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 More Arguments for Withholding Crestor [21:30m]: Play Now | Play in Popup | Download (93)

DrRich’s last post addressed a recent issue of the Archives of Internal Medicine which, strikingly, was largely dedicated to trashing the JUPITER study.

The JUPITER study was a landmark clinical trial in which giving the statin drug Crestor to apparently healthy individuals who were at increased risk of cardiovascular disease (and most particularly, had high CRP levels) resulted in a significant improvement in outcomes. In particular, within two years, individuals taking the statin had a 20% reduction in overall mortality, a 54% reduction in heart attacks, a 48% reduction in stroke, and a 40% reduction in venous thrombosis and pulmonary embolism. All these findings were highly statistically significant.

DrRich attempted to show that the criticisms of JUPITER recently offered by the Archives were sufficiently spurious to raise the question of what the authors and the editors were really trying to accomplish, and for him to suggest that perhaps they were auditioning for appointments to the government’s expert medical panels, which will soon begin determining who gets what, when and how. Indeed, DrRich will actually be quite surprised if none of these individuals end up with such an appointment. They have clearly demonstrated they have the right stuff.

Still, as DrRich also pointed out, the JUPITER study, while a reasonably straightforward clinical trial whose results seem impressive, was anything but air-tight. No clinical trial is air-tight, however, and if medicine were still practiced the way it should be, the JUPITER trial could be smoothly incorporated – with all its limitations – into clinical practice without a hitch.

But, since medicine is now practiced by guidelines, JUPITER poses a major problem. In fact, it has led to major and contentious debates between those who insist its results must be incorporated into formal clinical guidelines, and who insist they should not. On one hand, many point out that JUPITER is an important clinical trial which has demonstrated a vital clinical benefit (prevention of heart attack, stroke and death) with a high degree of statistical significance, which meets the high standards demanded by evidence-based medicine, and which therefore obviously demands a change in the clinical guidelines. But on the other hand, many others insist that the JUPITER trial simply does not demonstrate enough of a benefit with Crestor to justify changing the guidelines.

DrRich’s position – that the results of the JUPITER trial are striking and important but incomplete, and ought to change the conversation between, but not dictate the actions of, doctors and patients – simply does not obtain in the modern era.

So, unable to side with either party, DrRich observes with great interest the debate between those who want to change the guidelines, and those who believe that changing the guidelines would be the greatest of travesties.

Those who want to change the guidelines have, in their favor, the virtue of consistency. For, if one insists that every action by physicians must be supported by evidence-based medicine, then one is pretty much obligated to fully embrace legitimate clinical trials like this one that give clear-cut and statistically significant results. Unfortunately, the evidence-based strict-constructionists have painted themselves into a corner when it comes to JUPITER. They will not be able to say, for instance, “Statins are pretty much alike, so we’ll make the guidelines say ‘statins’ instead of ‘Crestor.’” For JUPITER did not study “statins,” it studied only Crestor, the most expensive statin on the planet. Expanding the results to all statins (despite a large body of experience that suggests this would be just fine) does violence to the whole concept of evidence-based medicine. It’s just not possible. The strict constructionists have therefore boxed themselves in to advocating a new, multi-billion dollar annual expenditure.

It is even more amusing to observe those who do not want to change the guidelines.

These people fall into two general camps. First, and easier to dismiss, are those who believe that drug companies are the embodiment of evil, and that any clinical trial sponsored by a drug company must be dismissed out of hand, particularly if the drugs which are being promoted are statins. (This, in fact, is the level of argument on which the main article in the recent issue of Archives relies.)

DrRich simply notes, once again, that the advancement of clinically useful medical science – in America and in the world – is almost entirely dependent on drug companies and other corporate dens of iniquity. That companies must pay for our medical research is the system we’ve invented. Furthermore, our total capitulation to the dictates of evidence-based medicine means that companies must fund large, expensive clinical trials like JUPITER before they are allowed to sell a new product, or to create a new indication for an old product. This evidence-based paradigm is inherently a double-edged sword. Sure, it creates a huge barrier to the development and adoption of expensive new therapies (which is the covert rationing dividend of evidence-based medicine), but it also creates opportunities, for companies who manage to successfully complete such trials, to create iron-clad indications for their products. For, once a product has been “proven” in a randomized clinical trial, there is no easy way to legitimately keep that product out of the guidelines and off the shelves. The makers of Crestor have simply figured out the rules. One can whip up anti-corporate emotions by criticizing the sponsor for playing the game well, but the fact that the sponsor stands to gain does not negate in any way the results of a well-designed study.

That the anti-pharmaceutical and anti-statin crowds vociferously object to the results of the JUPITER trial is, of course, entirely expected and cheerfully acknowledged. DrRich will merely observe that their position is one of default. It is not dependent on the scientific merit of JUPITER (or any company-sponsored study), and thus it adds no useful information to the debate. We can only note their objections and move on.

The second group of people who object to changing the guidelines are less dogmatic and more open to reason, and indeed (and very interestingly so) claim to be proponents of evidence-based medicine, and thus claim to be willing to follow the data to where it will lead. It seems pretty clear (to DrRich, anyway), that the chief concern of these individuals, as it relates to JUPITER, is cost. That is, this group feels strongly that the implications of the JUPITER trial are simply too costly to follow to their logical conclusion. This, indeed, is a very reasonable position to take.

Unfortunately, the only legitimate way to turn aside the results of a costly but statistically definitive, evidence-based study is by rationing healthcare. (To ration, remember, is to withhold at least some useful medical services from at least some people who would be likely to benefit from those services.) But we can’t do that, because, well, it would be rationing. Because members of this second group are unable to invoke the “r” word, they are therefore forced to find other “reasons” for keeping the guidelines unchanged. This unfortunate situation leaves them little choice but to discover ways in which to impugn the legitimacy of the JUPITER trial.

In short, they find themselves forced to engage in statistical legerdemain in order to diminish the significance of the JUPITER trial. There are several useful statistical arguments they can employ.

From what DrRich has seen, many of the arguments that have been ginned up to this end have not come directly from the JUPITER trial itself, but instead from an editorial accompanying this study, written by Dr. Mark A. Hlatky.

Most of Dr. Hlatky’s editorial is measured and reasonable. But he threw in a key summary sentence that has been greedily grasped by the anti-alter-guidelinetarians, to wit: “The proportion of participants with hard cardiac events in JUPITER was reduced from 1.8% (157 of 8901 subjects) in the placebo group to 0.9% (83 of the 8901 subjects) in the rosuvastatin [Crestor] group; thus, 120 participants were treated for 1.9 years to prevent one event.”

This statement, at least taken at its face value as a stand-alone analysis, is statistically naive and wrong. DrRich realizes that one or two of his readers might not enjoy statistical arguments, so if you do not wish to wade through the reasons why, simply skip the next two indented paragraphs.

