Community For Better Health Care

Vol XI, No 9, Dec 18, 2012

In This Issue:

  1. Featured Article: ObamaCare: Who’s Winning, Who’s Losing

  2. In the News: The Underworked Public Employee

  3. International Medicine: How does US Healthcare compare with Rest of the World?

  4. Medicare: Raise the Retirement and Social Security Age to 70?

  5. Medical Gluttony: The Cure

  6. Medical & Other Economic Myths: What Saved the Great Depression?

  7. Overheard in the Medical Staff Lounge: When doctors reach 65?

  8. Voices of Medicine: Dr. Benjamin Carson, Neurosurgeon, at the National Prayer Breakfast

  9. The Bookshelf: Questioning the Obesity Paradigm by Deborah Donlon, MD

  10. Hippocrates & His Kin: How the Donkey learned to Tax & Spend.

  11. Restoring Accountability in Medicine, Government and Society

  12. Words of Wisdom, Recent Postings, In Memoriam, Today in History . . .

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The Annual World Health Care Congress, a market of ideas, co-sponsored by The Wall Street Journal, is the most prestigious meeting of chief and senior executives from all sectors of health care. Renowned authorities and practitioners assemble to present recent results and to develop innovative strategies that foster the creation of a cost-effective and accountable U.S. health-care system. The extraordinary conference agenda includes compelling keynote panel discussions, authoritative industry speakers, international best practices, and recently released case-study data. The 10th Annual World Health Care Congress will be held April 8-10, 2013 at the Gaylord Convention Center, Washington DC. For more information, visit The future is occurring NOW.

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  1. Featured Article: ObamaCare: Who’s Winning, Who’s Losing

The Affordable Care Act’s Likely Winners and Losers.

David J. Gibson, M.D.

Increasing federal spending by over a trillion dollars during the next decade will have profound effects on the health care delivery system here in the United States. This level of spending will generate vast fortunes for some of the existing and emerging vendors, consultants and manufacturers within health care. Others, those concentrated at the patient care level; will experience catastrophic downside risks and consequences. This article explores those entities that will likely be the winners and the losers under health care reform over the next decade.


Health care in the U.S. is an incredibly complex, decentralized industry that will consume over $2.6-trillion of the country’s resources this year. After restaurants and hospitality, health care is now the biggest industry that employs the most people in the United States. It consumes 24 percent of the federal budget. Over the coming decade (2012-2021), the Affordable Care Act (ACA) will increase net federal spending on health care by more than $1.15 trillion. ACA will add between $340 billion and $530 billion to federal deficits over the same period, with accelerating amounts thereafter.

It is be prudent to view the above alarming cost projection with a high degree of skepticism. In the past federal cost projections have been grossly understated. For example in 1967, the House Ways and Means Committee predicted that the new Medicare program, launched the previous year, would cost about $12 billion in 1990. Actual Medicare spending in 1990 was $110 billion—off by nearly a factor of 10. Another example, the Iraq war, cost between 40 and 100 times the original estimates.

The losers Read more . . .

Let us start out by looking at those parties that will likely experience the most dislocating losses because of the ACA’s implementation. It is disconcerting that the losers will concentrate at the patient and actual care delivery levels while the winners will be peripheral players at the vendor, product sales, consultants, manufacturing, insurance company and criminal fund diversion levels within the industry.

The patient / beneficiary

As we discussed in our prior publication, Ten Likely Outcomes from the Affordable Care Act’s Implementation, none of the promised benefits for patients that would result from passage of the ACA are proving to be correct.

The most important dislocation will be the development of a health plan centric vs. a patient centric system payment system. As payments for goods and services are concentrated into a progressively centralized system, the industry that results will be population outcomes rewarded rather than individual patient outcome and satisfaction rewarded. Decision making within the evolving health care system will reflect this new reward system.

Population based rewards will have profound consequences for patients who will find their physicians locked into an “evidence-based medicine” regimen that treats them like mere statistics and confines personal knowledge of them to demographic variables of age, race, and gender (like the Dartmouth Atlas does). In the near future, they will find themselves assigned to an Accountable Care Organization without their knowledge or consent. In population-based medicine, standardization of treatment is by far more important than physician autonomy.

All of this will come as a shock to patients. They generally now interact with health care holistically. They are unique individuals that are fully realized human beings with a complete range of emotions, abilities, resources, and support systems. Experience has shown that these qualities have an enormous influence on outcomes and can only be factored into any treatment plan by a personally involved health care professional with the autonomy to override statistical based best practice protocols. How can a system that views the government and third party payers as the customer treat the patient’s autonomy with respect?

Young People

Young people, as a subset of patient / beneficiaries, are specifically at greater disadvantage under ACA. On average, young people are much healthier than older people are, and consume less health care services. Ordinarily, therefore, young people are much cheaper to insure than older people are. Under free-market conditions—what insurance pros call experience rating—the typical 18-year-old costs one-sixth what it costs to insure the typical 64-year-old. However, ACA requires community rating, which has the potential for doing the most damage to the private insurance market.

Under Federal Health and Human Services (HHS) published community rating standards, ACA requires that insurers only charge three times as much to their costliest beneficiaries as what they charge to their least-costly ones. This requirement will increase the cost of insurance for the young by 75-percent.

ACA advocates assert that younger people should pay more so that older people pay less. However, most young people are at the beginning of their careers. They are starting families, and generally have lower incomes as well as far less savings, than older people do. The results, young people will likely look at community rating as a gross inter-generational wealth transfer mechanism.

If a young person is required to pay $8,000 or more for a health insurance premium that is overpriced by 75-percent or more per year when they rarely use the health care system, the resulting incentive will be to drop coverage. Should young people drop out of the insurance market and thereby skew the risk pool demographics; older Americans will face much higher rather than lower premiums than they would have under the current experience-rated system.

Tax Payers

ACA contains twenty new or higher taxes. Five of the taxes hit for the first time on January 1. In total, for the years 2013-2022, Americans face a net $1 trillion tax hike for the years 2013-2022, according to the Congressional Budget Office.

ACA includes higher taxes for all tax payers who are sick and have medical bills exceeding 7.5% of income. They include higher taxes for families with special needs children who had previously been spending more than $2,500 a year from a Flexible Spending Account. And they will be reflected in higher medical bills for anyone who needs a hip or knee replacement, a pacemaker or any other medical device.

Medicare spending cuts that help pay for covering the uninsured have started to take effect, but they are staggered. The law's main benefit, coverage for 30 million uninsured people, will take a little longer. It does not start until Jan. 1, 2014.

Generating the revenue to pay for ACA was at the heart of the debate in Washington over the “Fiscal Cliff”. Employees are in the cross hairs. Taxing health insurance benefits are now at the top of the loophole closing options. About half of Americans benefit from the tax-free status of employer health insurance. Workers pay no income or payroll taxes on what their employer contributes for health insurance. It's the single biggest tax break allowed by the government, outstripping the mortgage interest deduction, the deduction for charitable giving and other better-known benefits.

If the value of job-based health insurance were taxed like regular income, it would raise nearly $150 billion in revenue in 2013, according to congressional estimates. By comparison, wiping away the mortgage interest deduction would bring in only about $90 billion. If the sequestration debate in Washington turns tax revenue beyond increasing rates, taxing health benefits is the biggest pot of money of all.

It's hard to see how lawmakers can avoid touching health insurance if they want to eliminate loopholes and curtail deductions so as to raise revenue to pay for ACA. Even without touching this loophole, tax increases individuals will face related to ACA’s revenue generation will include:


We are predicting that practicing physicians will also become big losers under the ACA’s implementation. They have been placed in harm’s way by their own trade associations. The American Medical Association (AMA) and many state medical societies, supported the administration during the debate over ACA, the outcome of the act’s implementation will have a devastating effect on these organizations’ constituent physicians.

Primary care physicians are uniquely vulnerable to the intended and unintended consequences of ACA. For openers, they face peripheralization from their current position within the delivery system.

