Physicians, Business, Professional and Information Technology

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, December 9, 2003

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In This Issue:
1. Despite the World’s Highest Taxes, Swedish Health System Feels the Economic Pinch
2. Micro-Management by Medicare Increases Cost and Lowers Quality
3. Sweden Edges Toward Free-Market Medicine
4. Our Monthly Review of the Twenty Myths of National Health Insurance
5. Medical Gluttony or Excessive HealthCare Costs
6. Medical Charity
7. The MedicalTuesday.Network for Restoring Accountability in HealthCare & Government

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1. Swedish Health System Feels the Economic Pinch
A reader from London sent us a reprint by Nicholas George of the Financial Times which reports that despite the highest taxes in the world, public hospitals in Sweden are suffering from an acute financial crisis. Hospitals are closing wards, medical staff are being sacked and health authorities are telling patients to look to the private sector for operations. The health authority at Uppsala’s University Hospital 90 km north of Stockholm is cutting 100 doctors to save money. In the Stockholm region about 1500 staff are scheduled to lose their jobs and there are plans to merge major hospitals. In a country where equal access to health care is seen as a basic tenet, newspapers are publishing price lists for private treatment and how much it costs to jump hospital queues. The most controversial action has been taken by the Ostergötland region. They have published a list of treatments that they will no longer fund, such as vasectomies and removal of benign tumors or varicose veins.  Patients will now have to finance these procedures themselves. Many believe the financial crisis reflects an inability of administrators and politicians to control costs in a public system. “All political parties can make political gains out of spending the money, but nobody makes gains out of balancing the budget. It is not seen as a heroic thing,” says Bengt Jönssen, a professor in health economics at the Stockholm School of Economics. (Isn’t that why all public programs will continue to deteriorate and eventually fail?)

A Swedish author wrote in another journal that when the addition of all taxes in Sweden added up to 100 percent of his income, he had to flee his native country for economic survival. Similarly, Michael Caine, the British actor, told the Queen that he came to the United States when his taxes in the UK added up to more than 80 percent. A patient recently told me that he saw nothing wrong with a 100 percent income tax on the wealthy, for how else could the poor survive. He, however, was highly incensed when I pointed out to him that his utilization of health care resources was about twice that of my wealthy patients. This was before I even considered an additional $5,000 of durable medical equipment he wanted that I was unable to medically justify. Health care, if it were on the open market without the government or a third party doubling the costs, would be on the order of what our country spends on cigarettes, alcohol, sports and other leisure activities. This doesn’t change in socialized or single-payer health systems. In Sweden, it is estimated that doctors only spend one-third of their time in patient care!

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2. Micro-Management by Medicare Increases Cost and Lowers Quality
Every time I visit my personal physician, I am mailed a Medicare Summary of costs for services provided, including explanations of how Medicare is saving me money by controlling charges. In each instance, I note that my doctor, hospital, x-ray facility or laboratory is forced to provide services at either reduced charges or no charge at all. In each case I am commanded: DO NOT PAY YOUR PROVIDER FOR THIS SERVICE. The summary also outlines a series of rules to follow in reporting your case if you paid the bill and warns, under a section of “useful” information,  how a whole lot of people could get in trouble.

For the second time, I am informed that a “gluco-hemoglobin” test for determining diabetes in the earliest possible phase, which I had done some six months ago, was again disallowed because the information provided did not support the need for this test. However, the information supporting this need is noted in the section called “Family History”of my medical record. It is unreasonable for a physician, who spends an hour with me to obtain my entire medical history including my family medical history of maternal diabetes, to be forced to put this on a laboratory requisition. The test is needed because I obviously have one maternal diabetic gene and, since I have a paternal cousin with diabetes, my father may also have had one diabetic gene. This gives me a 50 percent chance of diabetes. These odds recently increased when my sister was found to be diabetic, assuring me that my father did have at least one diabetic gene. I am at risk for diabetes and all its complications. However, it is unreasonable that a second medical record, namely my sister’s personal medical history, be made available to Medicare from the state of Oregon to comply with this extensive micro-management of a single laboratory test. It would cost more than the $69 charge for the test, at least doubling the cost of care. Meanwhile Medicare’s intimidation in getting doctors not to order tests consistent with optimal health care lowers the quality of care.

Medicare meanwhile is claiming that excessive costs and overutilization are due to fraud that costs Medicare billions of dollars yearly. In reality, it is not fraud, or overutilization or excessive cost that burdens Medicare. The excessive cost is produced by Medicare’s micro-management, which in turn jeopardizes my health and yours.  I would have loved to just pay for this valuable test for preventive care; however, in doing so it could cause a Medicare Fraud lawsuit, for either the laboratory or me, depending on who Medicare is focusing on this season.

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3. Sweden Edges Toward Free-Market Medicine
Wess Mitchell, of the National Center for Policy Analysis, reports that for decades, advocates of socialized medicine in the United States and Canada have maintained that health care systems financed by taxes and under government control are more efficient than private sector models in their ability to control costs and maintain quality of health care. Central to this argument is the belief that user fees and the profit motive, both salient features of a private health system, favor the wealthy and are unfair to the poor. Advocates of national health care have frequently cited perceived successes in Western Europe’s social welfare states. But recently, policy-makers in Stockholm, the capital of Europe’s most heavily socialized Scandinavian state, began implementing market-style reforms that may deprive national health care proponents of their favorite example.