In a long-term clinical study in which the endpoints are events that can occur at any time (such as heart attack, stroke or death), then the probability that an enrolled patient will reach an endpoint in the trial increases the longer he/she has been enrolled in the trial. But in virtually all clinical trials, the length of time different people are enrolled varies greatly. This is because it often takes years to enroll people in clinical trials, so that when the trial ends, some will have been in the trial for many years, others for only a little while. This means that the risk exposure of each research subject is different, and is proportional to the total time they were enrolled. Not uncommonly, the enrollment process is not smooth – there are periods of more rapid enrollment, and periods of slower enrollment – so if all you do is average the enrollment time (as was done by Hlatky – 1.9 years) you are likely to get skewed results. So it is simply not statistically legitimate to do so.

There is a legitimate way of analyzing such longitudinal outcome statistics, and it’s called the Kaplan-Meier method. And indeed, the authors of the JUPITER trial presented in their paper a complete Kaplan-Meier analysis of their data (see Figure 1 of their paper), and the results look quite a bit different from Hlatky’s summary statement. The Kaplan-Meier analysis reveals that the risk of heart attack, stroke, and death all increase steadily through at least 4 years (5 years was the longest time anyone was enrolled in this study), so that at 4 years, the risk of reaching one of the “cardiovascular event” endpoints was about 8% (not 1.8%). Further, the Kaplan-Meier analysis shows that the protection imparted by Crestor persists through at least 4 years, and that indeed the magnitude of protection (i.e., the difference in outcomes between the treated group and the placebo group) increases throughout that entire duration. So, at 4 years, the placebo group had roughly an 8% event rate, compared to roughly a 3% event rate for the Crestor group – an absolute difference of about 5% (not 0.9%). This is a far greater benefit than is suggested by Hlatky’s shorthand summary.

Suffice to say, then, that Hlatky’s summary statement apparently ignores the appropriately analyzed data which is clearly presented in the JUPITER paper itself, and which documents that the clinical benefit of Crestor was substantially more impressive than his widely-quoted summary statement suggests.

But as illegitimate as this summary statement may be, let us accept it at face value for a moment just for the sake of discussion, since that’s the data the anti-alter-guidelinetarians have latched on to.

Taking these numbers, the “antis” make the following argument: While the relative reduction in “hard cardiac events” is 50% (1.8 to 0.9), the absolute reduction is only 0.9%, which, anyone would agree, is a pretty small number. So, they conclude, the actual benefit imparted by Crestor is actually quite small.

That’s a very interesting argument. Let’s look at it in a couple of ways.

So we’ve got a population of patients whose risk of heart attack, stroke, bypass surgery/stenting, or death is about 2% at about 2 years, and by giving them a pill we can reduce that risk to about 1%, and we’re arguing that the absolute drop of 1% is not very much to crow about. Well, OK. But what if we found a pill that reduced their risk to zero at 2 years? That is, it completely wiped out the risk of cardiovascular catastrophes altogether. Would that be a good thing? Or would we say, “It’s just a 2% drop, really not much greater than the 1% drop we had with Crestor, so it’s no big deal?” DrRich thinks not. DrRich supposes we would think that totally eliminating all cardiovascular risk would be a very big deal.

When you’re starting at a 2% risk, then any drop in risk is going to be an “absolutely” small number. And if we’re not going to pursue improvements in outcome of such a small magnitude, then why the heck are we worrying about preventative medicine in the first place? Once you get past the big things (drain the swamps, don’t drink the water downhill from the outhouse, etc.) then all preventative medicine tends to consist of small, incremental improvements in outcome. Popular pronouncements to the contrary notwithstanding, preventative medicine is largely the art of spending a lot of money for this kind of incremental improvement. If we decide we shouldn’t do this anymore, then DrRich would find it unfortunate but understandable. But it hardly seems reasonable to arbitrarily focus on this one, particular improvement in preventative cardiology, and (within a healthcare system that insists it is not rationing care) pronounce that this is the one we’re not paying for.

Another way of looking at this “the benefit is too small” argument is by considering that 7.4 million Americans fit the entrance criteria for JUPITER. By giving all these people a statin, we would be preventing about 66,600 major cardiovascular events over a 2 year period. If you’re going to say that 1% is a small number, DrRich will counter that 66,600 is a big number. So do statins offer a substantial benefit or not? It depends on whether you choose to focus arbitrarily on the 1% or the 66,600.

(DrRich understands that many of his readers are not focusing at this moment on the 66,600 cardiovascular catastrophes that could be prevented, but on the 7.4 million people who will be taking a drug that costs $120 per month. But we’re not talking about cost yet, we’re only talking about whether the drug does some good. If we decide it does, then we’ll need to link that “good” to a procedure that measures whether the “good” is worth the money we would need to spend to achieve it. The “antis” try to avoid talking about cost – since that would admit they’re rationing – by insisting that there’s just not enough “good” to bother with. DrRich is simply pointing out that such an argument – that preventing 66,600 very bad outcomes is not enough to bother with – is on its face absurd.)

Another argument invoked by the anti-alter-guidelinetarians is based on the “number needed to treat” (NNT) analysis. Again they rely on Hlatky’s unfortunate summary of the data: “120 participants were treated for 1.9 years to prevent one event.” This number – which the “antis” insist is just too high – is misleading for the reasons already discussed. The real NNT, based on more legitimate statistical analysis, is plainly laid out in the JUPITER paper itself. It turns out that the longer patients in this trial were treated with Crestor, the lower the NNT became. So: At 2 years, the NNT was 95; at 4 years, it was 31; and at 5 years, it was projected to be only 25. Whether you think it is reasonable to treat 25 people with a pill for 5 years to prevent one of them from having a heart attack, stroke, or death is, DrRich supposes, a matter of opinion. But based on NNT analyses for many widely-accepted therapies in medicine today, it looks pretty good.

All these arguments, of course, are merely distractions. The fact is that JUPITER showed a pretty striking reduction in nasty cardiovascular events over s pretty brief period of time, and the only real reason there’s any controversy at all is because of the cost of Crestor.

That cost is what makes us want to withhold Crestor, even though it is imparting at least some (and, DrRich, argues, quite a bit of) clinical benefit. In other words, the high cost makes us want to ration Crestor. The fact that we can only ration covertly, instead of openly, is what makes us want to bastardize the science and do a Kabuki dance with the statistics.

If we were rationing healthcare openly, then we could do an objective, full-bore cost-benefit analysis on the use of Crestor in JUPITER patients, using legitimate and not ginned-up statistical analysis, and taking into account not only the cost of the drug, but also the cost that would be incurred by failing to stop preventable heart attacks, strokes, etc., and then determining where the overall cost-benefit result fell within our coverage criteria. If it met the criteria we would cover it, if not, not. This decision would not be arbitrary. It would be a fully transparent process, so that if the sponsor did not like the results, they would try diligently to find a way to reduce the cost of Crestor (DrRich thinks they would succeed) to a value that would be compatible with their staying in business. (And for the first time, the price of medical products would be determined by a Laffer-like curve, where a price that was too high – like taxes that are too high – would reduce revenue, instead of increase revenue. Companies, being fairly rational, would ratchet their prices down to the optimal price point.)