When the Affordable Care Act’s insurance mandate takes effect in 2014, some 30 million newly covered patients—people generally treated in emergency rooms now—will be shopping for doctors. In addition, the U.S. Census Bureau also projects a 36% rise in Americans eligible for Medicare during the next decade.

That is a problem because the U.S. now has 15,230 fewer primary-care physicians than it needs, according to the U.S. Department of Health and Human Services. Furthermore, in 2010, the Assn. of American Medical Colleges projected a shortage of 130,600 physicians by 2025, with half of the shortfall occurring in primary care specialties.

Thus, expect significant modifications in the scope of practice now reserved to licensed physicians that will accrue to physician extenders – Physician’s Assistants (PAs), Nurse Practitioners (NPs), pharmacists and various home based care givers.

Currently, medical care generally has coordination, continuity communication and accountability generally under a primary care physician’s leadership. To spin off care delivery into a desperate network of various licensed and unlicensed caregivers represents a new increased risk paradigm for health care delivery that most patients will find foreign.

Reduced reimbursement for physician services is now a reality in Medicare and will soon become generalized as private health insurance companies base their reimbursements on Medicare fee schedules. Congress passed the Balanced Budget Act of 1997 in an effort to reduce budget deficits. Part of this law included the Sustainable Growth Rate (SGR) for Medicare payments to doctors under Medicare Part B. Each year since 2002, the statutory method for determining the annual updates to SGR system, has resulted in a reduction in the reimbursement rates.

Recognizing the destabilization effect that these cuts would impose upon Medicare and the resulting political fallout, Congress has passed a series of bills that has overridden the SGR called for cuts each year since 2002. The just completed “Fiscal Cliff” resolution continued this pattern of avoidance by extending the cut prevention for an additional year. The cost for cost for delaying this 26.5 percent payment cut for Medicare physician’s payment by one year will be approximately $30 billion.

However, this issues does not go away. At best, it delays the cuts by only one year. While seniors will see no changes in their benefits Medicare providers will face $11 billion in cuts through the end of the government’s fiscal year on Sept. 30. For doctors who take Medicare patients, that would be an additional 2 percent reduction on top of the 26.5 percent scheduled Medicare payment cut, if it is not “fixed” by then.

The American Academy of Family Physicians (AAFP) calculates that if the SGR reduction takes effect, the average family physician stands to lose $27,000 in Medicare revenue next year. The loss for a 3-physician practice would be $80,000. Those estimates do not include possible reductions by private insurers, which typically peg their rates to Medicare's

In reality, all of the $245-billion in SGR savings referenced above are already spent the projected $700 billion plus savings built into the ACA’s cost saving projections with the primary purpose being to finance the called for growth in Medicaid.

Physicians have three contracting options with Medicare next year

The most drastic measure available to physicians in the Medicare reimbursement crisis is changing their status in the program in 2013. The program gives them an opportunity every year to choose one of three contractual options for the coming year. The deadline for making the choice is December 31.

The three options consist of Medicare participation, Medicare nonparticipation and private contracting with seniors, which represents dropping out of the program entirely.

Physicians who choose participation accept Medicare's allowed charge for a particular service as payment in full for all Medicare patients. This is called taking assignment on Medicare claims.

Nonparticipation means that physicians take assignment on a claim-by-claim basis. If they choose not to take assignment, they can bill the patient within limits for more than Medicare pays.

In private contracting, a physician bills the patient directly, and neither one can receive any reimbursement from Medicare. Physicians who opt out of the program this way must wait 2 years before rejoining it as either a participating or nonparticipating provider.

Physicians can anticipate further loss of autonomy in the future under ACA. Hospitals now directly employ about 20% of practicing physicians, according to the American Hospital Assn. With declining levels of reimbursement, increasing office costs for information systems such as electronic medical records and coordinated efforts to limit independent physicians from contracted provider panels, the number of physicians who are self-employed will continue to decline. Now more than 60% of physicians younger than 40 are employed by a hospital, physician group practices or other corporate entities.

The cost resulting from the AMA’s support for ACA is now becoming apparent. The AMA has a valuable contract1 which it negotiated in 1997 originally with the Health Care Financing Administration (HCFA). HCFA’s successor is the Centers for Medicare & Medicaid Services (CMS) which is now the contracting party. The contract calls for CMS to use the AMA’s primary asset, the Current Procedural Terminology (CPT) Coding system in reporting physicians' services under Medicare and Medicaid rather than substitute the use of CPT Codes with the non-proprietary and Medicare derived Healthcare Common Procedure Coding System (HCPCS).

CPT Codes are the registered trademark of the AMA and represents one of the organization’s primary proprietary assets.. The organization reported total income of $273.8-million in 2010 with royalties for their CPT Code product contributing $72-million, which does not include affiliated publishing royalties. The AMA’S CPT Codes define all services and procedures in the Medicare & Medicaid fee-for-service billing process.

This income stream gave the Obama Administration leverage in extracting the AMA’s support for the ACA during the deliberative process. The Administration threatened substituting the CPT Codes with the Medicare derived Healthcare Common Procedure Coding System (HCPCS) non-proprietary system and the AMA chose to protect their proprietary CPT asset over the objections of the majority of their physician membership.

Now practicing physicians are facing the consequences of organized medicine’s pecuniary self-interest. They are facing catastrophic reductions in their reimbursement levels (an over 30% reduction under Sustainable Growth Rate (SGR) mandated cuts for Medicare payments to doctors under Medicare Part B), loss of autonomy and re definition of their leadership role in the evolving health care system. In addition, physician practices are facing a projected $590 million in penalties for not meeting EMR “meaningful use” criteria starting in 2020. These penalties will further drive the closure of physician owned practices with physician consolidation into hospital owned groups.

Further, the AMA generated pyric consequences are becoming apparent as the CPT Codes are becoming progressively marginalized with the rise of bundled service and outcomes based reimbursement.


Hospitals are also in a precarious position as a direct result of the leadership of their trade association, American Hospital Association (AHA), the national organization that represents nearly 5,000 hospitals, chose to support the enactment of the ACA. The reasoning behind this decision was complex.

On the one hand, expanding health insurance coverage addressed the issue of uncompensated care. On the other, ACA is designed as a managed care, health plan paradigm under which hospitals have profited in the past. Under managed care, hospitals have successfully consolidated into regional oligopolies that dictate service pricing to health insurance companies. They successfully lobbied Medicare to advantageously reimburse technical fees for hospital owned diagnostic and therapeutic facilities at the expense of those owned by physicians. They were empowered to build vertical delivery systems that dominated both Part A (in-patient institutional) and Part B (out-patient mostly professional) Medicare reimbursements.

So supporting ACA’s passage seemed to be advantageous to the hospitals goal of becoming the corporate center for health care delivery with regional hegemony while ACA would mitigate the liability of uncompensated care.

Unfortunately, the above AHA beneficial assumptions are now facing the harsh realities associated with ACA’s implementation. Hospitals are being forced to place big bets on the future the ACA will ostensibly deliver.

It is worth noting that ACA does not address demand for services. The act rolls back payment rates for hospitals and insurers. However, it does not change the scope of benefits that patients now enjoy. From a political perspective, beneficiaries vote, hospitals do not.

It is important to understand that hospitals are in a uniquely vulnerable financial position and are ill equipped to handle disruptions in reimbursements from Medicare and Medicaid. One fourth of the hospitals are now operating at a loss and many that are not face a severe cash crunch. They face the likelihood of insolvency at each pay period. Much of this has been precipitated by the fact that hospitals were caught flat-footed when the private insurance market moved toward high deductible health plan (HDHP) designs over the past few years. Hospitals have traditionally cost shifted the under delivery cost reimbursement by Medicare and Medicaid to the private health insurance market.

As the following graph demonstrates, HDHPs now constitute over 20-percent of the market and are growing each year at the market expense of managed care products. The typical institution experienced immediate increases in their uncollectable aged patient receivables as a direct result. Thus, the institution’s ability to absorb unexpected reductions in revenue from any or all of the above is limited.

