Physicians, Business, Professional and Information Technology Communities

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, March 25, 2003

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In This Issue:
1. Financial Times on US HealthCare Costs
2. The Medicare Report
3. Pharmaceutical Innovation & Pricing
4. Our Monthly Report on Socialized Medicine
5. HealthCare in English Speaking Countries
6. Expanding Medicare Coverage
7. Privatize in China means Eliminate Competition
8. Medical Gluttony
9. The MedicalTuesday.network

UK Financial Times
Several years ago, a report from GM stated that the cost of health insurance for workers and retirees exceeded the cost of steel in their cars. Nancy Dunne, writing on US Health Care costs in the UK Financial Times, reports that Honeywell spent $300m last year covering 60,000 employees. However, 10 percent of the employees incur 70 percent of the health care bills. Other companies have urged their employees for 20 years to quit smoking, watch their diet, start exercising and achieve “a balance between work and family.” Some have even provided a $500 reduction in health care premiums for participation in a health care appraisal. It appears that all this expense to expand wellness programs has not significantly dented health care costs. One would not expect that it would. It does not address the health care problem.  It appears that Grace-Marie Turner is correct in stating that intense national debate over health care reform . . . has produced many counterproductive . . . attempts at solutions. Just returning health care directly to a market-based plan, where competition always seeks the lowest price, would make health care affordable.

The 2003 Medicare Trustees Report: In One Year We Are Four Years Closer to A Crisis?
The annual Medicare Trustees' Report delivered last week found that the financial stability of the program has declined from last year due primarily to lower-than-expected revenues and higher-than-expected hospital spending in 2002. The Hospital Insurance Trust Fund (HITF) will face insolvency four years earlier than was projected last year, and is expected to be exhausted in 2026. Expenditures will surpass revenues in the HITF program in 2013. "Without changes in the Medicare program, closing the projected HITF gap between revenues and expenditures would require that benefits be reduced by 42 percent, or income from the payroll tax would need to be increased by 71 percent," the report said. For the full text see: www.cms.hhs.gov/publications/trusteesreport

The Denial of Reality
Jacob G Hornberger in his book, The Dangers of Socialized Medicine, points out in the essay, “The Real Free-Market Approach to Health Care,” that most Americans, including many free-market advocates, simply will not–perhaps cannot–face the truth: That the welfare state (socialism) and the managed economy (interventionism) have never worked and can never work. No matter what is done–no matter who is put in charge–no matter what plan is used–the result will always be the same: failure. The sooner we come to grips with this truth, the sooner we can begin traveling the road to a healthy and prosperous society.

Hornberger contends that we have such a difficult time accepting the reality of our condition because of the indoctrination we receive from first grade through college. After saying no to income taxation, licensing, economic regulation, Medicare, Medicaid, and Social Security for over 150 years, why have we endorsed all these during the last 75 years? How can these opposite principles represent the same freedom? Americans do not want to face reality for reality is too terrifying for them to consider. That would mean that everything we have learned in school is false–that we have been living a life of the lie–living a life of deception. And we resent deeply the true advocates of economic freedom because they expose our lie. They provide the tough medicine, even though we caused the pain associated with our descent into slavery, for the recovery process.

Would our fellow physicians and professional colleagues be better off if we simply let them continue living their lives of deception that government control of HealthCare is inevitable? No, that would be morally wrong. It would worsen our society and make it even more difficult to recover. Many of our colleagues feel our task at MedicalTuesday is hopeless. We are told we will never have the freedom from oppressive government regulations, control, and yes even criminalizing of our patient’s medical history, diagnostic and therapeutic codes, as we try to help our patients in their pursuit of a healthier existence. What if our founding fathers had elected to live under the servitude of the motherland rather than embark on an untried new freedom the likes of which the world had never seen? That new freedom worked for 150 years giving us unbelievable prosperity. Despite the fact that liberty has provided our country 10 times the prosperity of unfree countries, the forces that seek to control the human spirit are industrious in making us poor and convincing us that there are not enough health resources for everyone. In each MedicalTuesday, we will continue to emphasize the need to strive for the freedom to pursue  a cost effective practice on behalf of our patients. This will reduce costs to their lowest competitive level more effectively than price controls and other regulations, whether for office visits, diagnostic testing, pharmaceuticals or hospital stays. We welcome your participation in the MedicalTuesday.network–an exciting journey on behalf of those we serve.