But since we insist on doing our rationing covertly, DrRich is sorry to say that we’re destined to keep making spurious arguments, and using dumbed-down statistical analysis to back them up. The JUPITER trial, while it is imperfect and while it does not answer every question, really is pretty straightforward. That we get so wrapped around the axle trying to fold such clinical trials into our covert rationing paradigm is simply another demonstration of the fact that covert rationing corrupts everything it touches.

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 Why the American NICE Will Not Be Like the British NICE [9:45m]: Play Now | Play in Popup | Download (138)

The United Kingdom’s National Institute for Clinical Excellence (NICE) has now issued its final ruling on the new cancer drug, Nexavar, which has proven effective in treating liver cancer. NICE will not cover Nexavar “because its high cost could not be justified by its marginal benefit.”

In a well-designed randomized clinical trial, Nexavar significantly prolonged the survival of patients with liver cancer, by an average of 2.8 months. Prolonging survival by a little less than 3 months may not seem like much, except for two things. First, that’s only the average. Some liver cancer patients treated with Nexavar have survived a year or longer, a result which is at least a little remarkable. And second, Nexavar represents a true and long-awaited breakthrough in the effort to find an effective treatment for hepatocellular carcinoma. Until Nexavar came along no chemotherapy had ever been shown to significantly prolong the survival of patients with liver cancer. For the first time, thanks to Nexavar, these unfortunate patients have been offered a real glimmer of hope.

But alas, Nexavar is expensive. Very expensive. It was a difficult drug to develop and test and bring to market, and it is expensive to make. So to recoup its costs, and to make the sort of profit that justifies its risk, the Bayer company is charging about $5000 a month for Nexavar. This means that any insurance company or government that agrees to pay for this drug is going to be out some big bucks.

The UK’s NICE was not being evil when it declined to pay for Nexavar. NICE simply did the math, and determined that spending money for the marginal benefit provided by Nexavar would create too high an opportunity cost – that is, that money would be better spent elsewhere, on other patients, for greater gain.

This is what open healthcare rationing looks like. It’s ugly, all right. But because it is open and transparent, making clear to everyone the rationale for its coverage decisions, NICE gives the British electorate all the information it needs to decide whether to accept the process, or to change it. This is far better – far more equitable and far less destructive to a society – than rationing healthcare covertly. DrRich tips his hat to NICE.

But DrRich notes that this recent decision by NICE has caused some of his conservative friends to descend into major bouts of caterwauling. Horrified that NICE has condemned liver cancer patients to an avoidable premature death, they insist we all notice that Obamacare creates an Outcomes Research Institute that is modeled after the British NICE, and so, we could soon have the same kinds of coverage decisions here in the U.S. American citizens, they demand, must consider how well they will like it when some government “panel” refuses to cover life-saving medical therapies because they are too expensive.

DrRich agrees that Americans will not like it much at all, but believes his conservative colleagues are overlooking an important difference between the British NICE, and any American NICE that might accompany our new healthcare system.

The Brits are plagued with a constant deluge of new medical products that are extremely expensive, and that, like Nexavar, offer real but only marginal improvements over current, cheaper therapies. Each time NICE has to render a coverage decision on one of these new therapies, the process is painful for everyone involved. But, being Brits, when faced with a difficult but necessary task they suck it up and carry on.

It is important to note, however, that the British NICE is required to deal with a constant stream of new medical products only because there is a ready market for those products elsewhere, and that market is in the U.S.

For, in the U.S., we have always recognized that medical progress usually occurs in incremental steps, and that to encourage continued medical progress we have to accept (and pay for) these incremental steps. That is, medical progress is much like all other forms of progress. Americans famously went to the moon, for instance, but did not do so all at once. Hundreds of incremental steps were required, several of which were seemingly trivial and expensive, and others of which involved catastrophe and tragedy. But we all understood that this is how one gets to the moon.

So a product like Nexavar, which does not cure liver cancer but gets us one step closer, would traditionally be viewed in the U.S. as an important incremental step toward the ultimate goal. And indeed, in contrast to the British NICE, the FDA has approved the use of Nexavar for liver cancer. This approval, in turn, encourages medical industry to keep going.

But consider: If a new American NICE steps in, and begins refusing to cover treatments that provide only incremental improvements, then the companies that invest hundreds of millions of dollars to achieve those incremental steps will simply stop doing so. After our new American NICE refuses to cover Nexavar-like therapies two or three times, medical industry will get the message loud and clear, and as a simple matter of corporate survival will change its business model. And the rapid succession of new medical therapies we have enjoyed will stop, or at least slow markedly.*

This means, of course, that if our new American NICE can just find the intestinal fortitude to make a few tough calls like the one the Brits have just made, and stick with those tough calls despite the firestorm that may ensue, then the hard part of their job will end. Forever. Pretty soon, they simply won’t be faced with any more Nexavars.

The healthcare bureaucrats in Britain and elsewhere around the world, whose jobs are made very difficult by the continual medical progress which is stimulated by the traditional American healthcare system, are cheering on our new reforms. Most especially, they are praying that the American NICE will have enough backbone to do what needs to be done. If the Americans can just make a few of the tough calls the Brits and others have had to make routinely, the job of healthcare bureaucrats will become vastly easier all over the world.

In any case, the prospect raised by conservative alarmists – of a NICE-like panel that is forever condemning American patients to an early death through their refusal to cover effective new therapies – will be only a very temporary phenomenon. After a very short time, such coverage decisions will no longer be necessary, and Americans will no longer be subjected to the anguish these decisions will provoke.

*If individual Americans are permitted to purchase with their own money medical products that are not approved for coverage by the government, then at least some stimulus will persist for continued medical progress. But as DrRich has documented in detail, the plan is to disallow such individual prerogatives.

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DrRich explains it all in, Fixing American Healthcare – Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare.

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 Physician-Industry Relationships – What Is Appropriate? [21:13m]: Play Now | Play in Popup | Download (185)

The following is a close approximation of a talk DrRich gave to a gathering of some of the world’s most promising young cardiac electrophysiologists, in Nice, France, on June 15, 2010. He was asked to talk to these young physicians about physician-industry relationships. The organizers of this gathering apparently did not know, as anyone who reads this blog would know, that DrRich should never, ever be allowed an opportunity to influence promising young physicians.  But, what’s done is done.

* * * * * * * *
A worldwide controversy is now roiling over the appropriate relationship between physicians and industry. Superficially at least, this controversy has to do with the undisputed fact that a physician’s relationship with industry can unduly influence his or her behavior.

That is, this controversy is said to be related to the conflicts of interest (COI) that are always inherent, to some degree, in such relationships.

I believe there is a deeper, and far more disturbing, reason behind this controversy, and I will address it in a short while.  But let’s first talk about COI, because it is ostensibly the chief concern, and it is in fact a very important issue.

A COI is present when an individual has a sacred, fiduciary duty (i.e., a duty of trust) to Entity A, but then develops a secondary relationship with Entity B, which (by creating self-interest, competing loyalties, or even just an inability to be objective), threatens to interfere with the primary duty to Entity A.

