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

Volume 65, No. 3 March 2009


It is possible that the theme song for the current Administration in Washington will be "The Winner Takes It All," and its motto, "I won."

The majority party has changed the rules so as to stifle the voice of the minority. Failed agendas of past decades are being stuffed into omnibus legislation that "must pass" or else the economy will go into free fall. Democracy in action: a 50.1% margin one time can change the rules perhaps forever.

The disgrace and fall of HHS Secretary-designate Tom Daschle may actually have expedited the enactment of the plan he outlined in his book Critical (AAPS News, January 2009). Key features simply appeared in the "stimulus" bill.

Who Pays? The Elderly, the Sick, and "Outliers"

In order to provide pork for the favored ones whose votes and campaign contributions keep politicians in office, money has to come from somewhere. At present, one-sixth of the economy is devoted to "healthcare." Much of this is spent on the old and the sick and the scapegoats who provide the care. This money sink could be converted into a source.

According to Betsy McCaughey, former lieutenant governor of New York, who provided a trenchant analysis of the Clinton Plan, the stimulus will force doctors to ration care.

The bill calls for electronically tracking the health records of every American to enable the work of a new bureaucracy, the National Coordinator of Health Information Technology. Its job is to monitor doctors' treatments, to be sure they are cost effective and meet government guidelines.

Doctors who are not "meaningful users" of the system will face penalties. The HHS Secretary will be empowered to define "meaningful" and to impose more stringent criteria over time.

The "tough" decisions will be delegated to the Federal Coordinating Council for Effectiveness Research to insulate elected politicians from the wrath of older patients who can't get their joint replacements or cancer therapy. The Secretary of HHS would get a "$400 million slush fund, likely used to set up [Daschle's] dream Federal Health Board to direct traffic in our $2.2 trillion health economy," writes Grace-Marie Turner.

Daschle admits that the reform "will not be pain free." Seniors will bear the brunt: "Individuals benefit in younger years and sacrifice later."

The bill allocates more funding for the health control bureaucracy than to the Army, Navy, Marines, and Air Force combined (www.bloomberg.com 2/9/09). This makes sense there's a war against wasteful sickness care.

At this writing, the bill is headed for conference.

The AMA "applauded the House measure's investments in health care, including health information technology" in a letter from CEO Michael Maves, M.D., M.B.A. Ted Epperly, M.D., president, American Academy of Family Physicians, also welcomed the bill as a "great harbinger of what's to come in terms of what the priorities are" (AM News 2/9/09).

Crisis and Opportunity for State Capitalism

Without any hearings or debate, millions of Americans will be added to Medicaid, Turner writes. Medicaid expansion is "the most plausible path toward universal coverage," states Michael Sparer, Ph.D., J.D. (N Engl J Med 2009;360:323-325). He suggests changing the program's name to remove the stigma and give the program a new identity as a middle-class entitlement. The funding problems he sees, owing to a "society disinclined to limit the diffusion of new health care technology or to regulate the prices and salaries paid by the private health care sector," are addressed in the stimulus bill.

Medicaid now covers 20% of Americans, up from 10% in 1975. Already at 20% of state spending, it is the fastest growing component. Instead of cutting benefits, enrollment, or providers' pay, a "less damaging and more effective long-term solution," writes Jennifer Fisher Wilson, is to use more managed care for the 25% of the Medicaid population the disabled and the elderly who account for 70% of the spending (Ann Intern Med 2009;150:149-151).

In other words, delegate inflicting pain to mercenaries in a public-private partnership. Not coincidentally, the might-have- been health czar Daschle collected nearly $250,000 in 2 years speaking to the insurance industry: "not a conflict of interest," ruled Obama. Daschle said he would resign from law and investment firms that paid him more than $4 million in 2 years, including InterMedia advisors, which specializes in buyouts and industry consolidation (NewsMax 2/1/09).

The marriage of centralized power and concentrated wealth was the key tenet of Lincolnism, writes Daniel Larison (Chronicles, February 2009). "Obama's attempt to connect himself to Abraham Lincoln goes well beyond his publicity stunt of announcing his candidacy at the state house in Springfield." Many other presidents also embraced this idea.

Cause for Despair?

"The political barriers to reform remain immense," writes Jonathan Oberlander, Ph.D. (N Engl J Med 2009;360:321- 323). Obama lacks the supermajorities that enabled Presidents Roosevelt and Johnson to pass Social Security and Medicare. Advocates of "universal coverage" are divided. The economic crisis presents "an extraordinary political opportunity," and intervention in banking and financial systems created a precedent for expanding government but there is still a remnant of checks and balances, and the traditional (and growing) American suspicion of government. And the internet.

Obama and congressional Democrats may plan to make history. But their motto might end up as Famous Last Words.

