Volume 65, No. 11 November 2009


Going broke is not altogether bad, in the view of former New England Journal of Medicine editor Arnold Relman, M.D.

Without a dramatic political awakening, "the current slide of the system toward bankruptcy will continue," he writes. "That decline, however, might ultimately cause a disaster that would generate popular demand for real reform" (N Engl J Med 2009;361:1225-1227). Such reform would include a central public agency that controls total medical expenditures and prevents physicians from keeping any net income.

We need to "get past denial" and move toward "fundamental reform," write Sutherland et al. of Dartmouth (N Engl J Med 2009;361:1227-1230). This means radical change in payment and delivery systems for example, implementation of a 1933 recommendation to use integrated delivery systems. While some believe this to be impossible "until the older generation of physicians retires," the shift could proceed much more rapidly, as physicians become more dissatisfied with the status quo, and with the implementation of previously unavailable computer technology, suggests Francis J. Crosson, M.D., vice-chairman of the Medicare Payment Advisory Commission (MedPAC) (N Engl J Med 2009;361:1324-1325).

Congressional proposals are just a beginning.

The Baucus Not-a-Bill and the CBO

The CBO (Congressional Budget Office? Can't Bank on It?) has miraculously managed to score a bill without having legislative language. Coming up with a price tag of just under $1 trillion over 10 years is said to be a "green light." The $829 billion cost projection is uncheckable, as it is largely based on private conversations, writes Ernest Istook (Newsmax.com 10/9/09), and comes with an admitted caveat of "substantial uncertainty." CBO claims the bill will knock an average $8 billion (0.5%) off the annual deficit of $1.4 trillion.

They "claim we're saving $81 billion by spending $829 billion," said Rep. Eric Cantor (R-VA) (SFGate.com 10/8/09).

The CBO assumes that Medicare SGR physician pay cuts will occur in 2012 and omits costs imposed on states and the private sector through mandates. The real cost would be more than $2 trillion, writes Michael Cannon (Cato 10/8/09).

Who Goes Broke?

Under the Baucus plan, families could be forced to spend up to 19% of their income on "health care costs," regardless of how much care they use (Wash Post 10/13/09). Penalties for those who don't buy insurance have been halved from up to $3,800 per family (for now), and phased in more gradually. Those who failed to pay the penalty could be charged with a misdemeanor and fined $25,000 or jailed for one year, according to a handwritten note Sen. John Ensign (R-NV) received from Joint Committee on Taxation Chief of Staff Thomas Barthold.

The owner of a hamburger franchise with 250 employees calculated that a proposed mandate would cost him $1,000,000 a year, driving him out of business.

Drug and medical device makers are expected to pay $180 billion, including $29 billion from not being allowed to deduct this "fee" from their corporate taxes (WSJ 10/0/09).

The "mother and father and crazy uncle of unfunded mandates" will break 50 state budgets by expanding Medicaid (WSJ 9/28/09). The cost to California was estimated to be $8 billion (San Diego Union-Tribune 10/8/09).

Like the Tariff of Abominations of 1828, the favoritism in the Baucus bill pits states against each other in a hurtful and divisive way. Senators seek a higher threshold for the 40% excise tax on insurance premiums in New York and Massa-chusetts; a $1 billion tax credit for New Jersey drug firms; and special favors for Harry Reid's Nevada (WSJ 10/8/09).

Insurers are rethinking their support as they calculate how much the Baucus bill will add to premiums (49% in the individual market) and costs. Reducing the noncompliance penalties means that they won't get as many reluctant new customers as they were counting on (WSJ 10/13/09).

Who Reaps a Windfall

Besides exemptions from provisions that limit or tax their health benefits, and a $10 billion bailout of insolvent union plans, unions count on increased power and forced unionization of health workers. In 2004, Obama vowed to paint the nation purple, the color of the Service Employees International Union (SEIU). What will Detroit-style labor relations mean in hospitals? In the 1970s, orderlies belonging to 1199 sat idle while patients not on their route could not get to needed procedures for hours.