Physicians, especially academic physicians, have (at various times) at least three primary fiduciary duties that must take priority. These are: a duty to patients when practicing medicine; a duty to students (i.e., actual students, colleagues, or the public) when teaching; and a duty to society (and truth itself) when conducting medical research.  It is clear that ties with specific companies and their products can easily create important COI that may interfere with each of these primary fiduciary duties, and it is equally clear that physicians have commonly allowed this interference to happen.

Far more often than we like to imagine, doctors have allowed bias to creep in when recommending a course of action for their patients, in imparting knowledge to trainees, colleagues or the public, or when designing, analyzing or reporting results of clinical trials. And typically, most doctors who exercise inappropriate bias have convinced themselves that they are really acting in the best interests of their patients, students or society at large. For it is quite difficult to be objective about one’s own COI.

And there is no question that industry has become adept at the gentle art of creating COI among physicians (subliminally whenever possible), and have carefully incorporated the creation of such conflicts into their business models.

Obvious abuses we have all seen include doctors “shilling” for companies or their products at national meetings; clinical guidelines committees seeded with biased members; unbelievable amounts of money (well above “fair market value) being paid to key doctors for consulting services; long advertisements disguised as CME events; and ghost-writing scientific papers, then recruiting prominent physicians to sign on as “authors” after the fact. There are many others.

Such ongoing abuses of our fiduciary duties ought to be deeply embarrassing to us in the medical profession.

And if it’s not embarrassing, it is at least becoming painful. In the US, physicians who are discovered doing some of these things are being called out publicly, being investigated by Congress if not the Justice Department, losing their prestigious academic positions, and having their reputations destroyed. It is hard to be sympathetic toward them.

Despite all the negative attention – both public and legal – that such COI have brought to our profession in recent years, many of us continue to have tin ears.  A recent example, which has caused a stir in the blogosphere if nowhere else, happens to relate to the EP community. (Thanks to Larry Huston of Cardiobrief who did the heavy lifting on this one. )

Recently, the ACC/HRS collaborated in the launch of a new website, called AFibProfessional.org, which is described as “a unique collaboration to address atrial fibrillation for the cardiology community.” The site has only one corporate sponsor – Sanofi, the maker of Multaq.

At the time of launch, all the content on this new website consisted merely of old, recycled material from older ACC and HRS websites, with a single exception. The single exception was a slide lecture by a prominent electrophysiologist, who we all know and love, on “Managing Atrial Fibrillation.”  This lecture makes a strong case for the off-label, off-guideline use of Multaq. The lecture was posted without any COI disclosure statements, though the lecturer, it turns out, has significant financial ties to Sanofi.  When the matter became a public issue, the lecture was pulled from the site, and the ACC promised to investigate. A few days later, the investigation apparently completed to the ACC’s satisfaction, the lecture was reposted, this time with a COI disclosure.

While one hesitates to suggest malfeasance here, it certainly looks bad.  For the ACC and HRS to co-sponsor a brand new website that , by all appearances, is chiefly a vehicle for advertising Multaq suggests, if nothing else, that we in the medical profession, and our professional organizations, still don’t get it. If we don’t police our own COI, it will be policed for us.

What remedy should be applied?  A reasonable approach would be to recognize that physician-industry ties will always bring at least some COI, and to manage the problem by strictly limiting inappropriate COI, and fully disclosing any that remain.

Accordingly, a number of groups – most prominently the Institute Of Medicine – have recently made formal, and tough, recommendations regarding physician-industry relationships. The final “rules” under which we will all have to live are still being negotiated.

But it is highly likely that they will include many if not all of the following:

-    Doctors should not accept any gifts, no matter how small, from industry. These include trivialities such as pens and notepads, and more substantial gifts such as meals and travel.
-    Doctors should not give presentations in which content is controlled or influenced by industry.
-    Doctors should not consult for industry without a written contract, nor should they receive more than “fair market value” for consulting activities.
-    Doctors should not accept drug samples from industry.
-    Doctors who have a financial interest in a product or company should not participate in clinical trials in any capacity that involve that product or company, including patient enrollment, data collection, analysis or reporting.
-    Doctors who have industry ties should not participate in the development of clinical guidelines.
-    Medical schools and professional organizations should not accept direct funding, or attributable funding, for CME.
-    Any interaction with industry will be fully disclosed, and made publicly available.

What this “full disclosure” will look like can be seen in the Physician Payment Sunshine Act, a law which is pending in the US. Under this act,  all “transfers of value” totaling $100 or more in a year to any physician will be reported by each company to the government annually, along with each physician’s identifying information. Such “TOV” includes food, trinkets, entertainment or gifts; travel; consulting fees or honoraria; funding for research or education; stocks or stock options; ownership or investment interest, and any other economic benefit.  This information will be posted on a public, searchable government website. Companies will be fined $10,000 for each incident of an unreported TOV.

You younger physicians will be spending your careers in a COI environment that is significantly different from that which we, your elders, have experienced. Activities that have been acceptable, and even encouraged, will now cause you to be publicly stigmatized, or worse. This matter is in great flux, and you need to pay close attention to it as the rules are changing. In the meantime, you need to choose your interactions with industry very carefully, and very circumspectly.

Everything I have just discussed assumes that the real issue regarding doctor-industry relationships is COI. Indeed, everything I have discussed assumes a particular way of looking at industry relationships, which I will call Theory A. Theory A, goes as follows:

Theory A:

-  Medical progress is Good, and benefits mankind.
-  Industry is responsible for a high proportion of medical progress.
-  Industry-driven progress requires the active participation of physicians.
-  Therefore, a well-managed cooperation between industry and physicians is beneficial to mankind, and ought to be encouraged.

If you subscribe to Theory A you believe that, because well-managed physician-industry relationships benefit mankind, these relationships are good. So, fundamentally, it’s the management of these relationships which is at issue. These beneficial relationships produce unavoidable COI, which we must manage by strictly limiting their extent, and fully disclosing the ones that are left.

On the surface, at least, that’s what the debate is about – where to draw the necessary limits.  But just below the surface, the debate is about something else entirely. Beneath the surface, Theory A is rejected outright.

Today we hear prominent voices telling us that merely managing COI does not go far enough. No amount of COI is acceptable, and ALL physician-industry ties should be prohibited.  Among these is Jerome Kassirer, former editor of the New England Journal of Medicine, who says, “The ideal handling of COI is not to have them at all.” For these voices, Theory A simply does not apply. Rather, (I submit) they subscribe to Theory B:

Theory B:

-    The greed of medical industry creates excessive costs, and produces far more harm to society than good.
-    Physician-industry alliances strengthen industry, and increase the harm.
-    Therefore, crippling these unholy alliances is critical to the interests of society.

A corollary of Theory B is that it can only be the State’s job to cripple these alliances.

Proponents of Theory B, noting, not incorrectly, that medical industry is chiefly concerned with profits rather than the public good, conclude that industry will always behave in ways that are counter to the interests of society.  While many proponents of Theory B will agree that industry provides at least some benefits, they are convinced that these benefits are far outweighed by the harm they produce. Therefore, Theory B proposes to stifle, if not cripple, medical industry. And a very useful strategy for achieving this goal is to de-legitimize any practical relationships whatsoever between medical industry and physicians.

