Physicians, Business, Professional and Information Technology Communities
Networking to Restore Accountability in HealthCare & Medical Practice
Tuesday, January 13, 2004
MedicalTuesday is a network to gather ideas from the open Medical MarketPlace regarding our health care challenges and to debate and discuss these ideas. In this Newsletter, MedicalTuesday presents many health care and related economic and political concerns that contribute to our understanding of health care issues.
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In This Issue:
1. Micro-stimulators - Privacy and Security
2. How Do Politicians Get the Votes to Destroy Private Health Care?
3. The Dean Phenomenon
4. Our Monthly Review of the Twenty Myths of National Health Insurance
5. Medical Gluttony or Excessive HealthCare Costs
6. The MedicalTuesday.Network for Restoring Accountability in HealthCare & Government
* * * * *
1. Advances in Implantable Batteries; Privacy and
Scientific American gave its annual report on the research ideas of the year. Khalil Amine, born in Morocco and trained in France, led a team at Argonne National Laboratory in Illinois that improved a design on lithium, iron and phosphate batteries for implantable medical devices, where the sticking point is energy storage rather than peak power. Today’s implantable batteries last about three years, whereas this new version is expected to last 10 years–long enough to make it practical for micro-stimulators that are being investigated for the treatment of Parkinson's disease and other nervous system disabilities.
The Magazine also recognized Rakesh Agrawal, of the IBM Almaden Research Center in San Jose, California, for devising a method to keep information in large databases private. He felt that data mining, a technology that extracts useful patterns from data (health records included), would become popular if privacy was assured. Dr Agrawal developed software that allows the computer to decide what to delete or what to hide from certain users. He was also able to obtain personal information, e.g. age, from websites and by adding or subtracting a random number to the age, the computer would then reconstruct the overall distribution of ages while keeping each individual’s age a secret. (www.sciam.com)
2. How Politicians Get the Votes to Destroy Private
Linda Gorman, the Director of the Health Care Policy Center at the Independence Institute, www.i2i.org, reminds us of how politicians obtain the votes to destroy America’s Private Health Care system. She quoted from the public choice theory:
And you have to have ways to put checks on politicians who primarily want to use public money to buy votes and so have a huge incentive not to spend on the seriously ill. You get more votes by having programs that help the larger volume of worried well than you do taking care of the seriously ill. They, after all, are expensive, relatively few in number, and are going to die anyway. Understand this and you understand what is going on in the NHS, Europe, and Canada. In the Netherlands the government has taken things to the logical finish and physicians murder patients to free up hospital beds.
3. The Dean Phenomenon
We have received a number of requests concerning the democratic presidential candidates. We are not an advocacy organization. We do report and comment on issues that may impact health care. We reported on Vermont’s former governor’s disastrous experience of enlarging his Medicaid program as a back door approach to obtaining socialized medicine in Vermont, since he could not get a single-payer initiative passed. Also, Howard Dean left Vermont with a personal income tax exceeding 10 percent, one of the highest in the nation.
Gary Wolf writes, “How the internet invented Howard Dean,” appearing in the recent issue of WIRED (www.wiredmag.com), that he got a pure dose of Internet religion from Howard Dean while in his private jet above Colorado. Forget fund-raising, the real reason the Doctor is in: He listens to the technology–and the people who use it. “We fell into this by accident,” Dean admits. “I wish I could tell you we were smart enough to figure this out. But the community taught us. They seized the initiative through Meetup. They built our organization for us before we had an organization.” The leading group on the site was a club for witches. Dean’s campaign manager became obsessed with overtaking the witches, who had 15,000 members compared to his 3,000. But from this nucleus of passionate supporters connected via the internet, others were recruited and growth was exponential. By mid-November, they had more than 140,000 members. This allowed Dean to bag endorsements from two of the country’s most powerful labor groups.
Wolf gives five internet axioms that give a
snapshot of Dr Dean’s campaign.
1) It’s a stupid network and that gives it strength. Hundreds of independent groups are organizing with little direction from headquarters.
2) Let the ant swarms do the work–not the Queen Bee. Let the supporters build their own nodes by feeding letters to the editor and graphics/videos through the network via email. This local and national volunteer infrastructure will arise with almost no help or supervision.
3) You’re not a leader, you are a place. The supporters are well to the left of the party’s mainstream. This allowed Dean–who is pro-gun, pro-death penalty, and argues for keeping US troops in Iraq–to win the online vote at MoveOn. “. . . The Dean-space is not really about Dean. It’s about us.”
4) Links attract links. Dean’s meetups are three times as large as the Clark Meetup. The Wesley Clark list is almost three times as large as the John Kerry list. The Kerry list is almost 30 times as large as the Dick Gephardt list.