The various bond-rating agencies are now beginning to issue warnings as a result. Assuming likely outcomes, hospitals are in harm’s way for catastrophic consequences resulting from ACA’s implementation.

The problem with the hospitals’ bet is that there will not be a return on investment that warrants the capital costs the hospitals are now incurring. Population based medicine does not generate a return on investment by leveraging advantages from scale. Rather it rewards preferentially selecting low case mix patients and deselecting those that are high. Like it or not, a reimbursement system that does not pay for high case mix patients will inevitably lead to an underwriting process for admission that avoids institutional exposure to high resource utilizing patients.

The Winners

A recently published study examined the savings projected during the enactment of the ACA that justified its passage involved reducing fraud, inefficiency associated waste and abuse within the current health care delivery system. To address these issues, the ACA mandates massive investments in information technology, delivery system restructuring and third party payment infrastructure redesign. As a result, most of the winners within this process will be product manufacturers, vendors and insurance companies that facilitate the health system’s redesign rather than the providers that actually deliver health care services to patients. The following summarizes the likely big winners in the health care reform process now underway.

Electronic Medical Record Companies

The drive to convert medical data to digital format has resulted in the spending of billions of taxpayer funds over the past four years. Unfortunately, most of this mandated investment is being spent on EMRs that are not yet ready, either operationally or from a security perspective, for deployment.

EMR companies have been profiting from taxpayer money under this administration dating back to the Health Information Technology for Economic and Clinical Health (HITECH) Act, enacted as part of the American Recovery and Reinvestment Act of 2009. The HITECH Act included billions of dollars in government incentives for medical providers that transition from paper records to EMRs.

The ACA represents an extension of this taxpayer funding for Information Technology (IT) goods and services. ACA included two primary mandates relating to IT. The first involved electronic Medical Records (EMRs). The second mandated that the federal and state governments establish new electronic systems for enrolling individuals who will purchase insurance in Health Insurance-based Exchanges (HIE) starting in 2014 (see the details in the next section).

The ACA calls for distributing $27 billion to implement Meaningful Use EHR incentive program, based on published rules for Stage 2 and early recommendations for Stage 3. The leading EHR systems are written in the Massachusetts General Hospital Utility Multi-Programming System (MUMPS) language that represents 1960s technology. Meaningful Use also relies on outdated standards such as version 2.x of Health Level Seven International's messaging standards rather than the more recent version 3.

Not one of the currently available EMR products is fully interoperable. The EMRs on the market are all provider rather than patient centric in that they are not integrated with personal health records (PHRs). Rather the current systems primarily focus on documentation to justify reimbursement.

Rather than reducing costs, these systems are enabling up coding and are driving inflation within the system. An investigative report issued on September 15, 2012, by the nonprofit Center for Public Integrity reported that medical professionals have increased their billings to the Medicare program by at least $11 billion over the last ten years. The use of more remunerative billing codes “may be accelerating in part because of increased use of electronic health records, which make it easy to create detailed patient files with just a few mouse clicks

Furthermore, it is now clear that the EMR systems being deployed lack the security to protect the patient’s clinical and identity information. The HHS inspector general is rightly concerned about the security of electronic medical records after two recent government reports found many security lapses and potential problems with electronic medical records. The second audit examined computer security at seven large hospitals in different states and found 151 security vulnerabilities The auditors classified 4 out of 5 of the weaknesses uncovered as “high impact,” meaning they could result in costly losses, even injury and death

Despite the problems relating to EMRs, we are predicting that the EMR vendors will continue to enjoy massive taxpayer funded growth over the next 5-years. This makes the EMR developers and manufacturers clear winners within ACA’s implementation.

Health Care Insurance Exchange Consultants and Vendors

Despite a projected cost of more than $150 billion over five years to develop a nationally interoperable system, including equipping physicians with standardized IT systems, the task of implementing and managing Health Insurance Exchanges (HIEs) is not feasible from a logistical, patient privacy, operational and technical perspective. Twenty-seven states have already said they will not participate while only 17 have committed to doing the work on their own. Six have requested a “hybrid” federal-state model. That means HHS will probably be responsible for fallback federal exchanges in full or in part in as many as 33 states.

An additional complication not generally appreciated, the administration’s congressional allies botched the drafting of the HIE aspect of the health care overhaul. As enacted, ACA does not empower federal exchanges to distribute taxpayer-funded subsidies to individuals. Only state-based exchanges are empowered to distribute the subsidies. HHS projects that Americans will spend $23 billion in federal subsidies through the exchanges in 2014. Most of these subsidies are currently at risk given the above.

The only option facing the federal government will be to contract under lucrative terms with large numbers of consultants and vendors from the private sector to approach a project of this magnitude.

Massive spending of taxpayer funds opens the door to political manipulation and crony capitalism. Do you remember the Emergency Economic Stabilization Act of 2008, the Troubled Asset Relief Program (TARP) Government Motors, and Solendra? Crony capitalism will be alive and thriving under ACA.

We anticipate that the various contractors and subcontractors that develop and thereafter manage the HIEs across the states will enjoy massive spending by the federal government that in the end will not work but will make the contractors and their investor’s incredibly wealthy.

Medical device manufacturers and sales

Medical devise worldwide sales for 2011 are estimated to be more $300 billion with the U.S. being the largest market. The U.S. medical devices industry is growing due to aging Baby Boomers, unmet medical needs, and increasing incidences of lifestyle diseases like cardiovascular, hypertension, obesity, and diabetes as longevity increases.

Direct to consumer (DTC) advertising by device manufacturers is on the rise. One cannot listen to the news on cable television without seeing an endless series of advertisements for monitoring devices, self-lubricating catheters and self-powered wheelchairs. In 2005, medical device makers spent $116-million on DTC advertising. During the past 3 years, device makers have substantially increased their spending on DTC ad campaigns. Some have borrowed from the consumer-product model by hiring celebrities to tout their devices.

Medicare now spends more than $10 billion a year providing beneficiaries with medical equipment. Medical devices represent an area that has been rife with fraud throughout all medical entitlement programs. Court records document that unscrupulous suppliers have sold beneficiaries items they may not need and successfully bill the cost to Medicare.

As an example, a just released Inspector general’s report found that Medicare paid $919 on average for back braces that cost suppliers an average of $191 each. The report found promotional materials generated by the manufacturer and targeted at attending physicians described how they could make an added $350 to $650 for each Medicare patient who qualifies for a brace. Medicare paid for more than 121,000 of the braces in 2011, compared with fewer than 49,000 in 2008. The $96 million that Medicare spent on back braces in 2011 was a small sliver of its total spending, but that amount had more than doubled in just three years, up from $36 million in 2008, the report said.

With ACA’s anticipated delivery of 32 million more insured people by 2019 and with the growth of DTC generated demand we are predicting a profitable future for device manufacturers, wholesalers and retailers. Physicians, lacking the time or the incentive to change the industry’s DTC generated demand for the various products will simply authorize the product’s purchase by third parties.. Thus, it is safe to predict that device manufacturers, wholesalers and retailers will be big winners as a result of ACA.

Pharmaceutical Companies

Pharmaceutical manufacturers are eagerly awaiting the implementation of the ACA. Spending in the U.S. for prescription drugs was $259.1 billion in 2010. Revenue is projected to double over the next decade. The current rate of growth has slowed from the highs of the 1990s and early 2000s to a more modest rate, but revenue is expected to increase sharply in 2014 after the implementation of the Affordable Care Act (ACA) as demonstrated in the accompanying graph.1

Growth trends are strong for the industry. The number of medicines being prescribed has increased: from 1999 to 2011 with the number of prescriptions increasing by 43% (from 2.8 billion to 4 billion), outpacing U.S. population growth of 9%.

It is projected that ACA will add $1.5-trillion in new taxpayer funding to the health care system over the next 12-years. Pharmaceuticals now consume 10-percent of health care spending in the U.S. Thus, the ACA will provide for an incremental expansion of coverage that should result in $150-billion, a 10% increase in revenues for pharmaceutical companies. The bulk of new patients will come in 2016 through the Medicaid channel.