Much of the pressure to experiment with privatization came from European Union regulations that forced reduced public taxation in Sweden. To function in a lower tax environment, Stockholm turned to the private sector to remove the public monopoly on the delivery of health care services and to control the spiraling costs of public sector services by introducing market forces and competition. In every category, the experiment has been a success.

One result of decentralizing and divorcing health care providers from bureaucratic control in Stockholm has been that private sector companies have been able to introduce simple, professional management structures that enable doctors to spend less time on paperwork and more time with patients. This change has, in turn, increased productivity in several key areas. Most importantly, it has drastically reduced waiting times for treatment by increasing the number of patients being served.

Conclusion: While opponents of the privatization reforms had predicted that the private sector, by seeking to make a profit for shareholders, would drive costs up and efficiency standards down, the opposite has in fact been true. Read the full report at http://www.ncpa.org/pub/ba/ba369/.

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4. National HealthCare Systems in the English-speaking World (No 20)
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), and Devon Herrick state 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 nineteen myths or www.ncpa.org for the original 21 chapters of the book along with well annotated references.

Myth Twenty: The Defects in Single-Payer Health Insurance Schemes in Other Countries Could Be Remedied by a Few Reforms
The rationale behind this argument is simple. Since health care services in countries with single-payer health insurance are government-administered public goods, any problems that arise in their delivery can be alleviated by some adjustment at the government level. However, as the years of failed reform efforts in Britain have shown, the structural defects of a single-payer system of national health insurance are not effectively remedied at the governmental level. (See items 1 and 3 above concerning Sweden’s similar structural defects.)

The characteristics described above are not accidental byproducts of government-run health care systems. They are the natural and inevitable consequences of placing the market for health under the control of politicians. It is not true that health care policy in countries with single-payer health insurance just happens to be as it is.

Why are low-income patients so frequently discriminated against under national health insurance? Because such insurance is almost always a middle-class phenomenon. Prior to its introduction, every country had some government-funded program to meet the health care needs of the poor. The middle-class working population not only paid for its own health care, but also paid taxes to fund health care for the poor. Single-payer health insurance extends the “free ride” to those who pay taxes to support it. Such systems respond to the political demands of the middle-class population, and they serve the interests of this population.

Why do single-payer health insurance schemes skimp on expensive services to the seriously ill, while providing so many inexpensive services to those who are only marginally ill? Because the latter services benefit millions of people (read: millions of voters), while acute and intensive care services concentrate large amounts of money on a handful of patients (read: small number of voters).  Democratic political pressures in this case dictate the redistribution of resources from the few to the many.

Why are sensitive rationing decisions and other issues of hospital management left to hospital bureaucracies? Because the alternative is politically impossible. As a practical matter, no government can make it a national policy that 25,000 of its citizens die from lack of the best cancer treatment every year, even though a substantial number of these will die because of a lack of government-provided resources.

These decisions are so emotionally loaded that no elected official could afford to claim responsibility for them. Important decisions on who will and will not receive care and on how that care will be delivered are left to the hospital bureaucracy because no other course is politically possible.

As we have been discussing these myths over the past 20 months, they have been revised from the 1991 original article. You may want to read the executive summary and the full original report at http://www.ncpa.org/studies/s166/s166.html and compare to the ones recorded in the archive section of http://www.MedicalTuesday.net

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5. Medical Gluttony by the Provider Rather Than the Patient.
We have collected numerous instances of excessive health care charges. Most are from hospitals. Here’s one that came across my monitor last week from the office of Dr Alieta Eck, a private physician:  “A resident rotated through our office having delivered her firstborn a few months earlier at Somerset Medical Center in Somerville, NJ.  It was an uncomplicated, normal vaginal delivery.  She was commenting on the bills that were coming in.  They had already totaled over $25,000 and she still had not heard from the anesthesiologist. (I imagine she had an epidural.) Now, she has insurance, and the big question is, ‘What will they eventually pay’?"   The $25,000 cost per day per delivery is pretty dramatic. We’re waiting for more info on how this figure was calculated? We’ll keep you posted.

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6. Medical Charity
There are so many instances of physicians and corporations doing great things on behalf of the needy, I thought that another of Dr Alieta Eck’s comments in the above Listserv was of interest: “In starting the Zarephath Health Center for the poor and uninsured in our area, I have been impressed with the generosity of the pharmaceutical companies. One of our roles is to help people access the programs that most of them have for the poor.  Those who meet certain income requirements, get free medicines.  I just received a three month supply of an anti-seizure medicine from Abbott Labs for one of our unemployed, depressed patients. We really do not need a new big government program. . . the Pharmaceutical Researchers and Manufacturers of  America, PhRMA, through its collective program HelpingPatients.org, donated free prescription medications to more than 5.5 million people in the US in 2002.”  To which another physician replied that he had patients on close to $5,000- $10,000 worth of drugs per year given for free or at minimal charges from Merck, Pfizer and other companies. Multiply that by a few hundred thousand physicians, and we’re talking about real money for the less fortunate. In California, we have such a huge catch net for the poor that many just thumb their noses at the free coupons I offer from the pharmaceutical companies because they get all of them free, at taxpayer expense, with their Medicaid card. For more info about these 48 companies helping those in need, check http://www.helpingpatients.org/.