5) Allow the ends to connect. Local Dean groups are not obsessed with passing their messages to the candidate. They are busy talking among themselves. Tactically, the local Dean groups are very powerful. But since none of the grassroots groups are officially tied to the campaign, there is no guarantee of influence over policy. Dean is free to ignore the political wishes of any of these groups, and he often does. Dean supporters may be arguing against his position on guns, the death penalty, and trade. The internet is his feedback–not the polls. “If I give a speech and the blog people don’t like it, next time I change the speech.” But what binds them strongly is that they admire Dean personally and despise the current administration.
If you’re still unclear on Dr Dean’s stand on health issues, Mortimer Zuckerman, Editor-in-Chief of US News & World Report, may have summarized it best in his annual quotables from some of our notables. In responding to charges that he has changed his views on some major issues, including Social Security, Medicare, the North American Free Trade Agreement and Osama bin Laden, he says, “If you don’t mind, I would like to reassess my position on the firm stand I took on my previous reassessment.”
4. Our Monthly Review of National HealthCare Systems
Over the past 20 months, we have reviewed “Twenty Myths about National Health Insurance,” by John C Goodman, PhD, president of the National Center for Policy Analysis (www.ncpa.org), and Devon Herrick who states that ordinary citizens lack an understanding of the defects of national health insurance and all too often have an idealized view of socialized medicine. Their concluding reason for all these myths is in their final chapter. With this summary, we conclude our review:
The Politics of Medicine.
A fascinating discovery of this discipline is that economic principles, if carefully applied, explain much of what happens in politics. Take the concept of competition. Just as producers of goods and services compete for consumer dollars, so politicians in a democracy compete for votes. Moreover, the process of competition leads to certain well-defined results.
In the economic marketplace, competition inevitably forces producers to choose the most efficient method of production. Those who fail to do so either go out of business or mend their ways. The ultimate outcome - efficient production - is independent of any particular producer’s wishes or desires.
In a similar way, political competition inexorably leads candidates to adopt a specific position called the winning platform. The idea of a winning platform is a fairly simple one. It is a set of political policies that can defeat any other set of policies in an election. A politician who wants to be elected or reelected has every incentive to endorse the winning platform. If he does not, he becomes vulnerable; for if his opponent adopts the winning platform, the opponent will win. Hence, all candidates have an incentive to identify and endorse this platform. Candidates who do not are unlikely to survive the political competition.
This line of reasoning leads to a remarkable conclusion: In all democratic systems with two major political parties, both parties tend to adopt the same policies. They do so not because the party leaders think alike or share the same ideological preferences, but because their top priority is to win elections and hold office.
Two corollaries follow from this conclusion. The first is that it is absurd to complain about the fact that “major candidates all sound alike,” or that “it doesn’t seem to make any difference who wins.” The complaints are merely evidence that political competition is working precisely as the theory predicts it will work. Indeed, the more accurate information political candidates receive through better polling techniques and computerization, the more similar they will become. The theory predicts that, in a world of perfect information, the policies of the two major parties would be identical.
The second corollary is more relevant for our purposes. In its extreme form, the corollary asserts that “politicians don’t matter.” Over the long haul, if we want to explain why we have the political policies we have, it is futile to investigate the motives, personalities and characters of those who hold office. Instead, we must focus on those factors which determine the nature of the winning platform.
This corollary is crucial to an understanding of single-payer health insurance. A great many British health economists who support socialized medicine are quick to concede that the British National Health Service has defects. But these defects, in their view, are not those of socialism; they merely represent a failure of political will, or the fact that the wrong politicians are in office. The ultimate goal, they hold, is to retain the system of socialized medicine and make it work better.
By contrast, we argue that the defects of the policies
which govern single-payer health insurance programs are the natural and
inevitable consequences of placing the market for health under the control of
politicians. It is not true that British health care policy just happens to be
as is. Enoch Powell, a former Minister of Health who ran the British National
Health Service, seems to have appreciated this fact. Powell wrote that “whatever
is entrusted to politicians becomes political even if it is not political anyhow,”
and he goes on to say that
“The phenomena of Medicine and Politics . . . result automatically and necessarily from the nationalization of medical care and its provision gratis at the point of consumption. These phenomena are implicit in such an organization and are not the accidental or incidental results of blemishes which can be ‘reformed’ away while leaving the system as such intact.”An extensive analysis of the British health care system shows that all of the major features of national health insurance can be explained in terms of public choice theory. That is, far from being the consequence of preferences of politicians (who could be replaced by different politicians with different preferences in the next election), the major features of single-payer systems of national health insurance follow inevitably from the fact that politicians have the authority to allocate health care resources, and from that fact alone. The following is a brief summary.
