Physicians, Business, Professional and Information Technology

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, April 8, 2003

MedicalTuesday.Network Continues to Grow
Last month we added more than 200 physicians, 50 nurses, plus dozens of business and other  professionals. One person sent in more than 140 physician email addresses. With a rejection rate of less than one percent, this indicates one of the highest positive responses to these messages in the industry. If this has been forwarded to you or you have not been on our email list and would like to continue to receive these messages on alternate MedicalTuesdays, please send an email to Info@MedicalTuesday.net. If you’d like to receive the quarterly companion message outlining the ideal universal HealthPlan for the USA, please send an email to Info@HealthPlanUSA.net

In This Issue:
1. The Medical MarketPlace can Reduce the Cost of Laboratory Tests by 90%
2. The Government Is Unable to Meet its Own HIPAA Deadlines
3. Government Regulations are a Hidden Tax on HealthCare
4. Our Monthly Review of the Twenty Myths of National Health Insurance
5. Medical Gluttony: Triplication of HealthCare costs
6. MedicalTuesday.Network: Working for Responsibility & Accountability in HealthCare

The Medical MarketPlace Reduces HealthCare Costs by 90 Percent in This Case.
In the Medical Gluttony section of our last issue of MedicalTuesday, we mentioned that the cost for a lipid panel is $81 in Sacramento. We were informed that the price of a lipid panel in the Medical MarketPlace, where patients pay in cash, can be as low as $8, a 90 percent reduction. Anecdotal evidence indicates that placing HealthCare in the Free Medical MarketPlace could reduce health care costs in the U.S. by 30 percent. Some physicians and those employers who provide health insurance find this idea difficult to comprehend. We are interested in hearing of similar instances that allow for these types of savings when third-party payment is bypassed. Unfortunately, many patients think their HMOs and insurance carriers should also be able to get an $8 lipid panel. They have no comprehension of the costs and hassles of third-party billing: the waiting, the rejections, the re-billing, the waiting for payment, the denial of payment and, sometimes, the lack of coverage. The end result is often a write-off for services rendered since further pursuit would be exorbitant. The important thing to understand is that the above laboratory thinks they can make a greater profit on the $8 lipid panel paid with cash up front than on the $81 lipid panel which may eventually be paid by Medicare at $18. The HealthPlanUSA would streamline the process and eliminate all billing, with transfer of funds processed at time of service. Stay tuned to see how the HPUSA restores the Medical MarketPlace on the Medical-Fifth-Tuesday this month.

The Government Is Unable to Meet Its Own Compliance Deadline
This past month we installed our Pentium IV, WinXP, with network and individual station security codes, secure patient office schedules, secure patient files with passwords, and encrypted billing software. This was to be the final stage in becoming HIPAA compliant–except the billing software did not have the Medicare HIPAA compliant electronic transfer program. We delayed this installation for over a month, waiting for the government to become compliant with its own rules. We were informed that they would not be able to meet their own April 14, 2003, deadline, and so we proceeded.

Government Regulations Are a Hidden Tax on Goods and Services
Dr Wendy Gramm of the Mercatus Center reminds us that regulations are a hidden tax on goods and services. In 1978, when a federal agency spent one dollar on regulatory activity, it cost $20 to comply. In 2002, for each dollar of regulatory activity, it cost $45 to comply. In 2001, it is estimated that businesses spent 4.8 billion hours responding to government requests; individuals spent another 2.45 billion hours responding to paper work required by the federal government. One bright spot: The U.S. Department of Agriculture (USDA) no longer regulates meat pizzas, but unfortunately still regulates the size of the holes in Swiss Cheese. Physicians are feeling the full impact of this report in complying with HIPAA Regulations. The profession will be spending billions to comply.

National HealthCare Systems in the English-speaking World (No 13)
In his recent update of the "Twenty Myths about National Health Insurance," John C Goodman, PhD, president of the National Center for Policy Analysis (www.ncpa.org), 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. For that reason, Goodman and his associates have chosen to present their information in the form of rebuttal to commonly held myths. See previous issues or the archives at www.MedicalTuesday.net for the summary of the first eleven myths or www.ncpa.org for the original 21 chapters of the book.

Myth Thirteen:  Single-Payer Health Insurance Is the Solution to the Problems of Managed Care.

Goodman and his associates state that although the term "managed care" means different things to different people, in all its guises it involves interference in the doctor-patient relationship by third-party bureaucracies -  insurance companies, government and employers - whose primary interest is in controlling costs. Although managed care succeeded in controlling costs throughout the 1990s, 45 percent of users say they possess negative opinions about HMOs despite polls that show 80 percent are satisfied with the care received from their HMOs. Another survey uniquely tracked people who were unaware of their true insurance status. People who thought they were HMO members (even if they were not) were more likely to say they were dissatisfied than those who thought they were not in an HMO (even though they were).

