Community For Better Health Care

Vol V, No 7, July 11, 2006


In This Issue:

1.                  Featured Article:  Stem Cells: The Real Culprits in Cancer?

2.                  In the News: Personal Information Isn't That Confidential

3.                  International News: The Absurdities Of a Ban on Smoking

4.                  Medicare: How a Hospital Stumbled Across an Rx for Medicaid  

5.                  Medical Gluttony: Doctor and Laboratory Induced

6.                  Medical Myths: Lessons from the Gasoline Myth

7.                  Overheard in the Medical Staff Lounge: Medicare Finally Paid Me $9 Last Week

8.                  Voices of Medicine: Courage at the Threshold, by Tom Crane, MD

9.                  From the Physician Patient Bookshelf: Healthy Competition - What's Holding Back Health Care and How to Free It: Conclusion by Michael Cannon & Michael D Tanner, Cato Institute,

10.              Hippocrates & His Kin: Drugs Are Cheap at Any Price

11.              Related Organizations: Restoring Accountability in HealthCare, Government and Society

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The Annual World Health Care Congress, 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 3rd annual conference was held April 17-19, 2006, in Washington, D.C. Watch these pages for reports on more than 100 presentations given. Some of the regular attendees told me that the first Congress was approximately 90 percent pro-government medicine. This year it was 50 percent, indicating open forums such as these are critically important. The 4th Annual World Health Congress has been scheduled for April 22-24, 2007, also in Washington, D.C. The World Health Care Congress - Asia will be held in Singapore on September 14-16, 2006. The World Health Care Congress - Middle East will be held in Dubai, United Arab Emirates, in November 2006. World Health Care Congress - Europe 2007 will meet in Paris. For more information, visit

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1.      Featured Article:  Stem Cells: The Real Culprits in Cancer? by Michael F Clarke and Michael W Becker, Scientific American, July, 2006

A dark side of stem cells - their potential to turn malignant - is at the root of a handful of cancers and may be the cause of many more. Eliminating the disease could depend on tracking down and destroying these elusive killer cells.


After more than 30 years of declared war on cancer, a few important victories can be claimed, such as 85 percent survival rates for some childhood cancers whose diagnoses once represented a death sentence.  In other malignancies, new drugs are able to at least hold the disease at bay, making it a condition with which a patient can live. In 2001, for example, Gleevec was approved for the treatment of chronic myelogenous leukemia (CML). The drug has been a huge clinical success, and many patients are now in remission following treatment with Gleevec. But evidence strongly suggests that these patients are not truly cured, because a reservoir of malignant cells responsible for maintaining the disease has not been eradicated.  Conventional wisdom has long held that any tumor cell remaining in the body could potentially reignite the disease. Current treatments therefore focus on killing the greatest number of cancer cells. Successes with this approach are still very much hit-or-miss, however, and for patients with advanced cases of the most common solid tumor malignancies, the prognosis remains poor.

Moreover, in CML and a few other cancers it is now clear that only a tiny percentage of tumor cells have the power to produce new cancerous tissue and that targeting these specific cells for destruction may be a far more effective way to eliminate the disease. Because they are the engines driving the growth of new cancer cells and are very probably the origin of the malignancy itself, these cells are called cancer stem cells. But they are also quite literally believed to have once been normal stem cells or their immature offspring that have undergone a malignant transformation.

This idea - that a small population of malignant stem cells can cause cancer - is far from new. Stem cell research is considered to have begun in earnest with studies during the 1950s and 1960s of solid tumors and blood malignancies. Many basic principles of healthy tissue genesis and development were revealed by these observations of what happens when the normal processes derail.


Today the study of stem cells is shedding light on cancer research. Scientists have filled in considerable detail over the past 50 years about mechanisms regulating the behavior of normal stem cells and the

cellular progeny to which they give rise. These fresh insights, in turn, have led to the discovery of similar hierarchies among cancer cells within a tumor, providing strong support for the theory that rogue stemlike cells are at the root of many cancers. Successfully targeting these cancer stem cells for eradication therefore requires a better understanding of how a good stem cell could go bad in the first place.


To read the entire seven page article (subscription required), please go to

MICHAEL F. CLARKE and MICHAEL W. BECKER worked together in Clarke's laboratory at the University of Michigan at Ann Arbor. . . Clarke is now associate director, as well as professor of cancer biology and of medicine, at the Stanford Institute for Stem Cell Biology and Regenerative Medicine. . . Becker is assistant professor of medicine in the hematology and oncology division of the University of Rochester Medical Center.

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2.      In The News: Personal Information Isn't That Confidential by David Lazarus
Experts weigh in on AT&T's assertion that it owns your data, SF Chronicle, Friday, June 23, 2006

In its new privacy policy taking effect today, AT&T asserts for the first time that customers' personal data are "business records that are owned by AT&T" and that "AT&T may disclose such records to protect its legitimate business interests, safeguard others, or respond to legal process." ...

"Saying they own your information is vague and imprecise," said Eugene Volokh, a law professor at UCLA who focuses on privacy and intellectual property cases.

"They don't own it like they have a copyright," he said. "What they're actually saying is that they have a right to disclose it."

"Our privacy policy speaks for itself," John Britton, an AT&T spokesman, said Thursday. "It fully complies with all legal requirements for disclosure of our privacy practices."

The company's new policy for Internet and video customers says that "while your account information may be personal to you, these records constitute business records that are owned by AT&T."