The Total Amount of Spending on Health Services. One argument used to justify socialized medicine is that, left to their own devices, individuals will not spend as much as they ought to spend on health care. This was a major reason why many middle- and upper-middle class British citizens supported national health insurance for the working class. It was also a major reason why they supported formation of the NHS in 1948. Many expected that, under socialized medical care, more total dollars would be spent on health care than would otherwise have been the case. It may have even led to the opposite result.
Public choice theory, then, predicts that the average voter will desire less spending on health care, relative to other goods and services, when health care is rationed. Moreover, the greater the rationing problems; the less attractive health care spending will be. So, we would expect even less spending on health care in a completely “free” service like the NHS than in a health service that charged patients more user fees.
Inequalities in Health Care. Decisions on where to spend health dollars are also inherently political. A major argument in favor of national health insurance is that private medical care allows geographical inequalities in levels of provision. Yet, as we have seen, those inequalities continue and many argue that levels of provision among geographical areas of Britain, Canada and New Zealand today are just as unequal as they would have been in the absence of national health insurance.
Spending Priorities: “Caring” vs. “Curing.”
The British National Health Service’s emphasis on “caring” rather than
“curing” marks a radical difference between British and American health
care. American economist Mary-Ann Rozbicki asked a number of British health
planners the following question: “If you suddenly enjoyed a sharp increase in
available resources, how “would you allocate it?” The response was
invariably the same. They would put the additional resources into services for
the aged, the chronically ill and the mentally handicapped. Rozbicki writes:
It is difficult for an American observer to comprehend that view. He has been impressed by the support services already afforded the non-acute patient ( and the well consumer) - the doctor, nurse and social worker attendance at homes, clinics and hospitals for the purpose of improving the comfort and well-being of the recipients involved. He has also been impressed (and sometimes shocked) by the relative lack of capability to diagnose, cure and/or treat life-threatening conditions. The U.S. patient, while having forgone the home ministrations of the family doctor and learned to endure the antiseptic quality of the hospital, also confidently expects immediate delivery of all that medical science has to offer if life or health is under immediate threat.What political pressures lead decision makers to prefer caring over curing? Rozbicki believes it is a matter of numbers - numbers of votes. Money spent on caring is spread out over far more people than money spent on curing. For example, three quarters of health expenditure is consumed by only 10 percent of the population. (41 percent is consumed by two percent that is most in need of care.) Rozbicki writes:
In weighing the choice between a more comfortable life for the millions of aged or early detection and treatment of the far fewer victims of dread diseases, [the British health authorities] have favored the former. The sheer numbers involved on each side of the equation would tend to dictate these choices by government officials in a democratic society.Like citizens in socialized countries, Britons know little about medical technology. This ignorance, moreover, is quite “rational.” Information is costly. In Britain, however, the average citizen has much less incentive to become knowledgeable about medicine than his counterpart in the United States. Precisely because the medical market in the United States is largely private, a better-informed person becomes a better consumer.
Administrative Controls. One of the most
remarkable features of national health insurance is the enormous amount of
decision-making power left in the hands of doctors, GPs and consultants,
and other producer interest groups which include hospital administrators, junior
doctors and nonmedical hospital staff. The complaint made again and again is
that the NHS is primarily organized and administered to benefit such special
interest groups rather than patients. As Dennis Lees puts it, in his Economics
and Non-economics of Health Services,
The British health industry exists for its own sake, in the interest of the producer groups that make it up. The welfare of patients is a random by-product, depending on how conflicts between the groups and between them and government happen to shake down at any particular time.Why the NHS Continues to Exist. In 1978, an article appeared in Medical Economics with the heading, “If Britain’s Health Care Is So Bad, Why Do Patients Like It? That British patients do like the NHS had been confirmed repeatedly by public opinion polls. The same can be said of Canadians.
There appear to be two major reasons: (1) the typical British patient has far lower expectations and much less knowledge about medicine than the typical American patient; and (2) most British patients apparently believe that they are “getting something for nothing.” An American economist noted with surprise that British hospital patients, “far from complaining about specialists’ inattention, a lack of laboratory tests or the ineffectiveness of medical treatment, more often than not display an attitude of gratefulness for whatever is done.”
An American Congressman on a trip with a group to examine the NHS first hand met a young women with substantial facial scars received in an accident. Although she wanted plastic surgery for her face, she said, “I've been waiting eight years for treatment, but they tell me I’m going to be able to have surgery within a year.” Yet when the congressman asked her what she thought of the NHS, her reply was, “Oh, it’s a wonderful system we have in Britain. You know, our medical care is all free.” Success in privatizing public health care programs is difficult as can be shown with Sweden’s attempts. It has been limited to Singapore and Chile with less developed countries such as Colombia and Venezuela making progress. Progress will come about as people seek private sector alternatives rather than through changes at the ballot box.
