Physicians and the Business & Professional Community

 Networking to Restore Accountability in HealthCare & Medical Practice

 Tuesday, September 24, 2002

Malpractice Premiums Force Big Cutbacks in Medical Care
The New York Times featured article last week outlined a dramatic scenario of 1300 hospitals affected by the rise in malpractice rates and a number of closures predicting further cutbacks in services, including maternity wards. An OBG colleague of mine mentioned his medical practice liability premium as $9,000 per quarter, which exceeds my yearly premium as a pulmonologist. He mentioned that some of his friends in Florida quit doing the OB part of their practice. The Times article states that premiums in Miami are $200,000 per year. Bush and the AMA are trying to implement California's MICRA (Medical Injury Compensation and Reform Act) which limits pain and suffering to $250,000 above an unlimited award for actual cost of error amortized over the life of the patient. The lawyers are objecting that they cannot afford to sue on behalf of a patient unless the pain and suffering is also unlimited. This article states that in some cases outside of California the awards have gone as high as $40 million. Now that's a lot of pain and suffering. I guess juries are like patients, when it comes to suffering or health care--spare no money. The attorneys would rather have their 30-50% or $12-20 million immediately rather than have it dribble in at only a few hundred thousand dollars or a half million a year for the life of the patient, which may go on for twenty or thirty years. Reminds me of Attorney John Grisham’s latest novel, The Summons, in which one attorney, enjoying huge class action awards, bemoans the fact that he would be a billionaire if he didn't have to share half of the award with the [injured] patients.

National HealthCare Systems in the English-speaking World  (Myth Number 3)
John C Goodman, PhD, president of the National Center for Policy Analysis (NCPA), www.ncps.org in his recent update of the “Twenty Myths about National Health Insurance,” documents that Europeans, who are supposed to have universal access and care that is mostly free at the point of service, are increasingly turning to foreign travel as the only way to secure these services. The failures of national health insurance are one of the great secrets of modern social science according to Dr Goodman. Not only do ordinary citizens lack an understanding of the defects of national health insurance, all too often they 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 Aug 27 & Sept 10 for Myth 1 & 2.)

Myth Three:  Countries with Single-payer Health Insurance Make HealthCare Available on the Basis of Need Rather than Ability to Pay.

Most people in countries that ration health care believe that the wealthy, the powerful and the sophisticated move to the head of the line. Because government officials have little interest in verifying this fact, few formal studies exist. There is considerable evidence, however, that in the face of health care rationing those who can pay find other ways to obtain health care.

1. In Britain, more than seven million people, 13 percent of the population, have private health insurance and private sector spending makes up 15 percent of the country's total health care spending. Although 84 percent of a survey had no private insurance, 40 percent of Britons surveyed would consider going to a private facility to avoid waiting.

2 In Canada, the share of privately funded health care spending rose from 24 percent in 1983 to an estimated 30 percent in 1998.

3 In Australia, about one-third of the population has private health insurance, and private sector spending makes up around one-third of all health care spending.

4 In New Zealand, 35 percent of the population has private health insurance, and private sector spending is about 10 percent of the total health care spending.

Paying Privately for HealthCare in Britain
From the time the National Health Service (NHS) was formed, people who wanted to pay for private treatment could have access to it as well as to the NHS. And despite the British claim that health care is a right that is not conditioned on the ability to pay, last year an estimated 100,000 patients elected to pay for private surgery in the 300 private hospitals in Britain, rather than wait for “free” care. Collectively, these hospitals account for an increasingly larger share of total health care services in Britain, including 20 percent of all non-emergency heart surgery, 30 percent of all hip replacements and $25 billion worth of total health care annually, primarily through employer provided insurance. The NHS earns $500 million per year in fees from treating private patients. The existence of a large, viable private health care industry suggests that many Britons do not believe they can get adequate health care through “free” public channels.

Canadian Medicare
Since Canada does not allow private health insurance for services covered by the country's Medicare system, Canadians who go to the country's few private physicians or private hospital must pay most of the cost out-of-pocket. Although the government may pay the surgeons fee, the patient is still responsible for the $1000 to $1200 facilities fees. For many procedures a growing number of Canadians go to the United States. The 1996 estimate was $1 billion. Due to long waits and the lack of equipment, seven of the 10 Canadian provinces have begun sending some of their breast and prostate cancer patients to the United States for radiation therapy.