The above projected increase in revenue does not factor in the effect of direct-to-consumer advertising (DTCA). To drive demand for pharmaceutical products beyond current spending percentages, the manufacturers are actively engaged in DTCA. The United States is one of only two developed countries that allow DTCA of prescription drugs. (The other country is New Zealand). By 1999, the average American experienced nine prescription drug advertisements on television every day. The number of television ads increased 40-fold between 1994 and 2000." The following table provides an historical perspective on DTC spending. The table demonstrates that the pharmaceutical manufacturers invest preferentially in DTCA over physician education and new product research and development.

Prescription Drug Promotion and Research and Development, 1997-2005.


Spending on DTC advertising

Spending on promotion to physicians

Retail value of samples

Research & Development

Total percentage increase, 1997-2005





(All figures in $Billions)

(Source: U.S. Government Accountability Office, Prescription Drugs: Improvements Needed in FDA's Oversight of Direct-to-Consumer Advertising', GAO report Number GAO-07-54, December 14, 2006

With no additional investments in new products, the pharmaceutical manufactures anticipate increases in revenue from taxpayer funding while they drive demand through DTCA. It is easy to project that pharmaceutical manufacturers will be winners under ACA.

Insurance Companies

Medicaid is rapidly converting from its traditional any-willing-provider fee-for-service delivery system to private HMO delivery systems, often without the consent of the beneficiaries. Medicaid's enrollment totals nearly 47 million, according to the Kaiser Family Foundation, roughly 60 million, or one in five Americans, receive coverage at some point during the year. The share of Medicaid enrollees in managed care plans rose from 56 percent to 71 percent in the past 10 years, according to Kaiser.

The ACA raises the federal income limit for Medicaid eligibility to 133 percent of the poverty level and broadens the type of enrollees to include adults who have no children. The changes will add 15 million Americans to Medicaid, according to estimates by the Congressional Budget Office, which will boost enrollment by about 30 percent. These enrollment gains will have a corresponding 30 percent boost to earnings for the private Medicaid HMO companies.

Although the full opportunity is several years away, investors appear to be seizing on it, as shares of insurers that specialize in Medicaid sharply outpaced the rest of the industry’s financial performance. For example, Centene Corp (CNC.N) rose more than 30 percent, and Amerigroup Corp (AGP.N) gained more than 20 percent. Fellow Medicaid specialists Molina Healthcare (MOH.N) and WellCare Health Plans Inc (WCG.N) also outperformed any other health care related investment.

We are placing these Medicaid HMO insurance companies, with their potential for growth and increased margins firmly in the winner’s column under ACA.


By far the biggest winners under ACA’s health care reform will be criminals. They have no fixed costs and bill using identity theft for products and services that are either not needed or never delivered. Both Medicare and Medicaid, since their inception during the mid-1960s, have proven to be a magnet for fraudulent diversion of funding to criminals.

Fraudulent activity will increase with Medicaid’s mandated expansion, Medicare’s demographically driven growth and the opportunity for identity theft that results from EMR deployment.

As discussed above, Medicaid will increase by 15 million, which represents a 30-percent increase in the program’s size. The U.S. Census Bureau also projects a 36-percent rise in Americans eligible for Medicare during the next decade. The EMR enables identity theft on a massive scale that precludes accurate projections as to the increased incidence of fraud that will result.

The Government Accountability Office estimates that fraud consumes close to 10% of annual program spending for both Medicare and Medicaid. Independent investigators suggest the rate is 20% or even 30% but their reports have never been published do to confidentiality agreements required by the various states.

The following table estimates the current amount of fund diversion from each program and total federal spending using the above percentage estimates. In addition, the table projects the increased level of fraud that will occur from 2014 forward with the growth of Medicaid under ACA and Medicare’s demographic growth.

Roughly calculating the potential diversion of taxpayer funding for $1.274-trillion in 2010 spending on health care entitlements, the range of possible diversion goes from a low of $127-billion at the GAO’s estimated 10-percent diversion rate to a high of $382.2-billion at the private external audit rate of 30-percent.

Total spending

GAO 10% estimate

20% estimate

30% estimate
















Current Total





Demographic growth in the Medicare and ACA growth in Medicaid Programs**

Medicare 36% growth over decade





Medicaid 30% growth in 2014





Post ACA Total





Post ACA Medicaid growth





Medicare growth






* Kaiser Family Foundation 2010 spending data

** Assumes no growth in Other programs

The increased funding for Medicaid with be approximately $540-billion and the demographically driven increase within Medicare will be $707.2-billion. That generates a $1.58-trillion in increased spending for these programs and gives the fraudsters an opportunity to increase fund diversion, using current estimates at a low of $158-billion to a high of $475.8-billion in additional fund diversion.

Beyond program growth, the insertion of EMRs provides fraudsters a powerful tool to enhance their fund diversion activities. Fraudsters covet health care records, since they contain identifiers such as names, birth dates and Social Security numbers that can be used to construct a false identity or send Medicare bogus bills. EMRs are known empowerment tools for criminals.

According to the HIPAA records, nearly 21 million Americans have had their EMRs stolen or lost since 2009. The largest single theft was from TRICARE, the Defense Department's civilian healthcare program for Armed Forces members, retirees, and their dependents. In 2011, 4.9 million TRICARE members' EMRs entered into the public sphere after one of their subcontractors lost a cache of back-up tapes. The tapes contained sensitive personal data such as clinical notes, laboratory test results, and prescriptions.

In another example, the exposure to foreign hackers of the records of more than three quarters of a million Utah Medicaid and Children's Health Insurance Program beneficiaries could become a watershed event in the history of healthcare information technology.

In recent years, federal prosecutors have broken up criminal gangs based in Armenia and Ukraine running massive Medicare and insurance-fraud schemes, The records stolen from Utah are likely to be used in medical frauds, and if that happens, fictitious records based on those frauds “are going to proliferate through health information exchanges and public health databases.”

Given CMS’s demonstrated inability to protect either the Medicare or the Medicaid programs; and given the anticipated explosive growth each program will experience over the next decade; criminals will enjoy a license to steal into the foreseeable future as they accelerate their fund diversion from these two entitlement programs.


The following table summarizes the winners and the losers under ACA. It also attempts to project a rough estimate as to the amount of gains and losses each participant in the system can expect after ACA’s implementation starting in January 2013.



Private Insurance

The losers


$32 billion in increased Medicare cost sharing; $28 billion in increase income-related premiums under Medicare Parts B; $350 million home health cost-sharing at $100 per episode

30 million uninsured people with either Medicaid or subsidized private insurance with no capacity within the system for them to access the health care delivery system.

40-100% increases in private insurance premiums


36% growth over decade with reimbursement below the cost of service delivery. Plus an estimated $500-billion in reduced payments and penalties

30% growth in beneficiaries that Medicaid reimburses far below the cost for delivering health care services.

Private insurance fee schedules pegged at a percent of Medicare marks the end of cross subsidization from private to entitlement reimbursement.


Similar growth in Medicare beneficiaries with below service deliver cost plus and estimated $200-billion in penalties and reduced rates of reimbursement.

30-million new insured patients reimbursed at below cost of service rates and no capacity to absorb the volume.

Private insurance fee schedules pegged at a percent of Medicare marks the end of cross subsidization from private to entitlement reimbursement.

The winners

EMR Vendors

Health care reform will deliver between $50 - $60 Billion in tax payer funding for ERM products

Additional reimbursement incentives from private insurers for HER conversion

HIE Consultants and vendors

Health care reform has already budgeted over $150-billion to development and support of the HIE with the eventual spending likely to be much higher. This figure does not include insider profits realized from crony capitalism.

The same consultants and vendors are pushing for a private health insurance exchange

Medical device manufacturers

Medicare now spends $10 billion a year providing beneficiaries with medical equipment. With a 36% growth in Medicare and a 30% growth in Medicaid, expect an overall doubling in growth ($10-billion) in taxpayer spending for medical devices

No foreseeable change in current spending.