It says: "We may also use your information in order to investigate, prevent, or take action regarding illegal activities, suspected fraud (or) situations involving potential threats to the physical safety of any person."

Legal experts say the policy represents a contract with customers, and that AT&T apparently does have the right to share customers' data as it sees fit.

"This is a privacy policy in the sense that it's a policy and it's related to privacy," said UCLA's Volokh. "But it's not a policy that promises a great deal of privacy." . . .

Shames said he wouldn't be surprised if all other telecom outfits, including cable companies, follow AT&T's example and claim outright ownership of customers' data.

"If AT&T is doing it," he said, "it's just a matter of time before every telecommunications provider is doing it."

To read the entire article on how privacy is no longer confidential, please go to

David Lazarus' column appears Wednesdays, Fridays and Sundays. Send tips or feedback to

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3.      International News: The Absurdities Of a Ban on Smoking, by Martin Wolf, Financial Times, June 23 2006

Smokers are the new lepers. One already sees them huddled in doorways. Soon the health bill now before parliament will ban smoking in all workplaces in England, including pubs, restaurants and private clubs. But the government revealed on Monday night that the ban might eventually apply to doorways and entrances of offices and public buildings, as well as to bus shelters and sports stadiums. Smokers are to be driven out into the wilderness, as befits their pariah status.

As a life-long non-smoker, I wonder what is driving these assaults. Is it an attempt to improve public health, as campaigners suggest? Or do smokers serve a need every society seems to have - for a group of pariahs that all right-thinking people can condemn? I strongly suspect the latter.

John Stuart Mill himself said that: "As soon as any part of a person's conduct affects prejudicially the interests of others, society has jurisdiction over it." The discovery of passive smoking has, for this reason, given the anti-tobacco lobby its success. It has overwhelmed the protests of libertarians. Riding a tide of moral indignation, the government has enacted a draconian law banning smoking even in private clubs. Now it plans to extend that ban outdoors.

So how many lives might this extension "save" (or, more precisely, prolong)? Indeed, how many lives might the ban itself save?

According to a survey published in 2003 by the Parliamentary Office of Science and Technology, a mere seven out of 37 studies showed a statistically significant impact of passive smoking on lung cancer. . .

Moreover, the government's ban does not even go near to eliminating passive smoking. As for the proposed extension to open spaces, it can add nothing. The notion that people would be exposed to dangerous quantities of passive smoke in open bus shelters or the doorways of buildings seems ludicrous. It also seems next to impossible to police fairly: where do doorways stop and who decides?

These difficulties do not, as it happens, apply to the places where the most damaging forms of passive smoking occur, in homes. That is where vulnerable children are likely to be most exposed and most damagingly affected.

If the government were engaged in a serious health endeavour, as opposed to gesture politics, it would outlaw smoking in the home. This would be perfectly feasible, or at least as feasible as the much discussed possibility of banning smacking. Children could be encouraged to "shop" their parents. Random visits could be arranged. Surely a government that has given us the antisocial behaviour order would find it neither difficult nor, still less, inappropriate to police the behaviour of adults in their homes.

There is a precedent, although not a happy one: Montgomery County, in Maryland, US, did ban smoking in the home a few years ago, but then retracted the ban under global ridicule. Yet why the ridicule should have won out is far from obvious. All those people who think that the risks from passive smoking justify comprehensive legislation on public places must see the still stronger case for protecting children at home. Indeed, I wonder why the UK government does not ban the noxious weed altogether, as Bhutan has done. That would be in accord with policy on a range of prohibited drugs.

Note: I am opposed to any such policy. I am merely pointing out the absurdities of current plans. Harm to others is a necessary justification, for government interference. But it is not sufficient. Intervention should also be both effective and carry costs proportionate to the likely gains. The bans already planned may well not meet these standards. Their proposed extension outdoors would fall vastly short. An extension into the home would be logical, but also intolerable. This is gesture politics at its worst.

To read the entire article (subscription may be required), please go to

To read the original proposals, please go to Smoking in Public Places,

[If the government can invade the home in an attempt to eliminate risky, unhealthy human behavior, what will stop them from invading the bedroom to eliminate anal intercourse, the riskiests, unhealthiest of all human behavior?]

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

--Canada's Supreme Court

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4.      Medicare: How a Hospital Stumbled Across an Rx for Medicaid 

Mt. Sinai Helps Patients Avoid The ER, Paring State Costs And Aiding Its Bottom Line

Dr. Chassin Goes After Salt by JOHN CARREYROU, WSJ, June 22, 2006

After being diagnosed with congestive heart failure three years ago, Norma Soto became a regular at the emergency room of New York's Mount Sinai hospital. Each visit was lucrative for Mount Sinai because Medicaid covered Ms. Soto's expensive treatment.

"I'd end up spending hours there," recalls the unemployed 54-year-old, who lives alone in public housing in East Harlem. On one visit she could barely breathe and was kept overnight, a service Sinai typically bills at about $7,000.

These days, when Ms. Soto doesn't feel well, she calls a nurse who checks her weight, gives her advice and adjusts her medicine. Mount Sinai pays the nurse's salary and misses out on the big fees Ms. Soto used to generate. More importantly, New York state, which helps fund Medicaid, avoids having to pay a hefty hospital bill.