Cost of Regulation
The Mercatus Center at George Mason University has a major goal of bringing true accountability and results to the government. If individuals spend their earnings on the basis of results, why shouldn’t the government spend taxpayers’ funds based on results? The Office of Management and Budget has introduced performance management standards to make continued funding of government programs contingent upon their performance in previous years. The average federal tax burden of the American family is now about $20,000 per year. Our national HealthCare expenditures have now surpassed $1,000 billion per year. The cost of regulation is now $843 billion per year or $8,000 per year for every household. I understand that the cost and regulating of social security, Medicare, Medicaid, and veteran’s medical programs is the major portion. Unless we reverse this, we will be in the same state as the rest of the world when tax funds of even greater magnitude are unable to pay the exorbitant cost of government programs. Would it not make sense to reverse this trend before the crises forces us to return to semi-private options after most of them have disbanded? However, when government, even after total failure of the socialized system, tries private options, many are programmed for failure with the claim that personal accountability didn’t work, when in effect it was not really tried.  (www.mercatus.org)

Why Foreign Aid Doesn’t Help the Poor or Sick
John Cassidy in his “Annals of Economics” which appeared in The New Yorker earlier this year, considers “How Foreign Aid could Benefit Everybody” after reviewing economist William Easterly’s book entitled The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. Easterly pointed out that between 1950 and 1995 the developed world dispensed the equivalent of more than a trillion dollars in economic assistance, yet many of the aid recipients remain poverty-stricken. He lists dozens of countries that wasted significant aid and some are now even poorer. He told Cassidy that “Economic development is too important to be left to politicians.” This is a contention which the Bush Administration has endorsed and has begun cuts in economic support. Cassidy, however, is optimistic that Bush will reverse these cuts since we will be more successful in achieving results with the second trillion dollars. Optimism reigns supreme. I’m sure when the second trillion dollars is squandered, optimism will nevertheless continue to grow with the belief that the third trillion dollars will be successful in helping the poor and the sick. In the real world, however, that will never happen. If government handouts cannot help the poor and destitute, we should make every effort to keep government bureaucracies from forcing a health plan on the 85% of the citizens who can afford to do it more cheaply themselves. Or as in Canada, where patients are prevented from obtaining individual coverage. The United States is not a third world country. There is no economic reason to bring third world health care to our country when it is clear that government medicine has not worked, even in the developed world.

Debate with the Left on Private Medical Care
This month Jim Peron opened his article, “The Contradictions of Capitalism” in Ideas on Liberty with a paragraph that's worth remembering: “We advocates of individual rights and free markets can't win the intellectual debate with the ideological left. That's because there is no intellectual debate with the left. There can't be a debate since the opponents of capitalism are simply not open to a rational discussion. They know that capitalism is inherently evil, and no argument, no evidence, no facts will convince them otherwise.” Every other Tuesday we list arguments made by renowned economists, actuaries, business and professional leaders in this electronic newsletter which illuminate the failures of single payer medicine or socialized medicine as promulgated by the liberal left. The fact that every system of centralized medicine throughout the world has failed has no effect on their thinking or on their continued effort to have a single payer system in this country whereby they can control the personal lives of those who can afford private care as well as the lives of the poor. Should we cease our dissent since no argument will change the opinions of the left? Since the left considers socialism, much as a religion, or akin to faith, the chances of conversion to a system of personal responsibility is rather unlikely. The administrator of one medical society points out that the periodic polls of its membership have seen a slow but steady growth in members who are for single payer or socialized medicine in California and in the USA. He feels in the next few years they will become a majority. What the Judeo-Christian right must recognize is that much of this is a sign of desperation and resignation bordering on hopelessness.

But Against All These Odds, Is There Still Hope?
Before the advent in the 1970s and 1980s of the For Profit Health Maintenance Organizations (FP-HMOs as opposed to Non Profit Kaiser-Permanente which is a well working staff model HMO–any generic reference to HMOs in MedicalTuesday does not include Kaiser) the vast majority of physicians still believed in a confidential Doctor/Patient interface and accountability. Integrity was the doctor’s middle name and Trust was the patient’s middle name. The written record of that interface was inviolable. My medicine professor at KUMC contended that the medical record is the doctor’s record, not the patient’s, and can be released only by mutual agreement or court order. The reason is apparent. Otherwise, it would never contain the important personal items concerning lifestyle, habits, (e.g., drug, alcohol, diet or sexual abuse) or indiscretions, that colors so much of our patients’ cause and response to illness. Then came the leftist social planners who maintained that the patient’s record should be freely available upon demand. In California, a law was passed that any patient could demand his physician’s account of his illness upon walking in the office and paying the cost of the copying fee. When patients realized the nature of the personal items contained in their medical records, there was a huge outcry and legal activity. Then it was decreed that a routine release could not include these personal items. Therefore, they had to be cut or inked out. A special release, which detailed the specific type of personal information to be given out, was required. Doctors finally acquiesced by discontinuing to record such items which was unfortunate since they were pertinent to fully understand and manage the patient’s illness.