Pharmaceutical companies

$150-billion in new tax-payer funded spending for pharmaceuticals

No foreseeable change in current spending.

HMO Insurance companies

36% boost in earnings for the private Medicare HMO companies

30 percent boost to earnings for the private Medicaid HMO companies


Between $158.6-billion and $475.8-billion in tax payer funding diverted to fraudsters each year from government entitlement programs. These estimates do not include the likely increase in identity theft that will occur with deployment of EMRs throughout the health care system.

No foreseeable change in current diversion of funding to criminal activity.

It requires an incredibly inexperienced group of arrogant, ideology committed wonks to design and implement a Rube Goldberg like reformed health care delivery system such as is called for within the ACA and then impose it nationally rather than introduce it cautiously in demonstration projects. The reform process will waste billions of dollars on technology that is not ready for deployment. It will destabilize the entire delivery system and it rewards unessential peripheral players including criminals that divert taxpayer funding for their nefarious gain. When this effort fails, it will be national rather than demonstration size in scope and it will have long lasting catastrophic results that will cripple America’s health care system.

It is reasonable to assume that ACA is not about improving health care at all. Rather, the revanchists now making policy in Washington are taking a big political risk. The problem with going big and shooting for a new collectivist Zeitgeist, is that it had better work. This over reach to restructure the complex $2.4-trillion American health care system using untested concepts is not going to work.

As currently designed, ACA’s health care reform penalizes patients and those entities that provide care for them while it rewards peripheral players that have no responsibility or accountability for delivering health care services. Furthermore, given the fragile economic status of most health care providers, particularly hospitals, interruptions in payment cycles stemming from the ACA penalties and reforms could quickly result in bankruptcy for a high percentage of providers both professional and institutional that make up the backbone of America’s health care delivery system.

David Gibson is the CEO of the Fraud Prevention Institute, a policy organization dedicated to preventing fraudulent diversion of public funding from public health entitlement programs.

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* * * * *

  1. In the News: The Underworked Public Employee

The cliché is true: Government workers do tend to take it easier than their private counterparts.


WSJ | OPINION | December 4, 2012

With state and local governments struggling to balance budgets in a still sluggish economy, government employment has fallen by 562,000 jobs since September 2008, a decline of 2.6%. In response, the Obama administration has called for more federal aid—on top of the $250 billion doled out in the 2009 Recovery Act—to help keep state and local government payrolls near prerecession levels.

But supporters of more federal aid implicitly assume that the size of the public sector was optimal before the recession. On the contrary, overstaffing is a serious problem in government, and the best evidence is a simple empirical fact: Government employees don't work as much as private employees. If public-sector employees just worked as many hours as their private counterparts, governments at all levels could save more than $100 billion in annual labor costs. Read more . . .

How do we know that? Are we just dredging up well-worn stereotypes of government employees enjoying shorter work days, prolonged sick leave and extended vacation breaks? In fact, new evidence from a comprehensive and objective data set confirms that the "underworked" government employee is more than a stereotype.

In the past, researchers have measured work time with what are called "contract hours," meaning the time that employers require their employees to work. But many people routinely take work home with them, or skip lunch breaks, or pass up vacation days, or go to the office on weekends. Others may regularly come to the office late and duck out early. Little of this variation is captured by contract hours.

Alternatively, researchers have used surveys that ask individuals how many hours they usually work each week. But answers are susceptible to exaggeration and subjectivity regarding what each respondent defines as "work."

To address these problems, we turned to the American Time Use Survey, which the Bureau of Labor Statistics administers to a large and representative sample of American households each year. Interviewers construct a comprehensive "time diary" for each respondent that describes activities that occurred during the entire 24-hour day before the interview. Survey administrators then place each respondent's raw answers into a detailed set of activity categories, one of which is work for a primary job.

The time-use survey's data on work time are far more comprehensive and objective than any other available data source. The survey doesn't undercount working at home versus working at an office, or working evenings rather than working regular business hours. If, for example, an individual was working at 2 a.m. on the weekend, the American Time Use Survey will account for it.

The data allow us to analyze both the number of hours individuals work during a typical workweek and the total number of hours they work during the year. Thus, we can capture differences in both weekly work hours and the amount of time off that employees enjoy throughout the year.

What we found was that during a typical workweek, private-sector employees work about 41.4 hours. Federal workers, by contrast, put in 38.7 hours, and state and local government employees work 38.1 hours. In a calendar year, private-sector employees work the equivalent of 3.8 more 40-hour workweeks than federal employees and 4.7 more weeks than state and local government workers. Put another way, private employees spend around an extra month working each year compared with public employees. If the public sector worked that additional month, governments could theoretically save around $130 billion in annual labor costs without reducing services. . . .

Based on the most detailed and objective data set available, the private sector really does work more than the public sector. This fact may hold different lessons for different people, but our own take is simple: Before we ask private-sector employees to work more to support government, government itself should work as much as the private sector.

Mr. Biggs is a resident scholar at the American Enterprise Institute. Mr. Richwine is a senior policy analyst at the Heritage Foundation.

A version of this article appeared December 4, 2012, on page A17 in the U.S. edition of The Wall Street Journal, with the headline: The Underworked Public Employee.

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* * * * *

  1. International Medicine: How does US Healthcare compare with Rest of the World?

The Rest of the Story

By John Goodman Filed under Health Alerts on March 25, 2009

Today I’m going to give you access to a paper with as many as 100 references that you almost never see cited in Health Affairs, or in the Journal of the American Medical Association (JAMA), or in the New England Journal (at least not in their public policy articles). In fact, if you are a regular reader of these publications, I think you are going to be very surprised. Read more . . .

My colleagues Linda Gorman, Devon Herrick, Robert Sade and I discovered that public policy articles in the leading health journals (especially the health policy journals) tend to cite poorly done studies over and over again in support of two propositions: (1) Our health care system needs radical reform and (2) the reform needs to be modeled along the lines of the systems of other developed countries. At the same time, these articles tend to ignore contravening studies – often published in economics journals and subject to much more rigorous peer review.

In our rest-of-the-story literature review, we focus on eight questions:

  1. Does the United States spend too much on health care?

  2. Are US outcomes no better and in some respects worse than those of other nations?

  3. Is the large number of uninsured in the US a crisis?

  4. Does lack of health insurance cause premature death?

  5. Are medical bills causing bankruptcy?

  6. Are administrative costs higher for private insurance than public insurance?

  7. Are low-income families more disadvantaged in the US system?

  8. Can the free market work in health care?

This paper was written over a year ago, in response to JAMA’s call for papers on health reform and may not include the most recent material. Nonetheless, since the national health care debate is well underway, since the peer review process (at least for our paper) is so inordinately long, and since the issue is so important, we are taking these unprecedented steps:

  1. We are ignoring the journals and publishing the paper online.

  2. We are posting the reviewers’ comments from Health Affairs so that readers can see why the critics thought this paper should not be published at all, and a link to the JAMA issue that excluded our paper here.

  3. We are inviting everyone – regardless of political views – to comment and cite additional evidence that has bearing on any of these questions.

In a completely independent effort, Stanford University Professor Scott Atlas has made many of these same discoveries. His findings are summarized in this NCPA Brief Analysis.

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Canadian Medicare does not give timely access to healthcare, it only gives access to a waiting list.

--Canadian Supreme Court Decision 2005 SCC 35, [2005] 1 S.C.R. 791

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  1. Medicare: Raise the Retirement and Social Security Age to 70?

CEOs’ proposal: Raise retirement age to 70

January 17, 2013, 1:47 PM

By Matthew Heimer

In the endless-loop battle over the federal deficit, whether and how to reduce spending on Social Security and Medicare remains one of the most combustible topics. The Business Roundtable, a group of more than 170 of the nation’s chief executives, has now spelled out its own stance on entitlement reform, and its headline proposal is: Americans need to wait longer for retirement benefits. Most notably, the group advocates raising the Medicare and Social Security eligibility ages to 70, up from the current 65 for Medicare and 66 or 67 for full benefits for Social Security. Read more . . .