The Measure of Value

As reformers demand paying doctors for "value" rather than for work done, the unit of value is increasingly in doubt. The implications of thresholds for subsidies and taxes depend on the value of the dollar and they are not indexed for inflation. The U.S. appears to have a de facto weak-dollar policy. On Oct 2, the dollar hit a 14-month low against other currencies. Measured in euros, the U.S. per capita GDP is down 25% since 2000. Investors have been playing the weak-dollar trade for years, diverting dollars into commodities, foreign currencies, and foreign stock markets: "the Third-World way of asset allocation." Experts suspect the Administration plans to escape the debt burden by devaluation (WSJ 10/8/09).

In 2009, about 40% of individual income tax payments will go for debt service (WSJ 10/20/09). Still, Congress is hurtling toward an unaffordable universal entitlement.

The Long-term Strategy

Savings from delivery-system reform are speculative and slow. U.S. budget projections indicate explosive increases in borrowing and debt-service costs, "which could cause lenders to lose faith in the nation's repayment capacity," writes Henry J. Aaron, Ph.D., of Brookings. "Prospects are so bleak that not even...the worthy goals of health care reform justify increasingly perilous budget deficits." Since the reform agenda may be beyond immediate political reach, it is "essential to identify elements of the full plan that would set the stage for later reforms" (N Engl J Med 2009;361:937-939).


Doing the Math

  • 800 gal/y: gas used by clunker (12,000 mi @ 15 mpg)
  • 480 gal/yr: gas used by newer car (12,000 mi @ 25 mpg)
  • 224 million gal/y saved (700,000 cars 320 gal/y) =
  • 5 million barrels of oil = 5 hrs of U.S. consumption
  • $350 million saved (5 million barrels $70/barrel)
  • $3 billion in taxes: $8.57 spent per dollar saved

"Will we get just as good a deal from centralizing our medical system?" asks Dave Johnson.


A Precedent: Got Milk?

The federal government has interfered in the milk marketing system since 1937, notes Dr. Lawrence Huntoon. The federal milk marketing orders system was put in place to assure an ample supply of milk at affordable prices. As with the CPT coding system, the government set classifications for milk products. Dairy farmers were lured into the system via promises of adequate minimum prices, rather like promises made to physicians to pay for services to Medicare "beneficiaries." Dairy farmers are having trouble making ends meet, and the American Farm Bureau is calling for market-based reform.


The "Woodwork Effect"

Arizona Governor Jan Brewer complains that the Baucus bill would require actual enrollment of all who are income-eligible for Medicaid, costing the state $4 billion in 5 years. The state has to pay now if eligibles end up in the emergency room, but since Arizona's Medicaid is set up like an HMO, it has to pay a monthly fee to providers for all enrollees, whether they use any services or not (Ariz Daily Star 10/8/09).


Eliminating Profit Won't Pay the Bill

The greatest problem with our third-party payment system is the illusion that somebody else can pay the cost, writes David Goldhill. He calculates that all the profits of the "famously greedy health-insurance companies" would pay for 4 days of medical care for all Americans. Adding in the profits of the "10 biggest rapacious U.S. drug companies": another 7 days. All profits of all American companies wouldn't buy even 5 months of care (Atlantic, September 2009).


Leave your health care to bums...what do you get?
Another day older and deeper in debt!
Saint Baucus don't you tell me what insurance is for
You sold your soul for a CBO score.

David McKalip, M.D., apologies to Merle Travis, 1946


New Officers Elected

At the 66th annual meeting in Nashville in October, George Watson, D.O., assumed the office of president, and the following officers were elected:

President-elect: Lee Hieb, M.D., of Logan, IA

Secretary: Charles McDowell, Jr., M.D., Johns Creek, GA

Treasurer: R. Lowell Campbell, M.D., Corsicana, TX

Directors: Richard Amerling, M.D., New York, NY; Alieta Eck, M.D., Somerset, NJ; Wayne Iverson, M.D., San Diego, CA; W. Daniel Jordan, M.D., Atlanta, GA; and Tamzin Rosenwasser, M.D., Lafayette, IN.