The unusual program is the result of a deal between Mount Sinai and the state, and it could offer a way to help ease the U.S.'s seemingly intractable health-care crisis. The hospital provides free preventive care to poor East Harlem residents in exchange for higher Medicaid reimbursement rates at its outpatient clinic. It also expects to fill the beds that become free with better-paying patients. Combined, that will more than make up for the hospital's lost revenue. The state, for its part, hopes the program will help reduce its ballooning Medicaid expenditures by cutting down on expensive trips to the ER.

As health care grows ever more costly, Medicaid is becoming a growing financial burden for the states. The program, which provides health insurance to 52 million low-income Americans, saw costs rise 44% between 2000 and 2004 to $296 billion. States share the expense with the federal government, and Medicaid now consumes almost 17% of their budgets.

The lion's share of these costs is generated by a minority of recipients, typically patients with chronic diseases such as heart failure. According to the nonprofit Center for Health Care Strategies, adults with chronic illnesses represent 40% of Medicaid recipients but 80% of its expenditures. Hospital fees for these patients make up a major chunk of the costs.

Some states have tried limiting the expenses they cover. Others have dropped thousands of people from the rolls by changing eligibility criteria. Neither approach tackles the core problem. Reducing hospitalization rates for chronically ill people is "the Holy Grail of Medicaid cost savings," says James Tallon, president of the United Hospital Fund, a philanthropic organization that tries to improve New York's health-care system. Mount Sinai's program, he says, could provide an answer.

To read the entire article (subscription is required), please go to

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

- Ronald Reagan

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5.      Medical Gluttony: Doctor and Laboratory Induced

A 59-year-old lady came into the office last week having made a change in her insurance affiliation. She brought in the laboratory requisition she had received from her prior personal physician for my OK to proceed and add any tests I thought she needed. I noted that a basic chemistry panel and a comprehensive chemistry panel were checked. The latter includes the former plus additional tests. There was a number of individual liver tests checked that are also included in each of the preceding panels. A lipid panel was also checked, including cholesterol and triglycerides that are also a part of the lipid panel. A thyroid profile was checked, as well as individual thyroid tests.

I've noted in the past that patients sometimes have duplicate tests on the same day from different physicians. For instance, a personal physician may give the patient a laboratory requisitions for a series of tests. A surgeon may give the patient a requisition for preoperative tests. Patients prefer to have their blood drawn once, if possible, and may take all requisitions into the laboratory on the same day to be stuck only once. This would be the perfect opportunity for the laboratory to eliminate duplicate testing at the source. The laboratory, however, told me that they are not allowed to eliminate duplicate tests and have to do them just as they are ordered. In this case, the patient would have three sets of liver tests - one in each panel, the set individually ordered and a duplicate.

This is another case where mandates and regulations triple health care costs. If ordinary human reason had been allowed to function, only the necessary lab testing would have been requested and duplicates would have automatically been eliminated.

The Trillion Dollar HealthCare Question:

How do we neutralize and keep the bureaucrats from pushing health care costs out of reach?

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6.      Medical Myths: Lessons from the gasoline myth.

Our annual guests from the UK recently visited the Sacramento Jazz Festival. Our discussions eventually went to why gas is so cheap in America. When I visited England several years ago, gasoline was about $1.75 per liter, which translates to about $6.50 per gallon. Our guests said gas in their country was about the equivalent of $7 per gallon. They really enjoyed driving their rental car all over the state of California for only $3 per gallon. American journalists apparently don't understand basic economics. When the price of gasoline rises, people will either continue their present consumption or consume less. They will buy more fuel-efficient cars, hybrids and electric cars, ride a bicycle or even, heaven forbid, walk. Obviously for Europeans, $7 per gallon still does not make it economically feasible to proceed along these lines.

A journalist for TIME Magazine, who had the lead editorial on the back page of the US May 22, 2006 issue, stated: "Nothing I read on the topic seems believable, and none of the old economic ideas seem applicable . . . We admitted that we were powerless over gasoline, that our lives had become unmanageable."

Why do some journalist fail to comprehend the very basic economic law of supply and demand? Gas prices follow the law of supply and demand rather well. When the price of gasoline increases beyond what people are willing to pay (in Europe it must be well above $7 a gallon), people will begin to consume less.

It's just like everything else we purchase. The price of electricity in my home has increased four-fold in the last decade. But the last time I checked, this was still cheaper than the price of a solar energy roof. Electric power has to double again before alternate forms of energy for my home become economically feasible.

Our country has wasted billions to develop electric cars before people will purchase them for economic reasons without subsidies paid by the government. If we just let the economic laws work without interference from the politicians, prices will seek their own level and we will be free of fossil fuels much sooner.

An example of this is the recent news that we are coming close to synthesizing jet fuel. It has become economically feasible, as airlines are going into bankruptcy and losing passengers due to higher fares, that alternative fuels for airlines are in the research pipeline. The same will happen to automobile fuel, if we let universal laws of nature and economics work.

Why do so many people think that health care doesn't respond to market forces? Just last week a patient told me he took all his prescriptions to Costco Discount Drug Center to price the true cost of his medications. He found that about half of them were available in generics for which the total price of a 100-day supply was cheaper than the co-payment of a 30-day supply his insurance carrier demanded. Thus, by paying cash and not showing his insurance card, he was able to save the insurance company all their costs and save considerable amount of the cost of his medicine on the open market as opposed to the bureaucratically controlled closed market. Or from another perspective, it only cost him a fraction of what his Pharmacy Benefits Manager said was the full cost.

