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Tuesday, April 22, 2003
Asking the Right Questions About HealthCare: How to
In the current issue of Entrepreneur–Solutions for a Growing Business, Rangaswamy Srinivasan, inventor of the eye laser, reminds us that smart companies “Think Different.” It was at a Thanksgiving dinner that he wondered if a laser could cut organic matter without burning. He snuck a turkey drumstick to his lab, checked a laser cut under a microscope, and found no heat burns. From there he developed the idea of using lasers in the human eye. In the same issue, Bruce Frimmerman tells how small companies compete successfully against large companies in large industries. Also in the same issue, Michael Zey points out how companies use their consumers to anticipate future product development. Arnold Sanow maintains that some of the best growth ideas comes from allowing the employees to innovate. And Jenny Hsui-Theleen suggests having your key employees in place before you introduce your business plan internationally. There you have the job description to expand MedicalTuesday and HealthPlanUSA in order to save HealthCare in the USA for our patients before the tentacles of the government destroy it. We appreciate your email response to these messages and suggestions on “Thinking Different” and “How to Innovate” and “How to avoid government bureaucracy.” Next week in our HealthPlanUSA Newsletter we’ll discuss how health care issues can be solved in the United States.
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. Medicare Rules Create Scandals
2. Surgery Centers Hire Former Lawmaker to Help Gouge the Public Trough
3. European Health Bureaucracy Deny Health Benefits to Control Costs
4. Our Monthly Report on Socialized (Single-Payer) Medicine
5. Medical Gluttony: Ten-fold Increase in HealthCare Cost for Patient Convenience
6. MedicalTuesday Networking for Responsibility and Accountability in HealthCare, Government & Society
7. MedicalTuesday Networking to Restore Accountability in Medical Practice
Medicare Rules Create Scandals
Walter Wriston writes in Opinion Journal that The Roman Empire operated initially with laws recorded on 12 tablets that every school child had to memorize. Over time, as laws proliferated, the 12 tablets grew to some 3,000 brass plates stored in the capital and read by nobody. Medicare rules are proliferating at an even greater rate and no longer can be read by anybody. They are too voluminous for physicians to read and still have time to practice medicine, too complicated for patients to understand, and subject to too many interpretations. Thus attorneys make more money arguing about the rules than doctors earn while navigating them as they care for patients. Hospitals and other institutions hire CPAs, MBAs, and lawyers to inform and explain the ever expanding rules and regulations in an attempt to avoid unknown scandals. Meanwhile, trial attorneys are pouring money into congressional coffers pressuring Congress to pass even more laws allowing unlimited claims that the courts have difficulty interpreting. Learned judges, hearing the same testimony and reading the same briefs, render split opinions of 5-4 or 2-1. Is that justice? No, that is simply access to confusing law. Wriston contends that the government off-balance-sheet financing, such as Enron, is more the rule than the exception. If government was held to the same standards they apply to business, the reported surplus of $170 billion in 2001 would have to be reported as a deficit of $580 billion. In regards to the HIPAA regulations, the government has essentially made criminals of all physicians even though the vast majority of doctors have little idea of what they might be doing that is contrary to congressional fiat. The solution to scandals? Simpler and fewer Rules.
Surgery Centers Hire a Former Lawmaker to Make Sure
Their Fees Aren’t Capped
Although California has a $30 billion budget deficit, the San Francisco Chronicle reports that a lawmaker, who last year (before leaving the California Assembly because of term limits) helped pass a bill that allows surgery centers to charge workers’ compensation insurance unlimited fees for treating work injuries, now works as a consultant for that industry. The surgery centers’ lobbying and campaign contributions exceeded $2.2 million to legislative leaders, (including $100,000 to the afore mentioned industry consultant), the Democratic party, and our Governor, Gray Davis. This gouging of the public till has allowed expansion of these surgery centers to more than 300 statewide. Republicans in the legislature think they have enough Democrats who will support a reversal of this stealing from the public trough.
Passing laws that benefit your future employer is not seen as unethical. Paying $100,000 to your future employee, while he’s in the legislature, to pass laws that only you benefit from is not seen as bribery. It is urgent that we restore accountability to workers’ compensation insurance and other health insurance companies rather than have patients be treated as commodities to be bartered.
Europe's Examples Show Bureaucrats Delay New Miracle
Medicines for Months
Grace-Marie Turner discusses prescription drug benefits that politicians promise would be "affordable, accessible, meaningful, and competitively administered." It is an easy promise to make but much harder to keep. As experience with Medicare demonstrates, centralized efforts to provide access to health care almost always turn a government into a medical gate keeper, deciding what kinds of care are eligible for coverage and how much the care should cost. There is no reason to assume it will be any different for prescription drugs.