The lesson from other countries is that America would not be served by an expansion of government bureaucracy or by greater governmental control over the U.S. health care system. Instead, what is needed is a limitation of the role of government and an expansion of the role played by the private sector and the individual in solving our health care problems.
See previous issues or the archives at www.MedicalTuesday.net for the summary of the first twenty myths or www.ncpa.org for the original 21 chapters of the book along with the well-annotated references.
5. Medical Gluttony or Excessive Health Care Costs
Last week, a 76-year-old man came in for his annual examination concerning his COPD. He was in tears over placing his wife in a nursing facility and was torn by her begging him to take her home. Over the past year, he had increasing difficulty in managing her care. The family shared in the decision to place her in a nursing facility.
She had suffered a heart attack one year earlier. After several days in the hospital, she was placed in a cardiac rehabilitation program. While exercising on a treadmill, she sustained a cardiac arrest. She was resuscitated, but he noticed when he brought her home that she had lost much of her memory, which continued to deteriorate over the next year. She no longer could help out in the home or even take care of her personal and private needs. She became increasingly disoriented. In fact, she was under direct observation at all times because otherwise she would wander off into the neighborhood. Obviously, she had sustained cerebral anoxia during the cardiac rehabilitation arrest and was increasingly demented.
When he asked why she was exercising just a few days after her coronary, he was told by the hospital not to worry since Medicare was paying for it. In retrospect, he felt the hospital was just gouging the Medicare system for all available money that they could obtain.
This illustrates the problem with all third-party payers for health care, whether government Medicare, Medicaid or HMO, or any other insurance without a significant personal financial responsibility. The costs become excessive, the quality of care decreases and life is placed in jeopardy. The welfare of the patient is a random by-product of third-party health care–not the primary goal as it should be.
6. 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.
• The Mercatus Center at George Mason University 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 at www.mercatus.org 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.
• 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 are always 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 entire newsletter at http://www.galen.org/ownins.asp?docID=585.
• 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 (MSA) which recently became Health Savings Accounts (HSA). This week, read Greg’s report regarding Insurance-Induced Demand Results in Physician Shortage in the "Milwaukee Journal Sentinel" which is raising alarms about a growing physician shortage. An article by Joe Manning cites Dr. Bud Chumbley, the president of Medical Associates Health Centers, who says physicians are "maxed out" in terms of providing patient care. The docs in his six clinics are "trying to educate patients to eliminate the 'worried well.'" He adds, "Everyone talks about the cost of health care going up. But people want more and more and more and more. They want as much health care as their employers will pay for."
• 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. It also shows that we have sufficient current capacity to cover the uninsured–without necessarily increasing spending.” Read the whole article which can be found at http://cahionline.org/cgi-data/industry/files/150.shtml.
• 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. She has an excellent article on Health Scare: Six Myths about the U.S. Health Care System, which can be found at http://www.i2i.org/article.aspx?ID=636 and is great to send to all your friends who are single-payer or socialistic health-care advocates.
• 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 reflects on how rural people with their first-hand experience and practical knowledge as stewards of the lands, sustaining a lifestyle of independence, prosperity and self-reliance, are now suffocating from bureaucratic incompetence allegedly for the "public good." 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 how market incentives within the public health care system, such as medical savings accounts, can improve the quality of care for all Canadians. Reform of the current public system could also encourage private investment and medical innovation, create employment and increase the range and quality of available health care.
• 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, http://www.heritage.org/Research/HealthCare/. This week’s posting is on poverty in America. If poverty means lacking nutritious food, adequate warm housing and clothing for a family, relatively few of the 35 million people identified as "in poverty" by the Census Bureau could be characterized as poor. While material hardship does exist in the United States, it is quite restricted in scope and severity. To see how our poor compare to the wealthy of other countries, see http://www.heritage.org/Research/Welfare/BG1713es.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 Prof Christopher Westley’s excellent essay on Mad Socialism Disease at http://www.mises.org/fullstory.asp?control=1411. 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 was founded in 1977 by Edward H. Crane, with Charles Koch of Koch Industries. It is a non-profit 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. Toward that goal, the Institute strives to achieve greater involvement of the intelligent, concerned lay public in questions of policy and the proper role of government. Ed Crane reminds us that the framers of the Constitution designed it 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 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. To read the chapter on Private Health Care in the Cato Handbook for Congress, go to 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 then directs you to additional 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 Institutes. 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 Dr Thomas G. West, professor of
politics at the University of Dallas, on “The Liberal Assault on Freedom of
Speech” 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, MD, CEO & Founder
"If you think health care is expensive now, wait until you see what it costs when it's free." -P. J. O'Rourke