MEDICAL TUESDAY . NET
Community For Better Health Care
Vol VI, No 9, Aug 14, 2007
In This Issue:
The Annual World Health Care Congress, co-sponsored by The Wall Street Journal, is the most prestigious meeting of chief and senior executives from all sectors of health care. Renowned authorities and practitioners assemble to present recent results and to develop innovative strategies that foster the creation of a cost-effective and accountable U.S. health-care system. The extraordinary conference agenda includes compelling keynote panel discussions, authoritative industry speakers, international best practices, and recently released case-study data. The 3rd annual conference was held April 17-19, 2006, in Washington, D.C. One of the regular attendees told me that the first Congress was approximately 90 percent pro-government medicine. Last year it was 50 percent, indicating open forums such as these are critically important. The 4th Annual World Health Congress was held April 22-24, 2007 in Washington, D.C. This year many of the world leaders in healthcare concluded that top down reforming of health care, whether by government or insurance carrier, is not and will not work. We have to get the physicians out of the trenches because reform will require physician involvement. The World Health Care Congress - Middle East will be held in Dubai, United Arab Emirates, on November 12-14, 2007. The World Health Care Congress - Asia will be held in Singapore on May 21-23, 2008. The 4th Annual World Health Care Congress - Europe 2008 will meet in Barcelona on March 3-5, 2008. The 5th Annual World Health Care Congress will be held April 21-23, 2008 in Washington, D.C. For more information, visit www.worldcongress.com.
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1. Featured Article: Where Are the Innovators in Health Care? By REGINA E. HERZLINGER, WSJ, July 19, 2007
No sector of our economy is more in need of innovation than health care, yet its many regulations handcuff entrepreneurs. A consumer-driven health-care system will unlock these shackles to bring about a much-needed entrepreneurial revolution.
Health care's $2.2 trillion of costs (17% of GDP), breaks the backs of U.S. firms that compete with companies in countries spending, at most, 12% of GDP on health care. Yet, despite this torrent of cash, more than 40 million Americans lack health insurance, mostly because they cannot afford it. Although some claim we have the world's best health-care system, where are the quality outcome metrics to back this up? Don't try that one on the loved ones of the 300,000 people killed by hospital "medical errors" in the past few years.
In almost every sector of our economy, brilliant,
effective innovators have forced sluggish U.S. industries to become more
productive. Sam Walton's exquisitely detailed supply chain management, coupled
with his daring decision to locate Wal-Marts in rural areas, kick-started the
boom in retailing, while Bill Gates, Steve Jobs and Michael Dell drove
productivity in the IT sector. These entrepreneurs, and so many others, have
fundamentally improved our economy by making goods and services better, cheaper
and more accessible.
To read more, please go to www.medicaltuesday.net/index.asp .
But can you name any innovators in our bloated, inefficient health-care system? While there is innovation in the medical technology and health-insurance sectors, when it comes to health services, the 800-pound gorilla of our system, entrepreneurs are nowhere to be found. And their absence has enabled the status quo providers to get fat and sloppy.
One analysis showed that hospital activities accounted for $400 billion of the excessive costs of U.S. health care while all too many quality measures have worsened. Patients learn -- sometimes the hard way -- to bring along an assertive, intelligent loved one to protect them during a hospital stay.
Entrepreneurs avoid health-care delivery because status quo providers, abetted by legislators and insurance companies, have made it virtually impossible for them to succeed. Unlike any other U.S. industry, consumers do not set prices, yet they provide all the money through taxes for government programs and foregone salaries for employer-provided benefits. A third party -- a government or an insurance company -- not only sets the prices but goes so far as to specify procedures and even the kinds of patients to be covered.
Lately, payers are even telling doctors how to practice medicine -- and those who follow their recipes get paid more. The recipes are devised through an innovation-killing "peer review" process. The history of medicine is filled with shameful stories of "peers" who used their powers to suppress innovations: Judah Folkman, the brilliant scientist whose anti-angiogenesis theory forms the basis for many important new cancer drugs, for example, had difficulty obtaining peer-reviewed government research funds for nearly a decade.
Third parties' lock-hold on reimbursement punishes innovators. When the Duke University Medical Center's innovative new program for people with congestive heart failure so substantially improved patients' health that hospital visits and usage plummeted, the perverse nature of the payment system meant Duke couldn't benefit from saving its patients' money -- nearly $8,000 per person. In only one year, the program had reduced costs by 40%, yielding the kind of do-good returns that would normally earn kudos from Wall Street and Main Street. But, because the third parties pay providers only for treating sick people, they penalize innovators who make people healthy. . . .
Until we control our own health- care system, the entrepreneurs who could reform it -- and make our lives better -- will continue to look elsewhere for opportunities. Who can blame them?
To read the entire report, (Subscription required) go to http://online.wsj.com/article_print/SB118480794902371108.html.
Ms. Herzlinger is a professor at Harvard Business School, a senior fellow at the Manhattan Institute and the author of "Who Killed Health Care?" (McGraw Hill, 2007).
See Book Reviews (Section 9) for another of Dr. Herzlinger's books.
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The Steamrollers Of Climate Science, By Clive Crook, Financial Times, Aug 1 2007
Almost from the beginning, critics have attacked the Bush administration for the way it has dealt with science. In many areas - and emblematically in the case of climate change - well-qualified accusers have complained that the White House and its political appointees across the federal government have interfered with the work of scientists, misrepresented their findings and censored their public statements. Many of these cases are shocking - or at least they were, until people became inured to them. . .
So when the White House disagrees with most other governments in the world and expresses doubts about the Intergovernmental Panel on Climate Change, [IPCC] that view is contemptuously dismissed as one more instance. . .