Proponents of Theory B rarely say what their real goal is. Most of them give lip service to Theory A. One must discern their real motives from their behavior.

Much of that behavior, in practical terms, has to do with controlling the flow of information. Let industry develop whatever it wants (perhaps), but don’t let profit-drunk industry – or its greedy physician spokespersons – instruct doctors and patients on who gets to use industry’s products, or when and how.

That kind of information can only be managed by unbiased sources. Proponents of Theory B invariably refer to government-appointed panels of experts to determine which products of industry are good and bad, and to manage the flow of information about them. Information coming from anywhere else is to be regarded as being charged with bias and greed, and should be ignored, or even suppressed.

Inherent in this viewpoint is the notion that the State is an honest broker, with no bias of its own, except to do what is best for the population. The State, in its disinterested beneficence, is the only civil entity which can pass judgment on which medical information is suitable for general consumption.

But even as a general proposition, no government is an unbiased and honest broker. Politics, according to Harold Lasswell, an early Progressive political scientist, is determining who gets what, when and how. Government officials do not cancel their own human nature when they put on a government name tag. As they go about the business of determining who gets what, when and how, they inevitably – and most often intentionally – create various favored constituencies, fiefdoms, and clienteles to suit their own goal. That goal is to consolidate and expand their own authority. In this way, in the exercise of its political mandate the government always creates co-dependencies, and determines winners and losers. So even in the general case, the government cannot be an honest broker.

But with regard to healthcare, government bias goes far beyond the general case. Healthcare spending is the chief problem governments face today. In the US, projected Medicare expenditures over the next 30 – 40 years will be $35-55 trillion. Numbers like this are deeply destabilizing, and simply cannot be abided, and promise nothing but chaos, revolution, and societal disintegration.

To the State, controlling healthcare spending is an existential problem, a matter of life and death, an issue that justifies any solution that has even a slight chance of working.

Why is the cost of healthcare rising so rapidly? Fundamentally, it is medical progress. Medical progress has greatly increased overall healthcare expenditures. Simply consider, for instance, the many fatal illnesses we have converted to chronic, and chronically expensive diseases – coronary artery disease, kidney disease, HIV/AIDS, various forms of cancer, and heart failure, to name a few.  Medical progress has made great strides in early detection and prevention, and preventive medicine always increases the cost of care.  And thanks at least partly to medical progress, life expectancies are on the rise, and people have many more years to consume healthcare.

Medical progress is very expensive, and the more we have of it the more it costs. The State can only look at medical progress and say, “Medical progress is killing us.”

But it is not politically feasible to come right out and say that stifling medical progress is necessary to the survival of the State. Rather, the State must assert that what it is stifling is greed.

Hillary Clinton gave us the State’s operative formulation in 1993: “There are just too many greedy doctors using too much expensive technology.”  So, to control costs, the State must control the doctors; and the State must control the technology, which is to say, industry.

I submit that an underlying theme within the debate over doctor-industry relationships is a desire to greatly slow or even stop the real threat to the State: medical progress, and the vast expenditures which medical progress produces.

The State has several means for stifling medical progress.  The State can institute increasingly oppressive regulations, which can have the effect of hamstringing industry, but more importantly, has the effect of converting industry to a client of the State, dependent on the State’s favors for its success. The State can demonize industry, trying to convince the public that drug companies and medical device companies are evil entities that would just as soon harm them as help them, and indeed, without the strong hand of the State would prefer to distribute pain and suffering as the more favored pathway to windfall profits. But more to the point of today’s discussion, the State can stifle the doctor-industry relationships that are so critical in steering medical progress in a clinically relevant direction.

So the  interests of industry must be represented as being fundamentally counter to the interests of society, and the doctors who have relationships with industry must be painted as their evil (or, at best, deluded) minions.

Yes, industry is biased, and industry will act on that bias whenever they can get away with it. Industry just can’t help itself. That’s just the way it is.

But the State is also biased. And the State will also act on that bias whenever they can get away with it. The State can’t help itself. That’s just the way it is.

Industry will try to exercise its influence over us by data-driven persuasion, and when that fails they will try to sweeten the persuasion, perhaps even with subtle or not-so-subtle bribes.

But the exercise of persuasion is even more dangerous when done by the State. While the State may also try to influence us with data-driven persuasion, it is very quick to resort instead to propaganda (i.e., the art of information-control by which the unwashed masses are told only what the specialized classes have determined is best for them), and when that fails, the State will resort to its ultimate form of persuasion – the enforcement of new and suppressive regulations at the point of a gun.

So, while industry is indeed biased, and needs to be kept at arms length, de-legitimizing industry altogether would be disastrous.  It would create an open field for extraordinarily powerful forces which are at least as biased, but in the opposite direction. If we value medical progress, we need the balance that industry provides – and that includes not only industry’s products, but its voice.

Medical progress driven by industry-physician collaboration is good for mankind. But that collaboration inevitably creates conflicts. We physicians need to control those conflicts, or the collaboration will be forcibly terminated altogether. Our professional history to date is bleak in this regard, and we only have one chance left to get it right, if that.

But in controlling our COI, we should not allow ourselves to be pushed too far. We should agree to reasonable limits on conflicts, and on full disclosure of any conflicts that remain. But we should draw the line when we are urged to forgo all relationships with industry altogether. We must recognize that industry and its selfish goals provide a necessary counterbalance to even more powerful forces whose goal is to stifle medical progress.

I don’t ask that you accept my synthesis of this problem at face value. I simply ask that you listen to what I am suggesting, and observe for yourself what is happening out in the wild. Then challenge yourself to come up with a better explanation for what you see happening out there. I sincerely hope you can, as I would much rather that my conclusions were not true. So if you do come up with a better explanation, I will greatly appreciate hearing about it.

________________________________

Now, read the whole story.

DrRich explains it all in, Fixing American Healthcare – Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare.

Now on Kindle!

Podcast:

 

 Mediating An Electrophysiology Dispute (With Bias) [13:31m]: Play Now | Play in Popup | Download (169)

A minor dispute – and an extraordinarily (almost disturbingly) polite one – has developed between the only two other electrophysiologists, that DrRich knows of at least, in the blogosphere. DrRich, being the third, ought to weigh in – not because his “vote” would break the tie, but because (as always) DrRich knows best.

Dr. Wes started it all off with a post noting, with some degree of dismay, that “(b)oth the Department of Justice (DOJ) and the Recovery Audit Contractors (RAC) are focusing investigations on Medicare billing for implantable cardiac defibrillator (ICD) surgery.”  Wes, with an appropriate degree of paranoia, concludes,”Consider yourself warned, criminals,” then recalls the halcyon days when the prospect of spending time in court conjured up for physicians nothing worse than malpractice suits.

Dr. John M. counters with a post whose purpose is to “welcome the upcoming policing of cardiac device implants.” John goes on to chronicle several examples he has witnessed of physicians implanting ICDs when, clearly, they should not have. The investigations of ICD implants by the Feds – and their private counterparts, the RACs – John posits, will serve to root out the bad eggs.

To his credit, John allows right off that his post is published “at the risk of exposing my naivete.”