The organization unveiled its position in an editorial in the Wall Street Journal yesterday by Gary Loveman, the CEO of Caesar’s Entertainment. The magic number 70 wasn’t in the editorial, but it appears in the more detailed version of the proposals on the Business Roundtable website. The roundtable also backed means-testing of entitlement benefits; creating private-sector competition for Medicare; and using the so-called chained CPI to slow the annual inflation adjusted growth of Social Security payouts. The group doesn’t specify a timetable for phasing in these reforms, and consequently it doesn’t try to estimate how much they would save, but none would apply to anyone who’s currently 55 or older. (Incidentally, the median age of CEOs of S&P 500 companies is…55.)

The proposal to turn 70 into the new 65 is a shoot-the-moon expansion of the parameters of the entitlement debate. During the fiscal-cliff negotiations, the White House briefly signaled a willingness to hike the Medicare eligibility age to 67, only to take the proposal off the table. In the eyes of some critics, increasing the Medicare threshold ignores both medical realities and the hard facts of the job market. Many surveys show that most Americans would prefer to keep working to 70, or beyond. But according to the Center for Retirement Research at Boston College, in practice the average man retires by age 64, the average woman by age 62. For many, poor health is a factor in their decision to leave the workforce as early as they do; others leave the workforce involuntarily after layoffs.

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Government is not the solution to our problems, government is the problem.

- Ronald Reagan

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  1. Medical Gluttony: The Cure

There is a striking difference in those that have pure Medicare with a personal liability of 20 percent of outpatient charges and a fixed copay of hospital admission charges and those that have Coinsurance that pays the copayment liability, the annual deduction liability and the hospital admission charges. The latter, sometimes called MediGap insurance managed by HMOs, also pays for a host of other benefits which formerly included pharmacy benefits. Read more . . .

The copayment places health care in the private economy where every health care cost is evaluated by the patient on a cost/health benefit basis. This is where health care evaluation should occur—by the patient, not the government or insurance carrier. If the physician cannot justify the benefit to the patient or his family, the patient declines the test, procedure, consultation, operation, MRI, CT, PET scan on the basis that his/her benefit is less than the 20 percent copayment cost. He/she will then save the 20 percent copayment, but Medicare, Medicaid, Blue Cross, Blue Shield, etc. will save the other 80 percent. The financial savings is quite variable. The individual variation in a complicated field such as health care is great. As is obvious that in this example, the patient variation will be somewhere between 20 percent for those that accept the physician’s recommendation of the cost of the recommendation to zero, for all patients who judge that the cost/health benefit ratio is unacceptable and thus decline the physician’s recommendation. Thus on a $1500 MRI not chosen because it failed the cost/health benefits ratio but is “free” in the HMO environment and thus chosen by the patient, is very costly to Medicare or other insurance carriers. This type of health information does not lend well to double blind studies. Thus it is not generally accepted by the Tax & Spend political establishment because they do not understand the cost of unnecessary health care. They do not understand how any health care is unnecessary.

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Medical Gluttony thrives in Government and Health Insurance Programs.

It Disappears with Appropriate Deductibles and Co-payments on Every Service.

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  1. Medical & Other Economic Myths: What Saved the Great Depression?

Economist Russ Roberts writing at Café

When I was younger, everyone knew that the New Deal had saved the US economy from the ravages of the Great Depression. Everyone knew that Keynes was right—look what had happened when Roosevelt implemented his ideas—the Great Depression ended! Eventually, everyone knew that story was false. The New Deal wasn't that big and the Great Depression didn't really end when the New Deal was implemented. Read more . . .

Now everyone knows that World War II ended the Great Depression. Of course, private consumption fell during WWII and the vaunted Keynesian multiplier seemed to only work for the defense industry. Someday, perhaps, people will understand that when a war takes over most of the industrial sector, you don't get much stimulus. And it's not hard to reduce unemployment when you force a huge chunk of the male working-age population into the army.

When the war ended, all the Keynesians predicted disaster and a horrible depression because of the cuts in government spending and men coming home from Europe and the Pacific. Well, when that didn't happen, people should have known that there isn't a simple relationship between government spending and prosperity. But somehow, people didn't learn that lesson.

A version of this article appeared December 21, 2012, on page A19 in the U.S. edition of The Wall Street Journal, with the headline: Notable & Quotable.

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Medical Myths originate when someone else pays the medical bills.

Myths disappear when Patients pay Appropriate Deductibles and Co-payments on Every Service.

* * * * *

  1. Overheard in the Medical Staff Lounge: When doctors reach 65?

Dr. Rosen: Most of us are nearly the same age having started to practice in the 1970s. We also have previously discussed that when we reached 65, we would work at least until age 72 since we would lose one dollar of SS benefits for every two dollars of income over the SS limit.

Dr. Edwards: I agree. We would have to work equally hard for reduced income. Now ten years later, none of our peers have retired.

Dr. Milton: I think most of us feel like we’re in our midlife at 65. People that retire usually die in three years. Those that keep on working will live seven years longer.

Dr. Edwards: Just looking at the economics of the picture. If we made even $3600 a month after age 65, we would lose the entire $1800 a month in SS benefits.

Dr. Milton: We live in better health longer. Many of our 80 year olds look like our sixty year olds when we started practice 30 years ago.

Dr. Edwards: Just last week the stats came out. With the last census women’s life expectancy increased five years from 76 to 81. And men’s life expectancy increased six years from 72 to 78.

Dr. Milton: That’s essentially living about 25 years longer than when SS was first implemented. That’s a long time to live off of other people’s money.

Dr. Rosen: That’s why I felt when President Clinton gave us the entire benefits regardless of our income as we approached 65, that was the wrong thing to do. He should have increased the full retirement benefits to age 72 since most of us would be productive into our 80s.

Dr. Patricia: Just look at the doctors in our midst who are practicing into their late 80s and early 90s. Their medical decisions are accepted by their patients they’ve had for 40 years. I think their medical decisions are as good and most cost effective than most of the physician extenders we now have.

Dr. Paul: Don’t you feel sorry for the union man who has put in 30 years of hard labor? He can’t work to age 72.

Dr. Rosen: I still think there should be an early retirement age—but not 62. That should be moved up to 65 where our current full retirement age is.

Dr. Milton: That’s an excellent idea. But will that create traction?

Dr. Rosen: I think it could be if we sold it appropriately. Remember when SS benefits started at age 65, the average life expectancy was less than 65. So at that time one-half of all people would never live long enough to receive SS benefits. But now with life expectancy approaching 80, it’s unreasonable to expect that people should live off the public dole for an extra 15 to 20 years. There’s not enough money in the world to give out those kinds of benefits.

Dr. Ruth: That goes for us women physicians also. Look at all the women in our medical society that continue to practice into their 70s. They have the full support of their families and they continue to add a perspective to the society’s approach.

Dr. Rosen: Clinton may have missed the best opportunity to bring fiscal responsibility to the SS system. But the current economic crises may be the best back ground to make SS last for our children also.

Move Social Security Full Retirement to age 72 as life expectancy reaches 80. Move early retirement age from 62 to 65 with reduced benefits. This will keep Social Security viable for our children. Then index benefits to 8 years of life expectancy.

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The Staff Lounge Is Where Unfiltered Opinions Are Heard.

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  1. Voices of Medicine: Dr. Benjamin Carson, Neurosurgeon, at the National Prayer Breakfast

A Perfect Contrast

By William Sullivan

Contrast can bring clarity. And I do not think that the two warring political ideologies in America have never been personified, juxtaposed, and as clearly defined as the contrast we witnessed at this week's National Prayer Breakfast.

Dr. Benjamin Carson, the famed director of pediatric neurosurgery at Johns Hopkins University, was given the unique opportunity to share his beliefs before a distinguished audience, including President Barack Obama. He did not waste the opportunity, and courageously expressed his beliefs with conviction, contrary though they are to those of the president. Read more or watch the video . . . his beliefs . . .