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 review 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 be sure to read the Policy Digest: “Changing Behavior to Cut Health Care Costs.” In a response to rising health care costs and coverage cutbacks, American workers are changing their behaviors, says a report by Fidelity Investments. Eighty percent plan to choose generic drugs when available. Twenty-five percent have managed to decrease emergency room visits. Forty-seven percent have improved their diet while 34 percent have lost weight. Despite these changes, many workers still need education about their health plan benefits. Forty-two percent do not know the differences between indemnity plans, preferred-provider organizations (PPOs) and health maintenance organizations (HMOs). Thirty-two percent do not understand the differences in co-pays, deductibles or co-insurance for medical plans offered by their employers. Read the entire Policy Digest at http://www.ncpa.org/iss/hea/2003/pd112503e.html.

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 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 and now signed into law in her current report found at http://www.galen.org/medicare.asp?docID=570.

• 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 last week became Health Savings Accounts (HSA). This week, read Greg’s analysis of what this and other pro-consumer developments in the health financing world in 2004 means at http://www.galen.org/iodocs.asp?docID=572.

• 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. This week they report on More Medicine is not Better Medicine by Elliott S. Fisher, Professor of Medicine at Dartmouth, who states: “Five colleagues and I published a study of variations in Medicare spending. In 2000, for example, per capita spending was $10,550 in Manhattan, only $4,823 in Portland, Ore. Despite the disparity, we found that neither the quality of care nor patients' satisfaction with it was related to costs. . . Because regional patterns of medical practice are similar for Medicare and non-Medicare patients, the findings have substantial implications for America's health care system. We could be wasting hundreds of billions of dollars each year. . .  As have other studies, we found that the average quality of care received by Americans is uneven. What was surprising is that quality was actually somewhat worse in regions that provided more care, with less frequent use of proven treatments for heart attack patients and of preventive services. Meanwhile, access to care and satisfaction were worse or no better than in regions that provided less care. . . And because almost all interventions involve some risk, unnecessary tests, treatments and hospital time can be harmful. . . Yet 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. Last month she had 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 friends who are single and/or socialistic health-care advocates. A previous article, Health Care Reform: Liberate Patients or Oppress Them?, can be found at  http://www.i2i.org/article.aspx?ID=896.

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 of which will allow you to brush up on your French. You may also register to receive copies of his webzine on a regular basis. This week Pierre Lemieux discusses the welfare state. What the rational-choice argument for the Welfare State mainly neglects are the enhanced control and surveillance requirements of this type of state. Many individuals, especially if they adhere to the Western tradition of liberty, will consider this a very high cost. The Welfare State has to become more and more bureaucratic, intrusive, and powerful, in order to survive. He concludes that the Welfare State and the Totalitarian State are the two faces of the same Leviathan.

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 want to go directly to their health research section at http://www.fraserinstitute.ca/health/index.asp?snav=he. Nadeem Esmail, Senior Health Policy Analyst & Manager, wrote an editorial last week: “Paying More and Getting Less” in which she discusses Roy Romanow’s magnum opus on a new commitment to the ideals of government monopoly health care. Romanow’s goal, shared by many Canadians, was to make the health care system better for all. But like many Canadians before, Mr. Romanow made the mistake of ignoring just what has been going on for years in this country under government health care. Read the entire editorial wherein she points out that the facts don’t support the argument: After accounting for our youthful population, Canada already spends more money (as a share of GDP) on health care than any other developed country in the world that promises it citizens universal access to care. Log on at http://www.fraserinstitute.ca/shared/readmore1.asp?sNav=ed&id=225.

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 points out that reckless spending by Congress and the President made it a year in which Government spending exceeded $20,000 per household for the first time since World War II. Read about this colossal government expansion at http://www.heritage.org/Research/Budget/BG1710.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 the Mises Economic Blog by Stephen W. Carson on Economic Ignorance, Democratically, Rules. The good democratic news is that public economic policy closely corresponds to public economic opinion. The bad news is that the public is economically ignorant, so public economic policy is terrible. You can read the story at http://www.mises.org/blogDetail.asp?control=1147. 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. Tom Miller, who spoke to the AAPS membership in September, is the Director of Health Care Studies, where a wealth of healthcare information can be accessed at http://www.cato.org/healthcare/index.html.

• 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, Michael Novak, the George Frederick Jewett Scholar in Religion, Philosophy and Public Policy at the American Enterprise Institute and winner of the 1994 Templeton Prize, gives the historical background of the now-suspended Alabama Chief Justice Roy S. Moore’s Ten Commandment Controversy who may have understood our history better than the federal judges. 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

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