For the rest of us, however,
this is a pity - because to put it bluntly the ICC deserves the
administrations' disdain. It is a seriousl
enterprise and unworthy of the slavish respect accorded to it by most
governments and the media. In the decisions which have already been made on
climate-change mitigation, to say nothing of future decisions, the stakes are
enormous. In guiding these momentous judgments, the flawed IPCC process has
been granted, in effect, a monopoly of official wisdom. That needs to change
and the IPCC itself must be reformed. To read more,
please go to www.medicaltuesday.net/news.asp .
For a fully documented indictment, read the article by David Henderson in the current issue of World Economics. Mr Henderson, a distinguished academic economist and former head of economics at the Organisation for Economic Co-operation and Development (OECD), has been tangling with the IPCC for some time. Five years ago, he and Ian Castles (a former chief of the Ausralian Bureau of Statistics) first drew attention to a straightforward error in the way emissions scenarios were being calculated. . .
Underlying it all is a pervasiv bias. From the outset the IPCC network was fully invested in the idea that climate change is the most pressing challenge confronting mankind and that urgent action far beyond what is already in prospect will be needed to confront it. . .
But if governments are to get the best advice, they need information and analysis from an open and disinterested source -or else from multiple dissenting sources. . . One incompetent institution, committed to its own agenda, should never have been granted this degree of actual and moral authority over the science, over public presentation of the science and over calls for "more serious action" that go well beyond the science.
To read the rest of the article (subscription required) please go to www.ft.com/cms/s/4a2bb6f6-404b-11dc-9d0c-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F4a2bb6f6-404b-11dc-9d0c-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fcomment%2Fcolumnists%2Fclivecrook.
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3. International Medicine: £1bn cost of waiting to see a GP, Jo Revill, Whitehall editor, Observer, Sunday July 22, 2007
Business leaders are to deliver a tough warning to the government that employees are spending millions of hours a year sitting in doctors' waiting rooms during office hours because of the lack of weekend GP clinics.
Three and a half million working days were lost last year because employees had to see a doctor during working hours, according to the Confederation of British Industry. This was more than four times the number of days lost to industrial action in 2006.
In an unprecedented move, the CBI is writing to Health
Secretary Alan Johnson asking him to give urgent consideration to opening
doctors' surgeries on Saturdays and Sundays instead of making it a weekday-only
To read more, please go to www.medicaltuesday.net/intlnews.asp .
The CBI, which is preparing a report that will call for a shake-up of GP services, estimates that the total cost to the economy is around £1bn a year, based on the fact that people visit their GP an average of three times a year and that the average hourly pay rate is just under £11.
The warning from business leaders will strengthen Gordon Brown's determination to make faster access to family doctors a priority for the health service, amid growing public unhappiness at the time spent in waiting rooms. It comes as new figures were released last week showing that in the first year of the new pay deal, 2004-05, some family doctors started to earn as much as £250,000 a year and that almost half of GPs in Britain earned £100,000 a year or more.
Dr Neil Bentley, the CBI's director of public services, said last night: 'Businesses need a healthy workforce, but not one stuck in doctors' surgeries during the middle of the day. It's frustrating for firms and for hard-working people who would rather be getting on with their jobs, not trapped in waiting rooms.
'The best surgeries should have greater opportunity to expand, while the NHS should use new providers to challenge existing services, and to provide care in areas that struggle to get GPs at all. All too often, the system seems to exist for the benefit of doctors and not patients.' . . .
To read the entire article, please go to http://observer.guardian.co.uk/print/0,,330238690-102279,00.html.
The NHS does not give timely access to healthcare, it only gives access to a waiting list.
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4. Medicare: REFORMS TO AVOID by John Goodman, PhD, President, NCPA
This is the season for health insurance reform, and that's dangerous. The odds of doing something bad are much higher than the chances of doing something good, says John C. Goodman, president of the National Center for Policy Analysis.
With that in mind, here are four things policymakers
To read more, please go to www.medicaltuesday.net/medicare.asp .
· Do not turn a tax subsidy for health care into an entitlement; Medicare and Medicaid entitlements are already on a course to crowd out every other government program -- we cannot survive creating more health care entitlements.
· Avoid mandated insurance coverage and mandated benefits; proposals to require everyone to have health insurance increase the likelihood that the government subsidy will become an entitlement.
· Don't create perverse incentives for health plans; if people can switch insurance plans annually at premiums that are unrelated to expected costs, the plans will seek out the healthy and avoid the sick.
· Don't encourage people to forgo private coverage by expanding public coverage; there should be no expansion of Medicaid or the State Children's Health Insurance Program in a way that encourages people to drop their private coverage in order to get free public coverage.
Government is not the solution to our problems, government is the problem.
- Ronald Reagan
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Herzlinger [Section one above] quotes one analysis, which showed that hospital activities accounted for $400 billion of the excessive costs of U.S. health care while all too many quality measures have worsened. Patients learn - sometimes the hard way - to bring along an assertive, intelligent loved one to protect them during a hospital stay.
That's 20 percent of the U.S. health care costs [or half of hospital costs] considered as gluttonous.
To read more, please go to www.medicaltuesday.net/gluttony.asp .
Mr. Lee, a 94-year-old Chinese American, had some discomfort under his breastbone after eating. Since he felt some food was stuck in his esophagus despite drinking fluids, he was taken to the emergency room. It resolved in the ER after the nurse gave him another glass of water. However, he received an extensive cardiac evaluation - complete ECG and cardiac laboratory evaluation with a repeat in six hours to rule out a myocardial infarction. He was feeling well within 15 minutes of arrival and he asked if he could go home. He was told that he needed a cardiac ECHO, stress tests and a CT. After about $6,000 worth of testing, he was allowed to go home. When he came to our office, he apologized for having gone to the ER. He said if he had waited another 15 minutes at home and drank another half glass of water, he not only could have saved his insurance company all that money, but he wouldn't have wasted nine hours in the Emergency Room. His own diagnosis of esophageal spasm was probably correct. Why did he go? His daughter and wife insisted.
