WELCOME TO THE MEDICAL TUESDAY NETWORK

 Physicians, Business, Professional and Information Technology Communities

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, February 10, 2004

MedicalTuesday refers to the meetings that were traditionally held on Tuesday evenings where physicians met with their colleagues and the interested business and professional communities to discuss the medical and health care issues of the day. As major changes occurred in health care delivery during the past several decades, the need for physicians to meet with the business and professional communities became even more important. However, proponents of third-party health care felt these meetings were counter productive and they essentially disappeared. Rationing was introduced in this country with HMOs, under the illusion that this was free enterprise. Instead, the consumers (patients) lost all control of their personal and private health care decision making, the very antithesis of freedom.

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In This Issue:
1. Costs of Socialized Medicine in America–Medicare, Medicaid, HMOs–Continue to Soar
2. Free-Market Health Insurance Continues to Be Ignored
3. Should Only Academics Define Essential Coverage?
4. Overheard in the Medical Staff Lounge
5. This Week’s Review of Socialized or Single-Payer Medicine
6. Medical Gluttony or Excessive HealthCare Costs
7. The MedicalTuesday Recommendations for Restoring Accountability in HealthCare & Government
 

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1. Costs of Socialized Medicine in America–Medicare, Medicaid, HMOs–Continue to Soar
The recent expansion of the US Medicare entitlement has grown by one-third, even before being fully implemented. The President had asked Congress to keep the ten-year cost estimate below $400 billion in his initial proposal. However, the first budget, which includes this Medicare entitlement, has already projected the cost at $540 billion, a 35 percent increase. Nearly everyone expects the cost of the Medicare bill to increase over the years, as the huge baby boom generation retires and medical costs increase. Douglas Holtz-Eakin, Director of the Congressional Budget Office, has said the measure's costs in its second decade could exceed $1.5 trillion which would equal our current entire national health care costs. The Congressional Budget Office also projected that this year's shortfall would be $477 billion. One possible explanation would be that the White House expects the economy to be weaker than the Congressional Budget Office predicts. (It appears that if you’re spending other people’s money, otherwise known as taxpayer’s income, the costs and facts are relatively unimportant. It’s basically how many votes can be bought.)

2. Free-Market Health Insurance Continues to Be Ignored
Gary Schouborg and Michael Booth, in a recent editorial in the San Francisco Chronicle, point out that proponents for universal health care often unquestioningly present a forced choice between employer-provided or government-provided insurance. Completely absent from their analysis is what should be an obvious alternative: We each buy our own health insurance the same way we buy auto, life, and home insurance–individually with quotes for various policies where we would purchase only the insurance we need. In fact, how we now think of health-care insurance is an accident of history. World War II wage controls limited unions in what they could get for workers. So they agitated for health-care benefits instead of increased wages. As part of the deal, the government made those benefits tax free. Individuals no longer became consumers of their health care. Instead, companies set up a kind of health-care plantation for their employees. This was supposed to be temporary. But once wage controls were lifted after the war, the system, like so many government policies, became permanent.

Schouborg and Booth maintain that permanence inevitably led to the assumption that any good company should provide health-care insurance to its employees. When some companies were unwilling or unable to do so, this sense of entitlement grew to a conviction that any good government should provide health care or force employers to pay for it much as California recently did with Senate Bill Two (SB2). Unfortunately SB2 was supported by both organized and unionized medicine to the detriment of small businesses, some of which will be forced to declare bankruptcy. But third-party insurance, whether provided by employers or government, prevents insurance companies from dealing squarely with individuals. They focus on groups.  Most insurance companies don’t sell individual policies at all, and those few that do are the very devil to deal with, since they have no effective competition. For the 40 million Americans who are self employed, semi-retired or fully retired and under age 65, the “crisis” isn’t cost, it’s availability–and that’s because we have the unquestioned and relatively recent notion that health insurance should be an obligation of the employers. Third-party insurance encourages employees to take coverage as a right rather than something they should provide for themselves, such as food and shelter. It also hides from employees the true costs of health care, distorting their behavior as consumers of health-care services.  If we thought about homes as we do about health insurance, we’d all expect employers or government to provide us homes in upscale neighborhoods.

3. Should Only Academics Define Essential Coverage?
The New York Times recently headlined “Only Academics Should Define Essential Coverage,” citing Dr William McGuire, CEO of UnitedHealth Group, who puts his faith in academia - "The definition of essential or basic coverage has to be made in the academic community." To which the Galen Group responded, “So much for the notion that UnitedHealth Group might have a role to play in consumer driven health.”  http://www.nytimes.com/2004/01/20/business/20care.html

Decision making is a very difficult and laborious process in academia. This is the way it should be. In their free exchange of ideas, all avenues need to be explored. When I was at the university medical school in the late 1960s, there was a discussion as to what logo to place on the women’s restrooms. Some wanted just the words. But many can’t read and wanted a female figure, but no one could decide whether that meant a dress (which some viewed as demeaning), a pantsuit, or a triangle reversed from the men’s restroom with the base at the bottom to show the distribution of weight in a woman’s body. As I recall, it was on the monthly faculty agenda for at least six months before it was resolved.

