to deny access is the business model for the entire nation. The necessary fix for rising costs is to curtail access. Lobb is working to get insurers to clearly disclose this clause, as is required by ERISA.


Cost High; Benefit Dubious

By 1970, Medicare caused a 37% increase in hospital spending, and the expansion of public and private insurance is probably responsible for half of the six-fold growth in real per- capita health spending between 1950 and 1990, writes Amy Finkelstein, assistant professor of economics at MIT. During its first 10 years, Medicare had no discernible effect on elderly mortality. Seniors were receiving life-saving treatments before Medicare, but often at great personal cost. By 1970, Medicare had reduced the risk of extremely large out-of-pocket expenditures by about half. It is possible that Medicare spurred the development of new technologies that have had important benefits. Based on this experience, adopting universal care for the rest of the population would improve the financial security of the currently uninsured and increase spending, perhaps substantially (Wall St J 2/28/07). But would changes in the structure of medicine enhance new breakthroughs? In Britain, a long list of treatments is now in jeopardy despite record new funding levels to the NHS (Observer 5/6/07).


Massachusetts Watch

Exemptions. To avert a public backlash, nearly 20% of uninsured adults (some 60,000 persons) who don't qualify for subsidies but can't afford coverage will be exempted from the mandate to buy insurance (Boston Globe 4/12/07).

Benefits Set. Massachusetts is the first state to set standards for "acceptable heath coverage" that apply to every resident and every insurer. Drug coverage, a maximum individual deductible of $2,000, and a $5,000 out-of-pocket maximum for in- network providers, are to be mandated (NY Times 3/21/07). All plans for low-income persons have a host of non- preventive mandates below the deductible that make them ineligible to include an HSA (Hogberg D, American Spectator 3/20/07).

"Universal Coverage Is a Tax," Citizens Say. One citizen complains that since his $300/month catastrophic plan isn't approved by the Connector, he'll be taxed $700/month to upgrade his plan. Another said that minimum credible coverage was designed such that any non-Massachusetts plan would be insufficient (http://blogs.wbur.org/commonhealth/?p=19).

"More Mirage Than Miracle." Massachusetts is already a very high-cost state "with a concentrated market of relatively inefficient providers already swimming in a sea of dysfunctional public subsidies and crippling overregulation." The plan "hopes to coerce enough relatively healthy uninsured residents into paying more for coverage than it is worth to them" (Miller T, Health Affairs 9/14/06).

Insurance Premiums Based on Income. Like in Canada, but for the first time in the U.S., people will have to pay more for equivalent coverage if they earn more. The Connector has determined the "Maximum Affordable Premium" to range from $0 for income up to $15,315 to $300/mon for income between $40,000 and $50,000. Those whose income increases from $40,000 to $40,001/y are expected to pay $100/mon more for their medical insurance (Consumer Power Report 4/19/07).

Questionable Cure. The Connector is a "new quasi- governmental bureaucracy with the ability to raise its own budget," writes Sally Pipes (www.pacificresearch.org). RomneyCare increases already lavish Medicaid benefits to cover vision, dental, and chiropractic. It mandates coverage of dependents until age 26 or two years after becoming independent.


AAPS Calendar

May 17. Arizona chapter, Tucson: Michael J.A. Robb, M.D., and Lynda Smith, office manager, NW Neuro Specialists.
Jun 8-9. Thrive, Not Just Survive VI, and Board of Directors meeting, Milwaukee, WI.
Sep 5,6. Arizona chapter, F. Edward Yazbak, M.D.
Oct 10-13. 64th annual meeting, Cherry Hill, NJ.

NPI Update

From FAQs at www.cms.hhs.gov/NationalProvIdentStand

Purpose: Besides identifying "health care providers" in standard transactions, such as claims filing, the NPI may be used to uniquely identify providers on prescriptions, for coordination of health plan benefits, in medical record systems, in program integrity files, and in other ways (ID 2623).

Non-covered entities "may elect to apply for NPIs but are not required to do so" (ID 2622, emphasis added). However, some health plans will require that paper claims be submitted with an NPI. "In addition, a health care provider who does conduct HIPAA standard transactions (such as pharmacies, hospitals, group practices, laboratories, and many others) may need to identify you as a rendering, ordering, referring, prescribing, attending, supervising, or other type of provider" (ID 8201). The NPI will eventually be the standard identifier for e-prescribing under Medicare Part D (ID 6147).