Friends, daughters, wives and other relatives can cause huge unnecessary increased health-care costs.
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It is not within the power of United Auto Workers President Ron Gettelfinger to save GM, Ford and Chrysler. But it is certainly within his power to kill them. Whether he chooses to do so will soon become clear. What are arguably the most critical contract negotiations in the history of Motown's auto industry began this week.
America's former Big Three auto makers are teetering on the brink of bankruptcy -- Ford's second-quarter profit notwithstanding. And one big reason for their dire state, apart from collective amnesia over how to make hit cars, is their ever-escalating health-care expenses. Every car they produce, they plaintively assert, contains $1,500 in health costs that their Japanese competitors don't face.
But Mr. Gettelfinger has already declared that he is not in a "concessionary mood." UAW workers at Ford and GM agreed to a health-care cost-sharing deal during an unusual round of mid-contract negotiations in 2005. Closing the competition gap with Japanese auto makers now, Mr. Gettelfinger insists, requires not more concessions by auto workers -- but a Japanese-style government health-care system for all workers.
"We pay more, but get less," he thundered to
roaring applause at a recent NAACP luncheon.
To read more,
please go to www.medicaltuesday.net/myths.asp .
Doubtless, some of Mr. Gettelfinger's tough talk is posturing, calculated to extract the best possible deal from auto companies. Yet his perennial calls for a national health-care system -- echoed by leading Democratic presidential candidates -- affect the dynamics at the bargaining table: By feeding the notion that Japanese workers are getting a better health-care deal than UAW workers, they make it harder for Mr. Gettelfinger to make reasonable compromises and sell them to his rank-and-file.
But do Japanese workers really live in some single-payer, health-care heaven where all their medical needs are covered by general taxpayers with no cost to them? Hardly.
The Japanese system comprises three basic insurance plans: one for the self-employed and the unemployed, including retirees under 70; one for the elderly over 70; and one for all private- and public-sector employees. The employee plan is not just completely self-financed, with no taxpayer support. It actually subsidizes the other two, an arrangement that is becoming increasingly unsustainable as Japan's population ages. (Both Toyota and Honda declined to give an estimate of their current or future health-care premium burden.)
The employee plan requires a premium equal to 9.5% of a worker's annual income. Employees themselves pay about 45% of the premiums from their paychecks, their employers the rest. This works out to $1,557 for an employee with an annual income of $36,500 -- average wages for a blue-collar Japanese auto worker -- according to figures provided by the Japanese Ministry of Health and Labor Welfare.
But that's not all Japanese workers are on the hook for. Working families also face a 30% co-pay -- capped at $677 per month for a mid-income family -- for medical expenses such as in-patient and out-patient hospital charges, drugs, doctor's visits and diagnostic tests. Because these services are exceedingly cheap, thanks to massive price controls, in practice the average Japanese family pays only about $720 a year in co-pays. This adds up to total out-of-pocket annual expenses of about $2,300 for every Japanese household, which is comparable to what active UAW workers pay after the 2005 deal in absolute dollars. But relative to their income, Japanese workers bear a far bigger burden than UAW workers.
Even that isn't the full story. In the event of a catastrophic or chronic illness requiring prolonged hospitalization, a UAW worker faces no further expenses. A Japanese worker who hits his co-pay cap each month would be out of pocket up to $10,000 a year -- about 25% of his annual pay-check and five times more than a UAW worker under similar circumstances. This puts a huge strain on some Japanese families, forcing them to default on their hospital bills. Asahi Shimbun, Japan's respected national daily, reported that Japanese hospitals lost $180 million in unpaid patient bills in 2004.
UAW workers get a better deal not only than Japanese workers, but other American workers as well.
. . . . Given the huge retiree population that the Big Three support –GM has three times more retirees than active workers -- this has saddled them with a combined unfunded health-care liability exceeding $100 billion.
By contrast, 90% of retirees in other American companies don't get any employer-provided coverage after 65, when they become Medicare-eligible . . .
UAW workers still enjoy a health-care deal that no one else in America or Japan -- or quite possibly the planet -- does. Yet Mr. Gettelfinger said last week that the 2005 health-care givebacks were the toughest decision he ever made in his entire career. This is a startling admission that reflects the depth of the UAW's entitlement mentality, and its detachment from the world that its fellow Americans inhabit. But such lavish expectations are unsustainable under any system -- American or Japanese. This is a reality that Mr. Gettelfinger must accept. Otherwise, he may well push U.S. auto makers over the cliff -- and his comrades with them.
To read the entire report, (subscription required) go to http://online.wsj.com/article_print/SB118549957416479849.html.
Ms. Dalmia, who lives in southeast Michigan, is a senior analyst at the Reason Foundation.
One of life's unfortunate paradoxes: The workers with the finest open-ended health care plan in the world complain the loudest and could end up with the worst – government-rationed close-ended health care. But then it will be too late to change courses. UK is still trying to restore some freedom in health care after 60 years of government servitude. Canada is desperately trying to make sure that none of their citizens experience a higher level of private health care.
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Dr. Rosen: I've been trying to train my patients to not call in for prescription refills. Sometimes I think it is a thankless job.
Dr. Michelle: How could patients possibly get their medications if they can't call in for refills?
Dr. Rosen: Isn't that what the office appointment is for?
Dr. Ruth: Our office even has a separate prescription refill line to call. We have an RN to manage that line. Otherwise those calls would paralyze our office work. She's busy eight hours a day.
Dr. Rosen: So you agree that phone refills is a huge and costly job?
Dr. Milton: But I
don't see how you can avoid it.
To read more,
please go to www.medicaltuesday.net/lounge.asp .
