This is Chapter 8 of my book-in-progress, “Open Wide And Say Moo! – The Good Citizen’s Guide to Right Thoughts And Right Actions Under Obamacare.” Comments are fervently sought; you can leave them here.

You can read my rationale for undertaking this project, and thus opening myself up to the possibility of public failure, humiliation, derision, disapprobation, and unwanted scrutiny, here.

And here is the up-to-date archive for all the chapters that have been posted so far.
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Chapter 8 – The Real Infrastructure of Obamacare

In 2009, while the Obamacare legislation was being debated, opponents put together various, very scary “flow charts,” to show how utterly convoluted and inherently dysfunctional our healthcare system would become under this new plan. These charts incorporated the scores of new federal agencies, panels, commissions and bureaus that were to be created by Obamacare, and attempted to demonstrate their complex interlinkages with meandering flow lines, making evident, for instance, numerous opportunities for procedural endless loops. And on these charts, invariably doctors would be positioned on one distant corner, and patients far away on some other distant corner, and the astounding bureaucratic morass in the middle made it plain that they might as well be on separate planets.

In other words, the main point of these flow charts was to show how getting medical services under Obamacare would become an ungodly mess.

This remains an important thing to understand about Obamacare. Still, if you are an American who has attempted to get healthcare services out of the pre-Obama healthcare system, it would not be surprising if your reaction to such news is, “So what else is new?”

In fact, it seems likely that many Americans regard the prospect of Obamacare thusly: “Yes, Obamacare will almost certainly become a bureaucratic nightmare. Those charts do look a little scary. But really, all that means is that we’ll be trading one bureaucratic nightmare for another. And if Obamacare gets a lot more people health insurance, and offers coverage for pre-existing conditions, and stops the evil insurance companies from killing people, it still might be a good trade.”

Such flow charts, as nicely as they may illustrate the bureaucratic complexity of Obamacare, nonetheless fail to tell the real story. They fail to show that Obamacare is, in fact, fundamentally different from anything that has come before. That fundamental difference is in the complete, top-down, centralized, command-and-control organization it will bring to American healthcare. This top-down structure will systematically destroy the role of individual physicians in making medical decisions, and as a result their patients will be reduced to faceless members of a herd.

The Real Structure of Obamacare

As we have seen several times, in order to control American healthcare it is absolutely imperative to control the behavior of American physicians. And fundamentally, the infrastructure of Obamacare is set up to do just that.

The scores of new federal agencies that show up on those flow charts, of course, will hamstring doctors in various useful ways. Each agency will have its own regulatory structure, and each will establish hundreds of new rules, regulations, and guidelines, and therefore, will produce hundreds of novel opportunities for doctors (and anyone else working in the healthcare system) to commit healthcare fraud. This will help to achieve the useful goal of placing doctors into a risk-avoidance frame of mind, rather than a patient-care frame of mind. But still, the large majority of these new agencies can be considered as nothing more than mere annoyances – sort of a swarm of flies buzzing around doctors’ heads as they plod along, trying to perform the main task.

It’s that main task – the real structure of Obamacare – that’s important.

Obamacare is set up primarily to eliminate the opportunity for doctors to make individual decisions. Important medical decisions will be made centrally, and will transmitted, through the new healthcare structure, to the doctors on the ground.

Over the years, healthcare bureaucrats have come to understand that just telling doctors what they are supposed to do will not be sufficient. Doctors may or may not obey, and policing the millions of individual decisions that are being made by doctors every day will be next to impossible.

So fundamentally, Obamacare is designed to incorporate doctors into new organizations that will be established to deliver efficient, high-quality healthcare, as defined by the Central Authority. And here I use the word “incorporate” in its literal form – to merge bodily into a larger structure, and to become fully a part of that larger structure.

To maintain their viability, these new organizations must require their physician-components (and all their other organic components) to function in what us usually referred to as an “integrated, team-based decisional paradigm,” that is, to give up any idea of independent decision making. Rather, for the survival of the whole, each entity within the organization will need to closely follow formally established “best practices.”

These new organizations – which at the moment are being called Accountable Care Organizations (ACOs) – will likely consist of hospitals, doctors, and legions of “nonphysician providers,” such as nurse practitioners, physician assistants, and care coordinators. All medical care will be delivered by “patient care teams,” and, spearheaded by these teams, the organizaitons will go “at risk,” accepting pre-determined bundled payments to deliver care to a pre-defined population of patients.

For such organizations to work, doctors will have to cease being independent agents. They will have to follow to the letter the care directives established by the “team.” The viability of the entire organization will depend on doctors’ full compliance with this collective prime directive. Fortunately, since there is no need (or allowance) for independent thought or action on the part of physicians in such a system, one doctor is pretty much the same as another, so doctors are entirely interchangeable. The non-compliant ones can be culled out and replaced as needed.

These ideas are not really new, of course. HMOs tried similar things in the 1990s. The difference is that now there is nowhere else for doctors to go. Private practice is rapidly becoming unfeasible. Direct-pay practices (for as long as they continue to remain legal) are really only suitable for primary care. Specialists, who require lots of expensive stuff – things like gamma cameras, operating suites, catheterization laboratories, hordes of highly trained medical technicians, &c. – generally find it exceedingly difficult to function as independent operators. It is no longer the 1990s; if doctors want to practice medicine, joining an ACO will soon be their only option.

Once doctors are fully absorbed into these new “team-based” entities, it becomes relatively easy for the Central Authority to control things. The ACOs will only be paid if they follow the directives that are handed down by the various panels, bureaus, &c, created by Obamacare, and the ACOs will only remain viable if the imbedded doctors spend less money than the ACO takes in. Since the decision not to spend all that money will have been disseminated among numerous members of the “team,” and since team-based decisions will be mindful of “social justice,” doctors will be at least partially absolved of the crime of withholding useful healthcare. And since the Central Authority is merely handing out the money (along with a few helpful “guidelines”), it can plausibly deny that it is telling doctors how to practice medicine.

We Are The Borg

Knowing that many American doctors will find this arrangement odious, Ezekiel Emanuel from the White House’s Office of Management and Budget, and Nancy-Ann M. De Parle, Mr. Obama’s Czar of Healthcare Reform, co-authored an article in the Annals of Internal Medicine in 2010, to help change hearts and minds. It is a message directly from the White House to American doctors, appearing in a prestigious peer-reviewed medical journal no less, explaining why joining up with the new ACOs will be to their great benefit, and indeed, that it is an offer they cannot refuse. After reminding doctors of all the glorious accomplishments of Obamacare, they articulated why there is a duty to comply:

“[Obamacare] will unleash forces that favor integration across the continuum of care. Some organizing function will need to be developed to track quality measures, account for and manage shared financial incentives, and oversee care coordination. . .As physicians organize themselves into increasing larger groups — patient-centered medical home practices and accountable care organizations — they are, out of necessity, investing in the acquisition or development of management skills that could provide these organizing functions efficiently for physicians groups. . .For physicians, this means a profession that is more rewarding, more productive, and better able to realize its moral ideal.”

For readers who become somewhat mind-numbed by this kind of policy-wonk jargon, here is the correct translation:

“Physicians! You have been neglecting your moral obligation to the collective, in favor of your archaic devotion to the individual patient. Under Obamacare you will need to join organizations which are devoted to the proper collective goals, and which therefore will guarantee the proper moral ideals. You must function not as individual decisionmakers, but as integrated cogs in a vast healthcare continuum, which will stretch from the centralized bastion of gleaming moral authority (from which we pen this message) all the way down to the humble tip of your stethoscope. You will be rewarded for your cooperation, or suffer for your resistance (resistance, of course, being futile). So rejoice for the health of the collective, and for your own well-being, and prepare to be assimilated!”

Doctors, and all other healthcare workers, are to be integrated into localized, healthcare delivery collectives, which will dance to the ever-changing tunes set by the Central Authority. Everything in these ACOs will be shared collectively, including the financial risk, the medical decisions, and even the ethics of those medical decisions. The notion of doctors working as independent professionals, answerable only to their professional standards and to their patients, is to be abolished once and for all. In an Accountable Care Organization doctors do not owe the featured accountability to the patients. but rather, to the ACO itself, and to the Central Authority that regulates it.

This, then, is the fundamental structure of Obamacare. It finally places doctors into their proper place. They become interchangeable cogs in an integrated healthcare machine, a machine which is tied irrevocably, flesh to flesh, to the Central Authority.

Under this structure patients will lose their personal advocates once and for all. They will finally be reduced to the position that Progressive healthcare requires of them. They will no longer be individuals whose doctors owe them a duty. They will be members of a herd which an ACO is charged with husbanding at the lowest cost possible. And so, assimilating doctors into the Borg is the final step. It removes the last remaining obstruction to the widespread implementation of herd medicine.

Everything else about Obamacare – all those new agencies and all that new bureaucratic complexity – is just details.

How This Structure Facilitates Cost Control

As we saw earlier (Chapter 1), in any system in which healthcare costs are shared collectively, truly controlling the cost of healthcare will require withholding useful medical services from many patients who would benefit from them. But so far, despite all the coercion that has been applied to the medical profession, and despite the troubling extent to which doctors have caved in to that coercion, not enough healthcare is being withheld, and costs continue to accelerate. Physicians still have not been sufficiently controlled.

Reducing physicians to members of an integrated “healthcare team” which makes decisions collectively is a brilliant move. Any remaining vestiges of professional responsibility that may remain to some of the newly-integrated physicians will be washed out by the other members of the team, who will outnumber the doctors and who never have had such a professional imperative. For these others, a moral responsibility to the needs of the collective, i.e., to social justice, will likely be the obvious overriding imperative. And furthermore, it will be an imperative that is strongly reinforced at every turn by the agencies of the Central Authority which will decide how much money the team is going to recieve for its efforts. So the integrated teams will be exquisitely sensitive (and even sympathetic) to the needs of the Central Authority.

Obamacare provides countless ways for the Central Authority to influence the integrated healthcare teams to withhold medical services, from imposing outright rules, to influencing treatment philosophies, to threatening (overtly or subtly) prosecution. For the most part, however, these can be reduced to two main efforts: the imposition of expert-generated guidelines, and the imposition of payment caps.

Guidelines – A Tyranny of Experts

A major thrust of Obamacare will be to create numerous panels of experts, appointed by the Central Authority, which will – in an entirely disinterested and objective manner, of course – publish clinical “guidelines” which will suggest to physicians what medical services they ought to offer patients with specific medical conditions. In concept, clinical guidelines are a perfectly fine idea, and indeed are often helpful to practicing physicians. This is why professional organizations have published and updated numerous sets of clinical guidelines for decades.

But the guidelines published by the GOD panelists (Government Operatives Deliberating) will be something new. These guidelines will be treated as sacrosanct rules, which must not be broken, the violation of which might lead to criminal prosecution. We already have examples of criminal investigations based on alleged guideline violations, which I will show later.

I will be devoting much of the remainder of Part II of this book to the tyranny of experts which is about to be unleashed upon American doctors and patients, through the medium of “guidelines,” so I will say no more about it here. I will simply note that the structure of Obamacare, wherein it is an integrated team (instead of individual doctors) deciding whether to follow “suggested” sets of guidelines, will render this tool immensely more powerful than it has ever been before.

The Independent Payment Advisory Board

Perhaps nothing in the Obamacare legislation embodies the top-down, command-and-control nature of Progressive healthcare more than the Independent Payment Advisory Board (IPAB), a 15-member panel of “experts” to be appointed by the President. There are three particular features of the IPAB that illustrate this fact: The IPAB will control all healthcare spending, public and private. The IPAB has been awarded near-dictatorial power. And the IPAB is designed to be a nearly immutable entity.

The IPAB Will Control Everything

While the IPAB has several duties, the chief among these is to impose a final, insuperable cap on healthcare spending.

Obamacare hands the IPAB the authority to cap not only public healthcare spending, but also private healthcare spending (thus demonstrating, once again, that Progressives do indeed mean to restrict private healthcare spending). This particular feature of the IPAB is one of the more difficult-to-tease-out aspects of the Obamacare legislation, so it is fitting that the IPAB acquired this sweeping authority in a suitably convoluted and sneaky way.

Anyone who paid attention to the remarkable process that brought us our new and transformational healthcare system might recall that Obamacare was not passed in the usual manner. It began typically enough; there were separate House and Senate bills, each of which passed in their respective chambers (though without any Republican votes). Normally, the next step would be to send those two bills to a Joint Conference to hash out the differences, and then off to a final vote. This did not happen with Obamacare.

The main hangup occurred in the Senate. There, the President needed 60 votes to assure final passage of his bill. And in the way of negotiating for those necessary 60 votes, five or six Democrat Senators went behind closed doors to cobble together a list of amendments to the original Senate Bill – the so-called Managers’ Amendments. It is in the Managers’ Amendments that one can find such famous niceties as the bribes paid to Nebraska and Louisiana in order to entice their respective Senators to support the bill. Some of the deals made behind closed doors were so outlandish that even the Managers themselves (according to many reports at the time) did not expect them to survive the Joint Conference that everyone assumed would take place.

The original Senate bill, before the Managers’ Amendments were added, never created anything called an Independent Payment Advisory Board. Rather, in Section 3403 it created the Independent Medicare Advisory Board, whose powers (appropriately) were limited only to federally funded healthcare programs, such as Medicare. It was the Managers’ Amendments which re-empowered the IMAB, and re-christened it as the IPAB.