To read the entire TIME Essay "A Million Little Barrels" by Walter Kirn, please go to,10987,1194013,00.html.

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7.      Overheard in the Medical Staff Lounge: Medicare Finally Paid Me $9 Last Week!

Dr Sam continued to hold forth on his Medicare predicament. He had gotten a Medicare check for a significant amount above the $3 and the $6 he'd gotten the previous two weeks. Then he came across the press release: HOLD ON MEDICARE PAYMENTS.  He's still waiting for about two months of Medicare claims to catch up. So when he became aware that Medicare will put a hold on Medicare payments for ALL claims (e.g., initial claims, adjustment claims and Medicare Secondary Payer (MSP) claims) for the last nine days of the Federal fiscal year, i.e., Sept. 22-30, 2006, he blew his stack.

The notice: "Providers need to be aware of these payment delays, which are mandated by section 5203 of the Deficit Reduction Act (DRA) of 2006. Accelerated payments using normal procedures will be considered. No interest will be accrued or paid, and no late penalty will be paid to an entity or individual for any delay in a payment by reason of this one-time hold on payments. All claims held as a result of this one-time policy that would have otherwise been paid on one of these nine days will be paid on Oct. 2, 2006. This policy applies only to claims subject to payment. It does not apply to full denials and no-pay claims. It also does not apply to periodic interim payments, home health request for anticipated payments, cost reports settlements, and other non-claim payments. Additionally, Medicare contractors will continue to apply the 14-day electronic claim payment floor and the 29-day paper claim payment floor. On a case-by-case basis, Medicare FIs, RHHIs or carriers may make adjustments, after Oct. 1, 2006, for extenuating circumstances raised by a provider. Payments will not be staggered, and no advance payments during the nine-day hold will be allowed. CR5047 is the official instruction issued to your carrier regarding changes mentioned in this article. CR5047 may be found by going to the CMS Web site. Please refer to your local carrier if you have questions about this issue."

Dr Ruth was commenting on the news release about doctors being derelict in the treatment of diabetes and hypertension.

"Millions of diabetics are being inadequately treated because of "clinical inertia" on the part of physicians who fail to push doses of diabetes drugs, insulin and blood pressure medications to levels that can best protect patients from the disease and its complications . . .

"There is a lack of physician action in the face of abnormal findings," said Nathaniel G. Clark, a physician and vice president of the association. "We are simply not achieving what we need to in clinical diabetes care."

The studies are the latest addition to the growing body of evidence that millions of Americans get less than optimal health care even when they are insured, well educated and middle class. The findings are especially troubling because they involve a disease -- Type 2 diabetes (once called "adult-onset") -- that affects 21 million Americans and whose prevalence is increasing at the rate of 8 percent a year.

Unanswered by the studies is what practitioners are thinking when they fail to intensify treatment. At a news conference Friday, the first day of the meeting, the researchers speculated that many factors are at work.

Among them are: the difficulty of hitting treatment goals when doctors do try; the time and effort required to start a patient on a new drug; the reluctance of many patients to take more pills or shots; the reality that elevated blood sugar and blood pressure rarely cause symptoms; the distraction of minor but immediate problems, such as sore throats, that patients tend to focus on during doctor visits; and a human tendency to be satisfied with results that are "close enough."

While not dismissing any of those, the researchers said they do not add up to an excuse . . ."

To read the entire article, including how the NHS bribes physicians into compliance, please go to

[Dr Ruth pointed out that the basis for treating a patient more aggressively is for the patients to monitor their blood sugars four times a day so the dose of insulin or oral agents can be adjusted appropriately, or measure their blood pressure twice a day so that the dose of anti-hypertensives can be adjusted as needed. "I've had both diabetic and hypertensive patients who were state bureaucrats, who couldn't be bothered with checking their blood sugars appropriately or their blood pressures regularly. So in most cases, it appears that the cause for less than optimal care lies with the patients, including the bureaucrats themselves, rather than the physicians." It was also of interest to her that the patients who go to specialists and a personal physician have less close monitoring and dose adjustments than if they just went to their personal private physician.]

Dr Rosen pointed out that the Feds assigned doctors a Unique Personal Identification Number (UPIN) that has been used for many years. Now the federal bureaucracy thinks they can abandon their misstep and simply reassign a new number that 800,000 physicians should just simply start using.  In case you missed it, here's a note from the Florida Medical Assn on obtaining your NPI (National Provider Identifiers).

May 1, 2006, CMS announced the capability for health industry organizations to submit health care providers' applications for National Provider Identifiers (NPIs) to the National Plan and Provider Enumeration System (NPPES) via Electronic File Interchange (EFI). With EFI, a CMS-approved health industry organization can submit a health care provider's NPI application data, along with the application data of many other health care providers, in a single electronic file in a CMS-specified format. EFI is an alternative to health care providers having to apply for their NPIs via the web-based or paper application process. After the NPPES processes a file, it makes available to the organization a downloadable file containing the NPIs of the enumerated health care providers. Interested health industry organizations should avail themselves of the EFI materials available from the CMS NPI page ( and from the NPPES page ( before downloading and completing the Certification Statement (available at and registering as EFI Organizations. A completed Certification Statement must be approved by CMS before an interested health industry organization can participate in EFI.