Dr. Rosen: By giving the patient enough refills to last until the next agreed upon appointment plus one.
Dr. Sam: I don't worry or take any time. I just answer my Medical Assistant "Yes" whenever she asks.
Dr. Rosen: So if you give a patient a month of Ketoconazole with one refill, and he calls in for more, you just say yes?
Dr. Sam: You expect me to pull the chart, do a mini office visit and make a medical decision for which I can't charge? We're not lawyers who charge for our "valuable" time.
Dr. Rosen: Don't you think that a big problem doctors have is that there are so many folks that usurp our time, which we give freely and without remuneration, that we become desperate and will do things not in our best interest or even the patient's best interest just to remain solvent? Dr. Sam, suppose you give that patient a refill for Ketoconazole and she goes into liver failure and may even die. A malpractice suit could take up most of your time for several years.
Dr. Edwards: That's the only time I ever wish I was a lawyer. You know my lawyer charges $180 an hour and the smallest charge is one-fourth an hour or $45. So a three minute phone call is $45. And every time I have a legal problem, she makes sure she uses her supervising lawyer for at least one hour and he charges $320 an hour. A phone call to him costs me $80 if it's only for a minute or three.
Dr. Sam: Why don't we charge like attorneys? That would certainly get people's attention.
Dr. Milton: But we have third-party insurance that controls the whole health care equation - doctors, patients, and the "value" for the interface. It's a take it or leave it situation.
Dr. Edwards: Attorneys charge for any time they spend on your case, whether in their office, in their home, in their bathroom, or on the phone to you. And not only that, every time they use their phone or their duplicating machine, they have to punch in your case number so you get charged for every minute of time at the hourly rate and every sheet of paper. I once put a small message on a Christmas card I sent to both of my attorneys. The Junior Attorney charged me $45 for reading his and the senior Attorney charged me $80 for reading his, which was their quarter-hour rate. Now, doesn't that make the sphincter at the end of the anal canal go into spasm?
Dr. Rosen: I once had a similar experience and the attorney apologized. She said she had no control over that. Her legal secretary opens all her mail and posts the charges to the account.
Dr. Milton: But we can't do that in our managed care environment. Bismarck in Germany who started government managed care 200 years ago didn't have that tight a grip on our profession.
Dr. Rosen: And we have people that want us to return to the government control that our grandparents fled from under the euphemistic term "that all industrialized nations have government controlled medicine." Didn't our country chart a new course for humankind?
Dr. Milton: For the same reason that people struggling after obtaining freedom by getting rid of a totalitarian ruler also wish for the comfort and security of a dictator.
Dr. Walter: When the speaker of the Lutheran Hour toured Russia in the 1960s, to obtain a blood sugar to check his diabetes, he relayed that they took a scalpel to pierce his vein and collect the blood. They didn't have needles like the free world did. But the people of Russia had free blood sugar tests and food on their table. But at what price? The exorbitant price could not be seen or understood. It was confiscated from the people to make it free for others.
Dr. Rosen: So we have to start with small and simple things. If all of us would just give all the refills to last until the time that we and the patient agree upon, Dr. Ruth could save the salary of her group's RN and we all could save many hours a week of our time and make life more pleasant.
Dr. Michelle: I'm going to start today and give refills until the next appointment plus one in case they have to reschedule the office visit and will not do another phone refill.
Dr. Sam: That's a good idea. Then when my Medical Assistant asks whether she can OK the refill, instead of yes, I'll always say no.
Dr. Rosen: By giving adequate refills, [up to 11 are authorized in California for one year] phone requests for medicine will then indicate a change in the patient's condition and require a follow-up appointment, or it's their last refill and, therefore, it's been a year and a yearly review and re-writing of all prescriptions is the order of the day.
Dr. Milton: Sounds like that should also improve the quality of care and avoid malpractice lawsuits.
Dr. Rosen: And make the practice of medicine more pleasant.
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From The SAN MATEO COUNTY MEDICAL ASSOCIATION BULLETIN, April 2007
The Changing Face of Tibet: A Mixture of Religion, Tradition and Medicine By Philip R. Alper, M.D.
Did I recently travel to Tibet to discover the meaning of life? Well, not exactly. But I did harbor an intense curiosity about a place that is 3 times the size of California yet has less than half the population of minuscule Israel and still seems to always be in the news.
There is a
joke about a jaded Westerner who does travel to a mountaintop in Tibet to meet
a guru who will tell him the meaning of life. The joke isn't that funny, so
I'll go no further with it other than to note that it gives tacit recognition
to the idea that religion and Tibet seem close to being synonymous. Of course,
here I am speaking of Tibetan Buddhism and the Dalai Lama, who, in a departure
from conservative tradition, recently visited Stanford Medical School and is
doing a joint project with the Neuroscience Institute on the physiology of
meditation, using the most advanced magnetic resonance imaging techniques.
To read more, please go to www.medicaltuesday.net/voicesofmedicine.asp .
The Dali Lama fled Tibet for India many years ago, when the Chinese government declared Tibet to be an integral part of China and asserted its right to control religious life in the "Tibet Autonomous Region." As I would come to learn, the story is exceedingly complex, and considerable ethnic tension remains between the mainstream Han Chinese and native Tibetans. (The latter actually most closely resemble Peruvian Indians in looks, dress, and even the kind of jewelry they wear.)
A military invasion (or suppression of a rebellion, depending on the point of view) in 1950 and 1951 has been followed by a large influx of ethnic Chinese into Lhasa, the capital city. Much has been done to improve the infrastructure of the region since then. Less has been done to integrate the populations. Stereotypes abound. As one Tibetan put it, "The Chinese think we are lazy and stupid, and we think they are rude and overly materialistic." Nevertheless, Tibetans send their children to China for the best educational opportunities. One such student was asked what Tibetans eat. She answered, "Sand—it cleans out our digestive organs" and rocked with laughter as she recounted how her deadpan explanation actually convinced a couple of her classmates.