Insurance Rescission on a National Scale

Reformers cite heart-rending anecdotes of sick patients who lost coverage when they needed it most, suffering or even dying because of delays and uncertainties about treatment. This may happen because of alleged fraud lying about a pre-existing condition. Sometimes insurers may act indefensibly. But Congress is not proposing better enforcement of contractual rights quite the contrary. While Americans may cheer requiring coverage of pre-existing conditions at least until they find out the effect on premiums the proposal that Peter Orszag calls "the most important game-changer" in the fight to control costs constitutes rescission for millions at a time. This is the Independent Medicare Advisory Commission (IMAC), which would apply comparative effectiveness research to deny coverage, in a process modeled on the UK's National Institute for Health and Clinical Excellence (NICE), writes David Gratzer, M.D. (FrontPageMag.com 9/16/09).

For a one-minute video on the public airplane to Healthyville and other ObamaCare short takes by the Independence Institute, see www.i2i.org.


Forget the Uninsured

While most arguments for reform start with the number of uninsured, they quickly shift the focus to everybody else, observes John Goodman. None of the bills in Congress deals with the short-term uninsured. Tests for eligibility and subsidies all assume that people have stable incomes, though fluctuating income is typical of uninsured and indeed many low-income families (www.john- goodman-blog.com).


Deficit to Bottom in 2012

According to a CBO analysis of the Obama budget, the ten- year low of $658 billion would be reached in 2012, with increases without end thereafter (CPR #197).


AAPS Calendar

Feb 5, 2010. Thrive Not Just Survive workshop, Houston, TX

Feb 6, 2010. Board of Directors meeting, Houston, TX

Sep 15-18, 2010. 67th annual meeting, Salt Lake City, UT.

Be Vaccinated or Else

The swine flu pandemic may be the pretext to implement state emergency powers acts. The governors of Massachusetts and Pennsylvania, for example, appear to have the power to order mass vaccinations, under pain of forced relocation or imprisonment. The police apparently cannot restrain people to inject them without consent, but can forcibly remove them from their homes and confine them with other refuseniks in group facilities thus exposing them to influenza. Authorities are virtually immune from accountability for harm they cause.

The Iowa public health department, whose policy is posted as a model by the CDC, has the authority to forcibly confine people to a quarantine facility if they simply have contact with a person who has H1N1 influenza.

The New York Department of Health (DOH) has recently passed a regulation requiring all medical staff and allied health personnel employed in medical facilities to have seasonal influenza immunizations every year by Nov 30. Currently, more than 90% of confirmed influenza cases are caused by H1N1 virus, but seasonal flu could emerge later, say public health officials. The H1N1 requirement will depend on vaccine availability and DOH priority guidelines. The only exceptions are documented severe prior reactions to vaccine.

To decline vaccine at a facility in Sacramento, physicians must sign a form acknowledging the "fact" that their refusal endangers the health of their patients and the community.

We know of no studies of the prevalence of viral shedding by asymptomatic vaccinated or unvaccinated persons, nor could the public health director in Pima County (AZ) cite any.

In the past, the majority of health workers have declined to take influenza vaccine. Most could change their minds and clamor for vaccine if influenza turned out to be more widespread or severe than anticipated.

A protest movement is posting signs around Phoenix, AZ: "Support first responders that say NO to mandatory shots."

"While nurses protest at the state capitol, another unintended consequence of New York State's bold attempt to claim ownership of people's bodies has arisen," writes Lawrence Huntoon, M.D., Ph.D. "Some volunteer workers may leave the hospital rather than submitting to mandatory vaccination."