The Managed Care Revolution in the United States. In 1980, fewer than 10 million people were enrolled in HMOs. Today almost 70 million are - approximately one in four Americans. And three-fourths of all employees with health insurance are covered by some type of managed care. What difference does this change make?

For starters, it means fewer choices for patients and doctors. In general, patients must choose from a list of approved doctors covered by their health plan and obtain the approval of their gatekeeper or the HMO itself for referrals, emergency room visits and hospitalizations. Under managed care, freedom of choice has been curtailed even more for doctors than for patients. Now, doctors who want to be on the "approved" list must agree to practice medicine based on the health plan’s guidelines. For most doctors, the guidelines mean fewer tests, fewer referrals and fewer hospital admissions. Furthermore, many U.S. physicians say they spend too much time and effort on billing, negotiating fees and interpreting numerous insurance contracts. Since the advent of managed care, many also complain that they are under pressure to spend less time with each patient.

Is Single-Payer Health Insurance a Solution? American advocates of a single-payer system of health insurance say that such a system would resolve virtually all of the major abuses of managed care. In particular, single-payer advocates would:
• Eliminate HMOs and most other forms of managed care;
• Have all health care financed by the government, with no premiums or co payments from those covered;
• Control costs by assigning global budgets to hospitals and setting fees and salaries for physicians; and
• Prohibit private insurance or personal payment for any service covered by a single-payer system of national health insurance.

A study in the British Medical Journal compared medical service delivery by the British National Health Service with that of the California HMO, Kaiser Permanente. The study found the NHS, for only slightly less money, provides far fewer services and less access to diagnostic tests and specialists than Kaiser. [See Myth No.8, Dec 10, 2002]

The problems of HMO enrollees include the following: 1) you often can’t see a specialist, (2) you can’t always obtain expensive tests, (3) you may experience obstacles getting approval for surgery, and (4) you may have difficulty gaining admission into a hospital. These appear to be minor inconveniences when compared to the experiences of patients in other countries. In fact, these problems are common to all single-payer health insurance systems.

Almost all single-payer systems place far greater obstacles in the patient’s way than do managed care organizations in the United States. Not only do these systems require patients to get a referral from a gatekeeper to see a specialist, they also limit the number of specialists and access to expensive technology. However, single-payer health insurance differs from many private insurance companies in one important respect - no profit motive. Hence there is no incentive to operate efficiently. In fact, national health insurance provides all the wrong incentives for both the health care system itself and the patients within the system.

Wrong Incentives for Providers: No Competition. The primary source of problems in a single-payer system is the lack of competition. In countries with government-controlled medicine, people have no alternative health insurer from which to buy. The same would be true of a single-payer system implemented in the U.S. For example, a proposal by the group Physicians for a National Health Insurance Program specifically states doctors would only be paid a negotiated fee for their work and the services of their support staff. As a cost-saving measure to reduce “medical inflation,” physicians would not be reimbursed for office-based procedures such as an MRI. The reason for this approach is to minimize “entrepreneurial incentives.” However, “entrepreneurial incentives” is another term for “competition.” In Canada, fee structures are designed to discourage physicians from providing office-based procedures. Physicians are often thought to provide too much “unnecessary” care if they can profit from the procedures and tests they recommend to patients. In other words, if your local hospital cannot give you the MRI you need on a timely basis, your physician isn’t allowed to “compete” with them to provide an alternative MRI service. Subsequently, if your local hospital chooses to skimp on capital equipment and buy too few MRI scanners, they lose no revenue for failing to provide these lifesaving services on a timely basis.

Wrong Incentives for Patients: “Free” Care. Because national health insurance uses tax money and patients usually pay little or nothing for a doctor visit, there is a tendency to think of health care as free. Numerous studies have shown that the less people have to pay out-of-pocket, the more medical care they consume. Despite consuming more, these patients do not experience better health outcomes. This is because in order to limit demand, single-payer systems limit access to equipment and specialists. For the most part, medical care is available for routine ailments like a cold or for emergencies like a ruptured appendix. But those with chronic serious illnesses and those needing non-emergency procedures or diagnostic tests are consigned to waiting lists.

Physicians Under National Health Insurance. Because of doctors’ frustrations with managed care, a single-payer system of national health insurance might seem appealing to them. Some believe a single-payer system would reduce administrators, paperwork and overhead and allow physicians to spend more time doing what they are trained for: treating patients. However, physicians in countries with (single-payer) national health insurance also express frustration as they spend even less time than U.S. physicians with each patient, face more obstacles in providing care for their patients, and receive even less compensation.