The truth is that both China and Tibet remain quite primitive across wide reaches of their territory. We found this as we traveled through Yunnan in southwest China, gradually climbing by motor coach over the course of nearly a week to acclimatize ourselves to Tibetan altitudes—12,500 feet in Lhasa and 4000 feet higher in some places we visited. (The new train from Beijing to Lhasa also crosses the mountains at 16,500 feet, but as part of a faster 48-hour itinerary. Despite oxygen provided by mask to all passengers, one early passenger did not survive the trip.)
The indigenous population was startling in their adaptation to a difficult environment. For example, in a mountain pass between Lhasa and Gyantse, isolated homes were scattered around Turquoise Lake, seemingly oblivious to the 4.5-mile–high altitude and the paucity of people. Nearby, a herd of yaks crossed an ice field, as if that was a perfectly normal thing to do.
Everywhere we went, the people were black-haired, copper-skinned, and had rosy cheeks—looking both sturdy and healthy. Without dentists, full mouths of white teeth were typical. Poverty is endemic, but it does not interfere with the pervasive quiet dignity of Tibetans. . .
But it is the place of religion in life that makes the most profound impression on visitors. Wherever we went, pilgrims on foot, in carts pulled by tractors, or in trucks were making pilgrimages to monasteries sometimes hundreds of miles away. Prostrating themselves on the ground to accumulate greater merit in this life to be favored in the next life was commonplace. . .
Historically, the seat of Tibetan power lay in its monasteries, and even today the support of monasteries is clearly viewed as worthy by Tibetans, if suspect by the Chinese. However, things seem to be changing. China is increasingly intrigued by arguments in favor of preserving its ethnic heritage. Monks are modernizing and, perhaps following the Dalai Lama's example, there is greater interest in the outside world. We saw more than a few carrying cell phones and sporting jeans and sneakers under their robes. . .
To read the entire report, go to www.smcma.org/Bulletin/BulletinIssues/April07issue/FeaturedArticlesApril07.html.
Dr. Alper is an internist in Burlingame, Calif. He originally wrote this story for Internal Medicine World Report. The entire article appears online at www.imwronline.com.
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9. Book Review: MARKET DRIVEN HEALTH CARE by Regina Herzlinger
MARKET DRIVEN HEALTH CARE - Who Wins, Who Loses in the Transformation of America's Largest Service Industry by Regina Herzlinger. Addison-Wesley Publishing Company, Inc. Reading, Mass, 1997, xxviii & 379 pages, (includes index) $25. ISBN: 0-201-48994-5
Dr Herzlinger, Professor of Business Administration, Harvard Business School, suggests by her title "how the market - not managed care - will provide the solution to the deep problems that plague the American health care system." Consumers in the United States are ambivalent about medical care--bemoaning high costs and inefficiency while applauding research advances and individual health care providers such as doctors and pharmacists. The abundant information that is available for other sectors--prices, cost, quality, availability--is stunningly absent in health care... Even prices are generally quoted "a la carte" not for the full episode of care. Herzlinger's book intends to help remedy "the contradictions in the American health care system: to keep what is so good about it and to purge what is so bad."
In Part One of this four-part book, Herzlinger looks
back twenty-five years to studies that found disparity in patient care. Women
in Maine underwent hysterectomy four times more often than those in New
Hampshire, implying that some back woods docs were a "greedy lot."
Nevertheless, providing equitable care to women seemed easy. Allow a few smart
doctors to routinize medicine and then tell the rest what to do and how to do
it. Quality would improve, and the cost of health care would plunge--one of the
cornerstones of today's powerful for-profit managed care movement.
To read more, please go to www.medicaltuesday.net/bookreviews.asp .
Herzlinger finds this strategy puzzling when compared to recent changes in most sectors of the American economy. She points to manufacturing's innovations in organizational structure, technology, information, and employee empowerment. The author describes "focused factories," where cleaving vertically integrated firms and "outsourcing" goods and services have proved beneficial, both in costs and customer service. These successful ideas have eluded much of the health care system, which continues to replicate the mistakes of long-gone manufacturing giants--believing that "big is beautiful" and that direction should come from the top.
By 1986, fifteen years after Herzlinger's initiation into the maddening contradictions of the American health care system, she was convinced that the forces that had revitalized manufacturing could reshape the health care system. A revolution was on its way. However, unique barriers--complex technology, multiple professional roles, and daunting legal requirements--had to be overcome. To prepare potential medical care managers, Herzlinger developed an MBA course at the Harvard Business School, "Creating New Health Care Ventures," proposing lower priced specialized medical care, "available before and after working hours, in easy-to-reach locations like work sites, shopping malls, homes, and schools," much as the eyewear sector and chain of cancer centers are doing right now. There will be winners, healthier, better-informed patients and health care providers no longer having to answer to bottom-line-oriented managers, and losers, providers who do not value customer convenience over their own and who also enjoy being in complete control.
In Part Two, Dr Herzlinger, using examples found in managed care and horizontal integration, analyzes why the two popular remedies for the health care system--downsizing, or managed care, and upsizing, or "big is beautiful," fail in most cases. She gives examples that merged hospitals have increased their costs disproportionately . . .
To read the entire review, please go to www.healthcarecom.net/bkrev_MarketDrivenHealthCare.htm.
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At the Institute of Ethics and Emerging Technologies (IEET) Conference, David Meltzer, a medical economist from the University of Chicago, was not amused by Ronald Bailey's comment that when you take into account all of the money spent on health care, the cheapest patient is a dead patient.
HMOs have understood that for years.