The Campaign Against Pharmaceutical Innovation
In a speech at the American Enterprise Institute last Tuesday, Sidney Taurel, chairman, president, and CEO of Eli Lilly and Company, described the dangers facing pharmaceutical innovation.

“The two most important preconditions for innovation in my industry are market-based pricing and intellectual property protection. But when I look at health care systems around the world, I see that policies that support innovation are dwindling, while policies that discourage it are proliferating. A third-party observer trying to make sense of this, without access to other data on the motives involved, might reasonably conclude that this amounts to a worldwide campaign against pharmaceutical innovation.”

“First, let me give you a very quick tour of what a company like Lilly faces as an innovation-driven business in a global pharmaceutical market. The market restrictions in Germany and Japan are unique only in their particulars. In general, they reflect a global pattern. Throughout Europe, the pharmaceutical industry labors under various kinds of price controls, of which the simplest and most onerous is a price set by government fiat. This is the practice in all of southern Europe, including France. Canada also has price controls. The U.K. substitutes profit controls for direct price controls and also has a number of mechanisms to restrict access and limit demand.”

"In short, pharmaceutical innovation for the entire world hinges on the policy choices of the American people and their elected representatives . . . The terrible irony of the campaign against innovation is that it is coming at precisely the moment in history that medicine is poised for a great leap forward. . . We need to understand, once and for all, that innovation is not the problem. It is the solution.” The entire speech is worth reading and is found at www.aei.org/news/newsID.16628/news_detail.asp. Thanks to Grace-Marie Turner for bringing this to our attention.

Demonizing Those Who Cure Us
Also last week, Doug Bandow of the Cato Institute argued in the Washington Times that "Americans can't get something for nothing: Canadian-style prices in the United States would mean Canadian-style access to pharmaceuticals in the United States." In Canada, he says, "Pharmaceutical controls have sharply cut access to needed drugs. Of 400 drugs considered for reimbursement by the Canadian province of Ottawa between 1994 and 1998, only 24 were added." This denial of new drugs has "horrible consequences for the sick." He warns the U.S. against going down the path of price controls. "But why stop at Canada? Instead, aim for the prices charged in Mexico, Congo, or, say, Afghanistan, all hotbeds of pharmaceutical innovation. Obviously, the situation still does not seem fair to Americans. Yet, in practice, shifting exchange rates would make uniform international prices impossible to maintain. And it would be suicidal for any business to ignore local economic conditions. Instead, U.S. firms would simply stop selling overseas. For instance, since the Canadian market is barely 6 percent that of U.S. sales, drug makers would be more likely to raise prices there or exit entirely than reduce their U.S. prices. This explains Glaxo's strategy of cutting off Canadian re-importers. And this is what seniors should desire. To the extent legislators or re-importers manage to arbitrarily lower prices, they will cut companies' incentive to invest in drug development, limiting access to new lifesaving compounds. Canada manages by free riding off of the United States. Alas, there is no one off of whom Americans can free ride."
Full text: www.townhall.com/columnists/dougbandow/db20030318.shtml

Socialized Or Single-Payer Medicine
Richard M Ebeling, who along with Jacob G Hornberger edited The Dangers of Socialized Medicine, cites sociologist Jack D Douglas’ who summarizes in his book, The Myth of the Welfare State:

America today is ruled by an immense imperial state bureaucracy headed by an imperial president, imperial legislators, and imperial courts, all of which strive mightily every day to extend their powers over our lives. We have drifted blindly, in the quest for the deceitful lures of utopian ideals and greed, into the tyranny of the majority which the founding fathers saw as the greatest danger to the System of Natural Liberty. America today is a government-dominated society in which all of us are controlled in innumerable ways directly and, far more, indirectly by vast and still-proliferating regulatory agencies issuing a torrent of administrative laws, by untold thousands of planning commissions and committees, by soaring police powers, by a tidal wave of legislative laws and activities, and by a tumultuous sea of injudicious court decisions in which revolutionary ukase are masked in the rhetoric of constitutional precedents, rational interpretation, and due process. Interlocking layers of our huge government bureaucracies now dictate minute details of our lives and enforce these dictates with vast police powers. There is literally no realm of life that is still free from massive intrusions by government legislative, regulatory, and judicial fiat.