Then came the various codes that defined not only the Doctor/Patient interface, but listed the ICDA codes of the patient’s various diagnosis. This code became required for Medicare and Medicaid and third party payment making the patient’s health history essentially an open record. Since the patient’s record was so widely available, then came HIPAA, the Health Information Privacy and Accountability Act. This is a heinous assault  against a non-violent profession, which re-instituted privacy, which only became a problem with governmental interference, with 300 pages of rules and regulations. Penalties for failure to adhere to these various codes reads more like the penalties for murder, burglary, robbery, or rape. For minor variations in coding, the penalty is up to $10,000 fine per line of code variation or interpretation and up to 10 years in prison, even if medical judgment and care was appropriate. This past week, at the AAPS meeting (Association of American Physicians and Surgeons) we heard from doctors who had been jailed for two to five years with fines exceeding their lifetime income. Considering that one might have 5-10 lines of diagnosis and/or procedure codes per patient encounter, the $50,000 to $100,000 fines per patient visit can add up to millions rather rapidly. And since any inconsistency is considered fraud, the physician always loses his/her medical license.

Yes, There is Hope
Also at the AAPS meetings, I met dozens of doctors who are abandoning Medicare, Medicaid, or any government program. They are, as practice consultant Barbara Lehman pointed out last week, developing Brand name practices. She cited several examples of doctors who successfully tell their patients to say no to HMOs and government health care and yes to Personal HealthCare. Initially these physicians were not convinced that they could survive without Medicare, Medicaid, and HMOs. But by reducing overhead and eliminating the cost of billing, their incomes actually increased as patients left their Medicare card at home and willingly paid cash. We will bring you other examples in future issues.

The Goal of MedicalTuesday
One of the goals of MedicalTuesday is to continue to point out the importance as well as the successes of non-governmental health care. Although the number of physicians that believed in personal and patient accountability may have dropped from 99% three decades ago to 70 percent (should we believe the leftist numbers), MedicalTuesday realizes the futility of trying to convert the left. As Peron (whom we mentioned previously) stated, there is no rational debate. MedicalTuesday is sent primarily to those 70 percent who believe in personal accountability in order to prevent further attrition to the liberal left. The left will forever consign American HealthCare to a third world status, which much of the developed world is now experiencing, and where less than enthusiastic privatization efforts are being started.

MedicalTuesday Recommends
The Greg Scandlen Health Policy Comments as an important source of market-based medicine. You may log onto NCPA (www.ncpa.org) and register to received Greg’s weekly report or the full NCPA daily report. We also recommend the market-based reports of Lew Rockwell, president of the Ludwig von Mises institute. Please log on at www.mises.org to obtain the foundation’s reports or log onto Lew’s premier free market site at  www.lewrockwell.com.

MedicalTuesday Recognizes
SimpleCare for their success in restoring private practice,  www.simplecare.com, HealIndiana as a supporter of market-based medicine, www.HealIndiana.org. The AAPS representing physicians in their struggles against bureaucratic medicine www.AAPSOnline.org.

Republishing MedicalTuesday
We continue to receive requests to reproduce the Medical Tuesday e-letter. We grant permission to any non-profit organization to republish this column with attribution to MedicalTuesday and its author as long as a formatted copy of the portion that is republished is sent to Info@MedicalTuesday.net along with the name of the publication and the date. Be sure that your readership is interested in the Medical MarketPlace rather than bureaucratic medicine. Subscription magazines should contact the author below concerning royalties.

Stay Tuned to the MedicalTuesday.Network
This week we welcome a number of new readers from the AAPS and KUMC. We invite their response, the re-sending of this to their friends and colleagues and other interested business and professional associates. It is our understanding that each individual is personally known, requested to be placed on our mailing list, or was recommended as someone interested in our cause of making HealthCare affordable to all. If this is not correct or you are not interested in or sympathetic to a Private Personal HealthCare system, email DelMeyer@MedicalTuesday.net and your name will be sorrowfully removed.

Del Meyer, MD