Specifically, Section 10320 (in the Managers’ Amendments portion of the legislation) grants the IPAB, beginning in 2015, the authority to limit all healthcare expenditures, that is, all healthcare expenditures, and not just expenditures by Medicare or government-run programs.

To emphasize this expanded authority, Section 10320 changes the name of the “Independent Medicare Advisory Board” to the “Independent Payment Advisory Board.” It directs the IPAB, at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private healthcare programs. Furthermore, it designates that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies “administratively” (that is, without any action by Congress).

The justification for this mind-boggling expansion of the IPAB’s authority, to the extent that any justification was offered, appeared to be that controlling private healthcare expenditures will directly impact Medicare, since the “target” Medicare growth rate (which the IMAB was originally charged with achieving) will be determined by overall healthcare expenditures. Therefore, it is necessary to control all healthcare expenditures, public and private. (More practically, if Medicare patients are subjected to arbitrary cost-cutting measures that do not affect younger Americans, we Old Farts are likely to become inconveniently rowdy.)

Once the Managers had devised sufficient paybacks in the Managers’ Amendments to get the needed 60 votes, and the Senate bill finally passed, President Obama and his Congressional allies, Mr. Reid and Ms. Pelosi, determined that allowing the new law to go to Joint Conference would be counterproductive. Support among Democrats in the Senate was so tenuous that party leaders realized the bill would never survive another Senate vote after a Joint Conference. It would be easier, they calculated, to ram the Senate bill, fully intact including the Managers’ Amendments, through the House of Representatives, employing the always-useful reasoning that passing the law right then was a manifest emergency. So that is what they did. And while the vote was also a much closer call than Democrat leaders would have liked, the Senate bill finally passed in the House. And in this way, to the astonishment of many, the Senate bill, Managers’ Amendments and all, became law.

However convoluted the process may have been, the fact is that Obamacare grants the IPAB, a non-elected entity within the federal government, the authority to limit all healthcare spending, including private spending.

The IPAB’s Authority Is Nearly Dictatorial

A quick reading of Section 3403 might leave one with the impression that the IPAB is a sort of Mr. Rogers of healthcare – a mild-mannered, friendly, always-helpful, but ultimately undemanding agent for good. This is the impression imparted by the first few paragraphs of the Section, which paint the new entity as an “advisory” board, whose main task is to develop “proposals” and “advisory reports,” which “proposals” and “advisory reports” would solely consist of various “recommendations,” that ought to be “considered” for the purpose of cost reduction.

Nothing could be further from the truth. This language is simply another example of supplying a new law, which is far more radical than the authors would like people to know, with a soothingly misleading introductory paragraph. The IPAB is actually designed to be as all-powerful as it’s possible to be.

Each year, once the Medicare’s Chief Actuary determines that the projected per capita growth rate for Medicare exceeds the designated target growth rate (which is an inevitability), the IPAB is required to submit a plan which will cut healthcare costs sufficiently to bring the growth rate back in line; which is to say, the IPAB will determine what will be paid for and what will not. Then, the Secretary of HHS is required to implement the IPAB’s plan in its entirety, without exception – unless Congress acts to block implementation. However, the ability of Congress to do so is severely limited. The representatives of the people are forbidden from taking any action “that would repeal or otherwise change the recommendations of the Board,” unless it: a)votes to halt the IPAB mandates with a supermajority of the Senate; and b: devises its own specific cost cutting scheme that will achieve equivalent results. If Congress had the will to do such a thing, however, we never would have needed Obamacare in the first place.

So, in practice, the cost-cutting “recommendations” which the IPAB will “propose” for “consideration” by the Secretary and by the Congress will be implemented in their entirety, automatically, without revision, and will be backed by the full authority of the Federal government.

For all practical purposes, the IPAB will become a new agency of the executive branch with near-dictatorial authority to cut healthcare spending, public and private, where and when and for whom it sees fit.

The IPAB Is Designed To Be Immutable

Section 3403 also contains some remarkable language that likely has never been seen before in American legislative history. To wit:

“It shall not be in order in the Senate or the House of Representatives to consider any bill, resolution, amendment, or conference report that would repeal or otherwise change this subsection.”

So the designers of Obamacare, recognizing that the arbitrary cost cutting that the IPAB will impose on all those ACOs and other integrated healthcare teams (as they happily toil away in the new healthcare worker’s paradise) is sure to create significant political blowback, has sought to immunize the IPAB from any revisionary lawmaking that might result.

And as astounding as it may sound, the IPAB and all its designated dictatorial functions are designed by law to be in force for perpetuity. Our Congress has passed legislation that purports to bind all future Congresses from altering it in any way.

We have heard from the President and others that the IPAB is a very important feature of our new healthcare system. This “immutability clause” ought to convince us just how important they believe it to be. This clause necessarily implies that the IPAB is not only the most important innovation in Obamacare, but indeed, it apparently is most important legislative provision ever written. We know this because no other provision has ever received such extraordinary protections from any future alterations whatsoever.

One can only bask in the utter audacity of our Progressive leaders, who are so sure they know what’s best for us that they were willing to engage in all manner of legislative legerdemain to pass Obamacare, not only against the apparent expressed will of the people, but also (as it turns out) against the objections of any future American Congress that is sent to Washington by those people.

Not even our Constitution itself – a document that attempted to establish a government for all time – was as audacious as this. For the Constitution, at least, provided a mechanism for its own alteration.

One wracks one’s brain to think of the last time a law was promulgated with such audacity – not with the audacity of hope, but the audacity of perpetuity. Even monarchs who purported to reign under Divine Right understood that future monarchs, who would also rule under the same God-given right, might thus alter any laws they made.

I believe we need to go all the way back to Moses, coming down from Mt. Sinai and holding aloft his awesome Tablets filled with divine writ, to find a law or set of laws that, from the moment they were written, were decreed to remain in force for ever and ever.

Only God has ever tried this before.

The Structure of Omamacare In A Nutshell

So now we can see clearly the entire skeletal infrastructure of Obamacare. Actual medical care will be parsed out by integrated healthcare “teams.” There will no longer be any “doctor-patient relationships,” dedicated to the welfare of the individual patient. Instead there will be “team-patient relationships” dedicated to the ethic of social justice. These teams will receive from the Central Authority, via expert panels whose work product is “guidelines,” the clinical rules under which they are to determine who gets what healthcare, when, and how. And they will receive from the greatest GOD panel of all – the IPAB – the budgets which will determine how much of that allowable healthcare they can actually deliver.

Individual patients who are cut out and who want to use their own resources to guard their personal welfare will be guilty of the crime of encouraging an unfair, two-tiered healthcare system.

So go ahead, if you must, and amuse yourself with those organizational charts about Obamacare published by Republicans and other troublemakers. They are indeed troubling.

But if all you get out of those charts is that Obamacare will become a bureaucratic nightmare – sort of a DMV on steroids – you are missing the greater point. Obamacare does far worse than merely add a few more layers of ossified bureaucracy onto an already difficult-to-navigate healthcare system.

It fundamentally changes the structure of American healthcare, centralizing control, eliminating the doctor-patient relationship once and for all, and subjecting individual patients to the decisions of “integrated teams” that will be overtly dedicated to collectivist goals.

This structure will finally systematize the practice of herd medicine in America.

This is Chapter 7 of my book-in-progress, “Open Wide And Say Moo! – The Good Citizen’s Guide to Right Thoughts And Right Actions Under Obamacare.” Comments are fervently sought; you can leave them here.

You can read my rationale for undertaking this project, and thus opening myself up to the possibility of public failure, humiliation, derision, disapprobation, and unwanted scrutiny, here.

And here is the up-to-date archive for all the chapters that have been posted so far.
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Chapter 7 – Limiting Individual Prerogatives in a Progressive Healthcare System

Of all the seemingly outlandish things I am going to assert in this book – all of which I will fervently desire the reader to, if not swallow whole, then at least take into serious account – the most outlandish of all is probably the one I am addressing in this chapter. Namely, that any Progressive healthcare system will necessarily attempt to curtail the ability of individual Americans to spend their own money on their own healthcare, and thus, will try to limit the most essential freedom of all – the freedom to act to preserve oneself.

To those many readers who at this moment are expressing alarm over my apparent paranoia, I thank you for your concern. But fear not, for if it turns out I am wrong about this (and I sincerely hope that I am), then not only do they have medication for paranoia, but also, I would be permitted to purchase it legally.

Progressives, of course, deny that they have any such thing in mind. And undoubtedly the majority of progressives, and even many actual Progressives, do not. Indeed, I will happily concede it likely that very few Progressives actually start out with this idea.

What I am saying is that limiting this vital individual liberty turns out to be such an essential component of any Progressive healthcare system that the people who run such a system, perhaps despite themselves, will, sooner or later, find themselves acting forcefully to limit it. This is my proposition.

My intention in this chapter is (once again) to present my proposition as a theory. It is a theory that takes into account two things. First, it incorporates the natural and necessary inclinations of the Progressive Program to limit an individual’s freedom of action regarding his or her own health. And second, my theory incorporates objective observations we can make today, relating to actions which Progressives have already taken in this regard. I contend that my theory best explains both of these things. And of course, as always, I invite (and in this case, greatly desire to hear of) any alternative theories that explain these observations better than mine does.

But if my theory is correct, then if we Americans are to avoid severe 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), such a favorable outcome will only result if we remain vigilant and alert to the aims of our Progressive leaders, and to fight vigorously against their efforts to suppress our liberties, whenever and whereever 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.

The Individual Is The Proper Guardian Of His Own Health

It really ought to go without saying that a person should be able to expend his or her own resources to purchase any healthcare service he or she desires. This is a primary corollary of classical liberalism, and was recognized as a fundamental human right by the likes of John Locke and Thomas Jefferson.

It is also an idea deeply imbedded in American jurisprudence. The great Supreme Court Justice Joseph Story, in his Commentaries on the Constitution of the United States (1873), noted that the individual “is the proper guardian of his own health.” This precept was repeated by Louis Brandeis in 1890, and became the foundation of the Supreme Court’s assertion of an individual right to privacy. In particular, the writings of Story and Brandeis were specifically relied upon by the Court in its 1965 finding (Griswold v. Connecticut) that a right to privacy is not only guaranteed by our Constitution, but is also a right which is “older than our Bill of Rights.” I would like to remind my Progressive friends that it was this very precept that laid the basis for deciding Roe v. Wade in 1973.

Fundamentally, both classic liberal philosophy and the American judicial system have always recognized a liberty to act to preserve one’s own health to be an inherent, inalienable right.

Why Individual Prerogatives Must Be Restrained

Despite this long history in political philosophy and in jurisprudence in favor of such an inherent liberty, it is nonetheless natural and unavoidable for any Progressive healthcare system to strive to limit it. This is because Progressive healthcare systems are necessarily universal.

They are universal in two senses. First, they attempt to cover all people. Second, they purport to cover all healthcare services.

Under Obamacare, for instance, health insurance – which every American is required to have – must cover (as laid out in Section 1302 of the law): 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, and oral and vision care.

Fundamentally, this “universality of features” reflects a particular philosophy. It is, in fact, the Progressive philosophy. Healthcare being an essential component of any ideal society, it is thus necessary to assure that everybody receives everything that is officially deemed to be healthcare. In Section 1302, the Central Authority is telling us, everything will be taken care of for all of us, from soup to nuts. So there is no need to worry our 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.

Complete central control is necessary not only to assure the societal perfection promised by the Progressive Program. Central control is also the method by which Progressives propose to manage America’s healthcare spending. Which is to say, controlling all healthcare expenditures is essential for the purpose of covert rationing.

Allowing individuals to spend their own money fundamentally undermines a Progressive healthcare 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 is holding back, and indeed, may be engaging in some kind of rationing. Such an implication cannot be permitted.

To say it another way, 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. The real problem is that this behavior raises expectations for everybody, and these higher expectations make it that much more difficult for the Central Authority to ration covertly.

The critical importance of controlling expectations in a Progressive healthcare system is nicely illustrated by some of the problems being experienced by the British and the Canadian healthcare systems. Both of these systems, naturally, initially outlawed private healthcare spending. But unfortunately, the very visible medical progress that continued unabated in the American healthcare system – new drugs, new techniques and new technology – were noticed by Canadian and British citizens, and created new demands upon their respective healthcare systems. Essentially, seeing what was possible, a critical mass of the population demanded some of these medical advances, even if they had to pay for them themselves. Ultimately the authorities were forced to relent, at least to a degree, on their desired restrictions on individual freedom.

Some have argued that such “loosening” of individual restrictions in Great Britain and in Canada proves that any restrictions on individuals simply will not stand – so we Americans don’t really have anything to worry about. For, if such restrictions cannot be maintained in those countries, how will they ever be maintained here? Perhaps. But I would suggest instead that the need to loosen individual restrictions in Canada and Great Britain graphically illustrates the critical necessity, in any universal healthcare system, of managing expectations. It in fact proves that a failure to manage the expectations of the people leads to a loss of control.

Had it not been for the very visible example of advances in American healthcare, citizens of Canada and Great Britain quite possibly never would have agitated for “more.” As it is, thanks to the unfortunate example of the high-cost healthcare their citizens saw in the United States, British and Canadian officials were simply unable to manage the expectations of their own citizenry. (Which means that healthcare officials in those countries were likely among the happiest people, anywhere, when Obamacare became the law in America.)

Once we have a universal healthcare system in America, it will therefore become critically important for the Central Authority to manage the healthcare expectations of American citizens. Fortunately, American healthcare bureaucrats won’t have any annoying, external healthcare systems to worry about, busily spinning out advances in medical technology and thus continually raising expectations. Their job likely will be somewhat easier than it was for their counterparts in Canada and England.