Contingency guidance does not mean that [covered] providers have an additional 12 months to obtain an NPI. "Failure to obtain an NPI may be viewed as a violation of the good faith provisions of CMS' contingency provisions" (ID 8321). If CMS receives a complaint, CMS will contact the entity that is the subject of the complaint to "determine the quality of its good faith efforts" (ID 8370). CMS will not review contingency plans, only pass judgment on "diligence and good faith efforts" after it receives a complaint (ID 8317).

Deactivation. A provider should deactivate its NPI in event of retirement, death, disbandment of an organization, or fraudulent use of the NPI. This requires completion of form CMS- 10114. If billing transactions are not complete before deactivation, payment issues may arise (ID 8382).

Change of address. A covered entity must notify the enumerator of changes in any of the information that is furnished on the NPI application, within 30 days of the change. Noncovered entities that have an NPI are "encouraged" to do the same (ID 2629).

While CMS urges physicians to "get it, use it, share it," and has issued guidance concerning the dissemination of lists of NPIs compiled by hospitals and health plans, there are still unanswered questions. If an entity failed to safeguard the NPIs it was disseminating, and they were later used fraudulently, the entity could be found negligent. Check your state law before disclosing the NPIs of others, get advance consent, and transmit data in a secured manner (HIPAA Compliance Alert 4/9/07). See above website to download guidance.


The Voluntary PQRI

"Ignore the PQRI at your peril," warned William Mangold, M.D., J.D., at a board of directors meeting of the Arizona Medical Association. See www.cms.gov/pqri.

"Incentive" payments will be made for reporting data to the Physician Quality Reporting Initiative in 2007; it is not clear whether they will be made in 2008. The amount is up to 1.5% of the Medicare Physician Fee Schedule allowed charges for services provided during the reporting period.


Dr. Hurwitz Convicted on 16 of 50 Counts

After deliberating for more than a week, a federal jury convicted William Hurwitz, M.D., on 16 counts of drug trafficking and acquitted him on 17 other counts. Hurwitz's prior conviction had been overturned by the Fourth Circuit Court of Appeals (AAPS News, October 2006).

The judge dismissed 17 more counts, including the most serious ones of drug trafficking resulting in death. In granting the defense motion to dismiss a rare action occurring about once a decade in a high-profile case the judge cited the Supreme Court opinion in Gonzales v. Oregon, which determined that federal narcotics laws did not give the Justice Dept the power to define general standards of medical practice.

Defense attorneys argued that Hurwitz was one of the few physicians in the country willing to risk prosecution for prescribing the doses necessary to relieve crippling pain.

Defense witness James N. Campbell, M.D., of Johns Hopkins University said he had at first been skeptical of some of Hurwitz's high-dose treatments but was then impressed by the results in patients he referred to Hurwitz.

Two patients committed suicide when Hurwitz closed his practice in 2002, because they gave up hope of pain relief.

Prosecution witness Robin Hamill-Ruth, M.D., testified about her treatment of a migraine patient who later resorted to Hurwitz. She had given the patient BuSpar, a referral to a psychologist, and a return appointment in 2.5 months. Headache is a side effect of BuSpar, an antianxiety medication.

Hurwitz testified that he felt he had a duty to those of his "misbehaving" patients that he thought were reforming. He feared they could not get help elsewhere if he discharged them, writes John Tierney (NY Times 4/24/07).

Tierney reports on his conversations with the jurors. The jurors, he concluded, were confused. "That's the norm in trials of pain-management doctors" part of standard prosecution strategy of multiple counts and mountains of evidence. They knew of the distinc-tion between the civil "standard of care" and the criminal one of "prescribing outside the bounds of medical practice" but none claimed to understand it. "Lapses in medical judgment or just differences in medical judgment have been criminalized," Tierney writes. "A doctor can suddenly be redefined as a non-doctor. All it takes is a second opinion from a jury."

AAPS General Counsel Andrew Schlafly observed that virtually all of the convicted counts relied on undercover tape recordings, which "have a greater impact than they should, as fascination with the technology and the `sting' can have a powerful effect. Also, because tape recordings are replayed during deliberations, they tend to drown out [trial] testimony."

Sentencing is scheduled for July 19.


Tip of the Month: When a sham peer review occurs, a physician's rights are defined by his medical staff bylaws. Inserting several provisions beforehand would help immensely against false charges of "disruptive behavior." For example, these bylaws should state that the medical staff must approve any medical staff policy on disruptive behavior and that the first response to an observation of disruptive behavior shall be an informal warning, giving the physician a meaningful opportunity to address and change his behavior. Finally, these bylaws should give the physician a right to appear before the Board prior to its rendering a final decision.