Limiting the Number of Physicians. Patients in most industrialized countries access the health care system through the use of a primary care physician. Consequently, in countries with national health insurance, governments often attempt to limit demand for medical services by having fewer physicians. Dr. Lome Tyrrell, president of the Association of Canadian Medical Colleges, says Canada needs about 540 new physicians each year to account for population growth and 1,950 to counter attrition. However, since 1980, Canada has, as a matter of policy, reduced the number of students accepted by its 16 medical schools by 18 percent, to 1,577 per year. There are approximately five qualified applicants for every acceptance to Canadian medical schools.

Some students who were unable to gain admission have opted to study medicine abroad, in such places as Ireland. Despite the shortage of physicians, few of these foreign-trained Canadian doctors will ever be allowed to practice in Canada. Medical students are required to complete a Canadian residency program in order to practice there. But health authorities limit the number of residency program slots to 100 for each 100 graduates of Canadian medical schools.

More Patients, Less Time. As a result of having fewer physicians, doctors that practice medicine under single-payer systems of national health insurance must see larger numbers of patients for shorter periods of time.  U.S. physicians see an average of 2,222 patients per year, but physicians in Canada see an average of 3,243 and those in Britain see an average of 3,176.

Canadian Unhappiness
• Thirty percent of Canadians reported having difficulty finding a family doctor.
• Most family doctors' practices are full.
• More than two-thirds of family physicians are battling problems in obtaining services for their existing patients.
Family doctors are working an average of 73 hours per week.
• The College of Family Physicians of Canada concluded that the country needs 3,000 more family physicians and predicted the shortage would worsen.

Discontent in Britain
• Last year, hundreds of family doctors announced plans to close their offices for a day of protest over working conditions.
• More than 20 percent of new doctors leave the NHS within five years of qualification; they often migrate to other countries or leave the medical profession altogether.
• A study of medical graduates in the northwest of England found that almost one-fifth had become disillusioned with the NHS and left over a 10-year period.
• A survey of Scottish GPs found that 60 percent were considering leaving medicine for other careers because of working conditions.
• Dr Michael Gross, a prominent neurologist, reported that he worked 4,000 consecutive days on call at the Surrey & Sussex Healthcare Trust before resigning in frustration.

Physician Compensation. Like managed care, one way single-payer systems reduce health expenditures by squeezing the compensation of doctors, nurses and other health care workers. But a single-payer system can squeeze physicians’ compensation much more effectively because it is a monopsony - that is, a single buyer of a given good or service. Just as a monopoly seller can raise prices above the market level, a monopsony can reduce the compensation and treatment fees to physicians, thanks to the lack of competing payers. As the Physicians’ Working Group for Single-Payer National Health Insurance has written in its Proposal for Health Care Reform in the United States, “Such single source (monopsony) payment has been the cornerstone of cost containment and health planning in Canada and other nations with universal coverage.”

Despite American physicians’ frustration with uninsured patients and managed care, these problems seem to pale in comparison with the lack of resources and bureaucratic hassles experienced by their national health service counterparts who are locked in their countries’ single-payer systems.

Medical Gluttony
Many years ago, a retired military patient followed me into private practice. He continue to receive his health care intermittently at the nearby military hospital. Later he became eligible for VA benefits and sought them out as another opinion. He stated he felt more comfortable and secure in using all three systems. After pointing out the risks of having three physicians treat him without communication, I offered to send my records to the military hospital and the VA hospital. He said that would not be necessary since they were performing the same pulmonary function tests and chest x-rays. When I tried to point out that he was duplicating and perhaps triplicating his health care costs, he begged to differ. He said that the private insurance was a benefit of his previous employment and, therefore, didn’t cost anything. He felt that he had earned the right to obtain the services of the government hospitals and did not see this as an unnecessary cost. And therein lies the problem. When health care is free or relatively free, there is no competitive advantage or incentive to save health care costs––especially when not seen as costs. Hence, this individual would see Single-Payer National Health Care as being free, even though the tax structure to pay for it is greater than the cost of private health care. The challenge is to reach such people with the reality that no tax structure could support the doubling in our country's healthcare costs, from $1.4 trillion to $2.8, without serious rationing by waiting and injury to patients. Unfortunately, the proponents of Single-Payer National Health Care have the same blind spot.

 * * * * *

The MedicalTuesday Network Recommends the Following in Restoring Accountability in 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 (reviewed in this newsletter monthly) also issues a weekly Health Policy Digest which is 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. Nobel Laureate Vernon L Smith, PhD, has joined its Economics faculty. Please log on at www.mercatus.org to read the government accountability reports and information on Dr Smith’s economic experiments that help us understand health care issues. You can also register to receive updates. Maurice McTigue, QSO, a Distinguished Visiting Scholar, who was instrumental in revolutionizing the way government did business in New Zealand from 1984 to 1994, reports that by evaluating every department from an accountability viewpoint, he was able to reduce the transportation department from 5600 employees to 153 employees. Since most drivers licenses are automatically renewed, New Zealand gives a license for life and only evaluates the record when there is cause nearly eliminating their DMV. He feels that he’s having success with our MBA President who understands such issues.