Ebeling responds that while many in contemporary America may admit and even express concern over the growth of state power due to the welfare state, they also often now believe that there is no alternative to governmental paternalism. The problems of old age medical insurance and health care preclude "individualistic" solutions of self-help, it is claimed. How can people provide these things for themselves? Surely, whether we desire it or not, the state must act as the provider and regulator of these essential "social services" for the good of all in the society. There is no turning back, it is said. All we can do is try to make the welfare state as humane and cost-efficient as possible. A free society cannot effectively supply those basic and vital services that the vicissitudes and uncertainties of life require each person to be concerned about for himself and his family.

We will be reviewing this treatise monthly as Hormberger and Ebeling take us on a journey of how we can correct this progressive enslavement. Stay tuned.

A HealthCare Report on Five English Speaking Countries from the NCPA
This was one in a series of studies conducted by researchers at the Harvard School of Public Health and the Commonwealth Fund in New York City. The authors surveyed 1,400 adults each in the United Kingdom (U.K.), Australia, New Zealand, Canada and the United States on the merits of their health care systems and their personal experiences. The conclusions are as follows:

Apparently none of the five countries surveyed has found an ideal health care system. Each country has its own strengths and weaknesses. The United Kingdom has the least out-of-pocket costs, but it has the longest waiting times. The United States is just the opposite. The rest fall somewhere in between on both measures. But to argue that the U.K. or Canada has a superior system, one would have to place a very high value on health care being "free" at the time of service and a low value on getting care quickly.

Despite superficial differences, all five systems rely almost exclusively on third-party payment, either public or private. Even in the United States, people pay directly for only 15 percent of all health care costs. Employers, insurance companies and/or the government pays the other 85 percent. The proportion of direct payment in the United States has fallen precipitously over the years. In 1980, patients paid 28 percent of all costs, down from 56 percent in 1960.

All five countries keep people from getting the care they believe they need - rationing care through prices or waiting lists, limiting the supply of services, controlling the number of doctors or simply denying care. “No wonder,” Greg Scandlen responds, “the level of discontent is so similar in all five countries.”

Medicare Debates Expanding Distribution of Heart Defibrillators
It's the central dilemma of modern medicine: Which patients should get high-cost but potentially lifesaving treatments, and which ones shouldn't? A federal advisory committee plans to tackle that issue today when it considers increasing the number of people in the Medicare program who are eligible for an implanted heart defibrillator.

   o   Medicare already pays for the devices for the 27,000 patients each year considered to be at highest risk of sudden death.
   o   In March 2002, a pivotal study found that the defibrillators could reduce the risk of death for many more heart-attack survivors.
   o   Medicare pays $25,000 to $30,000 for each device.
   o   If widely adopted, extending coverage to these additional Medicare patients would cost anywhere from $175 million to well over $3 billion a year.

The panel is in charge of advising the Centers for Medicare and Medicaid Services on whether the evidence warrants the substantial broadening of coverage sought by the makers of the defibrillators, Guidant Corp. Officially, Medicare doesn't directly consider cost when making coverage decisions.  But in this case, experts say that the potential costs are so enormous that they can't help but be a factor in deliberations.

Source: Laurie McGinley and Thomas M. Burton, "Medicare Panel to debate Use of Defibrillator," Wall Street Journal, February 12, 2003. For text (WSJ subscription required) http://online.wsj.com/article/0,,SB1045000408824332583-search,00.html

The unfortunate consequence is that when the patient is on the cardiac catheterization table, if the expensive gadget is available free, it will generally be inserted. If the patient was in charge, which e.g. a 10 percent co-pay would accomplish, he and the family may decide that the patient is in the final stages of his earthly journey and wants to live it un-encumbered without gadgets protruding over his bony chest. I’ve also seen a number of patients discharged from the hospital with strict orders on how to take anti-arrhythmic drugs or they could promptly die from a life threatening arrhythmia, only to find that they didn’t even get the prescription filled and were doing fine without their cardiac medications with a stable electrocardiogram. Of course, we do not recommend this approach of going against recommendations.