Legalized Gambling

The "synthetic" credit default swaps, in which the buyer did not own the underlying securities, were pure gambling. The $90- trillion derivatives market was illegal until the waning hours of the Clinton Administration, when a lame-duck Congress passed the Commodity Futures Modernization Act of 2000. This was folded into a spending bill so no member had to be on record as voting for this language in Section 17: "This Act shall supersede and preempt the application of any State or local law that prohibits or regulates gaming or the operation of bucket shops" (WJ Quirk, Chronicles, February 2009). (A bucket shop takes the opposite side of a customer retail order without executing the order on an exchange; the customer is betting against the bucket shop operator. Such shops flourished in the late 1800s and early 1900s.)


SCHIP Expansion: More Smokers Needed

Expanding SCHIP (State Children's Health Insurance Program) to cover dental and mental health care, legal immi-grants without the 5-yr wait, and 4 million more children relies entirely on tobacco taxes: 10% of Americans need to smoke a pack/day. Also, Obama reversed the Bush rule that states had to cover 95% of kids in families making less than 200% of poverty before expanding eligibility to higher-income families, so states can give priority to likely voters (CPR 2/6/09).


Make Them Buy Junk

Taxpayers are being forced to buy junk assets and could be forced to buy overpriced "insurance" that blocks their access to care. The individual mandate is the second part of Sparer's "most plausible path to universal coverage" (see p. 1).

As Richard Warner, M.D., points out, "any government that thinks it should mandate that its citizens must purchase health insurance will also think it should mandate that physicians must treat the patients who had to buy the insurance. Otherwise, the government has mandated that its citizens purchase something that is worthless."

"It is basic to socialism that everyone must participate."

Greg Scandlen observes that one-third of the uninsured children currently eligible for SCHIP or Medicaid were on the program within the last year. Their parents know about the program and know how to enroll. But they saw so little value in it that they didn't bother to re-enroll. Working people used to private insurance will be even less content.


Dr. George Watson Becomes President-elect

At the Feb 7 board meeting, George R. Watson, D.O., of Park City, KS, was elected President-elect, and W. Daniel Jordan, M.D., of Atlanta, GA, was elected to fill Dr. Watson's remaining year on the Board of Directors.


Hilton P. Terrell, R.I.P.

AAPS mourns the loss of our beloved president-elect, Hilton P. Terrell, M.D., Ph.D., who died unexpectedly at the age of 63 on Feb 2. Dr. Terrell was on the faculty in the family practice residency program at McLeod Regional Medical Center in Florence, SC. He was a long-time AAPS board member and an eloquent defender of ethical private medicine.


Penetrating the Echo Chamber

As pointed out by DownsizeDC.org, politicians talk to each other, to lobbyists, and to "court intellectuals." Members of the media talk to each other, to politicians, and to establishment experts. They cover the same stories, like a herd moving in unison. To change things requires a constant and growing influx in communications to the congressional and media echo chamber. While it will require the accumulation of thousands of tiny steps to have an effect, each step is incredibly easy a mouse click and a few keystrokes.

Advice from an Arizona legislator: put the district number in the subject line of your email, and start the message by identifying yourself ("I'm a family doctor in [your district]") to distinguish your message from automated emails from advocacy groups. It is likely a waste of time to communicate with legislators outside your district.

On current issues, AAPS President Mark Kellen, M.D., suggests emphasizing that "coverage is not care" and that "an individual mandate leads to single payer."


What Will They Use for Money?

Worldwide, governments are borrowing frantically to fund their bail-outs and cover a collapse in tax revenues. The U.S. Treasury needs to raise $2 trillion in 2009. The yield on 10-yr U.S. Treasury bonds has increased from 2% to 3% in 2 months a level that "will asphyxiate the U.S. economy if allowed to persist." Instead of buying a trillion dollars of extra bonds each year, China and the Pacific tigers are becoming net sellers, as their exports collapse. In Japan, one bloc wants to create $300 billion in scrip currency for an industrial blitz: "We are facing hyper-deflation, so we need a policy to create hyper- inflation," stated Sen. Tamura (A Evans-Pritchard, Telegraph 2/8/09).

Assuming $83 trillion in current debt, future stimulus debt, and unfunded liabilities, Craig Cantoni cites possible means of payment: (1) Force every taxpayer to fork over 13.2 years of income; (2) borrow from foreigners, adding interest costs; (3) mask indebtedness with inflation, which will have the same effect on standard of living as (1).

Erratum: John McClaughry, president of the Ethan Allen Institute, notes that the first sentence in the quotation attributed to Thomas Jefferson in the February issue came from a letter to John Taylor in 1816, "when state-chartered banks were flooding the country with the paper money that Mr. Jefferson so despised." The remainder of the quotation did not come from Jefferson though similar passages are in his writings.