Much has been made of Dr. Carson's alternative solution to make healthcare more efficient:
Here's my solution: When a person is born, give him a birth certificate, an electronic medical record, and a health savings account to which money can be contributed - pretax -- from the time you're born 'til the time you die. When you die, you pass it on to your family members, so that when you're 85 years old and you got six diseases, you're not trying to spend up everything. You're happy to pass it on and there's nobody talking about death panels.

Number one. And also, for the people who were indigent who don't have any money we can make contributions to their HSA every month because we already have this huge pot of money. Instead of sending it to some huge bureaucracy, let's put it in their HSAs. Now they have some control over their own healthcare.

We must admit -- there is something amazing about this. In two paragraphs, Ben Carson has offered a free market solution to create competition and reduce healthcare costs that is feasible, understandable, and compassionate. (And one that has already been tested -- it is very similar to the system used in Singapore.) Its relative simplicity alone stands in stark contrast to Obama's healthcare solution pitch, the mechanics of which were so confusing that after two years of explaining it, Democrats entreated Americans to not even try to understand it. Just accept it and see what happens, as Nancy Pelosi suggested.

But to focus on the contrast between their healthcare approaches alone is to miss the deeper contrast on display. That is, the contrast between Dr. Ben Carson and Barack Obama, the ideologies that have driven their life's work, and the results of that work.

Years ago, I remember my mother asking if I had ever heard of Dr. Ben Carson. She explained that he was a pioneer in neurological medicine, and that he had an amazing and inspiring story. She had a copy of Dr. Carson's book, Gifted Hands, and began to read passages that she had selected. I was captivated, committed to reading more about him, and later watched the film of the same title starring Cuba Gooding, Jr. Indeed, his story is one of the most amazing and inspiring I'd ever heard, from his unique upbringing to his design of a groundbreaking procedure in 1987 which successfully separated two cranially conjoined twin babies. His life, his work, is nothing short of miraculous.

Dr. Ben Carson was one of two sons born to Sonya Carson, a single mother who had married Ben's father at thirteen years of age. Ben's father was a bigamist, and after learning of his other family, Sonya resolved to raise her two sons alone. Though in poverty, and though she herself had no formal education beyond third grade, she insisted that her sons devote diligent efforts to their education. She required that the boys read books from the public library each week and write lengthy reports for her (which she would review for them to support their effort, despite being unable to read). She worked hard to support them financially, in staunch determination that she would not be a victim, and neither would her children. In short, the Carson family is a testament to personal perseverance and the success that follows. . .

Knowing of his background, it came as no surprise when I reviewed the entire speech at the National Prayer Breakfast that nearly everything Ben Carson said was a perfect contradiction of the values expressed by Barack Obama.

Dr. Carson began his speech, even as he shared the stage with the world's most renowned spokesman for political correctness, by decrying political correctness as a "dangerous" concept. He argued that political correctness acts as a "muzzle," keeping people from "discussing important issues while the fabric of their society is being changed," even as the architect of that "change" sat just a few feet to his right.

He related the admirable tale of his mother's unwillingness to be a victim, as he was in the presence of our president who unequivocally demands that women in such circumstances be viewed and treated as such.

Dr. Carson told the audience about his revelation that poverty is a "temporary" condition, one which people could personally alter. And he said this in the presence of a man whose political ideology is founded upon the notion that poverty is an institutionally applied condition, and that it is the responsibility of society, not the individual, to alter that condition.

Dr. Carson went on to destroy the notion of the progressive income tax, arguing that "God has given us a system" that would work. He argued that because God requires tithing regardless of outcome:
There must be something inherently fair in proportionality. If you make ten billion dollars, you put in one billion. If you make ten dollars, you put in one. Of course you gotta get rid of the loopholes. [Laughter]

But, now some people say, "Well that's not fair, because it doesn't hurt the guy who made ten billion dollars as much as the guy who made ten." Where does it say you have to hurt the guy? He just put a billion dollars in the pot!

Is it possible to say anything more contrary to Barack Obama's insistence on the moral imperative to take disproportionately more from the wealthy to redistribute among the collective?

And this is where the contrast between the two men becomes most apparent. Barack Obama rejects the notion of fairness presented by God, because his devotion to God, if it was ever a driving motivation in his life, has become supplanted by his devotion to the government administration of fairness. That much is abundantly clear. Consider that Dr. Carson carries himself with a pious humility, crediting God and family for giving him the strength of will to succeed. President Obama, whose name would rarely collide with humility in a sentence, insists that the government is responsible for people's success.

The revelation here is not that Barack Obama is a PC thug who intends to transform the fabric of America, or that he makes victims of women rather than empowering them, or that he subscribes to a Marxist's notion of fairness by coercion, or that his healthcare solution is a muddled, hopeless mess sold on Utopian dreams. We already knew all that.

No, the real revelation is that at this year's prayer breakfast, so often only a pious ritual, his exact opposite stood and spoke in sharp contrast to our president. And Dr. Ben Carson owns a legacy as an innovative pioneer of his field and philanthropist whose life and work have personally touched, and even saved, countless others. Barack Obama, on the other hand, despite all his celebrity, owns a legacy that amounts to little more than stirring fear and outrage on the premise that others are not doing enough to help people.

Which ideology has produced the more effective, positive outcome?

William Sullivan blogs at can be followed on Twitter. 

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VOM Is an Insider's View of What Doctors are Thinking, Saying and Writing about

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  1. Book Review: Questioning the Obesity Paradigm by Deborah Donlon, MD

CURRENT BOOKS, Sonoma Medicine: Spring 2012

Why We Get Fat: And What to Do About It, by Gary Taubes, 272 pages, Knopf.

As physicians, we think we know what causes obesity. Eating too much. Exercising too little. Sedentary jobs and leisure activities. Soda, chips, channel surfing and junk-food advertising. We counsel our patients to eat less and move more. I confess I am skeptical when an obese patient tells me she “eats tiny portions” and “exercises all the time.” Based on what I learned in medical school about calories consumed versus calories expended, this just can’t be true. Read more . . .

Or can it? In his book, Why We Get Fat: And What to Do About It, Gary Taubes argues against the prevailing wisdom about what causes people to gain weight. Over 10 years ago, bestselling author Taubes found that he continued to gain weight despite exercising regularly and restricting both caloric intake and fat consumption. As a self-identified carnivore, he started himself on an Atkins-like diet consisting of animal protein, healthy fats and vegetables--and lost 20 pounds in six weeks. He has maintained his weight loss by staying on the diet, and has spent the past decade researching the connection between specific foods we eat and their effect on our weight. (He is also the author of Good Calories, Bad Calories, a highly technical tome less accessible to the lay public than his current book.)

In Why We Get Fat, Taubes challenges widely held beliefs. For example, we tend to think that obesity is caused by affluence and abundance, or having “too much of a good thing.” We think that wealth, including the ability to buy machines to do work for us and transport us, is what is making us fat. Taubes turns this belief around by highlighting the historical connection between obesity and poverty. The Pima Indians became increasingly obese during a period of economic decline and famine. The poorest Americans during the Great Depression were those most likely to be obese. Today, people who live in poverty and are employed in physically demanding jobs have a high rate of obesity, as well as malnutrition. Under Taubes’ examination, the paradigm connecting obesity to too much food and too little activity begins to weaken.

Taubes follows his history lessons with two fairly discouraging chapters titled “The elusive benefits of undereating” and “The elusive benefits of exercise.” Prior to the 1970s, he observes, low-calorie diets were referred to as “semi-starvation diets,” the idea being that people would have great difficulty following such a regimen for a couple of months, let alone permanently. Well-controlled studies, according to Taubes, have failed to show a connection between calorie restriction and sustained weight loss. And vigorous exercise, while having numerous health benefits, leads to hunger and increased caloric intake. This fact limits the utility of exercise as a weight-loss strategy. Nonetheless, despite the lack of evidence for calorie restriction and exercise, the multibillion-dollar diet industry continues to promote these behavior changes for weight loss—and profits from our failures.