Mandatory vaccination is an assault on liberty, writes attorney Jonathan Emord. It subjects "the vast majority to a bodily intrusion that can have severe side effects for the sake of a minority why are or may become ill." Ordinarily, the state has to meet a heavy burden of proof to deprive a person of liberty. With vaccines, the government need only show a reasonable relationship between a means (vaccination) and the end (reducing the risk of disease). It does not need to show that less intrusive means were unavailable or inadequate. "Recognize that vaccination is one of the most extreme examples of prior restraint in the law" (NewsWithViews.com 10/12/09).

Also see News of the Day, www.aapsonline.org.


Nurses Charged with Felony for Malicious Report

In Winkler County, TX, a district attorney has indicted two nurses for filing a malicious complaint against a physician with the Texas Medical Board. The physician complained to the Sheriff's office about harassment. The TMB and the nursing association protested, arguing that people should be allowed to file TMB complaints with impunity. The trial scheduled for September has been postponed; a new date is not yet set.

Dr. Becker Entitled to Jury Trial

About 12 years after abuse of neurologist Taj Becker, M.D., by the Utah Medicaid Fraud Control Unit began, the U.S. District Court for the Central Division in Utah has ruled that defendants failed to show that they were entitled to absolute immunity (Becker v. Kroll, Case No. 2;02-CV24 TS). A 4-day jury trial is scheduled for February (see AAPS News, October 2007, and aapson- line.org/judicial/becker.htm).


Too Much Care Is "Fraud"

An ad in the Buffalo News reads that "many health care fraud victims have been subjected to unnecessary or unsafe medical procedures." Insurers mean to control the definition of fraud, writes Dr. Huntoon. They have long been filing anonymous complaints with medical boards against physicians who dare to provide care the insurer does not wish to pay for. The ad now goes beyond that clandestine tactic to a bolder tactic of establishing the link between insurer-defined medical necessity and fraud in the minds of the public. We are beginning to see the interlocking tentacles of top-down control of medicine fascism. Among the sponsors of the ad are insurers caught using the fraudulent Ingenix data base to cheat patients out of proper payment for out-of-network treatment.


Seniors May Be Able to Opt Out

There is no law or regulation compelling seniors to withdraw from Social Security and repay retirement benefits in order to withdraw from Medicare, ruled U.S. District Judge Rosemary Collyer. Plaintiffs Brian Hall, John Kraus, and former House Majority Leader Dick Armey are challenging a a Clinton Administration rule that bars them from keeping coverage they prefer to Medicare. The Obama Administration filed a motion to dismiss on the grounds that plaintiffs had failed to exhaust administrative remedies. The judge rejected it, noting that one plaintiff had sought an administrative hearing but had received no response from the Social Security Administration for 3 years; such a remedy is "futile," she said.

"A three-year wait is precisely the kind of bureaucratic hassle, or deliberate stonewalling, that government is famous for," opined Wall Street Journal editors. "The response of the Obama Administration to this lawsuit is revealing about its principles, as opposed to its rhetoric," which claims that the "public option" wouldn't be coercive (WSJ 10/4/09).


Citizen Sues to Stop National Health Database

In June, a citizen filed a class-action lawsuit against HHS, seeking an injunction to stop implementation of the national health database concealed in the American Recovery and Reinvestment Act of 2008 (ARRA or the "Stimulus Bill"). The suit argue that ARRA provides $22 billion to create a computerized system that "will by design violate the civil rights of every person in the United States" (Complaint, Heghmann v. Sebelius, et al., U.S. District Court for the Southern District of New York, 09 CV 5880). Additionally, it states that "penalties administered or threatened by the National Coordinator will deter the Plaintiff's health care providers from going beyond the electronically delivered protocols...."

The lawsuit calls attention to ARRA's infringements of personal freedoms, writes Twila Brase (www.cchconline.org).



