Physicians, Business, Professional and Information Technology Communities

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, March 11, 2003

Medicare Reform
This important message on Medicare Reform is being sent this week to an extended list of newcomers. Numerous readers have requested that we send our newsletter to our lawmakers. We agree with the Galen Institute that even after years of intense national debate over health care reform, politicians at all levels of government have produced many counterproductive and even harmful attempts at solutions. Congress and the Legislatures seem poised for further action, and while we are not an advocacy organization, we will acquiesce. In an attempt to prevent greater harm, we will bring our message to them. However, many lawmakers have shielded themselves from their constituencies by rejecting email and requesting that we paste the message into a form on their website. This, of course, precludes them from becoming aware of grass root opinions. But we would ask them to consider the Physician’s Hippocratic Oath of implementing only those remedies that benefit patients and abstain from all that may do harm.

In This Issue:
1. The Medicare Solution
2. Canada’s Health Care System as a Model
3. Our Monthly Review of the Twenty Myths of National Health Insurance
4. The Blue Cross/Blue Shield Association’s Data on the Uninsured
5. Unnecessary Medical Care Can Be Lethal
6. The MedicalTuesday.Network

If this has been forwarded to you or you are not on our email list and would like to continue to receive these messages on alternate MedicalTuesdays, please send an email to Info@MedicalTuesday.net.

The Medicare Problem
There is considerable attention being given to adding drug benefits to the American Medicare Program. President Bush has proposed that if certain restrictions are placed on Medicare, a limited drug benefit can be added–in essence enlarging the currently failed HMO Program. This would not make a dent in the run-away Medicare costs that are headed for bankruptcy within two decades. And this proposal without reform would help it arrive at said destination somewhat earlier.

The Medicare Evolution
When Medicare was proposed by President John F Kennedy in the early 1960s and implemented by President Lyndon B Johnson in 1966, the American Medical Association, as I recall, made a very significant contribution. It supported a 20 percent copay to physicians and outpatient care to make patients aware of the cost of medical care–keeping Medicare Part B partially in the Medical MarketPlace. The hospital portion, Part A, was 100 percent covered except for a copayment, as I recall, which has insignificantly increased by a few hundred dollars, whereas the average hospital bill has increased about tenfold. Thus to remain relevant, the copayment on admission should have also increased tenfold to $5,000 by this time. It may be preferable to disperse the copayment over the length of stay (LOS) so that patients would have a financial incentive to shorten their LOS. However, there were large regional differences. When Medicare started, I was doing my medical student preceptorship in a community hospital in Kansas, with a hospital cost of $20 a day. A few years later I came to California, and the community hospital in which I started to practice had an average cost of $200 a day. Now, thirty years later, my patients bring in a hospital statement that in most cases averages more than $2,000 per day.

The Medigap Destruction of Medicare
This minimal, but significant, Medicare market control was then destroyed by Medigap insurance which included the areas not covered by Medicare, namely the 20 percent co-payment of outpatient services (Part B) and the now $875 co-payment for inpatient services (Part A). Thus, any restraint on utilization was eliminated and Medicare costs soared into oblivion–enter the  “National Guard” of policing nurses and hospital reviewers to make sure no patient stays too long and no doctor orders too many tests. However, to second guess the dynamic exchange of information and data between the doctor, the patient, and consultants from a medical chart recorded once or twice a day over a 24-hour period can be disastrous to a patient’s health and possibly put his/her life in jeopardy. External controls never work effectively or efficiently.

The Medicare Solution
Medicare can be made more efficient and cost effective by a very simple solution. President Bush and Congress could propose that seniors can stay in either the current twentieth century Medicare or they can join the twenty-first century Medicare with drug benefits if they drop their Medigap insurance, agree to a 5 percent co-payment on hospital bills, a 10 percent co-payment on outpatient surgicenter bills, and resume the 20 percent co-payment on physician charges and outpatient laboratory and x-ray bills. Medicare would then cover the prescription drugs for a 30 percent co-payment.