Bureaucratic intrusion in health care systems throughout Europe provides myriad examples of where the road to a government-run health benefit leads. For decades, European governments, each in their own way, have made prescription drugs part of a national health benefit package. In most countries, the government, not the market, decides the price of prescription drugs. The results hardly have been reassuring. In several European countries, new drugs that have already been approved for safety and efficacy take months, even years, to reach the market as health officials argue over price and reimbursement levels. Rather than getting less expensive new drugs, European patients often have no access to them at all.
The full scope of this problem is described in detail in two incisive studies by the London-based Europe Economics research group. In one study of breakthrough medicines between 1986 and 1996, Europe Economics found that patients in many countries suffered long delays in obtaining widely prescribed drugs. The products covered by this study were not merely the costly medicines for rare diseases, but also such popular drugs as Zoloft, Prozac, Norvasc and Zocor.
Greece, Belgium and Portugal appear to be the worst offenders. Residents have gone for years unable to obtain medications through government programs that can effectively treat cardiovascular problems, respiratory ailments, urinary system infections and other illnesses. In every case, these medicines are widely available in the United States. The patients who are being denied these state-of-the-art medicines simply have the misfortune of getting sick in a country with a misguided health policy. European Economics researchers found that powerful anti-infective therapy takes four years to reach patients in Greece and Portugal and three years to reach them in Belgium and France. Portuguese patients who needed a new nervous system medication were denied access for nearly six additional years. In the 1995-1997 period, more than half of the new medications included in the survey weren't available in pharmacies in Portugal, Italy and Greece. And more than one-third weren't available in pharmacies in Belgium, France and the Netherlands.
Why is this happening? When faced with tight budgets, European health officials resort to a deliberate, if callous, policy of using price controls as a way to control their health care budgets. Prescription drugs, in other words, have become a tool of budget policy rather than health policy. That seems to be an inevitable result once government gets in the business of healthcare price controls. History suggests that American healthcare policy advocates often ignore such warning signs at their peril.
Indeed, in the United States, the original Medicare plan of 1965 promised to avoid setting any fees schedules or prices on physicians. But as the American Enterprise Institute's John Calfee pointed out in a monograph, the free market system for Medicare didn't last long. An initial effort to limit physician reimbursements to the rate of inflation gradually became a complex schedule of fees. Today, the reimbursement system for Medicare is monolithic and contentious, with a pricing scheme that controls and limits the health care seniors receive. Government bureaucrats in Washington manipulate this system to "socially engineer" health services by revising or adding to the 110,000 pages of regulation that govern the program. Today's, seniors - and the millions of Americans about to join their ranks - should be especially wary of policy proposals that almost certainly will deny them swift access to life-saving and life-enhancing medicines.
Socialized or Single-Payer Medicine
Jacob G Hornberger, a former trial attorney and adjunct professor at the University of Dallas where he taught law and economics, discusses the Real Free-Market Approach to Health Care in The Dangers of Socialized Medicine which he edited with Richard M Ebeling. He states that some so-called “free-market” solutions to America’s health-care crisis mislead people into believing that a reform of the welfare-state managed-economy is a “free-market” approach to the problem. He states that mandated health care and income-tax deductions do not constitute freedom or free-market medicine. Mandates and freedom are opposites.
The welfare-state, managed-economy way of life is doomed to fail, as central planning and economic control have failed all over the world. Hornberger contends that a few years from now, after one of the current proposals is adopted, the health-care system will be in an even bigger crisis. Public officials will make their inevitable proclamation: “We have tried free enterprise, and it has failed; now we must use governmental intervention to fix the problem.”
Hornberger feels that there is one and only one solution to America’s health-care woes: a total separation of the health care economy and the state. This involves, first, a recognition that the welfare-state, managed-economy way of life is a cancer that infects our body politic. And, second, a cure that calls, not for Band-Aids but, instead, for radical surgery by which all interventions in the practice of medicine including Medicare and Medicaid are eliminated.
Unfortunately, free enterprise, that has been successful for 150 years in this country, has been corrupted in the last half century, but has never failed when fully implemented. It is government intervention that has failed throughout the world and throughout history. The mission of MedicalTuesday is to promote the system that is the most economical and cost effective, that is the most patient sensitive, that restores the unfettered doctor-patient relationship, and that is the most humane - all this without mandates, coercion or criminalizing medical records that have always been confidential until laws have made it available to a large number of payers, reviewers and government agencies. The new HIPAA regulations do not assure patient privacy from government intrusion.
A patient called our office stating that for the past five days he had an upper respiratory infection and would like to go to the emergency room after work to get treated. We informed him that while we had no open appointments that day or the next, we could see him in the office in 48 hours. He stated that he would be well by then and would rather go to the ER that day since his $10 copayment was the same. We informed him that if he had called earlier, we could have seen him on three of the previous five days. He stated that would have inconvenienced him.