For American bureaucrats, managing public expectations will largely become a matter of restraining individual American citizens from going outside the system, and buying extra healthcare with their own money. And for this reason, restricting individual prerogatives in the United States will be 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.

It’s All About Fairness

The official rationale which the Central Authority will always invoke for taking such restrictive actions will be to achieve “fairness.” Allowing the rich to go outside the system would create an unfair, two-tiered healthcare system, &c. The goal of fairness, as is being taught to every schoolchild, is unquestionably and obviously a righteous one, and indeed, its achievement is a chief responsibility of the Central Authority*. Equally obvious is the fact that its hindrance is always threatened by the greed of a certain kind of person. Therefore, the Central Authority is fully justified in constraining the individual liberties of those enemies of righteousness who would stifle fairness.

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*As I write this, President Obama is campaigning very hard for a special new tax on the very rich. While this is nothing new in itself, what is new is the rationale that is being advanced for this new tax, i.e., “fairness.” The President and his spokespersons have all acknowledged that this new proposed tax would do next to nothing to reduce our deficit, or to create new revenue for the government. Rather, the purpose they articulate for taking the property earned by these very successful people is, quite explicitly, redistributive justice, or “fairness.” This argument, possibly for the first time, explicitly creates “fairness” as a principle goal of taxation, and makes achieving such fairness a chief responsibility of the Central Authority (which is convenient, since the Central Authority also gets to define what “fairness” is). This explicit new principle is readily extendable to government actions outside the tax code – such as healthcare.
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And so, restricting the right of individuals to use their own resources to benefit their own health is something that will always be conducted only for the best of reasons – to achieve the fairest and the most ethical healthcare system possible.

But whatever the reasons Progressives might offer for their actions, and whatever the dictates of classical liberal philosophy or American jurisprudence to the contrary, their attempt to restrict individual prerogatives will become deadly serious, because doing so is essential to their real aims.

Hillary Started It

The natural propensity of Progressives to limit individual prerogatives was manifest as early as 1993, with the Clinton Health Security Act, affectionately known as Hillarycare.

The question of how much individual freedom Hillarycare would permit came to a head in early 1994, just as the debate over this bill was reaching a crescendo, and played a significant role in defeating the legislation. What brought the question to a head was the publication of an article by Betsy McCaughey, entitled No Exit, in (of all places) The New Republic.

Ms. McCaughey, who quickly became for Progressives a sort of practice version of Sarah Palin, was at the time a frequent denizen of Conservative think tanks and an occasional editorialist. But what made her an acknowledged expert on Hillarycare was the fact that she was one of the few people who actually had read the legislation.

No Exit revealed that many of the claims being made by proponents of Hillarycare (for instance, that patients could keep their present insurance; that specialty care would be readily available; and that there would be no rationing) were actually false. Despite the fact that the White House quickly released an official response to Mcaughey’s article insisting that many of her conclusions were untrue, her accusations stuck. And according to many observers McCaughey’s article was at least as influential as the Harry and Louise commercials in turning the tide against Hillarycare. Indeed, the importance of her article was formally recognized when it won her the National Magazine Award for excellence in the public interest.

One of McCaughey’s chief assertions – and likely its most striking one – was that Hillarycare would make it illegal for patients to pay doctors directly, and that doctors could be paid only through the government-sanctioned insurance plans. And of all her claims this one in particular made proponents of Hillarycare angry, because the legislation explicitly stipulated that this was not to be the case. Here is the actual language from the bill: “Nothing in this Act shall be construed as prohibiting…an individual from purchasing any health care services.”

Because one of the main assertions in her highly effective article so obviously ignored this explicit statement to the contrary, for the past 20 years McCaughey has been widely painted in the general media as being totally incompetent at best, and more often as a congenital liar and/or a shill for various components of the healthcare industry. And in 2009, when she performed a similar analysis of the Obamacare legislation (coming to many of the same conclusions), she was for the most part either ignored or ridiculed.

It turns out, however, at least in retrospect, that McCaughey’s analysis of Hillarycare was largely correct.

Hillarycare Is The Model For Obamacare

Before demonstrating how McCaughey was right, I ought to say why spending any time with Hillarycare at this point is still worthwhile. Hillarycare is still relevant for two reasons. First, while Hillarycare itself never became law, many of the provisions of Hillarycare eventually did – and so, we are living under them today. And second, Hillarycare embodies the fundamental aims of any Progressive healthcare system, so understanding the aims of Hillarycare will help us to understand the aims of Obamacare (and whatever Progressive reforms might succeed Obamacare).

When House Speaker Nancy Pelosi famously pronounced that we would have to pass the Obamacare legislation in order to find out what was in it, she did not misspeak. She was not uttering a typical Nancy-ism (such as her contention that paying people not to work is a great stimulus to job creation), nor was she channeling Yogi Berra. She was, in fact, speaking the plain truth, and imparting a nugget of deep wisdom to us in the general public.

I have spent substantial time reading large portions of the 2700-page Obamacare legislation. And having done so, here’s what I can tell you about it.

The Obamacare legislation was specifically designed to be obscure; in fact, it is fundamentally indeterminate in its meaning. It was designed in such a way that the unelected regulators who would later translate it into actual rules, regulations and guidelines (under which healthcare providers can then be prosecuted), would ultimately determine what the bill really said. And until those regulators finish their work, what Obamacare actually says is a matter of debate. So Nancy was right.

This fact explains why none of our legislators bothered to read it before voting on it – except for a few pesky Republicans, who were only trying to make trouble. What’s the point in reading a long, boring document whose actual meaning will only be determined later?

This fact also raises another question. Where did this extraordinary document – whose true meaning was elusive even to the President and the legislators who were promoting it – come from? Who actually put the words to the page, and crafted this remarkable legislation?

We may never know the names of the people who actually held the pens which scratched out the actual words, any more than we will ever know the real names of the individuals who wrote the gospels of Matthew and Luke. But, just as New Testament scholars have been able to trace these two gospels to a now-lost common prior source – the so-called “Q document” – it is not difficult for anyone with a smattering of interest in the art of legislative exegesis to trace the source document for Obamacare.

The Q Document for President Obama’s Patient Protection and Affordable Care Act was Hillarycare.

In preparing to write this book, I decided to go back in time, and re-examine Hillary’s original proposal for fundamentally transforming the American healthcare system. What I found surprised me.

While Hillary’s Health Security Act was widely castigated by contemporaries as being a vast monstrosity of bureaucratic legerdemain, filled with complexity and labyrinthine passages that attempted to hide its true meaning, I found Hillarycare, in comparison to Obamacare, to be a model of legislative brevity and clarity. In fact, I now believe that its very straightforwardness is one of the things that killed it. (And, it seems obvious to me, so did whoever wrote the Obamacare legislation, an individual or individuals who so clearly and so painstakingly avoided making the same mistake.)

For instance, Hillarycare is only 1368 pages in length. How could they be so concise? Even more remarkably, Hillarycare spelled out pretty plainly what it actually meant to do.

For instance, in the Obamacare bill, in order for a reader to assemble the information necessary to determine that the Independent Medicare Advisory Board is actually to be called the Independent Payment Advisory Board (IPAB), and that its “advisory opinions” which are to be submitted to Congress for “consideration” are actually formal dictates which must be followed to the letter, and that it can inflict its cost-cutting mandates to all of healthcare and not just to government programs, one must jump around to numerous distant sections in the 2700-page document, cutting and pasting the relevant sections, jigsaw-like, into a coherent whole. In the Hillarycare bill, in stark contrast, the analogous National Health Board (which, like the IPAB, was to have been an appointed-not-elected Supreme Court of healthcare, beyond which there was to be no appeal, no revision, and no repeal) is presented in an entirely straightforward way, and pretty much all in one place.

Having now immersed myself in the relatively refreshing model of clarity and precision that was Hillarycare, I find it quite likely that the people who actually wrote the Obamacare bill (and may God keep these invaluable artists of legislative lyricism safe, as we will be needing them), simply began with Hillary’s old Health Security Act, disassembled it into various bits, padded each bit with a little more than twice its weight in verbiage, and reassembled the pieces in some nearly random fashion into the exceedingly difficult-to-read document that became Obamacare.

Obamacare’s debt to Hillarycare is obvious. Hillarycare required every American to have government-approved health insurance; it reduced private health insurers to government-directed utilities, whose products, rates, and profits were to be controlled by the feds; and it created omniscient and omnipotent panels which were to hand down dictates to “let doctors know” what services they may or may not provide and under what circumstances. This should not be surprising, since any Progressive healthcare system will ultimately have the same goals, and will likely discover similar pathways toward achieving those goals.

Hillarycare and Individual Prerogatives

So: if Hillarycare is to a large extent the model for Obamacare, and indeed, if it is a model for Progressive healthcare systems in general, then what did it have to say about the ability of individual Americans to use their own resources for their own healthcare?

Progressives have told us (and have spent nearly 20 years castigating Ms. McCaughey for telling us otherwise) that the answer is obvious – the bill says in plain language that “nothing in the bill should be construed as prohibiting an individual” from purchasing healthcare services. What could be clearer?

I humbly suggest, and ask the reader to suspend disbelief long enough to consider, that when an act of legislation makes an unprovoked, blanket assertion like this, apparently out of the clear blue, sometimes that assertion is being made in order to distract the overly curious from digging through the bill to find out what it really says, or at least, to create plausible deniability. There are lots of examples where legislation begins by saying, “This legislation does not do X,” and then immediately goes on to do precisely X.

For instance, the legislation that created Medicare contains the following language: “Nothing in this title shall be construed to authorize any federal officer or employee to exercise any supervision or control over the practice of medicine, or the manner in which medical services are provided, or over the selection, tenure, or compensation of any officer, or employee, or any institution, agency or person providing health care services.” (Section 1801, Medicare Act, 1965). This point of law, in light of what Medicare has in fact become, is mind boggling.

Also, in the Obamacare legislation, the introductory language in the section which creates the IPAB (the IPAB being a straightforward and very blunt instrument for rationing healthcare), contains language that prohibits healthcare rationing.

Then there’s the fact that Hillarycare itself, in its section on fee-for-service medicine, begins by establishing a collective negotiation process for determining what fee-for-service doctors may charge (Section 1322, paragraph (c)(2)). But then it immediately goes on to say (paragraph (c)(5)) that “collective negotiations by providers pursuant to paragraph (2) shall be considered as efforts intended to influence government action.” And efforts intended to influence government action is later defined, in the Fraud and Abuse sections of the legislation, as an act of healthcare fraud, and is subject to criminal penalties. To top it all off, the very next section of the bill also prohibits providers from boycotts or even threatening boycotts. So in effect, after asserting that there will be collective bargaining, the bill provides a mechanism for the government to dictate doctors’ fees, without input from doctors, and furthermore, these dictated fees are not even presented to doctors in a take-it-or-leave-it fashion, but rather, in a take-it-or-go-to-jail fashion.

All this, of course, is not to say that the language in Hillarycare denying that the bill has any intention of prohibiting individual prerogatives is itself definitive proof that the legislation intends to prohibit individual prerogatives. All I am saying is that such language, so gratuitously offered, may actually not mean anything at all in particular, and certainly should not be treated as being dispositive. If anything, it should make you want to read the rest of the bill with particular care.

And when we read the rest of the Hillarycare legislation we find (Section 1406, Paragraph (d)(1)) that “A provider may not charge or collect from any enrollee a fee in excess of the applicable payment amount. . .for items and services covered by the comprehensive benefits package.” When we deconstruct this language, we find that a “provider” is any individual who provides health professional services (a definition that includes all doctors); an “enrollee” is any American citizen (since all Americans are required to be enrolled in a government-approved health plan); and the “comprehensive benefits package” covers all healthcare services. So: any doctor who treats any patient in America is bound to the fee schedule as determined by the government. Furthermore, the next paragraph (paragraph (d)(2)) prohibits directly billing the patient for any of these services. The plain meaning of these provisions is that doctors and patients cannot contract with one another legally for the delivery of healthcare services.

The Fraud and Abuse sections of Hillarycare also limit the prerogatives of doctors and patients. For instance, under Hillarycare, some activities which would usually be considered compatible with routine medical practice, even when conducted within the government-approved healthcare system, created opportunities for jailtime for both doctors and patients. According to Paul Craig Roberts, writing in the Washington Times in December, 1993, “Mr. Clinton’s plan turns normal patient advocacy into a federal criminal offense. For example, a doctor who wants an earlier date for surgery for a needful patient can be accused of using wrongful influence and accepting a bribe and sentenced, along with the patient, to 15 years in prison.”

So, on one hand Hillarycare made a very direct, blanket assertion that it did not intend to inhibit individual prerogatives. On the other hand the specific provisions of Hillarycare seem to do just that. It seems likely, then, that the blanket assertion made in Hillarycare that people could buy whatever healthcare they wanted, may just be another example of employing such an assertion for the purpose of providing plausible deniablity that the legislation in fact (and in less plain language) does just the opposite.

Furthermore, the overall effect of the Hillarycare legislation, when viewed from 10,000 feet, was most striking in the detailed and minute control it assumed over each and every conceivable aspect of American healthcare. And when you consider their work product in its entirety, it becomes difficult to believe that the authors of Hillarycare would really countenance individuals going outside the system to buy whatever healthcare they wanted.

To me, this all indicates that Ms. McCaughey was probably right after all.

But since Hillarycare never became law, we can’t really know how its apparent limitations on the freedom of individuals actually would have played out.