Why the Medicare Solution with Drug Benefits Would Continue to Be Affordable
• The Medicare Solution would eliminate the Platoon of Nurses and other reviewers and result in huge bureaucratic savings.
• It would eliminate the war and adversarial relationships between the various elements of the HealthCare team: physicians, hospitals, insurance carriers and other providers and make care more efficient and pleasant.
• Only necessary hospitalizations would occur because patients, knowing that they have a five percent co-payment, would have a financial interest in avoiding unnecessary hospitalizations.
• Every hospitalization would have the shortest possible LOS because the patient, in reviewing his/her hospital bill daily, would have a change in attitude from “Doctor, please give me two or three more days just to make sure I am completely well.” to “Do I really need another day to get well? I think my spouse can do for me what the nurses are doing.”
• There would be a strong incentive for the patient to have procedures done as an outpatient since 10 percent of outpatient surgicenter charges are far less than five percent of hospital inpatient charges.
• The patient would make only the necessary office calls because the 20 percent co-payment to his doctor ($15 on a $75 office charge or $30 on a $150 consultation charge) will encourage him/her to be more resourceful and better utilize the office visit. The patient will want to be more organized by providing the required medical information including a list of prior hospitalization, illnesses, operations, and current prescriptions in order to avoid a second visit.
• The patient would call the pharmacies and personally research the difference in cost between name brands and generic brands to ensure filling the least-expensive prescription. As a result, the patient would probably request generic brands since the 30 percent co-payment of a $40 generic prescription per month is significantly lower than the 30 percent co-payment of a $150 brand name drug. My business and professional patients, who can well afford 30 percent of $150, and know the value of money, would also utilize the generics more readily. Thus there would not be an exorbitant insurance liability for the few who would choose brand name medications.
• The patient would no longer ask for routine x-rays and laboratory tests unless they are recommended by his/her physician because of the 20 percent co-pay. The number of patients who request and sometimes demand a battery of tests, even if the tests were recently normal, would decrease dramatically saving huge costs.
• Patients would also research the difference in costs of various diagnostic facilities and would gravitate toward those that charge less. They would find those that charge $60 for a chest x-ray rather than those that charge $120. Similarly they would find those facilities that charge $20 for a bone density scan and not patronize the ones that charge $50. This would be a huge savings in cost without any HMO coercing reduced payments.
• This whole package which provides greater coverage would probably be nearly cost and revenue neutral.
• From my 30-year personal anecdotal experience of observing how closely patients watch their costs, I would expect that the costs to Medicare of patients that chose this drug benefit option would be considerably lower than the costs from those remaining in traditional twentieth century Medicare without drug benefits.

Canada's Health Care System Is a Model for Those Who like Long Lines (NCPA)
Some public voices in the United States are urging us to adopt a national health care system similar to the one in Canada.  It provides free health insurance and pays for almost all medical treatment.

The trouble is that when services are free, people demand more and supplies become insufficient to meet this demand.  Also, sick people are forced to wait long periods to receive care they need immediately.

• A recent government study found that 4.3 million Canadian adults had difficulty seeing a doctor or getting a test or surgery done in a timely fashion.
• Three million were unable to locate a family physician -- a particularly serious situation since it is the family doctor who refers patients to specialists and medical testing.
• Although Canada spends $66 billion a year on health care, budget cuts have impeded efforts to keep the medical system up to date.
• Waiting times for some types of surgery now stretch from 20 to 30 weeks, or more.

The combination of obsolete or nonexistent technology, a shortage of nurses, and inefficient management of hospitals and other facilities add up to long waiting lines and a sort of rationed health care system.

The problem is not so bad for the politically powerful and their spouses and friends -- who can break into line anytime. Because many average Canadians realize that fact, Canada's health care system will be a leading issue in next year's national elections.

Source: Clifford Krauss, "Long Lines Mar Canada's Low-Cost Health Care," New York Times, February 13, 2003.

National HealthCare Systems in the English-speaking World (Our Monthly Review No 12)
In his recent update of the “Twenty Myths about National Health Insurance,” John C Goodman, PhD, president of the National Center for Policy Analysis (www.ncpa.org), states that ordinary citizens lack an understanding of the defects of national health insurance and all too often have an idealized view of socialized medicine. For that reason, Goodman and his associates have chosen to present their information in the form of rebuttal to commonly held myths. See previous issues or the archives at www.MedicalTuesday.net for the summary of the first eleven myths or www.ncpa.org for the original 21 chapters of the book.