Since, 1970 when I went into practice, I've noticed that my 70-year-old patients look younger and better than my 60-year-old patients did at that time.
But health care has not
gotten any less expensive with the prolongation of ageing.
To read more,
please go to www.medicaltuesday.net/hhk.asp .
Rupert Murdock will take control of Dow Jones and the Wall Street Journal next fall. Maybe we'll see the premiere six-column newspaper re-emerge. If the Financial Times can continue to give us seven columns of news before we even open it and disturb the person next to us, I'm sure Rupert will restore the dignity of the WSJ.
Even the Sacramento Bee has a six-column business news section in their format, which is wider than the WSJ.
Then we won't have difficulty finding the WSJ among all the newspapers in the Staff Lounge.
Ron Paul, MD, is considered by nearly everyone to be the most freedom-loving idealistic Representative with the highest degree of integrity of any Congressman. (www.ronpaul2008.com/) Recently it was reported that he also has several slices of pork going to some of his friends in Texas. His staff reportedly justifies this, as I recall, being necessary to get re-elected.
If a man of such integrity cannot rise above the evil influence of Congress taking money unnecessarily from hard working Americans and redistributing it to friends, then Congress must be one of the most Evil Institutions in America. Why would anyone even consider entrusting their personal health to such an institution with ulterior motives?
Why do business people and physicians smile and relax in August?
Because Congress is on their summer recess and we don't have to fight for survival.
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• The National Center for Policy Analysis, John C Goodman, PhD, President, who along with Gerald L. Musgrave, and Devon M. Herrick wrote Lives at Risk issues a weekly Health Policy Digest, a health summary of the full NCPA daily report. You may log on at www.ncpa.org and register to receive one or more of these reports. Be sure to read how Medicare and Social Security combined are on track to eat up the entire federal budget at www.ncpa.org/sub/dpd/index.php?Article_ID=14873.
• Pacific Research Institute, (www.pacificresearch.org) Sally C Pipes, President and CEO, John R Graham, Director of Health Care Studies, publish a monthly Health Policy Prescription newsletter, which is very timely to our current health care situation. You may subscribe at www.pacificresearch.org/pub/hpp/index.html or access their health page at www.pacificresearch.org/centers/hcs/index.html. Be sure to read about Giuliani's False Health Care Promise.
The Mercatus Center at George Mason University (www.mercatus.org) is a strong advocate for accountability in government. Maurice McTigue, QSO, a Distinguished Visiting Scholar, a former member of Parliament and cabinet minister in New Zealand, is now director of the Mercatus Center's Government Accountability Project. Join the Mercatus Center for Excellence in Government and read Annual Performance Report Scorecard of Government agencies at www.mercatus.org/programs/pageID.350,programID.4/default.asp.
The National Association of Health Underwriters, www.NAHU.org . The NAHU's Vision Statement: Every
American will have access to private sector solutions for health, financial and
retirement security and the services of insurance professionals. There are
numerous important issues listed on the opening page. Be sure to scan their
professional journal, Health Insurance Underwriters (HIU), for articles of
importance in the Health Insurance MarketPlace. www.nahu.org/publications/hiu/index.htm . The HIU magazine, with Jim Hostetler
as the executive editor, covers technology, legislation and product news -
everything that affects how health insurance professionals do business. Be sure
to review the current articles listed on their table of contents at hiu.nahu.org/paper.asp?paper=1 . To see my recent column, go
to http://hiu.nahu.org/article.asp?article=1328&paper=0&cat=137 . •
To read the rest of this column, please go to www.medicaltuesday.net/org.asp .
• The Galen Institute, Grace-Marie Turner President and Founder, has a weekly Health Policy Newsletter sent every Friday to which you may subscribe by logging on at www.galen.org. A new study of purchasers of Health Savings Accounts shows that the new health care financing arrangements are appealing to those who previously were shut out of the insurance market, to families, to older Americans, and to workers of all income levels. www.heritage.org/Research/HealthCare/hl1019.cfm
• Greg Scandlen, an expert in Health Savings Accounts (HSAs) has embarked on a new mission: Consumers for Health Care Choices (CHCC). To read the initial series of his newsletter, Consumers Power Reports, go to www.chcchoices.org/publications.html. To join, go to www.chcchoices.org/join.html. Be sure to read Prescription for change: Employers, insurers, providers, and the government have all taken their turn at trying to fix American Health Care. Now it's the Consumers turn at http://www.chcchoices.org/publications/cpr9.pdf.
• The Heartland Institute, www.heartland.org, publishes the Health Care News. Read the late Conrad F Meier on What is Free-Market Health Care?. You may sign up for their health care email newsletter at www.heartland.org/Article.cfm?artId=10478.
• The Foundation for Economic Education, www.fee.org, has been publishing The Freeman - Ideas On Liberty, Freedom's Magazine, for over 50 years, with Richard M Ebeling, PhD, President, and Sheldon Richman as editor. Having bound copies of this running treatise on free-market economics for over 40 years, I still take pleasure in the relevant articles by Leonard Read and others who have devoted their lives to the cause of liberty. I have a patient who has read this journal since it was a mimeographed newsletter fifty years ago. Be sure to read about proposed business tax cuts: Businesses don't pay taxes; they collect them at www.fee.org/in_brief/default.asp?id=1492.
• The Council for Affordable Health Insurance, www.cahi.org/index.asp, founded by Greg Scandlen in 1991, where he served as CEO for five years, is an association of insurance companies, actuarial firms, legislative consultants, physicians and insurance agents. Their mission is to develop and promote free-market solutions to America's health-care challenges by enabling a robust and competitive health insurance market that will achieve and maintain access to affordable, high-quality health care for all Americans. "The belief that more medical care means better medical care is deeply entrenched . . . Our study suggests that perhaps a third of medical spending is now devoted to services that don't appear to improve health or the quality of care - and may even make things worse." Be sure to read about Medicare's Future.