AAPS Calendar

Jun 5-6, 2009. Workshop, board meeting, Dallas, TX.
Sep 30-Oct 3, 2009. 66th annual meeting, Nashville, TN.
Sep 15-20, 2010. 67th annual meeting, Salt Lake City, UT.

Nonpayment of Rent Could Be a Crime

If you're a Medicare "provider" leasing office space from another provider such as a hospital, failure to pay "fair market value" for rent could be construed as a violation of the Anti- Kickback (Stark) statute. If you're strapped for cash, and your landlord gives you a break, a government agent could argue that this was a reward for referrals. You could be subject to recoupment, civil monetary penalties, and False Claims Act penalties. Attorney Maria Gonzales Knavel notes that "while other industries can restructure their arrangements,...the healthcare industry doesn't have that kind of leeway." It might be acceptable for the hospital to make a loan (MCA 2/9/09).


Computerized Records Blamed for Patient Death

In court papers, the son of an 89-year-old woman who died in freezing temperatures on the roof of the University of Pittsburgh's Medical Center in Montefiore alleged that a new and untested electronic medical records system was a major factor in her death. Rose Lee Diggs, who was diagnosed with dementia and had a documented history of wandering, was last seen in her room 13 hours before being found dead.

Plaintiffs charge that UPMC ignored warnings that the records system put patients at risk because the health conglom- erate has an ownership interest in Cerner, which developed the system, having received 74,787 shares of Cerner stock in 2005.

Burdened by a new system in which they had not been adequately trained, caregivers spent much of their time in "monitoring and updating the records system, as opposed to actually providing patient care," the lawsuit states.

Faulty locks, unalarmed doors, understaffing, and overcrowding were also implicated (Tribune-Review 2/11/09).


VA Software Glitches Endanger Patients

Because of a software problem that began in August 2008 and persisted for about 4 months, a number of veterans received incorrect drug dosages. The Veterans Affairs Department did not disclose the errors to patients, according to internal documents obtained by The Associated Press under the Freedom of Information Act. Medical data sometimes popped up under another patient's name, and stop orders, as for drugs like heparin, were not clearly displayed. Nearly one-third of 153 VA medical centers reported problems after the annual software upgrade was distributed (H Yen, AP 1/14/09).


Lack of Interpreter Costs $400,000

A New Jersey rheumatologist who declined to provide a sign- language interpreter may have to personally pay a $400,000 jury award. His malpractice carrier denied coverage, as well as defense. During a 3-week trial the doctor argued that it was an undue hardship to pay $150 $200 for an interpreter when the insurer paid him only $49 for the visit. But since tax records showed that he earned more than $400,000/yr, the jury was not impressed. Half the record-setting award is for punitive damages. Attorneys are concerned that they too could be held liable for not providing an interpreter. The case was filed under federal and state antidiscrimination laws (ABA J 10/17/08).

No decision has been rendered by the Ninth Circuit in the 2001 AAPS case (Colwell et al. v. HHS) challenging the translation rule (Clinton Executive Order 13166).


NY Workers' Comp: All or None

According to information sent by the Erie County Medical Society, the Workers' Compensation Board will be "educating" physicians about WC law if it learns that a practice might be limiting access to new patients. From responses by Joseph Salamone at the WCB:

If the physician is an authorized provider for WC, "the only acceptable reason not to take on new WC patients is if the practice is not taking on any new patients." If the physician cannot sustain the financial viability of the practice without limiting the number of WC claimants, "the physician may have to turn in their [sic] authorization to treat WC patients and cease treating all WC patients."

The consequence of "Failure to Treat" is to be removed from the list of authorized providers. Removal of a provider is reportable to the Department of Health. This could be considered professional misconduct, and put the physician's license in jeopardy, writes Lawrence Huntoon, M.D.

"With widespread dissemination of this information in New York State, I predict that we will see physicians turning in their Workers' Comp numbers in droves.... In the current physician-hostile environment, to be authorized to treat WC patients in New York State is to be authorized to be a slave."

As physicians drop out there will be increasing pressure on practices that remain in the program, and with no ability to limit losses, those practices may face financial demise, he continues. If the physician takes emergency call at a hospital, the hospital may force him to treat WC patients.


UnitedHealth to Pay $400 Million

To settle a 2000 lawsuit brought by the AMA and the Medical Society of the State of New York (MSSNY), which claimed that a flawed Ingenix database caused underpayment of between 10% and 28% for out-of-network services, UnitedHealth agreed to pay $50 million to create a new database and $350 million to reimburse patients and physicians who were shortchanged. Attorney General Andrew Cuomo stated that there was a conflict of interest in having a health insurer determine the usual and customary rate.