ER statements brought in by our patients indicate an average charge of about $900. One IPA (Independent Practice Association) states that their average payment to hospital emergency rooms is $600 per visit which is ten times their average payment for office visits. This patient increased his health care costs 10-fold because it didn’t cost him any more out of pocket. Having him pay a percentage of the charges, e.g. 30% of out patient charges, the difference between $18 (30% of $60 office visit) and $180 (30% of a $600 outpatient hospital emergency visit), would have prevented this gluttonous behavior and reduced health care costs by 90%. A health maintenance organization, as well as Medicare, with retrospective review, would not have controlled the costs. Any directive would simply have been ignored by the patient since the co-payment was the same. HealthPlanUSA will control costs prior to the first ER visit, because the patient is purchasing the health care visit. Therefore he would check the charges before going to the ER and would decide to obtain his care through conventional out-patient office visits, recognizing that his convenience was not worth the increase from $18 to $180.
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The MedicalTuesday Network Recommends the Following
for Their Efforts in Restoring Accountability in HealthCare, Government and
• 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) 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. 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 number of employees in many departments by over 90%. He feels he’s having success with our MBA President who understands efficiency 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 firstname.lastname@example.org. In her current issue, she feels that “Holy Week brings special occasion for thanksgiving that the fighting has all but ended in Iraq, and hope that peace will prevail. It also is occasion to appreciate the enormous good fortune that we have in this country where we are blessed with economic, societal, and political stability, leaving us free to have open debates about addressing our nation's problems. Sometimes it seems that the two sides that square off over issue after issue - most often those who believe in a bigger role for government vs supporters of private sector initiatives - are hopelessly grid locked. The Information Age is allowing millions more citizens to learn about and engage in public policy debates, making our democracy more participatory than ever before. Right now, it seems that progress is infinitesimally slow. But as more people engage in the conversation and learn about the implications of change for them, decisions will certainly be based upon a better informed debate. This Easter and Passover weekend we are especially reminded that progress does not come without sacrifice. So we will take a break this week in this space from our own hard fought battle over ideas to celebrate that we live in a country and in a time when we have the luxury of debating the best way to advance our civil society. And to take stock and remember that, yes, the battles for freedom and liberty are always worth the price.” The full article can be found at www.galen.org/happenings/041803.html. We congratulate and support our colleagues at the Galen Institute.
• Greg Scandlen, whose research at the NCPA we frequently used from his Health Policy Comments, has been named the Director of the new “Center for Consumer Driven Health Care” at the Galen Institute. He has a Weekly Health News Letter: Consumer Choice Matters. You may subscribe to this very informative and well-outlined health care newsletter by logging onto www.galen.org or reading his current newsletter by clicking on Consumer Choice Matters on this website.
• 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. Plan to attend one of the annual week-long von Mises Seminars which are now held every February. You may log onto 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 J Cihak, MD, & Michael Arnold Glueck, M.D, write an informative Medicine Men column that has recently moved to NewsMax. Please log on at http://www.newsmax.com/pundits/Medicine_Men.shtml or subscribe by sending Bob an email at email@example.com . The current issue on HIPAA (Will I notice anything different the next time I see my own doctor? You might notice that your doctor isn't there.) can be found at http://www.newsmax.com/archives/articles/2003/4/15/22630.shtml
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MedicalTuesday Supports These Efforts in Restoring
Accountability in Medical Practice by Restoring the Doctor & Patient
Relationship Unencumbered by Bureaucracy:
• 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 as well as an internal medicine practice. He states the entitlement mentality is hard to overcome as he sees patients go elsewhere rather than pay him only $15 over their usual co-payment.
• 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. He now reports that more than 1500 medical professionals and 15,000 patients are engaging in PIFATOS (Payment In Full At Time Of Service). The time is now to return medicine to patients and doctors by charging fair prices, getting paid directly, and teaching patients to secure an affordable major medical policy to cover catastrophic expenses.
• 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, whose mission is to educate people about health care and have open discussions about any health care alternative.
• 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. Jane Orient, MD, in her monthly Newsletter as the Executive Director of the Association says, “We have the Wrong Goal. Covering the uninsured begs the unanswered question of whether we should aim for ‘universal coverage.’” The Robert Wood Johnson Foundation (RWJF) claims that 75 million Americans, or one in three non-elderly, were uninsured for at least part of last year. Last month we quoted the Blue Cross/Blue Shield Association as estimating that there are really only 8 million low-income workers truly uninsured–less than those on the waiting lists of some countries with universal coverage. It is at times difficult to get a grasp on reality with such a display of hidden agendas. And that is a large problem in health care.
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Stay Tuned to the MedicalTuesday.Network and Have Your
Friends Do the Same
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Del Meyer, MD, CEO & Founder
''They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety.'' –Ben Franklin