Myth Twelve: A Single-payer System Would Lower Health Costs Because Preventive Health Services Would Be More Widely Available.

A common argument for national health insurance is that when care is “free” at the point of service, people will seek preventive services more readily. Consequently, it is argued that money will be saved when doctors catch conditions in their early states–before they develop into more costly-to-treat diseases.

But Do Preventive Services Save Money? Careful studies show that, in general, preventive medicine raises rather than lowers overall health care costs. As one observer put it, “nearly every aspect of preventive care has crashed upon the rocky shore of added costs.” Very few medical procedures - including preventive or diagnostic procedures - pay for themselves in terms of a net lifetime reduction in total health care costs. Some exceptions to the general rule include immunization for childhood diseases, smoking cessation advice and prenatal care for at-risk mothers.

Despite the popular mythology, checkups for children or adults do not save the health care system money. Nor do Pap smears. Nor do mammograms.

Nor do most other tests. It is true that diagnosing cancer early lowers treatment costs for the patient. But in order to find that patient through screening, the diagnostic test must be given to thousands of healthy patients. When all costs are considered, the extra costs to screen the healthy swamp the reduced costs of treating the few found to have the disease.

Although preventive care usually adds to overall health care costs, it can still be valuable. We need only to compare the money spent with the benefits received. Take breast cancer for example. The cost of screening (including the costs of treatment ) per year of life saved as a result of the screening and subsequent treatment for breast cancer are as follows:
• Giving regular mammograms to women age 55 to 64 costs about $110,000 for every year of life saved as a result of the screening, when all costs are considered.
For women in their forties, however, the costs jump considerably - to $190,000 for every year of life saved.

This does not mean that mammograms are wasteful. To the contrary, they are a reasonable investment for many women. Economists have found that people are willing to pay $75,000 to $150,000 for each year of life saved. Note: this is not the amount of money people are willing to pay to purchase an extra year of life. These numbers are implied by the amounts people are willing to pay to avoid risk. . . . Since the trade-off for mammograms are close to or within this range, regular mammograms probably would appear worthwhile to most women.

Similar considerations apply to Pap smear exams for cervical cancer:
Screening young women every four years for cervical cancer costs less than $12,000 for each year of life saved.
• More frequent screening, however, causes the costs to soar: from about $220,000 per year of life saved at three-year intervals (as opposed to four-year intervals) to about $310,000 at two-year intervals (as opposed to three).
• Giving Pap smears every year (as opposed to every other year) is really expensive; almost $1.5 million per year of life saved.

Pap smear screening - even every fourth year - costs money; it doesn’t save money. However, four-year cervical cancer tests are a “very good buy” in the business of risk avoidance. To put this figure in perspective, note that the payoff is not as good as the payoff from wearing seatbelts in automobiles. But it is a better buy than air bags.

The remainder of this chapter is equally important and all is well annotated with supporting references. Goodman contends that preventive care is not better in socialized countries than in the US. Doctors in America have more time with patients than doctors in other countries, and this allows more preventive care to occur. Preventive care is also related more to socioeconomic status than to the type of HealthCare system.

HealthPlanUSA proposes that outpatient HealthCare should have a percentage co-payment which would essentially place the above preventive care in the Medical MarketPlace. This would decrease the use of unnecessary health care and make it more available, without the bureaucratic controls. In the above instances, every woman would consult with her physician and assess risk-benefit ratios with the cost-benefit ratios for more effective utilization. At the present time, most HMOs are insisting on yearly mammograms as well as yearly Pap smears which Goodman’s analysis indicates would have low risk-benefit ratios but very high cost-benefit ratios. These excessive costs should then be seen primarily as a public relations effort by the HMO rather than a medical concern for a patient’s health.