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8.      Voices of Medicine: Sonoma Medicine, the Magazine of the Sonoma County Medical Association. Spring 2006 Issue: Clinical Empathy

Courage at the Threshold, by Tom Crane, MD

Dying patients can bring up our own worst fears and make us feel utterly inadequate to the task of doctoring. It's a clichι that medical education trains us how to prolong life, not to usher it out; but it's also true. My first clinical rotation began with a patient dying of pemphigus, even though death was never mentioned in the hospital chart. The dermatologist simply stopped returning calls from the family and the frantic medical student. I also have an indelible image from residency of a terrified old man, kept conscious by CPR, but with no hope of survival. The last words he heard were those of the cardiologist announcing "Abandon!" and then walking out of the ICU.

The history of medicine is also the history of empathy in the care of dying patients. In the days when hope of cure was often small, doctors saw their duty as attending to patients, sitting vigil at the bedside, and comforting the sick and dying.
The practice of empathic listening and emotional connection to patients is still central to good doctoring. We all want our physician to be smart, diligent and, most of all, caring. However, medicine is now a tightly run, time-constrained enterprise. Doctors must see outpatients rapidly just to survive financially. Meanwhile, hospitals have become finely tuned organizations whose job is to treat illness expeditiously, then quickly make the bed available for the next patient. Resources are scarce; discharge planners meet patients soon after they are admitted to the floor. In this context, the drama of the dying patient often gets short shrift.

Enter palliative care. Palliative care seeks to treat difficult symptoms and to help patients and their families grapple with life-threatening illnesses. The Latin root palliare means to cloak or mitigate, as in lessening the violence of disease. In modern terms, palliative care is a discipline with many roots. The bioethics movement has helped lead doctors away from the paternalism of past medical practice to the awareness that patient preferences and choices are keys to good medical care. Narrative therapy stresses the importance of honoring the patient's own story and shows what we can learn from the patient's experience of his or her illness . . .

The goal of palliative care programs is to move "upstream" and identify patients appropriate for palliative care before they arrive in the Emergency Department in extremis. Counseling outpatients about alternatives can avoid painful and sometimes futile hospitalizations, give patients a stronger sense of control, and allow them to make decisions that better reflect their deepest desires as they near the end of life.

Kaiser Santa Rosa began its Palliative Care Service in March 2005. Our team consists of a social worker, a nurse, and a physician. We've begun seeing patients in their homes, and we're developing an outpatient department to serve our patients better.

Late last year, Kaiser also inaugurated an end-of-life program at a local skilled nursing facility. Here, hospital patients who are imminently terminal and cannot go home can find a peaceful environment focused entirely on comfort care.


Dr. Crane is a palliative care specialist at Kaiser Santa Rosa.

To read the entire feature, please go to

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9.      Book Review: Healthy Competition - What's Holding Back Health Care and How to Free It: Conclusion by Michael Cannon & Michael D Tanner, Cato Institute


Despite its marvels, America's health care sector continues to present troubling symptoms: excessive costs, uneven quality, a lack of useful information for patients and providers, extraordinary waste, and enormous burdens for future taxpayers. An accurate diagnosis points to too much government influence and too little choice and competition. Proposals to increase the role of government would aggravate these symptoms. More subsidies or controls would drain from the medical marketplace even more of the dynamics that drive other sectors of the economy toward lower prices and higher quality. The only sure remedy is to restore those dynamics to the health care sector.

Although there are dark clouds on the horizon, we are heartened by the creation and steady growth of health savings accounts. HSAs have already begun to change private-sector health care from within, and will enable a reexamination of the role of government in health care. It is one thing to impose costly regulations on consumers - such as requiring them to purchase coverage for acupuncture and hairpieces - when it seems that employers are paying the bill. It will be more difficult to do so when the cost is apparent to millions of individual consumers.

HSAs also represent a down payment on reform of government health programs.1 First, they will help to contain medical inflation by making millions of consumers more price-sensitive. That will benefit all payers, including taxpayers. Second, experience with HSAs will accustom Americans to exercising more control over their own health care. That may make Americans more comfortable with experimenting with HSAs in government health programs. In particular, as more HSA holders reach age 65, they could form a powerful constituency for Medicare reforms based on choice and competition.  It is one thing for the federal government to make health care decisions for retirees when those retirees are already accustomed to surrendering control over such decisions to their employers. It will become more difficult for government to do so if workers are accustomed to making their own health care and insurance decisions.  Finally, HSAs enable today's workers to save for their retirement health expenses and can help build support for prefunding Medicare through personal savings accounts.

We are heartened by the creation of health savings accounts for more than these reasons, though. HSAs represent a moral victory for freedom and competition in health care. We are eager to see how health care will change as health savings accounts restore to patients and providers much of the autonomy that has been eroded by decades of increasing government control.  However, HSAs alone will not fully restore choice and competition to America's health care sector. State and federal lawmakers should build on the success of HSAs by applying these principles to all areas of health policy: tax reform, government health programs, the medical tort system, and regulation of health insurance, pharmaceuticals, medical devices, providers, and the allocation of transplantable organs. In particular, Congress should use HSAs as a model for prefunding Medicare's enormous future obligations through personal savings accounts.

The competitive market process will do a better job than government of making medical care of ever-increasing quality available to an ever-increasing number of consumers. We have seen competition deliver higher quality and lower prices in other areas of the economy.