Or can we?

After Hillarycare

As I have noted in an earlier chapter, the ignominious defeat of Hillarycare in Congress did not stop the Progressives’ efforts to overhaul the healthcare system. It simply put them on a somewhat slower track.

For instance, large sections of the onerous Fraud and Abuse portions of Hillarycare were cut-and-pasted into the HIPAA legislation which became law a few years later. We saw, in Chapter 3, just one example of how these new anti-fraud provisions were then employed to change routine medical practice into a maze of regulatory booby-traps, punishable by ruining fines and jail terms. Such methods, which were aimed at wrenching the physician’s attention away from what was best for the patient and toward what would best please the Central Authority, were extraordinarily painful for doctors at first, but in the intervening 15 years have come for many physicians – especially the younger ones who never knew anything else – to seem routine and natural. And so, despite the defeat of Hillarycare, the government has succeeded in getting physicians into the correct frame of mind for Progressive healthcare.

Similarly, the downfall of Hillarycare did not deter ongoing efforts by Progressives to limit the freedom of individuals to purchase their own healthcare. These efforts necessarily had to be relatively subtle, and accordingly have been marked by subterfuge and clever legal posing. But their aim cannot be plausibly denied.

Limiting The Rights Of Medicare Patients

Lest I mislead readers into thinking that I’m blaming only the Clintons for starting all this, I will point out that the first major effort to limit the ability of Medicare patients to purchase healthcare services outside of Medicare was effected by government bureaucrats during the administration of George Bush 41.

In 1991, Medicare administrators published a “carrier bulletin” warning physicians that direct-pay agreements between Medicare patients and doctors (even non-participating doctors) were strictly prohibited, unless the contract was initiated solely by the patient, and even then, the rate of payment for any such direct-pay agreements must be those rates set by Medicare, and further, that any such direct-pay agreements were still subject to all Medicare rules and regulations. Medicare added that if the patient at some later time became dissatisfied with that (patient-initiated) contract, Medicare would severely (and retroactively) sanction the physician. The clear aim of this new policy was to deter any direct-pay agreements, whatsoever, between Medicare patients and doctors, and thus, to limit the patients’ ability to spend their own money on their own healthcare.

When a group of physicians and their patients sued Medicare in 1992 to prevent this odious new policy from being implemented (Stewart et al. v. Sullivan), the government took the position that the plaintiffs could not prove that Medicare had really promulgated this new policy after all – since they could not “prove” that the carrier bulletin had been initiated by the Secretary of HHS. The judge agreed with the defendants over this legal technicality, and after implying that if Medicare had actually implemented such a policy (which at the time could not be “proven,”) it would indeed unreasonably limit individual rights, threw the case out in a summary judgement for lack of “ripeness.”

Then, having successfully dodged this challenge on a legal subterfuge, Medicare immediately (and cynically) rendered this very policy official, in its entirety, by formally changing its Medicare Carriers’ Manual.

But the Feds were still not satisfied. The new, restrictive policy technically still allowed for private-pay contracts, as long as the patient initiated them. So the Clinton administration engineered an amendment to the Balanced Budget Act of 1997 – Section 4507 – which prohibited any self-pay contracts whatsoever between Medicare patients and their doctors for medical services which are covered under Medicare. Under Section 4507 – which is still the law today – if a doctor provides even one self-pay medical service to a single Medicare patient, that doctor is punished by complete banishment from the Medicare program for at least two years.

The federal government was eventually challenged again in court over Section 4507, but that lawsuit was also thrown out in a summary judgment (United Seniors Association et al. v. Shalala). The rationale the government offered to the court for its actions in this case is instructive: “. . .what you will have is a system whereby the rich can buy what they want and those many beneficiaries who are on fixed income will not be able to afford those services.” So again, the interest of collective “fairness” was invoked to justify a law which stifles an individual’s fundamental right to purchase medical services he or she determines to be necessary for his/her well-being.

There are several legitimate reasons a Medicare patient might want to self-pay for a medical service that is covered by Medicare. If Medicare “covers” heart valve surgery, for instance, a patient might want to pay for a new, minimally-invasive surgical approach that is inadequately reimbursed by Medicare, rather than the big, open-heart surgery that Medicare reimburses fully. Or, one might want to self-pay for “covered” psychiatric care, or for treatment for a venereal disease, in order to keep embarrassing or harmful medical records out of government-controlled databases – that is, for privacy reasons.

Furthermore, it is important to recognize that just because a healthcare service is “Medicare-covered” does not mean that it will be covered for a given patient. Whether a specific individual is covered is often determined by a “medical necessity” ruling, made by a bureaucrat. Section 4507 essentially precludes a patient’s ability to purchase a denied (but “covered”) medical service, no matter how badly they want it, or believe they need it.

One can argue, and with some merit, that at this juncture denials of medically necessary services by Medicare have been relatively judicious, and therefore that the “Section 4507 rule” has not had much of an actual impact. In fact, it is likely that most Medicare beneficiaries do not even know that this rule exists.

But while its impact might be relatively small so far, the Section 4507 rule has now been in place for 15 years – it is very well-established. So, once Medicare begins reducing reimbursements to physicians and hospitals to the point where they can no longer afford to offer certain “covered” services to Medicare patients (and Medicare has just recently begun doing so, specifically, for some cardiac imaging studies), patients who need those services will be left out in the cold. Services which are officially covered by Medicare, but which are reimbursed at such a low rate that they cannot actually be provided to them, will become unavailable even to Medicare patients who are willing and able to pay for them.

It is conceivable that some older people who understand the implications of Section 4507, and who want to receive a covered-but-denied medical service, might decide to drop out of Medicare altogether so they could legally purchase that desired service. But this is something Progressives do not like either, because allowing patients to drop out of Medicare threatens to create an unfair, two-tiered healthcare system.

And this is why, also in 1993, the Clinton administration promulgated a rule in its Program Operations Manual System (POMS) to prohibit Medicare-aged Americans from forgoing Medicare. The rule implied that no elderly person could drop out of Medicare unless they also gave up their Social Security benefits, and repaid any Social Security benefits they had already received.

Recently, this POMS rule was challenged in a lawsuit filed by three elderly Americans (one of whom was Dick Armey) who wished to drop out of Medicare in favor of self-purchased health insurance, without having to sacrifice their Social Security benefits.

But in the summer of 2011, Washington DC District Judge Rosemary Collyer ruled for the defendants and upheld the POMS rule. So: elderly Americans do not have the right to drop out of Medicare and purchase their own health insurance, unless they also forgo and repay all Social Security benefits.

Interestingly, in 2009 Judge Collyer had denied a motion by the Obama administration to dismiss the suit, and in her denial pointedly noted that “neither the statute nor the regulation specifies that Plaintiffs must withdraw from Social Security and repay retirement benefits in order to withdraw from Medicare.” Her preliminary ruling thereby confirmed the plaintiffs’ main contention. So most observers had assumed that the judge’s final ruling would also be in favor of the plaintiffs.

It was not. In her final ruling in 2011, Judge Collyer found a new interpretation of the Medicare statute itself that upholds the POMS rule. The Medicare statute, she finally determined, specifies that people who are entitled to Social Security are automatically “entitled” to Medicare, and therefore if one elects to receive the Social Security payments one is owed, one must also accept Medicare. She flatly rejected the notion that when Congress says “entitled” it is implying anything optional, as in, “You can have it if you want it.” When you’re dealing with Medicare, she said, “‘entitled’ does not actually mean ‘capable of being rejected.’” So, when Congress creates a new entitlement, Congress actually means you must have it – that it’s mandatory. Judge Collyer ended her ruling by sympathizing with the plaintiffs (or laughing at them – I cannot tell for sure): “Plaintiffs are trapped in a government program intended for their benefit.”

The apparent change in Judge Collyer’s reading of the Medicare statute between 2009 and 2011 is disturbing. What made her originally read the plain language of the Medicare statute just like any literate American would, but then two years later read it as if she had to twist it into a presupposed “right” answer? We likely will never know what induced this marked shift.

It is instructive that the Obama administration would go to such lengths to prevent old people from dropping out of Medicare. Medicare is not only in the red, but is a great fiscal threat to our national well-being. One would think they’d welcome the idea that some of our elderly might want to pay for their own health insurance, and thereby save Medicare a lot of money. But instead, the administration fought the idea tooth and nail, to the point of articulating absurdities that even the judge could not refrain from mocking. One of the Obama administration’s arguments, for instance, was that the plaintiffs were lucky to receive such a boon as Medicare, and therefore suffered “no injury” by having to accept it. The judge responded in her ruling: “The Secretary extolls the benefits of Medicare and suggests that Plaintiffs would agree they are not truly injured if they were to learn more about Medicare. . .The parties use a lot of ink disputing whether Plaintiffs’ desire to avoid Medicare is sensible.”

So as it now stands, seniors (unless they are rich enough to also walk away from Social Security altogether) must accept Medicare. Admittedly, for most elderly Americans this is not a big deal – of course they’re going to accept Medicare. But, as we have seen, current law already makes it nearly impossible for patients on Medicare to self-pay for denied medical services. Once you are on Medicare, you will get the medical services the Central Authority approves for you – and nothing more. In the not-too-distant future, this restriction is likely to become much more apparent to Medicare recipients than it has been to date. When and if the day comes when we would like to buy ourselves some medical care which the Central Authority would rather we did not have, Old Farts like your author will find that we are “entitled” neither to pay for our own healthcare, nor to drop out of the government program that so restricts us.

Preventing Doctors From Adopting Direct-Pay Practices

Disturbed by the destruction of their professional autonomy, and by their inability to advocate for their individual patients, for the past decade more and more doctors have been dropping out of the “system,” and establishing practices under which they are paid directly by their own patients. By eliminating the pressure from insurers and the government to make the patient’s best interest a secondary concern, direct-pay practice immedidately restores the classic doctor-patient relationship, and therefore restores professional integrity – and so it is a menace to Progressive goals.

Unfortunately, direct-pay practitioners have a serious public relations problem. Part of the problem, to be sure, was caused by these doctors themselves. The first few to set up this new style of practice unabashedly catered to rich patients, and to attract the rich, referred to themselves as “concierge” practitioners. This name (and its elitist connotations) have been forcibly affixed to all direct-pay practitioners, even as this style of practice has evolved into a much more democratic form. Today, more and more doctors are starting direct-pay practices which are easily affordable to anyone who can afford a cell phone or cable TV contract. This evolving variety of direct-pay practice is actually not so radical as Progressives would have you believe. It is the way doctors practiced medicine until very recently. It is, in fact, the way Dr. Welby practiced medicine.

While many direct-pay practices offer patients certain benefits they usually cannot get from primary care doctors who remain in the approved system (such as phone and e-mail access, same-day appointments, appointments lasting as long as necessary instead of the allotted 7.5 minutes, &c.), the fundamental benefit, to both the patient and the doctor, is that it restores the classic doctor-patient relationship. The physician’s primary obligation is no longer to the 3rd-party overlord, or to the Progressive ideal of social justice, but to the patient.

And while critics (who abound) attack direct-pay practitioners for their elitism, laziness, and greed, their real issue is that direct-pay practitioners are acting as if their primary duty is to their individual patients, and not to “social justice.” It is for this reason that direct-pay practices are a deadly threat.

Having gained nearly complete control over the behavior of primary care practitioners, it is critical for Progressives to shut the door to any alternative forms of primary care. Direct-pay practitioners are a menace because they threaten to raise the expectations of both doctors and patients. Perhaps, doctors might tell themselves, there really is a way to maintain our professional autonomy within the healthcare system. Perhaps, patients might tell themselves, there really is a way for me to have a personal advocate watching out for my interests when I have to interact with the healthcare system.

The issue, as always, is one of “fairness.” It is not fair for rich people to be able to buy “extra” access to their doctors, since it will create a condition of inequality. The policy director for the AARP (an organization that is ostensibly intersted in the best interests of older Americans) has said that direct-pay practices creates “the prospect of a more explicitly tiered system where people with money have a different kind of insurance relationship than most of the middle class, and where Medicare is no longer as universal as we would like it to be.” It is apparent that, to assure fairness, no patient should have email or cell-phone access to their doctors, or same-day appointments – or to a true professional advocate who is dedicated to their own individual interests, instead of the competing interests of the whole.

The attacks on direct-pay practitioners have followed the usual scheme Progressives follow when they discover an idea they need to suppress. First, they were ridiculed. “For a Retainer, Lavish Care by ‘Boutique Doctors,’” said a headline in the New York Times in 2005. Then, they were demonized, widely attacked for their elitism, for catering to the frivoulous desires of the rich, and for their lack of fundamental medical ethics. In this latter effort, it was not difficult to find fellow physicians – generally, from the medical organizations which promulgated the New Medical Ethics (see Chapter 3) – to lead the attacks. There are countless examples. I will give just two.

Anthony DeMaria, then President of the American College of Cardiology, criticized the practice of direct-pay medicine in an article in the Journal of the American College of Cardiology in 2005, saying, “Personally, I do not mind if people acquire yachts or personal trainers if they have enough money, nor would I object if they secured a physician at their beck and call. However, unlike yachts, health care is not discretionary, and everyone should be entitled to the same quality.” So, direct-pay physicians improve the quality of healthcare only for only some patients (i.e, for their own patients), and so have no place in the healthcare system.