To which DrRich replies, “Indeed.”

When DrRich was young, his grandmother, an immigrant from the Old Country who never shed her rustic habits, and not owning a motor vehicle, kept an illegal henhouse in her garage, buying the silence of her neighbors with eggs. It was from her that DrRich learned that if a rooster is behaving badly – engaging in hen abuse, for instance, or perhaps chasing grandchildren around the yard – one does not deal with it by sending Uncle George’s pit bull into the henhouse to take care of the offender. While the nasty rooster (never one to avoid a confrontation) might well be taken down, so would a lot of innocent bystanders.

John, you are laboring under the charming delusion that the purpose of these new investigations is to carefully review ICD implants and tease out only those unethical and/or poorly-trained device implanters, who are clearly and habitually engaging in untoward medical practices. If this were the case, then you and Wes and all those other honest EPs would have nothing to be concerned about, and the audits would indeed make the world a better place.

But alas, DrRich must tell you otherwise.

First, he urges you to read about his own experience. DrRich is a bit older than you, John, and was around the first time the Feds decided to conduct such an “audit” of ICD implantations. DrRich – like you, as pure as the driven snow – was absolutely certain he had nothing to worry about. But as matters unfolded, the fact that DrRich is not today writing this blog from a federal prison (do they let you do blogs in the penitentiary?) is more a matter of luck than anything else.

This new “audit” is much more intimidating than the one DrRich endured. That one was done by the relatively benign Office of the Inspector General (part of HHS). This one is being done by the Justice Department. So if they finger you, you are by definition, as Wes suggests, a criminal.

DrRich has talked about the Regulatory Speed Trap many times. Regulations inevitably become obtuse by evolution if not by design, so that, if you are practicing medicine, it is likely that somewhere – in the hundreds of thousands of pages of indecipherable and self-contradictory Medicare regulations – you are guilty of failing to comply with a regulation somewhere or other, and thus are guilty of healthcare fraud – which is a federal crime. The only thing that likely separates you from a convicted (or, more likely, self-confessed as part of a plea bargain) criminal is that the Feds haven’t decided to “audit” you yet.

The Feds know this, of course. The fact that they know it is documented in a recent GAO report entitled “Improvements Needed in Provider Communications and Contracting Procedures.” The GAO report notes that the bulletins which Medicare carriers are required to send doctors periodically (to make sure they understand the regulations) are filled with dense, lengthy and poorly organized prose sufficient to make them unreadable. Even if they were readable, the GAO continues, these bulletins would do doctors little good since they routinely announce new regulatory policies well after the implementation date, when doctors will already have been guilty of violating such policies (and thus committing fraud). Finally, the GAO finds that when confused doctors contact the Medicare call centers for clarification on the regulations, they get the correct answer only 15% of the time. (Even the IRS does substantially better than that.) And the Medicare websites, required under the regulations to clarify everything for the providers, universally lack “logical organization and navigational tools,” and as a consequence are nearly unusable.

So even when a doctor prospectively asks for instruction on how to comply with Medicare regulations (so as to avoid committing healthcare fraud and incurring huge fines and jail time), nobody is able to give him/her a straight answer. For, while it’s easy to look at a provider’s actions retrospectively (as the auditors are about to do), and find something in the dense regulations that makes those actions imperfect, it’s not so easy to tell providers ahead of time how to navigate those regulations in pristine fashion. As the GAO report reveals, nobody knows how to do that.

Now, DrRich is not calling the DOJ evil. The Feds are not being evil when they set out to conduct audits of physicians’ compliance with uninterpretable regulations; indeed, from their way of looking at it they are being humane.

They are only doing what they have to do, which is find a way – any way – to reduce healthcare costs. In this instance they do not really want to label hundreds or thousands of electrophysiologists as criminals, and ruin their careers and their reputations and their lives. They just want to ruin a few, and make sure the other ones know about it. This limited-bloodshed approach will accomplish their goal, which is, to make all the other electrophysiologists think twice (or thrice) before using ICDs again, in anyone, ever.

But in this instance it gets even worse. With this audit, in addition to dealing with the relatively-restrained Feds, electrophysiologists will also be dealing with the slavering RACs.

The RACs are a fun tidbit brought to us by the Medicare Prescription Drug Act of 2003. Under the RAC initiative, private contractors are to be sent out to perform audits of billing already done by insurers, health plans and physicians. The objective is to find “overbillings,” which the providers will have to repay along with penalties. Further, the act explicitly allows for prosecutions to be brought for “fraud and abuse,” even if the providers have repaid any overbillings.

The purpose of the Recovery Audit Contractors is, well, recovery. During the 3-year pilot of the RAC initiative, which took place in only 3 states, over $300 million were recovered. This wonderful success is the reason RACs are being turned loose elsewhere.

The RACs are paid by commission. Essentially they are bounty hunters, and they get to keep 20% of whatever they collect. According to the Associated Press, hospitals and providers are just a tad worried that these contractors, being so generously incented, will prove a little overzealous in their enthusiasm to find fraud. But worried auditees should not look for sympathy from the public. “A little zealotry is what we’re looking for on the part of the taxpayers,” said Leslie Paige, spokeswoman for Citizens Against Government Waste. “We think it’s about time.” Indeed – everybody can get behind fighting fraud, which is what makes the fraud gambit such a powerful tool for covert rationing.

DrRich surmises that it is good to be a RAC, and thinks you should consider buying stock in these companies, if you can. These outfits are about to harvest the vast bounty of obfuscation that Medicare has been carefully cultivating in its regulations for over 40 years, and has been carefully fashioning as fraud-traps for a somewhat shorter period of time. The RACs see the vast herds of physicians (violators one and all) placidly grazing all across the fruited plains, just waiting to be harvested. Their chief problem will be in pacing themselves; showing some restraint so they don’t use up their resources all at once.

And so, in addition to the dogged, officious, unsympathetic countenances of the lawyers employed by the DOJ, electrophysiologists this time around can also look forward to seeing the leering faces of the RACs’ commission-drunk forensic accountants. Electrophysiologists will experience the worst excesses of both worlds – the excesses of the state, and the excesses of unfettered for-profit outfits.

John M. can welcome this if he wants, and DrRich will wish him the very best good luck. DrRich, though, is still a little shell-shocked 15 years after his own encounter with federal audits of medical practices, and is very glad he’s only a spectator, and not a participant, this time around.

________________________________

Now, read the whole story.

DrRich explains it all in, Fixing American Healthcare – Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare.

Now on Kindle!

Podcast:

 

 The Real Fight is Just Beginning (Limiting Individual Prerogatives, Part 1) [12:52m]: Play Now | Play in Popup | Download (5)

Unlike many of those who actually supported President Obama’s healthcare reform, DrRich always remained confident (even during the darkest days, such as right after the Scott Brown election) that Obamacare would pass.