Blue Cross/Blue Shield Analysis Shows One-Third of Uninsured Americans Could Have Affordable, Quality HealthCare Now.  "The Uninsured in America," a fact book released last week by the Blue Cross and Blue Shield Association (BCBSA), takes an in-depth look at the uninsured and dispels some myths about this segment of the population. Consider these facts about the uninsured: One-third of the uninsured, or 14 million, are eligible-but not enrolled in government-sponsored health programs. More than 30 percent or 13 million of the uninsured have income levels of more than $50,000 a year with an increasing number above $75,000 a year. Another 6 million adults are short term uninsured, which includes recent college graduates and those between jobs. Thus the long term uninsured are only 8 million low-wage workers in firms with fewer than 10 workers do not have coverage. Increasing access to healthcare coverage for small businesses and low-wage workers would further reduce the number of uninsured.

One of our readers contends that many of the “uninsured” consider themselves “insured.” They have made the determination that at their age, their highest risks involve accidents, not heart attacks or strokes or cancer. For example, should they be injured in a car accident or on their property or on the job, their car insurance or homeowners insurance or workers compensation insurance will take care of any medical expenses. Hence, this MedicalTuesday member feels that they have prioritized their expenses and thus are not totally uncovered or uninsured. An acceptable risk, in their estimation. Similar to the other risks noted above. Life is not without risks.

The fully uninsured in the US may be less than the percentage waiting in lines in Canada, the UK, Europe and elsewhere who are basically without coverage for an extended period of time, possibly years. Many Americans are uninsured for perhaps a three- to six-month period between jobs or after graduation. The three million Canadians that the New York Times states couldn't find a primary care doctor appears to be a larger percentage than the 8 million Americans without any coverage who can still find a doctor.

Unnecessary Medical Care Can be Lethal
We recently had an elderly diabetic patient with considerable complications of retinopathy, nephropathy and neuropathy, who had mild claudication in his legs on walking one block. An abdominal aortic bypass was recommended. After our discussion, he decided not to go forward with the procedure since he was able to walk and do as much as necessary in his eighth decade of life. His wife came in and thoroughly castigated me for going along with his decision, stating, “I want him to have that bypass even if it kills him.”

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The MedicalTuesday Network Recommends the Following in Restoring Accountability in Government and Society:

• The National Center for Policy Analysis, John C Goodman, PhD, President, issues a weekly Health Policy Digest which is a health summary of the full NCPA daily report. You may log onto NCPA (www.ncpa.org) and register to received one or more of these reports.

• The Mercatus Center at George Mason University is a strong advocate for accountability in government. Nobel Laureate Vernon L Smith, PhD, has recently joined its Economics faculty. Please log on at www.mercatus.org to read the government accountability reports and information on Dr Smith’s economic experiments which help us understand health care issues. You can also register to receive updates.

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

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

Martin Masse, director of the Montreal Economic Institute, is the publisher of the webzine: Le Québécois Libre. Please log on at www.quebecoislibre.org/apmasse.htm to review his free market-based articles, some will allow you to brush up on your French You may register to receive copies of his webzine on a regular basis.

• The Ludwig von Mises Institute, Lew Rockwell, President, is a rich source of free market materials, probably the best daily course in economics we’ve seen. If you read these essays on a daily basis, it would probably be equivalent to taking Economics 11 and 51 in college with considerably less bias. Please log on at www.mises.org to obtain the foundation’s daily reports. You may also log onto Lew’s premier free market site at www.lewrockwell.com to read some of his lectures to medical groups such as how state medicine subsidizes illness.

Hillsdale College, the premier institution for producing graduates that understand Free Market accountability, receiving no federal subsidies placing them at a monetary disadvantage to all other colleges and universities, recognizing that the price of freedom is never cheap. You may log on to www.hillsdale.edu to register and receive Imprimis, their national speech digest, that reaches more than one million readers each month.

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

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

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

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

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

The Association of American Physicians & Surgeons, (www.AAPSonline.org) The Voice for Private Physicians Since 1943,  representing physicians in their struggles against bureaucratic medicine and loss of medical privacy.

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Stay Tuned to the MedicalTuesday.network and Have Your Friends Do the Same
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Del Meyer

Del Meyer, MD, CEO & Founder