A Matter of Perception. We are seeing more and more articles extolling socialized medicine, such as one that was accepted for the Nov 26, 2006, issue of Neurology in a mere 13 days, rather than the usual several months. Author Thomas E. Feasby, who finds that Canadian neurologic care is better than U.S. care, has "no conflicts of interest" but is vice-president of Capital Health, the regional administrator for health care in Edmonton. He claims that Canadians have no constraints from third parties although there is "central constraint of funding and resources." Yes, wait times have been a major political issue and the subject of an unnamed court case, but "a list of medically acceptable wait times for some high-demand procedures has been developed." Access is "undeniably a main concern and will, in the absence of measured data from providers, remain doubly controversial." Yes, a lot of people lack a family physician, and few medical students choose family practice because of its "perceived lack of status and income" (read overwork and underpay via a capitated system).

Canada also has a lot of snow and cold in the winter, but I strongly suspect that it too is a perception problem, merely a temporary lack of warmth, which the government will fix by declaring what is "acceptably" cold.

Feasby recommends the VA as a model for improvement in American health care, "but its former reputation for poor quality...may preclude this" (see AAPS News, April 2007).

The problem with Americans, Feasby concludes, is that we are too focused on the quirky concept of a right to life, liberty, and the pursuit of happiness. If we would only change our perceptions, and prefer "peace, order, and good government" instead, we could be as enlightened as Canadians.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Incentives. People generally respond to incentives. Almost everyone works at furthering his own self interest, broadly defined. Free-market capitalism has succeeded so well because it is set up so that, by and large, you can't further your self- interest unless you also further someone else's. Governments don't work that way. Most government programs allow people to further their self-interest by impoverishing others. This is one of the main reasons why government must be limited.
Linda Gorman, Independence Institute, Golden, CO


"Reform" Created the Uninsured. The year in which there were the fewest uninsured was probably 1984 or 1985 before all the reforms to straighten out the market and before the medical expense deduction was raised to 7.5% of adjusted gross income (AGI). Curiously, there was plenty of underwriting, and no guaranteed issue. Somehow people managed to get themselves covered. Mandating coverage today simply locks into place all the misguided, corrupt reforms that have been enacted over the past 20 years. Better to roll back the reforms.
Greg Scandlen, Consumers for Health Care Choices


The Basic Distinction. Some see value in encouraging individual thinking and initiatives, and others feel that power must come from a collective group. That is the basic conceptual difference that divides us. The reason the Left worries about the seemingly trivial issue of tax equity for individual health insurance policies is that it is very protective of government influence (control) over the Great Unwashed.
Frank Timmins, Dallas, TX


America on the Decline. When at their peak, nations and businesses throw away the very attributes responsible for their success. A form of collective suicide, it is akin to mountain climbers throwing away their oxygen bottles, ropes, and ice crampons when they reach the top of Mt. Everest. America got to the top because of self-reliance, frugality, risk-taking, personal and family responsibility, limited government, and free markets. These are being supplanted with dependency, entitlements, debt, bureaucracy, collectivism, nannyism, and statism.... Early Americans focused on creating wealth, not redistributing it. Today, more than 60% of the federal budget is redistributed wealth, compared to 5% in 1900.... Parasites are quickly replacing producers.... Thus, more and more Americans have a vested interest in big government....
Craig Cantoni, Scottsdale, AZ


A Disgrace? People often say that it's a disgrace that the most prosperous country in the history of the world is the only industrialized nation to lack a "universal" health insurance program. Does it ever occur to them that one of the reasons this country is the most prosperous is that it has not nationalized an industry that constitutes one- seventh of the economy?
Donna Kinney, CPA, Texas Medical Association


Games Lefties Play. The process is to pass laws that hamper the market, and when the market sputters, point it out and say, "See, the market doesn't work. We need more government regulation." It is only a matter of time before the RomneyCare backers blame the insurance companies involved in the Connector for not pricing their policies low enough.
David Hogberg, National Center for Public Policy Research


An Opportunity, Not a Crisis. "Health care" is just the issue needed by politicians to keep dollars rolling into their campaigns, and a way to leverage unions to aid their ambitions.
Thomas LaGrelius, Torrance, CA