• The Galen Institute, Grace-Marie Turner President and Founder, has a weekly Health Policy Newsletter to which you may subscribe by sending an email to gracemarie@galen.org.

• Greg Scandlen, whose NCPA research we have frequently commented on over the past year, has been named the Director of a new “Center for Consumer Driven Health Care” at the Galen Institute and has a New Weekly Health News Letter: Consumer Choice Matters. Please subscribe to this very informative and well-outlined health care newsletter by logging onto www.galen.org.

• Martin Masse, director of 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 will allow you to brush up on your French You may register to receive copies of his webzine on a regular basis.

• 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. Reading these essays on a daily basis would probably be equivalent to taking Economics 11 and 51 in college with considerably less bias. Please log on at www.mises.org to obtain the foundation’s daily reports. You may also log onto Lew’s premier free market site at  www.lewrockwell.com to read some of his lectures to medical groups on such topics as how state medicine subsidizes illness.

• Hillsdale College, the premier institution for producing graduates that understand Free Market accountability, in recognizing that the price of freedom is never cheap, receives no federal subsidies which places them at a monetary disadvantage to all other colleges and universities. A phone call from Howard Shaw, the Master of Ceremonies at the Hillsdale meeting in Sacramento, reminded us of the fact that when Ludwig von Mises fled Vienna during the war, his writings were seized by the Nazis. When the Russians came upon his writings, they catalogued and preserved them. After the war, Professor Richard M Ebeling brought the papers to this country. Ludwig von Mises felt the best place to store his writings would be Hillsdale College because it most closely represents his economic philosophy. Plan to attend one of the annual week-long von Mises Seminars held every March. You may log on to www.hillsdale.edu to register and receive Imprimis, their national speech digest, that reaches more than one million readers each month; or you can register for one of their famous Shavano Institutes or their next cruise seminar "Exploring the Roots of Western Civilization."

• Robert Cihak, MD, writes an informative Medicine Man column which has recently moved from WorldNetDaily to NewsMax.  Please log on at http://www.newsmax.com/pundits/Medicine_Men.shtml or subscribe by sending Bob an email at rcihak@techline.com.

 * * * * *

MedicalTuesday Supports These Efforts in Restoring the Doctor & Patient Relationship:

• PATMOS EmergiClinic - www.emergiclinic.com where Robert Berry, MD, an emergency physician and internist, provides prompt care for many of the injuries and illnesses treated in Emergency Rooms, at a fraction of their cost. It is also an internal medicine practice;

• Dennis Gabos, MD, President of the Society for the Education of Physicians and Patients (SEPP) www.sepp.net for making efforts in Protecting, Preserving, and Promoting, the Rights, Freedoms and Responsibilities of Patients and Health Care Professionals, with a special page for our colleagues in nursing;

• Dr Vern Cherewatenko for success in restoring private-based medical practice that has grown internationally through the SimpleCare model network, www.simplecare.com;

• Dr David MacDonald has partnered with Ron Kirkpatrick to start the Liberty Health Group (www.LibertyHealthGroup.com) to assist physicians by helping them to control their medical benefit costs for their staff and patients. He is available to speak to your group on a consultative basis. You may contact him at DrDave@LibertyHealthGroup.com.

• Christopher Jones, MD, President of HealIndiana, a supporter of market-based medicine, www.HealIndiana.org, responds to the question, Why doesn't a patient’s insurance cover your fees?  “If you're an insurance executive and found out that, ethically, I will treat any patient regardless of their ability to pay, what are you going to pay me? You're going to keep going toward zero, because you have no ethical reason to say, ‘Oh, I'm going to pay that doctor what he's worth.’”

• The Association of American Physicians & Surgeons, (www.AAPSonline.org) The Voice for Private Physicians Since 1943,  representing physicians in their struggles against bureaucratic medicine and loss of medical privacy. They have renamed their official organization the Journal of Physicians and Surgeons, and named Larry Huntoon, MD, PhD, a neurologist in New York, as the Editor-in-Chief.

 * * * * *

Stay Tuned to the MedicalTuesday.Network and Have Your Friends Do the Same
Each individual on our mailing list is personally known, or requested to be placed on our mailing list, or was recommended as someone interested in our cause of making Private HealthCare affordable and accountable. If this is correct, you may consider opening a folder in your inbox labeled MedicalTuesday or copying these messages to your template file so that they are available to be forwarded or reformatted as new when the occasion arises. If this is not correct or you are not interested in or sympathetic to a Private Personal Confidential HealthCare system, email DelMeyer@MedicalTuesday.net and your name will be sorrowfully removed.

Del Meyer

Del Meyer, MD, CEO & Founder