As Michael Porter and Elizabeth Teisberg write:

It is often argued that health care is different because it is

complex; because consumers have limited information; and

because services are highly customized. Health care

undoubtedly has these characteristics, but so do other industries

where competition works well. For example, the business

of providing customized software and technical services

to corporations is highly complex, yet, when adjusted for quality,

the cost of enterprise computing has fallen dramatically over the last decade.

Although we share Porter and Teisberg's view, we also share one view held by many proponents of government activism in the health care sector: health care is a special area of the economy. Unlike software, wireless communications, or banking, health care involves very emotional decisions, which often entail matters of human dignity, life, and death. However, we do not see the gravity of these matters as a reason to divert power away from individuals and toward government. Rather, we see the special nature of health care as all the more reason to increase each consumer's sphere of autonomy. The special nature of health care makes it all the more important that we use the competitive process to make health care available to more consumers - and makes it all the more important to get started now.

To read the rest of - Healthy Competition - please go to the Cato Bookstore: The price is only $10. At that rate, consider purchasing two or three and surprise those friends, who don't understand that government involvement in health care is destroying affordable health care, with a gift that keeps on giving. There are other excellent recent titles you may want to consider.

To read some of the other book reviews that are available, please go to

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10.  Hippocrates & His Kin: Drugs Are Cheap At Any Price by Peter Huber

With the extraordinary advances that bioengineering now makes possible, we are at the threshold of an entirely new era in pharmacology. There can be no serious doubt that in due course we will find drugs to halt colon, breast and lung cancers in their tracks, drugs that curb obesity and thus heart disease, and that will not merely suppress the HIV virus but cure AIDS completely. A new pharmacology of the brain will cure depression and halt the onset of Alzheimer's. With the advances in molecular science that have occurred over the past few decades, all of these once inscrutable scourges are now--essentially--problems in diligent engineering.

Yes, very difficult and expensive problems, as engineering problems go. But when well-engineered molecular machines displace manual labor, costs don't rise, they fall. We will indeed spend more on drugs in the coming years than anyone has allowed for in existing budgets. They will be cheap at the price.

Peter Huber, a Manhattan Institute senior fellow, is the author of Hard Green: Saving the Environment From the Environmentalists and the Digital Power Report. Find past columns at

Government Subsidies For Buses Exceeds Giving Every Student A Private Taxi Ride To School

The bus ride to Folsom Lake College from the Iron Point light-rail station is a great deal for students but not so much for state taxpayers.

For each ride on a Folsom Stage Line bus between campus and the light-rail station, state taxpayers chipped in $17.65 in 2004-2005, according to figures from the city.

The private Folsom Lake Cab service would charge $14.75 for the 4.8-mile trip, co-owner Alex Vartolomey said.

How about giving poor people a private taxi ride to see their doctor?

Hasn't anyone at TIME heard of Supply and Demand?

Time magazine has recently published an editorial that none of the old economic ideas seem applicable when it comes to the price of gasoline. Fortunately, the price of gasoline follows the old economic ideas rather well. We just don't want to face reality.

How did the essay get pass the editorial staff?

To read more HHK vignettes from the Archives, please go to

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11.  Organizations Restoring Accountability in HealthCare, Government and Society:


•                      The National Center for Policy Analysis, John C Goodman, PhD, President, who along with Devon Herrick wrote Twenty Myths about Single-Payer Health Insurance, which we reviewed in this newsletter the first twenty months, issues a weekly Health Policy Digest, a health summary of the full NCPA daily report. You may log on at and register to receive one or more of these reports. Be sure to read the current one on HEALTH CARE SPENDING: WHAT THE FUTURE WILL LOOK LIKE.

•                      Pacific Research Institute, ( Sally C Pipes, President and CEO, John R Graham, Director of Health Care Studies, publish a monthly Health Policy Prescription newsletter, which is very timely to our current health care situation. You may subscribe at or access their health page at Be sure to read John R Graham's current article: Deadly Solution: SB-840 and the Government Takeover of California Health Care at

•                      The Mercatus Center at George Mason University ( is a strong advocate for accountability in government. Maurice McTigue, QSO, a Distinguished Visiting Scholar, a former member of Parliament and cabinet minister in New Zealand, is now director of the Mercatus Center's Government Accountability Project. Join the Mercatus Center for Excellence in Government 2004:        

•                      The National Association of Health Underwriters, The NAHU's Vision Statement: Every American will have access to private sector solutions for health, financial and retirement security and the services of insurance professionals. There are numerous important issues listed on the opening page.  Be sure to scan their professional journal, Health Insurance Underwriters (HIU), for articles of importance in the Health Insurance MarketPlace. The HIU magazine, with Jim Hostetler as the executive editor, covers technology, legislation and product news - everything that affects how health insurance professionals do business. Be sure to review the current articles listed in their table of contents at To see my recent column, go to

•                      The Galen Institute, Grace-Marie Turner President and Founder, has a weekly Health Policy Newsletter sent every Friday to which you may subscribe by logging on at A new study of purchasers of Health Savings Accounts shows that the new health care financing arrangements are appealing to those who previously were shut out of the insurance market, to families, to older Americans, and to workers of all income levels. To read her latest report on Market Innovations, go to