In a 2002 article in the New England Journal of Medicine, Troyen A. Brennan M.D., J.D., and M.P.H., really gets to the point. Referring to direct-pay practices as “luxury primary care,” he notes that “traditional medical ethics is rather poorly equipped to address issues related to luxury primary care.” That is, while “traditional” medical ethics always places the individual patient first, that kind of thinking is now outmoded. “(M)ost ethicists now agree that the financial structure of health care is an important subject for ethical consideration. Access to health care, in particular, is a salient ethical issue.” Direct-pay practitioners threaten (by their elitism and the limited size of their practices), to limit access to primary care, and thus are in fundamental violation of medical ethics.

The argument here, for those who missed it (advanced by fellow physicians no less), is that, of the two competing ethical precepts now established by New Medical Ethics (i.e., the physician’s obligation to the individual patient vs. the physician’s obligation to society), clear primacy is to be given to the physician’s obligation to society. Physicians must (like it or not) place the needs of society above the needs of the patient – and participate in covert bedside healthcare rationing. Physicians who take the only path remaining to them that allows them to make the individual patient their primary obligation are to be castigated as ethically deficient.

When ridicule and demonization fail to suppress their opposition, Progressive dogma indicates it’s time to resort to force. The first pass in this regard, of course, is always to render the opposition illegal. (Actual violence is reserved for criminals who persist in their misbehavior, despite more polite efforts to get them to behave lawfully.)

Making direct-pay medical practice illegal has not been accomplished yet, but clear efforts have been made in this regard. Noting with alarm the rise of direct-pay primary care, numerous Congresspersons have issued statements of concern, suggesting that perhaps Congress should “look into” the propriety of such activities.

Indeed, the first step by Congress has already been taken. In 2003, as part of the Medicare Prescription Drug, Improvement, and Modernization Act, Congress directed the GAO to study and report on the effect of direct-pay practices on Medicare patients. The GAO did so in 2005, and a fair paraphrase of its report is as follows: “The practice of direct-pay medicine is not currently a threat to Medicare patients, because the direct-pay movement is not large enough yet to have an impact. If it does begin to have an impact on Medicare patients, action will have to be taken.” That is, direct-pay medicine was considered OK in 2005 not because it was inherently an ethical and legal form of medical practice, but simply because there were not enough practitioners at that time to bother about. The clear implication is that Congress stands ready to pass laws outlawing – or, at least, severely limiting – direct-pay practices, as soon as those practices begin to “impact” the system.

A follow-up report was done in 2010 which showed a 5-fold increase in the number of direct-pay practices since 2005. It is not yet clear what actions the Feds may take – the numbers are still quite small – but leaders of MedPac (a commission that advises Congress on Medicare) has publicly expressed alarm that this new phenomenon appears to be growing rapidly.

Certain state governments are not waiting for Congress to ban direct-pay practices. The state of Maryland and a few others have taken the creative position that, because many direct-pay practices work on a retainer basis, they meet the definition of a health insurance company. And as a health insurance company, to be considered legal entities, they have to have millions of dollars set aside to pay for unforeseen “claims.” (Interestingly, the lawyers in state legislatures who are advancing this argument have never suggested that the same rules be applied to attorneys, who also often work on a retainer model.) According to the Baltimore Sun, the state’s stance in this regard has already successfully caused several primary care physicians to abandon their plans to become retainer practitioners. This interesting pathway to banishing direct-pay practices is being taken up by other states, as well. In early 2012, for instance, the state of Oregon also began requiring direct-pay physicians to register their practices with the state insurance commission.

Less devious (but more draconian) is the action that was proposed in the state of Massachusetts (whose universal healthcare system, we’ve all heard, is a preview of Obamacare circa 2015). A bill was introduced in 2009 in the Massachusetts Senate which would require doctors, as a condition of their licensure, to accept payment rates as determined by the government. The bill has not become law in Massachusetts (not yet, anyway), but its introduction illustrates the tactics which are being entertained to make direct-pay practices completely impracticable, if not illegal.

Since medical licensing is controlled by the various states, it would take 50 bills like the one proposed in Massachusetts to really get rid of direct-pay healthcare. But there are ways for the Central Authority to accomplish this goal much more expeditiously. Now that the federal government directly controls all student loans, for instance, it would be a simple matter to make student loans for medical students contingent on agreeing to become primary care doctors working strictly within the government controlled system, or to offer loan forgiveness for doctors who agree to do so, or to rescind favorable re-payment conditions (retroactively, and decades after the fact, if necessary) for doctors who go to a direct-pay model later in life.

Even without taking such action, the Central Authority may already have poisoned the water for direct-pay practices. Attorneys representing direct-pay practitioners think they have discovered a potentially fatal problem within Obamacare. Under this law, apparently only physicians enrolled in Medicare can order durable medical equipment or home health services for Medicare patients. Worse, the language of Obamacare may award to the Secretary of HHS the authority to expand this limitation to all other medical services they might order. If direct-pay physicians are banned from ordering any medical services for their patients, it is difficult to see how their practices can remain viable.

Direct-pay practices are the last, best hope for patients who want their own individual interests looked after, and for their doctors who want to practice their profession ethically. This is why Progressives are determined to terminate them with extreme prejudice.

What Do Contraceptives Have To Do With All this?

In early 2012, President Obama unleashed a firestorm when he ordered HHS to issue a directive requiring all organizations providing health insurance to their employees to cover contraception, “morning after” pills, and sterilization procedures. This directive stunned the American Catholic leadership, whose support for the Obamacare legislation (they tell us) was predicated on assurances that healthcare reform would never require Catholic institutions to violate their fundamental principles. The bishops, and many American Catholics, felt betrayed.

Some felt personally betrayed. Cardinal Timothy Dolan had met in the Oval Office with the President in November 2011 to discuss this very issue, and was assured by Obama’s own lips that the administration was committed to protecting the church’s principles. This new directive, Cardinal Dolan said after the President’s directive on contraceptives, “seems to be at odds with the very assurances that he gave me.” (This is as close as a Cardinal may come, when speaking of the President, to saying, “He lied to me.”)

Progressives were delighted with the new rule, which put the principles of religious belief into their proper place. Conservatives, however, along with Catholic leaders and leaders of other religions, expressed outrage at the President’s directive, which was a clear assault on religious freedom in America.

The President was ready for them. Supported by his allies in the American media, he portrayed objections to his new directive as a “Republican War on Women.” It is instructive to consider the basic premise of this War on Women, to wit: By objecting to the new directive, Republicans are saying that women should not have access to contraceptives.

This twist of logic seems completely absurd, from almost any perspective.

Almost.

If there is one aspect of healthcare services to which American women have plenty of access, regardless of their income levels, it is contraceptive services. That is why we taxpayers fund Title X Family Planning Services, and also why we fund Planned Parenthood. And for any woman who does not wish to avail herself of this taxpayer-funded access to contraception, Walmart sells birth control pills at $10 for a month’s supply. There is no lack of ready access to contraception.

Indeed, if Republicans really wanted to prevent women from having contraceptives, objecting to the President’s new directive would not be of any material help whatsoever in accomplishing such a goal.

But there is, in fact, one perspective from which blocking the President’s directive would indeed limit womens’ access to contraceptives. If one approaches the issue from this perspective – and only if one approaches it from this perspective – then the idea of a War on Women makes logical sense. Furthermore, when we listen to the passionate, heart-felt and indeed almost tearful arguments that are being made by Progressives against the heartless Republicans – vociferously denying that Republicans care anything about religious freedom or constitutional authority, and insisting instead that they only want women to be denied contraceptives – it seems plain that this is, in fact, the perspective which Progressives must necessarily hold.

That perspective is: Anything that constitutes healthcare MUST be provided by government-approved insurance products, since if it is not provided by government-approved insurance products, one cannot legally acquire it.

So, in fact, the controversy over whether religious organizations must provide insurance that covers contraceptives boils down to the notion that people should not have to – and indeed should not be permitted to – purchase healthcare services on their own.

The President’s directive on contraceptives, therefore, seems to have been issued in order to establish, once and for all, the essential set of foundational principles for Obamacare, to wit:

1) The government will determine what constitutes healthcare and what does not.
2) If the government says it’s healthcare, every insurance product must cover it.
3) If it’s not covered by insurance, thou shalt not have access to it.

Women must be provided contraceptives without paying for them NOT because there are so many women going without them today, due to insufficient access. Rather, women must be provided these services without paying for them because we cannot allow women (or any patient) to pay for these services (or any service the Central Authority classifies as “healthcare”) out of their own pockets.

All healthcare services must be covered by all insurance products – regardless of which institutions provide those insurance products – precisely because nobody can be permitted to pay for healthcare outside the sanctioned insurance product.

This is the principle which is being established by the President’s new directive. This principle, so critical to Obamacare and to the Progressive agenda, is a principle worth fighting for. None of the other explanations offered by proponents or opponents of the President’s action make any sense.

Summary

My main point, once again, is that the Central Authority has a deep and abiding need to limit our individual prerogatives when it comes to our healthcare, and has been acting on that need for a long time. The basis for these limitations on our individual liberties – the principle of social justice – has already been established, and has survived court challenges.

Extending these limitations on personal liberties to Obamacare, and broadening their usage, will not require any major changes in direction, or principles, or policy, but will merely require an expansion of already existent – and even “venerable” – rules, rules which have been an established part of Medicare for many years.

Such restrictions by our government on such fundamental individual liberties are a very big deal indeed, and, in fact, signal an end to the Great American Experiment.

When I have expressed this conclusion in the past, many critics have admonished me that I make far too much of it, and that our government, in its benign wisdom, is just doing what’s best for us. I beg readers to forgive me if I see, in such a reply, even more evidence that the only nation in the history of mankind to be founded on the principles of individual freedom is well on the way to abandoning those exceptional principles, for the sake of the same, soothing-but-empty blandishments that have been offered, throughout human history, by well-meaning people who end up producing – or becoming – tyrants.

This is Chapter 2 of my book-in-progress, “Open Wide And Say Moo! – The Good Citizen’s Guide to Right Thoughts And Right Actions Under Obamacare.” Comments are fervently sought; you can leave them here.

You can read my rationale for undertaking this project, and thus opening myself up to the possibility of public failure, humiliation, derision, disapprobation, and unwanted scrutiny, here.

And here is the up-to-date archive for all the chapters that have been posted so far.

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Chapter 2 – The Demise of the Health Insurance Industry

I fear that, in Chapter 1, I may have left you with the impression that our healthcare expenses have been piling up for the past 50 years, to the point where our entire culture is about to collapse under the weight, without anyone or any organization doing anything about it.

If so, I apologize, for nothing could be further from the truth. In fact, our healthcare expenses have been piling up for the past 50 years, to the point where our entire culture is about to collapse under the weight, in spite of the heroic efforts on the part of our health insurance companies, our doctors, and our government to stem those costs.

Indeed, their efforts have been little short of astounding. The health insurance industry has driven itself upon the shoals in a daring attempt to rescue our healthcare finances, and lies there today, foundering and needing rescue itself. Doctors have made what amounts to a suicide attack against the rising costs, essentially throwing away the very essence of their own profession in the attempt, and leaving for posterity a signed suicide note. And our government – well, our government of course has tremendous resources, and has spent or pledged the lifetime earnings of the next three or four generations of its citizens in what appears to be an entirely fruitless effort to bring healthcare costs under control. (Our leaders assure us they feel very badly about this, however.)

So it’s not for lack of trying. It’s that what they have all been trying – namely, covertly rationing our healthcare – not only does not and cannot work, but also intrisically makes things much, much worse.

This and the next chapter will demonstrate the sorry state to which such misguided efforts to control costs have reduced our healthcare system and its participants – and well before Obamacare ever came along.

A Bit On Covert Healthcare Rationing

I have been writing a blog for the past five years about the covert rationing of America’s healthcare, so there is plenty I could say about this. However, I will limit myself, with exquisite difficulty no doubt, to just saying what covert rationing is and why it’s a problem.

First, let’s be clear on the definition of healthcare rationing. To ration healthcare is to intentionally withhold at least some useful medical services from at least some of the people who would benefit from them.

To ration covertly is to do the above without admitting to it, and most often while indignantly denying it.

I will not go into an exhaustive argument here to “prove” we’re rationing our healthcare covertly, or that covert rationing intrisically wastes far more money than it can ever save. I have done that elsewhere. Instead, I will simply lay out a 3-point thesis which makes it intuitively obvious that covert rationing is what we’re doing, and that by doing it we’re compounding the underlying fiscal problem.

Point #1: Healthcare rationing is a fiscal imperative. Rationing is fundamentally unavoidable, and therefore, we are not avoiding it.

In any advanced society, where a centralized agency of one species or another creates a pool of money from which most of the society’s healthcare bills are to be paid, whether that pool of money is controlled by the government, or by private insurance companies, or by some combination of these, then even if that centralized agency is very large, very powerful, and very coercive, and even if that agency is able to borrow (say) trillions and trillions of dollars, there will always be limits on how much money can be placed into the pool. On the other hand, the amount of money that could conceivably be spent to purchase every bit of all the available, potentially useful healthcare for every individual in the population who might benefit from it is essentially limitless.

This limited supply, and limitless demand, means that somebody, somewhere, will not receive all the available healthcare that would be potentially useful to them. So rationing is occurring. Q.E.D.

Point #2: We’re Americans, and Americans don’t ration. So the unavoidable rationing must be, and is being, done covertly.

An endearing trait of Americans, endearing to us Americans at least, is our limitless optimism, our undying belief that anything good that we can imagine can, and will, and must actually be accomplished. This refusal to recognize limits is responsible for much of the creativity, inventiveness, and productivity that has come from our American culture. And it has led to much good in the world, resulting, for instance, in most of the remarkable advances in healthcare we’ve seen over the past half-century.