At a recent scientific meeting of the California Thoracic Society, it was interesting to observe the professors in academia involved in generally friendly banter on the essentials of treating atypical tuberculosis (Mycobacterium avium [tuberculosis] complex known as MAC disease). They not only disagreed on the preferred drug regimen for therapy, but also on whether treatment should even be given if the diagnosis is made. They freely admitted that even in University Medical Centers, in retrospect, there were errors when treatment was given, and there were errors when treatment was not thought to be indicated. But they also cautioned that physicians have to make clinical judgments in real time and that the “retrospectivescope” is a learning tool, not a treatment protocol.

At the evening dinner meeting, two additional lectures were presented. I sat across from a Professor of Medicine, one of the presenters at the conference, and asked him if he thought that academia could come up with a “definition of essential or basic coverage?” He stated that academic medicine is geared to the rather extensive evaluations of all possible causes of the primary medical complaint that brought the patient to the doctor, as well as a thorough investigation of etiologies of other problems that the patient did not feel were important. It is this latter “gilding of the lily” that he believed often provided the best training for medical students, interns and resident physicians, even though it was not essential or basic coverage and may not have made any improvement in health or health care. That is why academic medicine is so much more expensive than private medicine. He felt having academia involved in defining essentials of health care would be the worse possible scenario.

The New York Times' article also looked at a variety of efforts by the states to expand coverage and define "basic benefits,"  including an effort in Maryland to eliminate some mandated benefits and punish people who fail to purchase coverage. John Sheils of the Lewin Group seems to think it is hopeless–  "There is very little in health care you can trim off," he says. However, for those of us who take care of patients daily, we see patients who state that they were so much better than they were two days earlier when the appointment was made and that they really did not need to come in. It is only those patients that are responsible for a significant part of the bill that “can trim their health care costs without jeopardizing their health.”

4. Overheard in the Medical Staff Lounge
“I saw that patient just in time. If he had waited two more days, he would have been completely well.” Yes, much of health care is flexible and can be trimmed if the patient is responsible for paying a significant portion of each medical visit. As long as they only have a $15 copay on a $100 office evaluation, there is no incentive to cancel unnecessary appointments.

5. This Week’s Review of Socialized or Single-Payer Medicine
Gene Callahan and Robert Murphy discuss the cost of nationalized health insurance in the current issue of The Freeman. Citing a Los Angeles Times' article, the Physicians for a National Health Program (PNHP) claim that their “single payer” plan would eliminate $200 billion a year in “administrative, marketing and other private-industry expenses.” They allege that this would save enough “to provide health care to the 41 million Americans who now lack coverage.”

Callahan and Murphy draw several parallels. This would suggest that if we nationalize entire industries, our country would save trillions by government management. Internationally, such ideas have been tried by a number of countries, including the Soviet Union, Mongolia, Albania and North Korea, with disastrous consequences. But we need look no further than our own country. Does anyone believe that the Pentagon’s single-payer system has kept down the costs of military hardware?

Dr David Himmelstein has minimized Canadian waiting lists for some medical services. During the 1990s, however, they have increased from an average of nine weeks to an average of 16 weeks, with people dying while awaiting vital procedures. Himmelstein further asserts, “A single-payer system also would address the mounting billing and paper work frustrations experienced by physicians.” The authors have been unable to find any activity where increased government involvement has reduced paperwork.

The Los Angeles Times further reported that “The system envisioned . . . would be built on the foundation of the current Medicare Program.” Callahan and Murphy remind us that the costs of Medicare at the turn of the millennium were running about 700 percent above original estimates.
The authors conclude that whether PNHP doctors realize it or not, they will have to ask a government official for permission to perform procedures, prescribe medications, or run tests. And under the PNHP, it will be a criminal offense for anyone to pay for treatment if coverage is denied. Isn’t that the ultimate Catch–22 - having a disease that can be treated, having treatment denied, and making it a crime to purchase life-saving treatment? Medicare already does that.

6. Medical Gluttony/Excessive Health Care Costs
Last week, I saw a 70-year-old male who wished to have a pulmonologist as his personal physician. He felt his previous one was not helpful. He also wanted to continue with seven other specialists. He did have disease in seven organ systems of which I felt three were complicated enough to warrant three consultants. The other four were stable and did not require any further investigation or a complicated treatment program. He stated that since Medicare pays for as many doctors as he feels are required, I should not be concerned with costs or overutilization. This is why overutilization is measured in the 100s of percent excess and never as five or ten percent excess.
 

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7. MedicalTuesday Recommends the Following Organizations for Their Efforts in Restoring Accountability in HealthCare, Government and Society:

• The National Center for Policy Analysis, John C Goodman, PhD, President, who along with Devon Herrick wrote Twenty Myths about Single-Payer Health Insurance which we reviewed in this newsletter monthly, issues a weekly Health Policy Digest, a health summary of the full NCPA daily report. You may log onto www.ncpa.org and register to receive one or more of these reports. This week’s Digest is on Medicare Managed Care Reform located at http://www.ncpa.org/iss/hea/2004/pd020404b.html.