•                      Greg Scandlen, an expert in Health Savings Accounts (HSAs) has embarked on a new mission: Consumers for Health Care Choices (CHCC). To read the initial series of his newsletter, Consumers Power Reports, go to To join, go to  Be sure to read Prescription for change:  Employers, insurers, providers, and the government have all taken their turn at trying to fix American Health Care. Now it's the Consumers turn: Be sure to read Greg's current article on 100 Years of Market Distortions:

•                      The Heartland Institute,, publishes the Health Care News. Read the late Conrad F Meier on What is Free-Market Health Care? at You may sign up for their health care email newsletter at Read about the Free Market Health Care Alternatives at

•                      The Foundation for Economic Education,, has been publishing The Freeman - Ideas On Liberty, Freedom's Magazine, for over 50 years, with Richard M Ebeling, PhD, President, and Sheldon Richman as editor. Having bound copies of this running treatise on free-market economics for over 40 years, I still take pleasure in the relevant articles by Leonard Read and others who have devoted their lives to the cause of liberty. I have a patient who has read this journal since it was a mimeographed newsletter fifty years ago. Be sure to brush up on your economics with another Freeman Classic on Prices found at

•                      The Council for Affordable Health Insurance,, founded by Greg Scandlen in 1991, where he served as CEO for five years, is an association of insurance companies, actuarial firms, legislative consultants, physicians and insurance agents. Their mission is to develop and promote free-market solutions to America's health-care challenges by enabling a robust and competitive health insurance market that will achieve and maintain access to affordable, high-quality health care for all Americans. "The belief that more medical care means better medical care is deeply entrenched . . . Our study suggests that perhaps a third of medical spending is now devoted to services that don't appear to improve health or the quality of care–and may even make things worse." To review current trends in Mandates, go to

•                      The Health Policy Fact Checkers is a great resource to check the facts for accuracy in reporting and can be accessed from the preceding CAHI site or directly at This week, read the Daily Medical Follies: "Woeful Tales from the World of Nationalized Health Care" at

•                      The Independence Institute,, is a free-market think-tank in Golden, Colorado, that has a Health Care Policy Center, with Linda Gorman as Director. Be sure to sign up for the monthly Health Care Policy Center Newsletter at  Read her newsletter at, which includes a section on PC Medicine and Euthanasia. To read about the four most important words in American History, go to

•                      Martin Masse, Director of Publications at the Montreal Economic Institute, is the publisher of the webzine: Le Quebecois Libre. Please log on at to review his free-market based articles, some of which will allow you to brush up on your French. You may also register to receive copies of their webzine on a regular basis. To brush up on Global Warming, please go to To understand why Public Utility Monopolies Fail, go to

•                      The Fraser Institute, an independent public policy organization, focuses on the role competitive markets play in providing for the economic and social well being of all Canadians. Canadians celebrated Tax Freedom Day on June 28, the date they stopped paying taxes and started working for themselves. Log on at for an overview of the extensive research articles that are available. You may want to go directly to their health research section at Canadians reached their tax freedom day five days earlier than last year. Read the details at

•                      The Heritage Foundation,, founded in 1973, is a research and educational institute whose mission is to formulate and promote public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values and a strong national defense. The Center for Health Policy Studies supports and does extensive research on health care policy that is readily available at their site. This month, be sure to read the article on Ownership of Health Care Data at

•                      The Ludwig von Mises Institute, Lew Rockwell, President, is a rich source of free-market materials, probably the best daily course in economics we've seen. If you read these essays on a daily basis, it would probably be equivalent to taking Economics 11 and 51 in college. Please log on at to obtain the foundation's daily reports. The current essay on Price Controls on Labor can be found at You may also log on to Lew's premier free-market site at to read some of his lectures to medical groups. To learn how state medicine subsidizes illness, see; The Individualistic Code, or to understand how illiterate we are of the History of Any Religion go to find out why anyone would want to be an MD today, see

•                      CATO. The Cato Institute ( was founded in 1977 by Edward H. Crane, with Charles Koch of Koch Industries. It is a nonprofit public policy research foundation headquartered in Washington, D.C. The Institute is named for Cato's Letters, a series of pamphlets that helped lay the philosophical foundation for the American Revolution. The Mission: The Cato Institute seeks to broaden the parameters of public policy debate to allow consideration of the traditional American principles of limited government, individual liberty, free markets and peace. Ed Crane reminds us that the framers of the Constitution designed to protect our liberty through a system of federalism and divided powers so that most of the governance would be at the state level where abuse of power would be limited by the citizens' ability to choose among 13 (and now 50) different systems of state government. Thus, we could all seek our favorite moral turpitude and live in our comfort zone recognizing our differences and still be proud of our unity as Americans. Michael F. Cannon is the Cato Institute's Director of Health Policy Studies. Read his bio at Read his current article How About Some Healthy Competition at

•                      The Ethan Allen Institute,, is one of some 41 similar but independent state organizations associated with the State Policy Network (SPN). The mission is to put into practice the fundamentals of a free society: individual liberty, private property, competitive free enterprise, limited and frugal government, strong local communities, personal responsibility, and expanded opportunity for human endeavor. Click on FreedomFest06 or on EAI Commentary or on LINKS at the left of the home page for a wealth of freedom information.