The American culture of no limits, however, can be carried to counterproductive extremes. And that is what has happened with regard to healthcare.

Our “no limits” attitude about healthcare is typically American. It goes like this:

In America we have, and will continue to have, the best healthcare in the world – the best doctors, the best hospitals, and the best technology. Since one cannot place a price on a human life, anything that can be done for a sick person must be done, as long as there is some small hope of even a tiny benefit. Every disease is potentially curable, and as a matter of policy we will strive to learn how to cure every disease that exists (and when we run out of diseases to cure, we’ll invent new ones). Indeed, death itself is merely a manifestation of insufficient technology.

In summary, where healthcare is concerned, there are, and can be, no limits.

We can see the problem right away. While we have inherent spending limitations that unavoidably require healthcare rationing, we find that there can be no limits, and therefore, no rationing. Indeed, there can be no discussion of rationing, except to bitterly condemn the very idea. Any political leader or policymaker who would seriously suggest the idea of healthcare rationing would run squarely into this deeply ingrained culture of no limits, and would immediately become toast.

So, these two basic imperatives shaping our healthcare system – the unavoidable need to ration that will always accompany publicly-funded healthcare, and the culture of no limits – are, in their essence, completely incompatible with one another. Given our deep-seated need to simultaneously cling to both of these incompatible imperatives, our only option is to do the unavoidable rationing in a way that allows us to deny that rationing is occurring; in a way that allows us to ration while declaring that there are no limits. We can ration secretly. We can ration deceptively. We can ration covertly.

And (QED) that is what we are doing.

Point #3: Covert healthcare rationing is inherently and extravagantly destructive, not only to patients and their doctors, and not only to the healthcare system, but also to our national budget, and to our basic American social contract.

While there are plenty of problems with the American healthcare system, the truly intractable ones are intractable largely because of our need to ration covertly. As long as the need to ration healthcare covertly exists, these problems will persist.

By its very nature covert healthcare rationing is a deeply ironic construction. The whole purpose of rationing is to reduce spending on healthcare, and to control costs. But covert rationing (ironically) always increases expenditures. If we could ration healthcare openly, then it is possible that we could arrange, or at least try to arrange, the rationing in such a way as to optimize the efficiency, effectiveness and equity within our healthcare system.

But rationing covertly fundamentally means rationing in whatever way you can get away with. So, in order to hide the rationing, it is imperative to obfuscate, misdirect, complicate, juke, jive, shimmy and shake and do whatever else you must to to convince everyone – often including yourself – that whatever it is you’re doing, it’s not rationing. That is, you’ve got to create an environment of complexity and opacity in which you can get away with it.

As a direct result of this simple truth, simplicity, transparency and efficiency are lethal to a system based on covert rationing, and thus, are systematically rooted out. Covert rationing absolutely requires opaque processes and procedures, superfluous complexity, bizarre incentives, Byzantine regulations which are arbitrarily enforced or ignored in various times and places, astoundingly wasteful transactions, and the diversion of healthcare dollars to a complex host of non-healthcare ends, such as commissions, study groups and panels, various czars of this and that, ever-expanding layers of government bureaucracies, and the establishment of other massive bureaucracies within the healthcare system whose purpose is to defend against or manipulate those aggressive government bureaucracies. Covert rationing, by its very nature, demands and creates waste within our healthcare system, and therefore costs us far more money than it can ever save us.

So, while the fiscal mess in which we find our healthcare system is destined to screw all of us, by attempting to fix it with covert rationing we’re converting a simple screwing into a gang rape.

It will be instructive to have a look at how this has all worked out.

A Recent History of American Healthcare (continued)

It did not take long after the institution of Medicare and Medicaid in 1965 for astute economists and politicians to realize that, perhaps, we had just stepped off a financial cliff.

Smart people became alarmed about healthcare spending as early as 1970, when we were spending a “mere” 7% of our GDP on healthcare (a little more than a third of the proportion we’re spending now). And indeed, in 1972 Richard Nixon, demonstrating in yet another way that not all Progressives are Democrats, planned to propose in his second term a universal healthcare system. (So perhaps if those Progressives who today are so desperate for one hadn’t made such a big deal about Watergate, they would have had their heart’s desire 40 years ago.)

After Nixon was deposed, Gerald Ford got distracted trying to “Whip Inflation Now;” Jimmy Carter busied himself actually whipping inflation to heights not seen since the Weimar Republic; Ronald Regan dedicated himself to spending the Soviet Union into oblivion; and George Bush 41 beat up Sadam Hussein and raised taxes while trying not to move his lips. You know, stuff happened.

And the next thing you know it was 1992 and healthcare spending had nearly doubled as a proportion of the GDP since the time of Nixon.

Subsequently, the Clintons took up healthcare reform as their signature issue. Bill turned the effort over to Hillary because (as he explained it) she was smarter than he was, but some say possibly also as a reward for her amazing loyalty in the face of, well, you know.

In any case, at the beginning of the Clintons’ effort to reform healthcare, they had the goodwill and support of most Americans, of doctors, the media, and most importantly, the American health insurance industry. Hillary appeared to start off well, making a successful appearance before Congress, and, with great fanfare, convening numerous expert panels and other groups to gather their ideas, suggestions, and recommendations on healthcare reform, as if she intended to take them into account. Optimism was high.

But Hillary is a true Progressive, and so she already knew how to reform healthcare. Having made a great show of democratizing the process, she then retreated behind closed doors with a few hand-selected advisors, and soon emerged with a 1300 page bill of her own devising – Hillarycare.

Many were horrified by what was in that bill, which in fact gave the government full control of our healthcare system. Not the least among the newly-horrified were executives of the health insurance industry, who to that moment had been major supporters. They realized that if any law passed that was remotely like Hillarycare, their industry would soon become infeasible if not illegal. And so, acting with the alacrity of people who are in imminent mortal danger, the insurers quickly introduced the American people to Harry and Louise, a typical middle class couple who were depicted, in print ads and on TV, discovering numerous appalling provisions of the Clinton plan.

The rest was history.

The collapse of the Clintons’ reform plan caused a sudden deflation in Americans’ expectations, but the fiscal crisis remained. In fact, the one thing the Hillarycare effort had indeed accomplished was to create a general awareness among the public that the healthcare system was in dire financial straits, and that business as usual was not an option. And nobody (except for the doctors, wallowing as usual in wishful thinking) believed things could simply go back to the way they were before.

Into the breach stepped the very health insurance industry that had just torpedoed Hillarycare. And they had a plan.

“Citizens!” they said, “We have just dodged a bullet. Thanks to us, the frightening socialist reforms of the Clintons have been soundly defeated. But where does this leave us? We stand now between Scylla and Charybdis, between the specter of nationalized healthcare on one hand, and continued, wasteful, traditional fee-for-service medicine on the other. And we cannot countenance either.

“But wait! Here is a third way, a painless way, based on the sound principles of managed care, open markets, and free enterprise. Let us in the health insurance industry, successful businessmen all, wielding the tools of efficiency and sound business practices, step in and save the day. We will apply our proven tools and methods of efficiency to American healthcare, through our new vehicle for medical excellence – our for-profit HMOs. And we will demonstrate to the world the wonders that modern, free-market management principles can bring to American healthcare.”

And not having any other viable choice that any of us could see, we Americans gave the go-ahead.

The Brief But Remarkable Era of For-Profit HMOs

By this time, HMOs had been around, here and there, for 20 years. They were inventions of pipe-smoking, elbow-patched academics and other well-meaning naifs, who envisioned user-friendly, non-profit organizations which, by inculcating their clientele to the benefits of good health habits, disease-prevention lifestyles, and regular check-ups would – you know – maintain the health of its members. Until the collapse of the Clinton health reforms, HMOs were widely regarded with some bemusement, as the typical sort of ineffectual but benign social engineering experiment you generally get from cloistered academics, or as an eccentric aunt puttering about the attic of the healthcare homestead.

The for-profit HMOs which the health insurance industry introduced to America after the fall of Hillarycare were a different species altogether. If you asked the CEO of one of the old-fashioned HMOs what the mission was, she would say something like, “Why, it’s to maintain the good health of our clients, of course.” Not so for the new-style HMOs. Their mission (quite explicitly, since this is the message they used to sell all of us on the idea of turning American healthcare over to them) was to apply the modern management techniques of American business to make American healthcare efficient at last. And how does one assure that such modern business techniques will be fully and enthusiastically applied? By doing what every business must do to be successful – by focusing like a laser beam on profitability.

So if you asked a 1990s, new-style HMO executive what was his mission, he would reply, “Why, it’s to take this wasteful, inefficient puppy and turn it around into a profit-generating machine. Of course, as a spin-off you will get more efficient healthcare and the like. But the mission – and indeed the measure of our success, the evidence that we’re making healthcare more efficient – is our profitability.”

And with the mantra, “Profits = Efficiency” emblazoned on their standards, and with “Deus Lo Volt!” on their lips, the new-style HMOs went forth in the crusade to save American healthcare.

However, just as the real Crusaders became distracted on their way to the Holy Land by the opportunity to sack and pillage Constatinople, so did the HMOs become distracted by an unprecedented opportunity to sack every city, town and village in the land. Because it was the prospect of profits which would at last make American healthcare efficient, HMO executives argued, it only made sense for all the non-profit hospitals in America to be turned over to them. This way, the HMOs could incorporate those old, creaky, inefficient institutions into their new, machine-like, ultra-efficient, healthcare paradigm. When the city fathers and state commissioners of America seemed interested, the CEO would add, “We’ll even pay you for them.”

During the next six or seven years, virtually every non-profit healthcare organization in America – hospitals that had been owned and operated for decades by cities, counties, states, or religious organizations – were acquired by for-profit institutions. The way these transfers worked was: a) the hospital’s board of trustees (many of whom later wound up with well-paying jobs with the acquiring HMO) would approve the transfer; b) the state insurance commissioner or state attorney general would determine the intrinsic value of the hospital; c) the HMO would reimburse the appropriate entity with the assessed amount of money, often by establishing a charitable foundation.

For reasons I cannot fathom, the state officials seemed congenitally unable to estimate, even within an order of magnitude or two, the true intrinsic value of the transferred asset. Only the hospital’s value as a charity was considered, and not its potential as a business. They failed to consider the market value of trademarks, name recognition, decades of community goodwill, provider contracts, or subscriber lists. There were no competitive bidding processes; no formal valuations. So the new HMOs acquired thousands of major, publicly-held community assets, all across America, for pennies on the dollar.

If state officials were inefficient in this process, the markets were not. And the HMOs found that each time they acquired a formerly non-profit institution, the market would immediately reward them with a nice boost in their market valuations. HMOs suddenly became hot investment vehicles, and investors jumped in with their dollars. HMO executives were very, very happy.

This asset-acquisition phase of the for-profit HMOs was largely responsible for the great financial success these organizations enjoyed in the 1990s. And the hugely important story of the massive transfer of public assets to private companies went largely unreported.

Once they had gobbled up all the public hospitals, the for-profit HMOs immediately entered into a prolonged period of negotiated mergers with one another, thus consolidating the industry into a few massive players. This interval also produced large boosts in their market valuations, and it sustained the facade of corporate success for a few more years.

And that pretty much covers the glory years of the modern HMO. For a decade or so these companies were extremely successful, and performed very nicely for their shareholders. But their success, such as it was, had relatively little to do with their ability to make American healthcare more efficient. Rather, like those holy warriors who fought in the Fourth Crusade, their profits came mainly from sacking Constantinople, the city of their supposed allies and co-religionists.

To be sure, HMOs did work as hard as they could at improving healthcare efficiency during this period of time. They did this mainly by instituting efficiencies of scale. When you are managing several hospitals, or several scores of hospitals, you can streamline and consolidate your processes and procedures in some very big ways – with more pointed negotiations with vendors, for instance, or by computerizing and standardizing billing and ordering, or limiting drug formularies. You can also conduct fancy efficiency studies to show that, really, you could probably get away with an 8:1 nursing ratio instead of a 4:1 ratio. (By “get away with,” apparently, the efficiency experts meant that while the “downside” of such cutbacks might be suspected or even perceived by people on the ground, it was unlikely that it could ever be accurately measured – or therefore, proven – by a few local troublemakers.)

So the efficiencies of mega-corporate bigness were broadly applied, and as a result, during the latter half of the 1990s we saw less healthcare inflation than during any 5-year period over the previous 30 years. But the thing about applying this kind of cost-cutting measure – the kind that is applied on a global basis to the whole system – is that it is a one-time event. That is, the savings are realized right away, and as a result you successfully establish a new and lower spending baseline. But because (as we saw in the last chapter) the rate of growth in healthcare spending is not caused by the inefficiencies you’ve just eliminated, the increase in healthcare spending will thereafter simply resume and continue apace (albeit from a lower baseline).

This is just what happened. By the turn of the century, healthcare inflation was headed back up into the double digits.

And so, if they had not realized it before, by the early 2000s it finally occurred to the HMO executives that, at long last, if they were going to remain profitable they were going to have to figure out how to cut healthcare costs by doing what they’d always told everyone they were so good at doing, but which they had never yet accomplished – actually managing the medical care of sick people.

This is when the panic began setting in.

Their panic was not inappropriate. For the HMOs had not been sitting on their hands when it came to making actual patient care less expensive. In fact, they had already tried everything they knew how to try – and it had not worked.

The business model of the HMO, simply put, is to gather the health insurance premiums from its subscribers, use that money to efficiently manage their healthcare, and keep whatever is left.