• The Independence Institute, www.i2i.org, is a free-market think-tank in Golden, Colorado, that has a Health Care Policy Center, with Linda Gorman as Director. Be sure to sign up for the monthly Health Care Policy Center Newsletter at www.i2i.org/healthcarecenter.aspx. Read what minimum wages do for poor people at www.i2i.org/articles/2006-I.doc.
• Martin Masse, Director of Publications at the Montreal Economic Institute, is the publisher of the webzine: Le Quebecois Libre. Please log on at www.quebecoislibre.org/apmasse.htm to review his free-market based articles, some of which will allow you to brush up on your French. You may also register to receive copies of their webzine on a regular basis. This month, read LEARNER-PACED EDUCATIONAL PROGRAMS: AN ALTERNATIVE TO STATE RUN SCHOOLS.
• The Fraser Institute, an independent public policy organization, focuses on the role competitive markets play in providing for the economic and social well being of all Canadians. Canadians celebrated Tax Freedom Day on June 28, the date they stopped paying taxes and started working for themselves. Log on at www.fraserinstitute.ca for an overview of the extensive research articles that are available. You may want to go directly to their health research section at www.fraserinstitute.ca/health/index.asp?snav=he. Be sure to read California Dreaming: The Fantasy of a Canadian-Style Health Insurance Monopoly in the United States.
• The Heritage Foundation, www.heritage.org/, founded in 1973, is a research and educational institute whose mission is to formulate and promote public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values and a strong national defense. The Center for Health Policy Studies supports and does extensive research on health care policy that is readily available at their site. Be sure to read The Estonian Economic Miracle.
• The Ludwig von Mises Institute, Lew Rockwell, President, is a rich source of free-market materials, probably the best daily course in economics we've seen. If you read these essays on a daily basis, it would probably be equivalent to taking Economics 11 and 51 in college. Please log on at www.mises.org to obtain the foundation's daily reports. This month be sure to The Trouble with David Friedman's "Rationality at www.mises.org/story/2669. You may also log on to Lew's premier free-market site at www.lewrockwell.com to read some of his lectures to medical groups. To learn how state medicine subsidizes illness, see www.lewrockwell.com/rockwell/sickness.html; or to find out why anyone would want to be an MD today, see www.lewrockwell.com/klassen/klassen46.html.
• CATO. The Cato Institute (www.cato.org) was founded in 1977 by Edward H. Crane, with Charles Koch of Koch Industries. It is a nonprofit public policy research foundation headquartered in Washington, D.C. The Institute is named for Cato's Letters, a series of pamphlets that helped lay the philosophical foundation for the American Revolution. The Mission: The Cato Institute seeks to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets and peace. Ed Crane reminds us that the framers of the Constitution designed to protect our liberty through a system of federalism and divided powers so that most of the governance would be at the state level where abuse of power would be limited by the citizens' ability to choose among 13 (and now 50) different systems of state government. Thus, we could all seek our favorite moral turpitude and live in our comfort zone recognizing our differences and still be proud of our unity as Americans. Michael F. Cannon is the Cato Institute's Director of Health Policy Studies. Read his bio at www.cato.org/people/cannon.html. This month please read about School Choice, which is just as important as Patient or Consumer Choice in Health Care, at www.cato.org/homepage_item.php?id=615.
• The Ethan Allen Institute, www.ethanallen.org/index2.html, is one of some 41 similar but independent state organizations associated with the State Policy Network (SPN). The mission is to put into practice the fundamentals of a free society: individual liberty, private property, competitive free enterprise, limited and frugal government, strong local communities, personal responsibility, and expanded opportunity for human endeavor.
• The Free State Project, with a goal of Liberty in Our Lifetime, http://freestateproject.org/, is an agreement among 20,000 pro-liberty activists to move to New Hampshire, where they will exert the fullest practical effort toward the creation of a society in which the maximum role of government is the protection of life, liberty, and property. The success of the Project would likely entail reductions in taxation and regulation, reforms at all levels of government to expand individual rights and free markets, and a restoration of constitutional federalism, demonstrating the benefits of liberty to the rest of the nation and the world. [It is indeed a tragedy that the burden of government in the U.S., a freedom society for its first 150 years, is so great that people want to escape to a state solely for the purpose of reducing that oppression. We hope this gives each of us an impetus to restore freedom from government intrusion in our own state.]
• The St. Croix Review, a bimonthly journal of ideas, recognizes that the world is very dangerous. Conservatives are staunch defenders of the homeland. But as Russell Kirk believed, wartime allows the federal government grow at a frightful pace. We expect government to win the wars we engage, and we expect that our borders be guarded. But St Croix feels the impulses of the Administration and Congress are often misguided. The politicians of both parties in Washington overreach so that we see with disgust the explosion of earmarks and perpetually increasing spending on programs that have nothing to do with winning the war. There is too much power given to Washington. Even in wartime, we have to push for limited government - while giving the government the necessary tools to win the war. To read a variety of articles in this arena, please go to www.stcroixreview.com. To review my Book Review of Who Really Cares click on book reviews in the August issue.
• Hillsdale College, the premier small liberal arts college in southern Michigan with about 1,200 students, was founded in 1844 with the mission of "educating for liberty." It is proud of its principled refusal to accept any federal funds, even in the form of student grants and loans, and of its historic policy of non-discrimination and equal opportunity. The price of freedom is never cheap. While schools throughout the nation are bowing to an unconstitutional federal mandate that schools must adopt a Constitution Day curriculum each September 17th or lose federal funds, Hillsdale students take a semester-long course on the Constitution restoring civics education and developing a civics textbook, a Constitution Reader. You may log on at www.hillsdale.edu to register for the annual weeklong von Mises Seminars, or their famous Shavano Institute. Congratulations to Hillsdale for its national rankings in the USNews College rankings. Changes in the Carnegie classifications, along with Hillsdale's continuing rise to national prominence, prompted the Foundation to move the College from the regional to the national liberal arts college classification. Please log on and register to receive Imprimis, their national speech digest that reaches more than one million readers each month. This month, read Ross Terrill of Harvard University on National Security: Dealing With China in the Coming Years at www.hillsdale.edu/news/imprimis.asp. The last ten years of Imprimis are archived www.hillsdale.edu/hctools/imprimis_archive/.
