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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.
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.
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.
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).
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.
May 17. Arizona chapter, Tucson: Michael J.A. Robb, M.D.,
and Lynda Smith, office manager, NW Neuro Specialists.
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.
"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.
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.
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.
"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.
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.
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....
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?
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.
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.
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