Therefore, to the HMO executive (the steely-eyed business executive we had all deputized to control our healthcare costs), the biggest risk to the business is: sick people.

Sick people are a huge problem. They are not subject to the usual “efficiencies” you can apply to most businesses. Simply streamlining business processes (admission and discharge procedures, consolidating laboratories, computerizing records and the like) does not work with sick people. You could implement these sorts of efficiencies all day long, and sick people will still be sick, and each one of them could blow through tens of thousands of your dollars each and every day.

Sick people, unlike the widgets which businesses typically process and manipulate to make their money, are not all alike. Each of them has a different constellation of medical problems, different needs, and different responses to testing and therapy. A medical service that makes Patient A recover in two days puts Patient B in the ICU for three weeks. Patients who recover enough to go home, but then stop taking their medications (or cannot afford to take them), or immediately resume an all-pizza-diet, will bounce right back in your hospital, and recommence consuming even more of your resources.

There can only be one answer to this problem. What you need to do is something you learned on your very first day of MBA school (where basically all you did was get your seat assignment, and eye-up the rest of the class to decide which ones you think you can work with and which ones you’ll need to sabotage in order to smooth out the curve). Namely, eliminate unnecessary expenditures. Which means: you need to avoid the sick.

Find ways to keep the sick (or potentially sick) from enrolling in your HMO. For sick people who manage to make it through the obstacle course you are going to set up for them, you will need to find ways to make things so unpleasant for them that they’ll go elsewhere. For the really sick who won’t (or more likely, can’t) leave, you’ll need to find ways to just toss them out.

And so, naturally, this is what HMOs did.

They made their best insurance products available to employers only, on the theory that people who have jobs are less likely to have serious, chronic illnesses or severe disabilities, or addictions. The inferior, “individual” insurance products (when HMOs could not avoid them altogether) were pre-loaded with onerous pre-existing condition clauses, so that only healthy young people were likely to be eligible. When HMOs held “open enrollment” drives for Medicare patients, they were invariably located on the second or third floor of buildings without elevators, often in affluent suburbs or at country clubs, and in any case in places that were at least two bus transfers away from “undesirable” neighborhoods. Such methods came to be known as “skimming” or cherry-picking, and were aimed at avoiding the sickest 10% of the population that accounts for 75% of all healthcare spending.

Sometimes, despite increasingly sophisticated cherrypicking techniques, a sick person would still get through the door. Or more likely, a formerly healthy subscriber, by virtue of a newly-acquired illness, would transform – werewolf-like -  into a voracious, healthcare-consuming monster. Techniques were developed for these, as well. In fact, the academic managed care literature (and yes, there is such a thing) paid particular attention to this issue – that is, how to frustrate undesirable patients sufficiently to entice them to go elsewhere. One interesting article titled “Demarketing of healthcare services,” appeared in the Journal of Healthcare Marketing in 1994. It said, among other things:

Decreasing accessibility to services . . . can be accomplished by “managing” the information distributed to patients regarding services available and how to access them. For example, an organization might excessively promote less-costly preventive procedures . . . and repress information about other elective and/or expensive services. In addition, providers can strategically locate and number specific services to make them easy (e.g., primary care) or difficult (e.g., specialists) to utilize. Furthermore, lag periods . . . also serve as containment strategies. Lags may be affected by the need for referrals, limited number of contracted specialists, restricted or inconvenient appointment availability, and increased office-visit waiting periods.

I would like you to notice a couple of things about this excerpt. First, of course, it nicely demonstrates that driving patients away was not an unintended consequence of HMO inefficiencies. The inefficiencies were manufactured specifically to achieve that end. But second, please observe that this is probably the most straightforward statement about covert healthcare rationing you’re ever likely to see from the people who are actually doing it. It graphically demonstrates that much of the inefficiency in our healthcare system is not accidental. It is carefully engineered for a very specific purpose. It is, in fact, an investment, aimed at improving the bottom line.

Here’s another example. In the late 1990s, the famous Jim Clark, the first Internet genius, the man who had founded both Silicon Graphics and Netscape, decided to launch a new venture which he called WebMD. While today WebMD is muddling along as a reasonably successful information portal, it was originally conceived by Clark as a powerhouse that would revolutionize healthcare in America. He wanted WebMd to become a platform for seamlessly interconnecting all the players in the healthcare system – doctors, patients and insurers – to improve communication, streamline transactions, reduce medical errors, and otherwise create efficiencies that would benefit American healthcare (and at the same time build shareholder value for WebMD). When he finally had built up the infrastructure for doing all this, at enormous cost, he went to the health insurers with his first can’t-miss proposition, the very can’t-miss proposition that had enticed his investors to put up the money for WebMd in the first place. Namely, he offered (in exchange for a tiny transaction fee) to process the HMOs’ medical claims for 70 cents per transaction (as compared to the $7.00 per transaction it currently cost them), and furthermore, to complete the transactions in a matter of minutes instead of a matter of months. Much to Clark’s amazement, there were no takers. None. And his dream died on the spot.

Astute readers will see the problem right away. HMOs, of course, have no interest whatsoever in streamlining their transactions. Quite the opposite. HMOs only make money if they do not have to pay out claims. And if they do have to pay claims, the longer they can hold on to the money before they actually pay it out, the longer they can keep it invested. And so, claims processing procedures have been carefully engineered into the most inefficient, Byzantine, and frustrating endeavors the devious human mind can conceive of. Unless a doctor’s practice hires a cadre of “claims specialists,” who spend all their time in an elaborate dance with the “claims specialists” employed by the HMOs, they would never collect any money at all. As it is, it is so expensive to chase smaller claims that many doctors simply don’t send in bills for them – which means the HMOs get to keep that money. Which means that doctors are reluctant to offer the medical services for which only a small bill is generated.

Are you starting to see how covert rationing works?

The End Game For HMOs

By the middle of the last decade, the health insurance industry realized it had run out its string. It saw no pathway forward to continued profitability.

The insurers had tried every sneaky and underhanded idea they could think of for reducing costs – cherry-picking the healthy patients, treating chronically ill patients like pariahs so they would go away, making access to specialty care as inconvenient as possible, forcing doctors to sign “gag clauses” to prevent them from telling their patients about certain treatment options (more on this shortly), browbeating primary care physicians into zombie-like compliance with handed-down care directives, refusing to cover expensive-but-effective medical services, and canceling the policies of tens of thousands of patients after they got sick, based on trumped-up technicalities. Indeed, they had tried everything short of dispatching teams of Ninjas in the dark of night to slaughter their most expensive subscribers in their beds. And still, their costs – essentially, the money they could not avoid spending on people who needed healthcare services – increased relentlessly.

All these efforts were to little avail. The cost of providing healthcare continued to skyrocket, entirely unabated. Finally, when all else failed, the insurers began instituting huge and unsustainable annual increases in premiums, to the point of driving their customers out of the market.

This latter move, of course, was an open acknowledgment that the industry had entered its death spiral. In fact, it was an SOS, a cry for help. It was the health insurance industry wailing, “No mas!”

The Health Insurance Industry And Obamacare

By 2009, when President Obama began his push for healthcare reform, the insurance companies knew they had no prospect of long-term profitability. Their business model was no longer viable, and, while telling soothing stories to avoid shareholder panic, they were urgently casting about for an exit strategy.

A drowning man will cling to any piece of flotsam that comes his way. What the insurance industry found floating by was Obamacare.

In return for its support in the healthcare reform battle, President Obama offered the insurance industry the graceful exit strategy it so desperately needed. Under Obamacare, for at least a few years the insurers hope to get One Last Windfall – namely, profits from the influx of previously-uninsured Americans whose premiums will be paid, or at least subsidized, by taxpayers. Here, the insurers are relying on the likelihood that the inflow of new premiums will, for a year or two at least, greatly outweigh the outflow of money they will have to spend caring for these new subscribers. Obviously, they will use every trick in their well-worn book to stave off expenditures for these new subscribers for as long as they can, but if they actually knew how to avoid paying healthcare costs indefinitely, they wouldn’t have sought a government bail-out. In any case, an inflow of new subscribers will be a very temporary source of profit for insurers. Hence, at best it is One Last Windfall.

What happens to the insurers after they exhaust this last windfall is still up in the air. Obamacare may, of course, eventually transition to a single-payer system, an outcome which many Conservatives desperately fear, and many Progressives fervently desire. Should this happen, there may very well be some final compensatory buy-out (or a buy-off) for the insurance companies – a truly-last windfall.

But more likely, the insurance companies under Obamacare will continue to exist essentially as public utilities. That is, they will exist as companies chartered by the government, which administer healthcare under the direction of the government, with the products they may offer, the prices they may charge, the profits they may keep, and the losses they may incur, determined solely by the government. It’s not glorious, but it’s a living.

And it’s a far better exit strategy than anything the insurance companies could devise for themselves.

So, when the time came, the insurance industry did whatever it needed to do to make sure President Obama’s reforms became law. Their assistance consisted of four simple steps:

1) Do not actively oppose Obamacare. In stark contrast to its behavior during the Clintons’ effort to reform healthcare, this time the insurance industry never employed its vast public relations resources to stifle healthcare reform. While they resurrected the original Harry and Louise, this time, like the insurance industry itself, they were older, wiser, sadder, and fully in support of the proposed reforms.

2) Submit quietly to demonization. A key strategy of proponents of Obamacare was to remind Americans repeatedly that the for-profit health insurance industry is fundamentally evil. This strategy was based on the time-honored precept that it is easier to get the unwashed masses to cooperate through hatred than through reason, and so, to gain their cooperation, one must give them something to hate. Obviously, this strategy meant that the health insurance industry had to accept its role as the bad guys in the reform debates without complaint, and without engaging in any serious self-defense. They did so.

3) Offer subdued public support to Obamacare. The AHIP (America’s Health Insurance Plans) issued public statements every so often that cautiously supported President Obama’s healthcare reforms. But its support had to remain subdued and tepid, since Satan can’t be seen leading the hymns. It was just enough public support to signal opponents of Obamacare not to expect much help this time from this quarter.

4) Whenever necessary, rise up and demonstrate to the world just how evil you really are.  At the end of the day, this was the most important role the insurance industry played in advancing Obamacare. It was certainly their most active role.

It was not a difficult role to fill. Since 1994 the health insurers had engaged in the sorts of truly evil, inhumane, and reprehensible practices that are naturally engendered by covert healthcare rationing, and that harmed or killed many of their subscribers. The only difficult part was choosing which reprehensible behaviors to feature, and when to do it.

In at least two key moments during the fight over healthcare reform – June, 2009 and February, 2010 – when the proponents of reform felt their momentum lagging, the insurance industry intervened with gratuitous evil behaviors whose chief function was to remind Americans just how unremittingly wicked and inhumane they really are. In the second case, at least arguably, the insurance industry turned the reform effort from apparent defeat to almost certain victory. Indeed, it is not too much of an exaggeration to assert that, in the end, the health insurance industry saved Obamacare.

June, 2009: Say Hello To My Little Friend

The debate over Obamacare entered a new phase in May and June of 2009. It was during those months that the opposition to healthcare reform found its voice, and it began to seem as if perhaps the Obama steamroller could really be slowed, if not stopped. People were even beginning to say that many Democrats in Congress, after getting an earful from their constituents when they held their summer town hall meetings, would abandon any idea of supporting President Obama’s healthcare reforms.

Supporters of Obamacare decided it was time to invoke the demons. So in mid-June, the House Subcommittee on Oversight and Investigations called three health insurers to testify on the practice of rescission, and to face not only indignant Congresspersons, but also some of the people who had been personally harmed by their practices.

“Rescission” is when an insurance company voids subscriber’s health insurance when they get sick (after happily accepting premiums from that subscriber, often for many years). Under some circumstances, rescission might be justifiable. It is legal and proper to cancel a policy if the subscriber is found to have purposely lied on the insurance application about a prior illness that is material to the current illness.

But health insurance companies for years have actively and aggressively practiced rescission on subscribers whose insurance applications contained inadvertent and non-material inaccuracies. Furthermore, the health insurance industry does not merely engage in occasional unfair rescission practices; it has industrialized the process (which, after all, is what they’ve always told us they would do to reduce costs). It employs health insurance detectives whose job is to comb the prior medical records of subscribers who are newly diagnosed with certain, expensive medical conditions, looking for even trivial discrepancies on insurance applications, which they can inflate to “fraudulent” omissions, thus voiding the policy. These health insurance detectives are paid by commission, according to how much money their efforts can save the company. Many of them find it a very lucrative career.

So, at the cost of perpetrating a bit of inhumanity, rescission can save insurance companies a lot of money.

Consider some of the individuals who testified in Congress along with the insurance companies on that day:

- A nurse in Texas had her insurance canceled after she was diagnosed with breast cancer because she had failed to reveal that, years before, she had consulted a dermatologist about acne.
- A man (whose surviving sister had to testify) had his insurance canceled before he could begin expensive cancer therapy, because he had not revealed (and indeed he had not known) that a prior CT scan had showed gallstones and an aneurysm – conditions unrelated to his cancer.
- A woman had her insurance canceled – and due to the rescission could not find replacement insurance – because she failed to reveal that, at one time, she had been on medication for irregular menstruation.

During the hearing, the three health insurance executives were caused to listen, on camera, to these and other mind-bending stories describing some of the inexcusable pain, suffering and death their unfair rescission practices had caused, and then were forced to listen to withering commentary by stunned Republicans and Democrats on the Subcommittee, whose own investigation had found that the three companies on the docket had retrospectively canceled the policies of 20,000 sick subscribers over the past 5 years.