For Taubes, “why we get fat” turns out to be a complex interplay between genetics, diet and lipid metabolism. Those looking for a crash course in thermodynamics will be pleased to find one in his book. Basically, the more fat cells we have in our bodies, the more those fat cells drive us to eat, and the more energy they rob from other cellular functions in the body. “What to do about it” requires identifying a villain that we should avoid in our diets. Taubes’ villain is the carbohydrate, which drives insulin secretion, which drives energy storage in fat cells. According to Taubes, the more carbohydrates we consume, the more we crave, and the fatter we become. The same carbohydrates zap our energy and leave us unmotivated to exercise. So, our fat cells from excess carbohydrate intake turn us into couch potatoes, rather than the other way around. The last chapter of Taubes’ book offers a nutritional program in which carbohydrates are essentially eliminated in favor of animal protein, vegetables and fats.

In the arena of weight-loss research, every argument has a counter-argument. One of those taking a contrary view to Taubes is local physician Dr. John McDougall, whose new book The Starch Solution will be published in May. According to McDougall, animal products are what should be limited in the American diet. He recommends a low-fat, vegan diet that includes liberal quantities of starches such as rice, beans and potatoes.

Let’s return to our obese patients . . . Read the entire review at Sonoma Medicine . . .

Dr. Donlon, a Santa Rosa family physician, chairs the SCMA Editorial Board.


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The Book Review Section Is an Insider’s View of What Doctors are Reading about.

* * * * *

  1. Hippocrates & His Kin: How the Donkey learned to Tax & Spend.

The donkey in the self-help section of the bookstore, looking over the recent volumes “SPEND” and one on “TAX” says to the clerk, “I’ll take both.” –After Jerry Holbert | Boston Herald. Read more . . .

Hordes of Frightened people … stranded without plumbing . . . no electricity . . . no elevators . . . some standing at the railing as it they want to dive into the Gulf of Mexico. [At least that would be cleaner than the sewage backing up into your room.]

Is Congress running the Carnival Cruise Lines now? –Rob Rogers | Pittsburgh Post-Gazette

Ryan Herche: As a newly elected school board member, I attended a three-day conference hosted by the California School Boards Association for the first time last month. The event serves as a training of sorts for new members.

I was eager to receive my school board "training," but after about two hours in attendance, my excitement quickly turned into disbelief as nearly every panelist presented information on how to raise taxes during lean economic times. As a matter of fact, the conference featured five different sessions on how to raise taxes.

Considering California's volatile state and slow economic recovery I was shocked to see there wasn't one workshop on how to save parents money, or any workshop that mirrors what millions of Californians are doing right now in response to these hard times: doing a little more with a little bit less.

The conference felt more like brainwashing. Before I was elected, I promised my constituents I would keep an open mind and duly consider everything set before me. I could not see that same willingness to appreciate a different perspective at this conference. All I could see was an insatiable desire to raise taxes.

Read more here:

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Hippocrates and His Kin / Hippocrates Modern Colleagues
The Challenges of Yesteryear, Yesterday, Today & Tomorrow

* * * * *

  1. Restoring Accountability in Medical Practice, HealthCare, Government and Society:

Bottom line: "We are the best deal Physicians can get from a statewide physician based organization!"

Our motto, "omnia pro aegroto" means "all for the patient."

* * * * *

  1. Words of Wisdom, Recent Postings, In Memoriam, Today in History . . .

Words of Wisdom

"In a world awash in debt, power shifts to creditors." —Fareed Zakaria:

An Indian-American journalist and author

"A man in debt is so far a slave." —Ralph Waldo Emerson:

An American essayist, lecturer, and poet

Some Recent Postings

In The November Issue:

Featured Article: Obama Care: Ten Likely Outcomes by David Gibson, MD

In the News: Are consumer-directed health plans near the tipping point?

Medicare: Obamacare

In Memoriam

Beate Sirota Gordon, interpreter of Japan to Americans, died on December 30th, aged 89

DRAFTING a constitution isn’t something one does every day. It took Washington, Franklin and Co several months to achieve, that steamy summer in Philadelphia in 1787. When Beate Sirota was roped in to do it, in chilly, ruined Tokyo in the spring of 1946, she was amazed. She was no lawyer. She was 22, and only just an American citizen. Her idea of fun was going out every night. She had tagged on to General MacArthur’s occupation army mostly to find her parents, whom she had left in Japan before the war. Her job, which she did very well, was to translate Japanese. But suddenly there she was, called in with two dozen men, to write—in deepest secrecy—the basic law for post-war Japan. In a week. “Beate, you’re a woman,” said her colleagues. “Why don’t you do the bit about women’s rights?” “Wonderful, I’d love to!” she cried—and then realised she had no idea how. Read the entire obituary . . .

She saw all too clearly, though, how women were treated in Japan. From the age of five to 15 she had lived there while her father Leo Sirota, a concert pianist from Ukraine, taught at the Imperial Academy. The land seemed enchanted to her, all exquisite gardens and cherry blossom and black-eyed, straight-haired children with whom, unusually for a Westerner, she was allowed to play. Over puppet shows and shuttlecock games she picked up the language, she claimed, in just three-and-a-half months. And she learned other things. Japanese women, for example, never came to her mother’s parties. Only the men came. Japanese women would serve their husband’s friends dinner, then eat alone in the kitchen. In the street they always walked three or four paces behind the men. They were usually married to men they did not know, could inherit nothing, and could even be bought and sold, like chattels.

Fired with her task, she raced in a requisitioned Jeep round Tokyo, borrowing other countries’ constitutions from war-battered libraries. Rattling through them, she produced what became Article 24:

Marriage shall be based only on the mutual consent of both sexes and it shall be maintained through mutual co-operation with the equal rights of husband and wife as a basis. With regard to choice of spouse, property rights, inheritance, choice of domicile, divorce and other matters pertaining to marriage and the family, laws shall be enacted from the standpoint of individual dignity and the essential equality of the sexes.

There was plenty more, as she warmed to her mission: women’s right to paid work, to custody of children, to equal education. Much of it was stripped out, because it made the men’s eyes water on the American side as much as the Japanese. A kindly colonel pointed out that she had put in far more rights than were in America’s constitution. She fired back that that wasn’t hard. He told her that matters like divorce did not belong there. She informed him, from long experience of trying to sort out her parents’ papers with Japanese bureaucrats, that if rights were not already mentioned in a constitution they would never be written into the civil code. Then, to her huge vexation, she burst into tears.

The Japanese negotiators hated Article 24. But because they liked her, and because they were told that “Miss Sirota’s heart is set on this” (with no word of the fact that this mere girl had also written it), they acquiesced. And so, to her astonished satisfaction, history was made. Whenever she visited Japan in later years women would cluster round to take her photograph, press her hand and thank her for her gift to them. . .

To read the rest of the obituary, go to

This Month in History - December

December 15 is Bill of Rights Day, marking the anniversary of the ratification of the first ten Amendments to the Constitution, The Bill of Rights. The first of those Amendments provides for freedom of speech, of religion, of the press and of the right to assemble or petition the government.

After Leonard and Thelma Spinrad

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Chancellor Otto von Bismarck, the father of socialized medicine in Germany, recognized in 1861 that a government gained loyalty by making its citizens dependent on the state with social insurance. Thus socialized medicine, any single payer initiative, or Social Security was born for the benefit of the state and of a contemptuous disregard for people’s welfare.

We must also remember that ObamaCare has nothing to do with appropriate healthcare; it was similarly projected to gain loyalty by making American citizens dependent on the government and eliminating their choice and chance in improving their welfare or quality of healthcare. Socialists know that once people are enslaved, freedom seems too risky to pursue.

1 The first clause of which states that “HCFA shall adopt and use [the AMA's] CPT-4 in connection with HCPCS, for the purpose of reporting physicians' services under Medicare and Medicaid. HCFA agrees not to use any other system of procedure nomenclature in HCPCS for reporting physicians' services.”

1 Note: 2000-2009 shows average annual growth in that period.