Hailing the settlement, AMA President Nancy Nielsen credited Cuomo with stopping use of a "rigged Ingenix database that increased insurer profits at the expense of patients and physicians" (BNA's HCFR 1/28/09).

Before assuming the AMA presidency, Nielsen gave up her day job as chief medical officer for Independent Health of Buffalo, which used the Ingenix database but said most of its members would be unaffected because the vast majority of its claims were in-network (Buffalo News 1/19/09).

"Underpaying out-of-network physicians and punishing patients who go to them is merely another 'tool' insurers can use to coerce physicians to participate in their networks," stated Lawrence Huntoon, M.D.


"What one person receives without working for, another person must work for without receiving. The government cannot give to anybody anything that the government does not first take from somebody else. When half the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work..., that...is about the end of any nation. You cannot multiply wealth by dividing it." Adrian Rogers


Miranda Warning for Peer Review. In New York, anything said in a hearing by the subject of a peer review can be used against him. His statements are discoverable in a malpractice suit. Under NY State Education Law 6527(3), everyone except the subject of a peer review is protected from disclosure.

To avoid harsh punishment, the accused may admit guilt and express groveling contrition to satisfy the panel. (If it is a sham peer review, this doesn't help.) In a malpractice action, this admission means the case is over. If the accused does not admit guilt, the panel often views him as being in "denial" a state that itself merits "corrective action."
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Standardization Not Always Efficient. Attempts to standardize food production and distribution have resulted in extreme inefficiency. I think the same would happen with medicine. Generally healthy people need medical facilities and insurance that differ significantly from those needed by the chronically ill. And their needs differ by the type of illness. One question is why health insurance is separate from disability and long-term care. Market demand, or regulation? I'd bet the latter.

Even standardizing underwriting may not be efficient. Auto insurers used a variety of standards, some imposed by states. Then someone discovered that a client's credit rating was a superb underwriting tool it did a great job of predicting losses. Everything changed. This would not have happened if only one underwriting method had been allowed.

Nobody knows the optimal set up, and how many options consumers might support, as adjustment can't occur in the current regulatory environment, even if analysts were looking beyond their preferred solution. To me, the key is to look at changes that will get rid of roadblocks to contestable markets, innovative efficiency, flexible pricing, and new product development.
Linda Gorman, Ph.D., Independence Institute, Golden, CO


Consensus Plan. Big business has a plan; so do health insurers, Max Baucus, and just about everyone. The consensus is emerging: 1. I am not at fault. 2. Doctors are at fault. 3. We must force doctors to change the way they practice medicine.
John Goodman, Ph.D., Natl Center for Policy Analysis


House Parties. I hosted a meeting that suggested: (1) Don't rush; move thoughtfully. (2) Study what works and doesn't work elsewhere. Another group suggested a single government-run system that required everyone to belong. We got a polite thank- you. They got an invitation to further discussions.
Edward Dee Hinds, C.L.U., Paso Robles, CA


The "Progressive" Way. This has become the tactic of choice for "reformers" in recent years. Gather the populace in "town hall meetings" and "discussion groups," and have them clamor for "change." Out of the thousands of comments choose the ones that support the direction you want to go. Use the process to put pressure on possible opponents.
Richard B. Warner, M.D., Overland Park, KS


Right to Medical Care in Japan. After being struck by a motorcycle, an elderly Japanese man with head injuries waited in an ambulance while paramedics telephoned 14 hospitals, all of which refused to treat him. He died 90 minutes later at a facility that finally accepted him. According to an article on Breitbart.com, he was one of thousands of victims repeatedly turned away in recent years by understaffed, overcrowded hospitals. In Japan, medical services are provided by national and local governments. But Obamacare will be different!
Danny M. O'Grady, C.L.U., Midland, TX


Permanent Records? Many have noted that an atomic blast [through an electromagnetic pulse or EMP] would wipe out computer-stored electronic records. No one has tried to explain how these records will survive the atomic blasts that Homeland Security is predicting.
Leonard R. Friedman, M.D., Middleton, MA


Disruptive Behavior. A staff nurse, who had worked at the hospital for 18 years, commented to a supervisor that she thought they were understaffed and that patient care was being endangered by the practice of allotting nurses on the basis of severity of disease. She was suspended for 2 days and required to attend disruptive behavior classes.
Haven N. Wall, Jr., M.D., Lewisburg, WV


Competition, Obama Style. The public pla n can print money for its claims obligations, and can fix payments. It competes with a free-market plan that has to collect premiums and pay actual costs, plus make up the shortfall from public programs. Talk about a health insurance death spiral! How long before we hear the private sector just couldn't make it?
Frank Timmins, Dallas, TX