•                      The Free State Project, with a goal of Liberty in Our Lifetime,, is an agreement among 20,000 pro-liberty activists to move to New Hampshire, where they will exert the fullest practical effort toward the creation of a society in which the maximum role of government is the protection of life, liberty, and property. The success of the Project would likely entail reductions in taxation and regulation, reforms at all levels of government to expand individual rights and free markets, and a restoration of constitutional federalism, demonstrating the benefits of liberty to the rest of the nation and the world. [It is indeed a tragedy that the burden of government in the U.S., a freedom society for its first 150 years, is so great that people want to escape to a state solely for the purpose of reducing that oppression. We hope this gives each of us an impetus to restore freedom from government intrusion in our own state.] NH wins the prize of paying the least income to taxes of any state in the U.S. See U.S. Census data at

•                      Hillsdale College, the premier small liberal arts college in southern Michigan with about 1,200 students, was founded in 1844 with the mission of "educating for liberty." It is proud of its principled refusal to accept any federal funds, even in the form of student grants and loans, and of its historic policy of non-discrimination and equal opportunity. The price of freedom is never cheap. While schools throughout the nation are bowing to an unconstitutional federal mandate that schools must adopt a Constitution Day curriculum each September 17th or lose federal funds, Hillsdale students take a semester-long course on the Constitution restoring civics education and developing a civics textbook, a Constitution Reader. You may log on at to register for the annual weeklong von Mises Seminars, held every February, or their famous Shavano Institute. You may join them to explore the Roots of American Republicanism on a British Isles cruise on July 10-21, 2006. Congratulations to Hillsdale for its national rankings in the USNews College rankings. Changes in the Carnegie classifications, along with Hillsdale's continuing rise to national prominence, prompted the Foundation to move the College from the regional to the national liberal arts college classification. Read President Arnn's comments at Also read his comments on Ronald Reagan, RIP, at Please log on and register to receive Imprimis, their national speech digest that reaches more than one million readers each month. This month, read "Free to Choose: A Conversation with Milton Friedman" at The last ten years of Imprimis are archived at

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Del Meyer

Del Meyer, MD, Editor & Founder

6620 Coyle Ave, Ste 122, Carmichael, CA 95608

Words of Wisdom

Eden Chen Forsythe, who was raised under the twin pillars of communism -- China and Soviet Russia -- before fleeing to the United States at 17, celebrates her first Independence Day as an American Citizen. As a new attorney, she really believes in the American judicial process. It's not flawless, but it's the best process I know. In Russia there's "telephone justice -- the government calls the judge and says 'we want this outcome.' If he doesn't comply, his apartment is taken; he's out of a job. The government there retaliates. It's not capable of taking on criticism."

Mark Twain, (1866): There is no distinctly native American criminal class save Congress.

Some Recent Postings

The Encyclopedia of Stress and Stress-Related Diseases by Ada P. Kahn, PhD, has now been published. To read the foreword I wrote please go to Published by Facts On File: Enter Kahn in the search box

In Memoriam

Publisher Patriot WSJ, REVIEW & OUTLOOK June 15, 2006

The world of journalism and politics lost a friend of liberty this week with the presumed drowning of Philip Merrill in a boating accident. The 72-year-old publisher went for a solo weekend sail on the Chesapeake Bay, and the 41-foot Merrilly was later found without him.

In the view of some modern media ethicists, journalists aren't supposed to spend time in government. But Mr. Merrill moved between the two with ease, and the country is better for it. He was a successful publisher of the Capital-Gazette Newspapers and Washingtonian magazine. He also worked for six Presidential administrations over the years, usually in foreign policy or Defense posts, and most notably as assistant secretary general of NATO during the historic period from 1990 to 1992 when the Soviet empire was imploding and Germany was uniting.

We knew Mr. Merrill as a stalwart hawk against Soviet oppression and a believer in free markets. He was also a philanthropist, giving away big chunks of his wealth to a variety of causes, notably in education with a $10 million gift to the University of Maryland for a journalism college.

Above all, he was an energetic businessman-journalist who understood that a free press is more vital and independent if it also makes money. The last time we talked to him -- at a dinner honoring his friend and our former colleague, George Melloan -- Mr. Merrill offered all sorts of ideas for how newspapers could make money on the Internet. He stayed up late with the younger writers, telling stories. As usual, they were very good stories.

On This Date in History - July 11

On this date in history, in 1274, Robert "The Bruce" was born In Turnberry, Scotland. One of the favorite stories of many generations has been the one about Robert the Bruce and the spider. Robert was the king of Scotland who, downhearted by his defeats at the hands of the English, was about to give up the struggle when he saw a spider spinning its web. The spider failed once but went right back and spun and spun until, finally, its web was finished. And Robert said to himself, if a little spider can stick to the fight so long and so courageously, then I can too. So he went back to the fight and ultimately won it.  Now when we get discouraged and have to be reminded to stick to a challenging task until we can overcome it, we don't have to sit down and watch a spider. We can remember the story of Robert the Bruce.

On this date in history, in 1804, Aaron Burr fatally wounded Alexander Hamilton in a duel in 1804. History remembers today as the day when, on the bluffs of Weehaawken, across the river from Manhattan, Aaron Burr fatally wounded Alexander Hamilton. Because Aaron Burr, both as an individual and in his subsequent public career, was not a favorite of the people, he has been made the villain in this most famous of all American duels. But the fact that Burr had at least some degree of cause is a matter of historical records.  Without arguing the merits, we can all be grateful that dueling to the death is no longer a factor in American politics; and on this anniversary day, we can talk together about public affairs while shooting off nothing more deadly than our mouths.

Speaker's Lifetime Library, © 1979, Leonard and Thelma Spinard