DrRich’s confidence stemmed from the simple fact that the health insurance industry required this outcome. That industry, having clearly reached the end of its life-cycle and having nowhere else to turn, desperately needed the government to provide it with a graceful exit strategy. And Obamacare, which promised to convert the health insurance industry into a public utility, was as good a deal as they were going to get. And so, while the President and his supporters traveled the land, painting insurers as the very embodiment of all healthcare evil, with sundry hapless victims of insurance industry atrocities in tow (for demonstration purposes), we Americans were treated to the spectacle of the insurers themselves not only declining to defend themselves, but actively adding fuel to the fire whenever necessary to keep reform moving along, and gratefully embracing their assigned role as the villains of the set piece. And in the end we got the healthcare reform the insurers desperately needed.

So, dear readers, now that this thing has finally come to pass, it is time to prepare ourselves for the real fight, the fight whose outcome is actually in question, and which will determine not merely what kind of healthcare system we will finally end up with, but more importantly, what kind of society we will be. That question, of course, is whether individual Americans ultimately will be restrained from using their own resources to provide for their own medical care.

DrRich has said many times that this was to be our real battle. And whenever he has said this, loyal (but misguided) readers have questioned his sanity – or at least, his judgment. There is simply no reason (these critics insist) for our leaders to attempt to prevent individuals from buying some of their own healthcare with their own money. There is nothing in the bill (they go on) that explicitly does so. And besides (they offer as a clincher), we’re Americans, and even our clueless political leaders know that we’d never stand for it. The very notion that our government would try such a thing amounts to simple paranoia.

DrRich sincerely hopes his critics are right, and that his fear over such a restriction to our personal liberties is just one more manifestation of his paranoid psychosis. For, if his critics are right, not only do we have drugs for that, but also DrRich would be allowed to buy them.

DrRich is sorry to say, however, that if we Americans are to suffer no restrictions on our ability to purchase healthcare services with our own money (and, ultimately, on our ability to expend any individual resources for any individual benefit), this outcome will likely result solely from enough of us remaining vigilant, and vigorously fighting oppressive efforts whenever we find them. It will not result from our complacency, or from placing our trust in the beneficence, the common sense, or the respect for fundamental American precepts, of our political leaders.

This will truly be a momentous fight. Its outcome will determine, to a very great extent, what kind of country we will be, and more importantly, whether the Great American Experiment – arguably the greatest secular endeavor in human history – will continue, or will end in a whimper.

In this and in the next few posts, DrRich will attempt to explain himself by addressing three specific questions. 1) Why must individual prerogatives be restrained in our new healthcare system? 2) What evidence do we have that such restraining efforts are already in the works? 3) How have such restraining efforts already become ingrained in our current, pre-reform healthcare system?

Why Individual Prerogatives Must Be Restrained

It is natural and unavoidable for universal healthcare systems to strive to limit individual prerogatives.*

These healthcare systems are “universal” in two senses. First, they attempt to cover all people. Second, almost by definition they cover “all” healthcare services. Under America’s new healthcare law, for instance, our new health insurance utilities (formerly health insurance companies) are required to issue policies (which every American must have) that cover everything. “Qualified” health plans under our new law MUST cover (as laid out in Section 1302): ambulatory patient services, emergency services, hospitalization, maternity and newborn care, mental health and substance use disorder services, including behavioral health treatment, prescription drugs, rehabilitative and habilitative services and devices, laboratory services, preventive and wellness services and chronic disease management, pediatric services, including oral and vision care.

Fundamentally, this “universality of features” reflects a particular philosophy. The central authority is telling the individual that “everything” will be taken care of for them, from soup to nuts. So no need to worry your pretty little heads. But, as always when the central authority assumes all responsibility for providing some aspect of security (in this case, healthcare security), it also assumes all control.

It is important for the government to control all healthcare spending not only because it is the natural state of governments to continually accrue all the power they can (see: Thomas Jefferson), but also because, in the case of healthcare, controlling all expenditures is essential for the purpose of covert rationing.

Allowing individuals to spend their own money fundamentally undermines such a system. It implies that the central authority is actually not supplying all useful healthcare services (when, by definition, it is), and thus implies that the government may be doing some kind of rationing. When one is dedicated to rationing covertly, such an implication cannot be permitted.

Perhaps more importantly, when individuals are allowed to purchase “extra” healthcare, that’s a graphic admission to the unwashed masses that there is extra healthcare to be had. That is, it raises expectations for everybody, and these higher expectations make it that much more difficult for the central authority to pull its covert rationing strings.

(The official reason the central authority will always give for restricting individual prerogatives is one of “fairness.” Allowing the rich to go outside the system would create an unfair, two-tiered healthcare system, etc., etc. But the real reason is that individual healthcare spending undermines the government’s control, and that control is essential for covert rationing.)

The critical importance of controlling the expectations of the masses is nicely illustrated by some of the problems being experienced by the British and the Canadian healthcare systems. In both of these systems, the very visible progress that has been made in the American healthcare system – new drugs, new techniques and new technology – has created new demands and new expectations among Canadian and British citizens. Essentially, seeing what was possible, enough of the population demanded better care that something had to change.

The inability of these universal healthcare systems to ignore such increased expectations has led to an acceleration in expenditures, and even to loosening up the restrictions on individuals. (Both of these universal systems started out, as a simple matter of course, by strictly forbidding individuals from purchasing “extra” healthcare with their own funds.)

Some of DrRich’s critics have argued that such “loosening up” shows that any restrictions on individuals simply will not stand – so we don’t really have anything to worry about. For, if such restrictions cannot be maintained in Canada or Great Britain, how will they ever be maintained in the U.S.? Perhaps. But DrRich suggests that, to the contrary, the fact that restrictions on individuals in Canada and Great Britain systems had to be revised simply illustrates the critical necessity, in any universal healthcare system, of managing expectations. For a failure to manage expectations, obviously, leads to a loss of control. Had it not been for the very visible example of American healthcare to show them what was possible, citizens of Canada and Great Britain quite possibly never would have agitated for “more.” As it is, thanks to the unfortunate example of high-cost healthcare their citizens saw in the U.S., British and Canadian officials were simply unable to manage the expectations of their citizenry.

Now that we too will soon have mandated universal healthcare (much to the relief, no doubt, of Canadian and British healthcare bureaucrats), it will become critically important for our government to manage the expectations of American citizens. Since American healthcare bureaucrats won’t have an annoying external healthcare system to worry about, continually displaying more effective, and more expensive, healthcare options,the job will be somewhat easier for them than it was for their counterparts in Canada and England. For American bureaucrats, managing public expectations will mainly mean restraining individual American citizens from going outside the system, and buying extra healthcare with their own money. This makes restricting individual prerogatives in the U.S. critical, even more critical than it was in our cousin nations. And we should not be surprised if our bureaucrats employ some very devious and even draconian maneuvers to do so.

DrRich believes that they will pull out all the stops to restrict individuals. Whatever methods they employ will, of course, be conducted only for the best of reasons – to have the fairest healthcare system possible, to have the most ethical healthcare system we can devise, and to protect misled Americans from throwing their hard-earned money away on unproven medical services. Whatever the reasons they might offer, their attempt to restrict individual prerogatives will become deadly serious, because doing so is absolutely essential to their real aims.

Covert rationing demands it.