Privatize in China Means Pure Profit for State Officials
The On and On Condom Company set up shop in Shanghai in 1998, dreaming of taking a ride on China’s sexual revolution in the old city of sin. The government had eliminated the custom duties to make condoms more available to help fight disease and unwanted pregnancies. The company was told that this was considered family planning and was advised to go through the Family Planning Commission. The product had to be sold through the government’s Drug Supply Center in each of Shanghai’s 17 districts. The center functions as a toll booth collecting a 25 percent revenue for the government official, who happens to be a private business woman. The retailers were told not to pay the On and On Condom Company for the condoms sold and to remove the remainder from their shelves. It’s the Chinese version of free enterprise as the government gets out of the retail business but the remaining bureaucrats still control the market through a private marketing monopoly. Which is really not that different from American Medicare. When the government implemented HMOs for Medicare recipients as privatizing, many HMO executives made a fortune and health care wasn’t any closer to a free market where everyone competes for the best service at the lowest possible price.

Medical Gluttony
Recently a new patient asked for a requisition for his quarterly lab work. Seeing my astonished look, he explained that his last physician obtained a quarterly cholesterol and lipid level to monitor his high blood levels. It turned out he was not following any prescribed low fat diet, declined lipid-lowering Statins, and seemed to feel that sooner or later his cholesterol and triglycerides would miraculously return to normal. When his previous records arrived, there indeed were lipid levels, recorded approximately every three months, showing a steady incline over the previous five years. I explained the guidelines recommend checking lipids every five years unless there is therapeutic intervention, whether dietary or pharmaceutical. Since he again declined, there was no medical reason for such frequent checks. His record documented about 20 determinations over five years reflecting a 20 fold or 2,000 percent excessive utilization. Whether a Lipid Panel is $81 or $124, (local quotes) that also translates into a 2,000 percent excessive health care cost. It should be noted the HMO, whose sole reason for existence is to reduce health care costs, was unable to make any reduction in this 2,000% blatant over-usage. The patient said he just felt better having it checked every three months and would change physicians until he found one that agreed with him. Again only the Medical MarketPlace with patient responsibility, e.g. a 30% co-pay, would have stopped this exorbitant usage, probably by the second set of tests rather than after 20 and counting

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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 on to NCPA (www.ncpa.org) and register to receive one or more of these reports.

• The Mercatus Center at George Mason University is a strong advocate for accountability in government. Nobel Laureate Vernon L Smith, PhD, has 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 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 on to 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. President Larry Arnn was in Sacramento last week to update supporters on the challenges in education. They disregard the GPA of all applicants from public schools since most are near a 3.9 average, but many have never read a book nor do they place a verb in their sentences on the application essays. You may log on to  www.hillsdale.edu to register and receive Imprimis, their national speech digest, that reaches over one million readers each month.

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

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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. He states, “After opening it two years ago for patients who pay at the point of care (primarily the uninsured), I had to opt out of Medicare so as not to discriminate against anyone seeking my services. Medicare regulations now prevent me from working in ER’s where I would be able to maintain my proficiency in Emergency Medicine, supplement my income, and assist hospitals in rural northeast Tennessee that are having difficulty finding qualified physicians to staff their ER’s.” Dr Berry, in his capacity as President of Health & Care for the Uninsured, has also shared two of his recent editorials with MedicalTuesday. In the first he feels that Senator John Breaux’s  “new approach” that purportedly combines the best of both private and public healthcare looks like a duck and sounds like a duck, and is probably a fare too foul for the American palate. In the second he points out that Health Coverage Does Not Equal Health Care. Good work, Dr Berry.

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

Del Meyer

Del Meyer, MD, CEO & Founder