What Seniors Say About Doctors. A survey done by the AMA, AARP, and ANA showed that "87% [of persons aged 50 and older] said it is very or somewhat important for physicians to be paid adequately so doctors can continue to accept Medicare patients" (AM News 9/28/09). Note that the flip side of that survey result is that there are 13% who really don't care whether the doctor is adequately paid. Some seniors apparently believe that the government should force doctors to work without adequate payment, i.e. as a government slave.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Enforcing a Mandate. A problem Massachusetts faces is people paying the penalty for not having insurance, then buying insurance when they get sick, and dropping it after they recover. The penalty was set low $900 probably so that the bill would pass. You can always raise it later. Now the monthly penalty is half the lowest available Connector policy. If it is too high, you run the risk of bankrupting a lot of younger people, or of encouraging people to skip filing taxes. Or you might get a bunch of people suddenly converting to Christian Science, as there is a religious exemption. The form for the hardship exemption is now 13 pages long.
Linda Gorman, Ph.D., Independence Institute, Golden, CO


Primary Care. When I was a child, the newly minted general surgeon in our area did house calls. When I was a teen, he no longer did house calls, but he was still our family doctor.

Before third-party payment and the exponential increase in costs, specialists also did primary care. If patients were put back in control of their medical dollar, many specialists would find out that primary care was where the money is, and would brush up on their generalist skills. In a free market, primary care would rise to the top of the cost-effectiveness heap, and the problem of too little primary care and too much speciali- zation would be solved. The three-legged stool of price, quality, and accessibility can only be balanced when the free market allows people to make their own choices.
Alieta Eck, M.D., Somerset, NJ


No Risk-Rating, No Choice. If you want guaranteed issue, no limits on pre-existing conditions, and severe rating restrictions, you must remove choice. Too much reliance on pooling does little good without appropriate risk classification, as better risks will reduce participation or leave the pool. If you choose to pool many people together regardless of the risk/cost they represent, you must mandate participation with little or any choice of benefits or anything else.
Mark E. Litow, F.S.A., Brookfield, WI


Why Small Employers Pay More. As Obama said, small businesses have to pay more for health insurance. That's because of the "other SGR": small group reform, which passed in the 1990s. Every insurer must issue insurance to any employer with fewer than 51 employees on a guaranteed-issue basis, and cannot hike premiums based on claims experience. If ObamaCare passes, large businesses and individuals will also have to pay more.
Ralph Weber, C.L.U., Paso Robles, CA


Sham Peer Review of Whistleblowers. The U.S.A. is becoming a perfect anti-meritocracy like the U.S.S.R. Oligarchy rules by the spurious supremacy of the unqualified the factory worker was more powerful than the engineer, and the opinion of the hospital orderly counted more than that of the physician. This was mere illusion in that the Communist Party elite was the only supreme class. The "protection of the little guy" con is very effective. It is refreshing to see some fighting back against this scheme in Winkler County (see p 3).
Walter Borg, M.D.


Why We Dropped Medigap. In 1993, my wife had bypass surgery that cost $50,000. The Blue Cross Medicare supplement paid about $800. We had paid in about $3,000 per year for several years. In the 15 years since then, we would have paid $45,000 in premiums had they stayed at the 1993 level.
Curtis Caine, M.D., Brandon, MS


Let Government Cut Doctors' Pay! With cuts to doctors' Medicare and Medicaid fees scheduled for 2011-2012, there will be no doctors accepting these patients. I believe this is the time for all doctors to submit their resignation to CMS. We can start working directly for patients sooner rather than later. That's the best thing that could happen for American medicine.
Marcy Zwelling-Aamot, M.D., Los Alamitos, CA


Networks Control Doctors. These days, it would be wise to avoid insurance contracts for closed networks. It might even be wise not to have expensive insurance for doctors' vis- its which, after all, cost about as much as a tank of gasoline.
Richard Swint, M.D., Paris, TX


Defending Liberty. My first American ancestor arrived in Jamestown in 1608. My ancestors fought in the American Revolution against tyranny and taxation without representation. Now it is my turn to fight the 21st century tyranny of government owning our health choices. It is not for government to say, "You cost too much. Die and get out of the way." I have signed the Physicians' Declaration of Independence....
Lee Vliet, M.D., Tucson, AZ