*This is the case in practice, but not necessarily in theory. In his book, DrRich proposed a kind of universal healthcare system in which each American would be provided with catastrophic universal health insurance (which would operate under a system of open and transparent rationing), and in which Americans would then be expected to buy their more routine healthcare, as well as any non-covered healthcare they might want, themselves. (Poor Americans would be subsidized to do so.) But a system like DrRich’s encourages – even demands – individual responsibility, and is therefore philosophically objectionable.

__________
Part 2 of Limiting Individual Prerogatives

Part 3 of Limiting Individual Prerogatives

Part 4 of Limiting Individual Prerogatives

The U.S. Congress has been distracted from the vital issue of healthcare reform in recent weeks, due to the prospect of elections of one form or another (that is, Scott Brown’s, or their own). It may be a little difficult to understand why the Democrats – who still hold the Presidency, a large majority in the House, and a 59 to 41 majority in the Senate – suddenly seem to be so very disheartened, to the point of virtual paralysis, on healthcare reform. Healthcare reform, after all, is the crowning jewel in their agenda to fundamentally change America as we know it.

While President Obama, Speaker Pelosi, and a few other stalwarts seem to understand that passing healthcare reform would be worth almost any price that might be extracted by the electorate in November, less principled (and more at-risk) members of Congress, who are apparently less dedicated to a certain ideology than their leaders, apparently see it another way.

And so, from all appearances, things appear to have stalled on healthcare reform.

But while our political leaders seem willing at this moment to take a breather – either to lick their wounds and regroup, or to celebrate an important tactical victory – one interested party in the healthcare reform wars cannot afford to rest.

That would be the health insurance industry.

As DrRich has pointed out before, the health insurance industry is the one entity that simply cannot afford to wait. They need healthcare reform now.

The health insurance industry has pretty much run out its string. The era in which insurers can increase their market cap by acquiring public assets (i.e., non-profit institutions) for a fraction of their true value, and by making mergers and acquisitions, is pretty much over. For the past few years insurance companies, for the first time, have had to try to make a profit by taking care of sick people. They have never done that successfully, and never will. They have tried every underhanded trick imaginable to avoid paying benefits to their subscribers. They have already raised insurance premiums to the very breaking point. But an uncooperative public insists on getting older and sicker, and greedy drug and medical device companies insist on bringing ever-more expensive technologies to the clinic. The insurance industry finds its profit margins (already small) rapidly eroding. The industry’s business model – taking in inflated insurance premiums, then attempting to withhold medical services – is irreparably broken.

As a result, what the health insurance industry needs more than anything else is a graceful exit strategy. And Mr. Obama’s healthcare reforms promised them that very thing. (What, exactly, they have been promised is largely a matter of conjecture, but most likely they will take on a role in administering government-funded healthcare, quite possibly assuming the role of a public utility.)

Whatever may be the particulars of the “deal” the health insurance industry struck with the reformers, that deal offered them enough to purchase their silence during the entire roiling debate over healthcare reform through the summer, fall and winter. They have stoically (almost cheerfully) accepted their assigned role as “villain” in this set piece, and have silently borne the public “attacks” the President and his soldiers have dutifully launched against them in an effort to drum up support for their reforms. All the nasty things the Democrats have said about them, the industry understands, are necessary components of their last best hope to salvage something serviceable out of their broken business model. No Harry and Louise this time!

Despite this symbiotic relationship, the reforms envisioned by the Democrats and the insurance industry have now faltered. The stalling of the reforms, however, means very different things to these partners.

For the Democrats, while abandoning, or even substantially diminishing, the ambitious reforms they had in their sights might prove modestly embarrassing for a time, such is the nature of politics. When one overreaches, one pulls back and waits for a while, until the other side overreaches. Look at where the Republicans were just a year ago. A year or three from now, they may be back in a similarly diminished state – and the time for passing healthcare reform may again become propitious. If you’re a Democrat politician, you must take the long view.

But the insurance industry does not have that luxury. They are at the end of their tether, and their only alternative to a graceful exit strategy of the type (whatever it was) the President promised them, is a completely graceless one. Whatever happens or doesn’t happen with healthcare reform, the insurers can’t keep doing business as usual. DrRich believes the health insurance industry has been backed into a corner, and the doorway the Democrats were making for them is being nailed shut.

In such a situation, it is entirely predictable that the insurance industry will take some kind of drastic action, to try to force healthcare reform back on the table.

And last week, Wellpoint did so. Wellpoint’s California subsidiary, Anthem Blue Cross, announced it is raising its already-astronomical health insurance premiums by as much as 39%, a move that promises to greatly increase the number of Californians who are uninsured.

Kathleen Sebelius immediately fired off a public letter to the company, demanding that they justify this unconscionable rate increase. And Wellpoint, lustily assuming its assigned role as villain, was delighted to comply. We’re in a recession, Wellpoint brazenly asserted, and in a recession, like it or not, people exercise their prerogative to drop their health insurance. The only people who don’t drop their health insurance are the sick people or those who are likely to become sick, which means that our cost per subscriber goes way up. So naturally, we have to increase premiums. By a lot. It’s just business. That’s just the nature of our current, unreformed healthcare system. So choke on it.

Wellpoint was also kind enough to mention (for anyone dense enough to have missed the point) that the need for higher premiums would be nicely mitigated if everybody was mandated to purchase health insurance.

Wellpoint’s premium increase immediately triggered great volumes of delighted outrage by thankful Democrats, who really need a large dose of “evil insurance company” right about now, but it elicited only a few lame and uncomfortable attempts by stunned Republicans to diminish the significance of the unfortunate action.

DrRich would like to point out that, from a pure business standpoint, there was no good reason for Wellpoint to stir the soup at this moment. Wellpoint is the most financially sound private health insurance company. While its California subsidiary did lose money last year, overall the company performed quite well, and reported a very nice profit growth for the year. And with several of its competitors in trouble, Wellpoint stands to do comparatively well for the foreseeable future. So it stands to reason that, if Wellpoint really wanted healthcare reform to go away, they would have waited a few months before announcing their rate hike. It would have cost them very little to do so. The last thing they would have done is to throw the reformers a critical lifeline just as they were going under for the last time.

Wellpoint’s astounding premium increase was, DrRich submits, a strategic move to push health insurance reform back to the front burner.

The Republicans, many of whom believe that the failure of Obama’s healthcare reform will spell the failure of his presidency, have been thereby served notice. An angry electorate – which, at the moment, seems ready to punish Democrats for their attempt at passing an unpopular government takeover of healthcare – is likely to become even angrier if it turns out that the failure to reform healthcare will give the haughty insurance companies the green light to price even more millions of hard-working Americans out of the health insurance market. That species of anger will be directed toward the Republicans, and not the Democrats.

DrRich has always maintained that if healthcare reform is to happen, despite the incompetence of the Democrats who control everything, the reason it will happen is because the insurance companies cannot survive without it.

Accordingly, Republicans who understand what Wellpoint is telling them will think twice about skipping President Obama’s proposed bipartisan summit on healthcare, or behaving intractably if they do show up. If they fail to get the message, DrRich suspects that we will soon be hearing about additional, even more astounding, rate hikes.