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Del Meyer, MD, Editor & Founder
6945 Fair Oaks Blvd, Ste A-2, Carmichael, CA 95608
Words of Wisdom
"Never doubt that a small group of thoughtful committed people can change the world; indeed it is the only thing that ever has." -Margaret Mead
"There is one quality that one must possess to win, and that is definiteness of purpose, the knowledge of what one wants, and a burning desire to possess it." -Napoleon Hill
"People with goals succeed because they know
where they are going. . . It's as simple as that."
"The first step to becoming is to will it." -Mother Teresa
"I don't know the key to success, but the key to failure is trying to please everybody." -Bill Cosby
"Let go of the past and go for the future. Go confidently in the direction of your dreams. Live the life you've imagined." -Henry David Thoreau
Some Recent Postings
Who Really Cares -- America's Charity Divide -- Who Gives, Who Doesn't, and Why It Matters, by Arthur C. Brooks, Reviewed by Del Meyer, MD www.stcroixreview.com/ [click on book reviews]
Politicians Cannot Manage a Health Care System by David J. Gibson, MD www.healthplanusa.net/DGPoliticiansCannotManager.htm
The CMA [California Medical Association] has become part of the problem by David J. Gibson, MD www.healthplanusa.net/DGReformingCMA.htm
Harry Potter Battles Big Brother, by James Murtagh, MD www.healthcarecom.net/JM_HarryPotter.htm
America Alone, The End of the World as we Know It, by Mark Steyn, reviewed by Del Meyer, MD www.delmeyer.net/bkrev_AmericaAlone.htm
THEY put out a red carpet for Mohammed Zahir Shah when he returned home, after 29 years of exile, in April 2002. As he stepped into the bright sun at Kabul airport, flanked by 50 Italian bodyguards, Pushtun elders struggled to touch him and kiss his hand. He whispered that he was glad to see them. And all was as it should have been.
To read the entire obit, go to www.economist.com/obituary/displaystory.cfm?story_id=9539910#top.
On This Date in History - August 14
On this date in 1952, Debbie Meyer, US, 200m/400m/800m freestyle swimmer (Oly-gold-1968), was born.
On this date in 1774, Meriwether Lewis, Charlottesville, VA, Capt of Lewis & Clark Expedition, was born.
On this date in 1958, Gladys L Presley, mom of Elvis, dies at 46.
On this date in 1846, Henry David Thoreau was jailed for tax resistance.
MOVIE EXPLAINING SOCIALIZED MEDICINE TO COUNTER MICHAEL MOORE's SiCKO
Logan Clements, a pro-liberty filmmaker in Los Angeles, seeks funding for a movie exposing the truth about socialized medicine. Clements' strategy is to release the documentary this summer at about the time when Michael Moore's pro-socialized medicine movie "Sicko" is released. Clements is seeking 200 doctors willing to make a tax-deductible donation of $5K. Clements is also seeking American doctors willing to perform operations for Canadians on wait lists. Clements is the former publisher of "American Venture" magazine who made news in 2005 for a property rights project against eminent domain called the "Lost Liberty Hotel." For more information or to review a trailer, visit www.sickandsickermovie.com or email firstname.lastname@example.org.
Logan Plans To Release The Movie Before The End of August 2007. He is currently reviewing distribution plans and seeking distributors for various media and territories. Join the e-mail alert list to get first notice of the movie's release date.
SICK AND SICKER is a feature-length movie in currently in post-production that explores the ethics and realities of a government take over of the medical profession.
SICK AND SICKER will investigate whether government intervention in the U.S. medical system is the cause of, or the solution to, our problems and whether Canada is really the health care utopia that politicians tell us it is.
This won't be a dry documentary that will put you to sleep. Logan Darrow Clements will bring the abstract concepts to life in dramatic and surprising ways. If he can show how a monkey with darts can beat the investment return of Social Security, then you know it will be a movie you won't forget.
More on Moore: John Goodman, PhD, President of the NCPA, announces that they have a new Michael Moore site: http://sicko.ncpa.org/. At his own site, Michael invites visitors to send him health horror stories - but only about the U.S. system! To add balance, our site has health horror stories about Canada, France and Britain. Read the reviews at http://sicko.ncpa.org/?c=reviews. Read the testimonials at http://sicko.ncpa.org/?c=Testimonials. Read the Rest of the Story by going directly to http://sicko.ncpa.org/?c=The-Rest-of-the-Story.
A Canadian Doctor Describes How Socialized Medicine Doesn't Work: DAVID GRATZER, MD, on Canadian Medicare: I was once a believer in socialized medicine. As a Canadian, I had soaked up the belief that government-run health care was truly compassionate. What I knew about American health care was unappealing: high expenses and lots of uninsured people. My health care prejudices crumbled on the way to a medical school class. On a subzero Winnipeg morning in 1997, I cut across the hospital emergency room to shave a few minutes off my frigid commute. Swinging open the door, I stepped into a nightmare: the ER overflowed with elderly people on stretchers, waiting for admission. Some, it turned out, had waited five days. The air stank with sweat and urine. Right then, I began to reconsider everything that I thought I knew about Canadian health care. Read more at www.ibdeditorials.com/IBDArticles.aspx?id=270338135202343.