• The Mercatus Center at George Mason University (www.mercatus.org) is a strong advocate for accountability in government. Susan Dudley of the Center reports that the administrative costs of federal regulation are budgeted to reach an all-time high of $30.1 billion in 2003! Please log on to read the government accountability reports–their fourth annual Performance Report Scorecard by author Maurice McTigue, QSO, a Distinguished Visiting Scholar, a former member of Parliament and cabinet minister in New Zealand, and now director of the Mercatus Center’s Government Accountability Project. http://www.mercatus.org/governmentaccountability/

• The Galen Institute, Grace-Marie Turner President and Founder, has a weekly Health Policy Newsletter to which you may subscribe by logging onto their website at www.galen.org. The politics of Medicare reform become more complex by the day but always are driven by deep and still-unresolved ideological fissures. The question that is always at the center of the debate over health care in this country is whether government or individuals should be in charge of managing resources and making decisions. This week, Grace-Marie continues her discussion of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, recently passed by Congress. She currently reports that the major insurers in the consumer-driven market already are offering the new tax-free health accounts, and media interest in HSAs remains intense. Read the current  newsletter at http://www.galen.org/ownins.asp?docID=599.

• Greg Scandlen, Director of the “Center for Consumer-Driven Health Care” at the Galen Institute, has a Weekly Health News Letter: Consumer Choice Matters. You may subscribe to this informative and well-outlined newsletter that is distributed every Tuesday by logging onto www.galen.org and clicking on Consumer Choice Matters. Archives are now located at http://www.galen.org/Search.asp?search=Consumer+Choice+Matters. This is the flagship publication of Galen's new Center for Consumer-Driven Health Care and is written by its director, Greg Scandlen, an expert in Medical Savings Accounts (MSAs) which recently  became Health Savings Accounts (HSAs). Read the current issue at http://www.galen.org/ccbdocs.asp?docID=598.

• The Council for Affordable Health Insurance, http://cahionline.org, 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. They provide educational materials for consumers, legislators, employers and other interested parties. 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. To answer your questions on HSAs, please see  http://cahionline.org/cahi_contents/resources/n121HSAQuestions.pdf.

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. Review her health care archives at http://www.i2i.org/author.aspx?AuthorID=7. Be sure to sign up for the monthly Health Care Policy Center Newsletter at http://www.i2i.org/HCPCBulletinJoin.aspx. The last bulletin includes a discussion of the now discredited reports from the formerly reputable Institute of Medicine and can be found at http://www.i2i.org/jan2004hcpc.aspx#2.

• Martin Masse, Director of Publications at the Montreal Economic Institute, is the publisher of the webzine: Le Québécois 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. A current editorial on Independence, prosperity, and self-reliance suffocate as the rural economy and lifestyle become extinct because of bureaucratic incompetence allegedly for the "public good." Read about the Blitzkrieg of regulations at http://www.quebecoislibre.org/031220-9.htm.

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. Log on at http://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 http://www.fraserinstitute.ca/health/index.asp?snav=he. Currently, the Institute is exploring a number of medical issues such as market incentives, medical savings accounts, waiting lists, and how the British Columbia Government is Eroding Patients’ and Physicians’ Rights.

• The Heritage Foundation, 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, with the current posting on the State of HealthCare at http://www.heritage.org/Research/HealthCare/wm397.cfm.

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 week, read Karen De Coster’s review of Jim Bovard who provides an encyclopedia’s worth of timely quotes laid out in chronological fashion, to funnel the reader through an extensive framework of US government double-dealing, coercion, corruption, and propaganda milling. You may also log onto 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 http://www.lewrockwell.com/rockwell/sickness.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. The chapter on Private Health Care in the Cato Handbook for Congress can be found at http://www.cato.org/pubs/handbook/hb108/hb108-27.pdf.

The Ethan Allen Institute is one of some 41 similar but independent state organizations associated with the State Policy Network. 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. Please see http://www.ethanallen.org/index2.html. Click on “links” to see the other 41 free-market organizations throughout the U.S. and Canada, which will then direct you to even more free-market sites.

• 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. You may log onto www.hillsdale.edu to register for the annual week-long von Mises Seminars, held every February, or their famous Shavano Institute, and the current Seminar on “The Conditions of Free Market Capitalism” at the Center for Constructive Alternatives being held this week. Please log on and register to receive Imprimis, their national speech digest that reaches more than one million readers each month. This month, read an important essay by Foster S. Friess, “What Kind of Society is Good for Business and Investing?” at http://www.hillsdale.edu/imprimis/2004/January/january_printable.htm. The last ten years of Imprimis are archived at http://www.hillsdale.edu/imprimis/archives.htm.

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Del Meyer

Del Meyer, MD, CEO & Founder
DelMeyer@MedicalTuesday.net
www.MedicalTuesday.net

"If you think health care is expensive now, wait until you see what it costs when it's free."    -P.J.
O'Rourke