After these heart-rending testimonies and the blistering attacks from extremely angry congresspersons, the executives were challenged by Chairman Stupak (D-Michigan) to now commit to discontinuing the practice of rescission unless intentional fraud could be shown.

All three replied, in turn, “No.”

Such a reply, in such a setting, almost defies belief. The only possible explanation, in fact, is that the insurance industry was stepping up to the plate, and embracing its assigned role as the Evil One in the great healthcare debate.

Even the most stone-hearted insurance executive can see that canceling the health insurance of a newly-diagnosed cancer patient, because she’d forgotten she had required acne medicine before the prom 20 years ago, is just a bit unfair. But how did these three executives react? They did not attempt to deny such reprehensible behavior, or to explain it, or to defend it. They were simply defiant about it.

One is put in mind of Tony “Scarface” Montana, bereft of friends, family, allies and bodyguards (albeit because of his own actions), hopelessly surrounded by an army of heavily-armed assassins, screaming, “Say hello to my little friend!” then launching defiantly into a wild, bloody and spectacular suicide.

One cannot for a moment believe that Richard A. Collins, chief executive of UnitedHealth’s Golden Rule Insurance Co., Don Hamm, chief executive of Assurant Health, and Brian Sassi, president of consumer business for WellPoint Inc., would have been stupid enough to publicly defy Congress over such an indefensible practice, if doing so was against their own long-term interests. Appearances to the contrary notwithstanding, they were not auditioning for a remake of Scarface.

This is not how an industry behaves which wants to court the goodwill of Congress at a critical juncture in its life cycle. This is not the strategy of an industry that wants Congress to defy its own party’s President and defeat healthcare reform, or that is begging Congress to give them another chance to figure out how to bring healthcare costs into check. This is not the behavior of any industry that wants to elicit any sort of favorable action from Congress. Indeed, these executives would have seemed more sympathetic and deserving if they had proposed instead to place live puppies on a spit and roast them over an open fire during half-time at the Super Bowl.

There is only one explanation for their astounding public defiance on this matter. Which is, it must have suited their long-term interests.

Recall that at the time of this remarkable hearing, there was growing skepticism about President Obama’s healthcare reform efforts, not only on the part of Republicans, but also on the part of a critical minority of Democrats in Congress. And for the first time since the election, there was some question about whether his reform plan would succeed in gaining sufficient support.

In this light the stark, defiant, public “no” uttered by the three insurance executives makes sense. “Look at us,” they were saying, “See how evil we are! We are utterly devoid of human decency, ethical constraints, or a sense of fair play. If we behave this defiantly when we are in the position of mere supplicants to your eminences, just think how we will behave if you fail to rein us in with new reforms! Abandon all hope, those of you who rely on us for your healthcare, and behold the congressional dogs that placed us in this position of power over your very lives!”

Given the headwinds the healthcare reform effort was to face during the next nine months, it is difficult to say with any certainty how much good the insurance industry did in June, 2009, when it took such an extraordinary step to remind Americans just how incredibly evil it is. But when the time came to help boost the President’s reform efforts, nobody can deny that the insurance industry stepped up and did its duty.

February, 2010: Raising Obamacare From The Dead

Things looked especially bleak for healthcare reform in early February of 2010. The incredible, Constitution-defying, machinations Congress had employed in its desperate attempt to pass healthcare reform had disgusted a majority of Americans, and momentum was clearly shifting to the opponents of Obamacare. And when Republican Scott Brown incredibly won the Senate seat in Massachusetts, robbing the Democrats of their crucial, filibuster-blocking 60th vote, many thought healthcare reform was dead.

But then out of nowhere, in early February, Wellpoint’s California subsidiary, Anthem Blue Cross, announced it was raising its already-astronomical health insurance premiums by as much as 39%, a move that promised to greatly increase the number of Californians who are uninsured.

The demoralized Democrats in the administration greedily capitalized on this new opportunity.

Secretary of HHS Kathleen Sebelius immediately fired off a very 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 reply, equally publicly.

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 insurance premiums would be nicely mitigated if everybody was mandated by the government to purchase health insurance.

Wellpoint’s anounced premium increase immediately triggered great volumes of delighted outrage by thankful Democrats, who desperately needed a large dose of “evil insurance company” at just that time. Wellpoint’s action reignited the proponents of healthcare reform, who were inspired to remind all Americans that this is what would happen to everyone if healthcare reform failed, and the greedy insurance companies had their way.

Stunned Republicans, seeing their impending victory over Obamacare evaporating before their eyes, could only issue a few lame and uncomfortable attempts to diminish the significance of Wellpoint’s unfortunate action. But to little avail. The momentum had shifted. At least arguably, it was Wellpoint’s decision to announce an unconscionable rate increase at this extremely critical juncture that put healthcare reform back on the road to adoption.

From a pure business standpoint, there was no good reason for Wellpoint to stir the soup at that moment. Wellpoint at the time was the most financially sound private health insurance company. While its California subsidiary did lose money in 2009, 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 stood to do comparatively well for the foreseeable future.

Furthermore, it has since been learned that Wellpoint’s math was bad. An independent actuary working for the California Department of Insurance reported on May 5, 2010 that the company had made “numerous errors” in calculating is rate increases, and further, that Wellpoint could cut its rate hikes substantially, and still meet its required 70% medical-loss ratio threshold. So, uh, oops.

It stands to reason that if Wellpoint really wanted healthcare reform to go away, they would have first checked their math before announcing seismic rate increases, and then, if such astounding rate increases were really needed, they would have waited a few months – while Obamacare died – before announcing their rate hike.

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.

In any case Wellpoint’s action, especially at that moment, seems entirely gratuitous. Wellpoint could only have chosen to do its demon dance, at such an inopportune moment, in order to revive Obamacare during its darkest hour.

And that’s precisely what happened.

What This Means

What this means to those of us who would like for Obamacare to go away ought to be quite obvious. Simply nullifying or repealing Obamacare simply will not do. The insurance industry simply will not tolerate it. If we decide we need to get rid of Obamacare, to shed ourselves of the spectre of government-controlled healthcare (and far worse, government-controlled covert rationing), we’ll need to have another solution in hand.

This is Chapter 1 of my book-in-progress, “Open Wide And Say Moo! – The Good Citizen’s Guide to Right Thoughts And Right Actions Under Obamacare.” Comments are fervently sought; you can leave them here.

You can read my rationale for undertaking this project, and thus opening myself up to the possibility of public failure, humiliation, derision, disapprobation, and unwanted scrutiny, here.

And here is the up-to-date archive for all the chapters that have been posted so far.
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Part 1 – Progressive Healthcare, and Why We Have Chosen It

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Chapter 1 – Run For The Hills, As We Are All Doomed!

I originally meant to call this chapter, “Healthcare Economics,” but I decided that name would frighten people off.

Everyone (that is, everyone with an ounce of common sense) is frightened by economics. Economics is the index case of what happens when you attempt to apply mathematics and the language of science to what is essentially a study of human behavior. (Microeconomics, as I understand it, attempts to study the behavior of one or two guys at at time; macroeconomics purports to study the behavior of everyone, all at once.)

Human behavior will stymie anyone who tries to understand it, let alone predict it, or especially control it. (Even God, according to Genesis, became so frustrated with human behavior that on at least one occasion he was moved to wipe just about everybody out and start over. And all to no avail, one must note.)

And so economists, having dedicated their lives to studying something that intrinsically surpasses all understanding – such that even astrophysicists seem closer to their goal of understanding what happened before the Big Bang than economists are to theirs – are reduced to devising massive, complex and unlikely constructs of mathematical clockwork only they can understand, with which to pummel one another in professional meetings, in peer-reviewed publications, and on CNBC.

Oh, and they also advise our political leaders.

So I have called this chapter by a name that is far less alarming than “Healthcare Economics,” and that I hope will not send readers scurrying away. Besides, the name I have chosen is at least partially true. For it seems reasonably likely that we are indeed all doomed, though heading for the hills probably will not help very much.

Assuming that we can avoid the Really Bad doomsday scenarios that are always out there (collisions with asteroids, nuclear war, electromagnetic pulses, sudden ice ages, &c.), then the thing that is most likely to produce among us the renting of clothes, gnashing of teeth, heaping of ashes upon heads, and other behaviors commonly associated with the End Times, is the fiscal black hole we’ve made of our healthcare spending.

Our healthcare spending is sufficiently out-of-control that it produces a real threat to our survival as a society, and within many of our lifetimes. It was largely the effort to control this runaway spending that led us to adopt Obamacare in the first place, even though Obamacare (as I hope to demonstrate) promises to be almost as destructive itself.

The first five chapters of this book that comprise Part I aim to show how our healthcare system’s dire fiscal problems have led us to choose a Progressive healthcare “solution.” Here in Chapter 1, I will describe the astounding magnitude of our healthcare system’s financial mess, and how we have created it. In Chapter 2 and 3, I will survey some of the incredibly harmful changes we have made to our healthcare system in an attempt to cope with the fiscal mess. These changes have caused so much damage that, when it was time to try to choose among the four possible methods for bringing the costs of healthcare under control (which are described in Chapter 4), we finally acceded to the Progressive solution many of our elected representatives had been pining for for at least 20 years. Accordingly, in Chapter 5 I will discuss the Progressive program in general, and show why control over our healthcare is the lynchpin to the Progressives’ overarching plans for all of us.

The Fiscal Golden Age of Healthcare

Once Upon A Time, when people received a service from a physician, they paid for it themselves. Physicians who wanted to maintain a viable practice would keep their prices within the reach of their patients. And if somebody could not pay they would typically accept a reduced fee, or even a couple of chickens in exchange. During this time, healthcare was not considered a crisis, or a right, or even very important in the lives of most people.

I call this the Lancing Boils And Getting Paid In Chickens era of healthcare. It was the dark age of medicine – there was generally very little a doctor could do for you, other than lance those boils, set some but not all broken bones, and hasten your demise with leeches and bleeding. (At this point we must say a prayer of thanks that Progressives care very little about history, and so are relatively unlikely to re-discover the benefits of leeches and bleeding.) But while it was the dark age of medicine, it was the Golden Age of healthcare finance. Healthcare in those times accounted for none of our (or anyone’s) national, collective debt.

Even when inhaled anesthesia first came into common usage – making various surgical procedures such as appendectomy and Caesarian sections routinely available for the first time – the cost of healthcare was not considered a major societal problem. Somehow, arrangements were made to reimburse doctors for their services, whether through cash payments, barter, or some sort of Victorian E-Z payment plan, thus allowing the patient to avoid destitution, and the doctor to avoid the sundry nefarious activities that have always been available to cash-strapped medics.

Indeed, right up until World War II, when penicillin was discovered, physicians and their skills could offer relatively little benefit for most serious illnesses beyond the surgical variety. As a result, relatively little money was spent on healthcare. And by the traditional means of barter or negotiated settlements, or the more modern means of charity hospitals, hospitals run for their employees by the big railroad and lumber companies, or in the later years, fledgling Blue Cross plans, all the medical services that were considered useful were somehow paid for on an as-you-go basis. There was no fiscal burden placed upon society. And all was well.

Unless you got sick.

The Medical Golden Age

Conservative Americans can rant and rave about it all they want, but the fact is undeniable that the remarkable advances we’ve seen in American healthcare over the past 50 – 60 years were ushered in by a new fiscal era – an era in which we began to pay our healthcare costs collectively.

This new era was begun during World War II, when companies began offering health insurance to their employees in order to attract workers during the wage controls then in effect. Health insurance proved so popular that Congress changed the tax laws to make the insurance premiums paid by employers tax-deductible so as to encourage the practice, and before very long virtually every company provided health insurance to their employees as a matter of course.

The tax-deductibility of employer-provided health insurance was the game-changer. Healthcare costs suddenly were no longer borne entirely by individuals, or by individual businesses who paid the insurance premiums. Instead, they were distributed among the American taxpayers, whose taxes had to make up for the insurance deductions taken by businesses. So-called “private” health insurance became publicly subsidized.

The public funding of healthcare advanced by a giant step with the institution of Medicare and Medicaid in 1965, which amounted to direct public funding of healthcare for a large proportion of the population. So, by 1970, most of American healthcare was paid for by the taxpayer either directly, or indirectly through subsidized private insurance. We had largely collectivized the financing of our healthcare.

While most of my Conservative friends would like to think otherwise, when you look at the big picture it becomes apparent that this collectivization of healthcare financing has not been the unmitigated disaster they like to claim. There have been substantial benefits, and chief among these is the incredible progress we’ve made in medical learning and medical technology over the past half century.

In fact, this taxpayer subsidization of healthcare catalyzed an incredible golden age of medicine.

It turns out that, the moment everything that is deemed “healthcare” is “covered” by taxpayer-supplied or taxpayer-subsidized health insurance, and therefore payment is guaranteed for virtually any medical product by the full faith and credit of the United States government, a huge amount of investment money suddenly appears to fund research and development in every aspect of medicine you can imagine. And the next thing you know, you’ve got medical progress.

Medical entrepreneurs figured out in about a minute and a half that to be successful, all they had to do was to come up with a product that offered a measurable benefit to some group of people with some illness – no matter how marginal that benefit might be, or how expensive their product – and they were certain to have a ready market for their product and a customer who would pay the going rate without complaint. The more products you could develop, the greater your profits. And so R&D budgets went through the roof.

An utter explosion in medical progress, virtually all of it arising in the United States, began in the 1950s and 1960s, and really accelerated in the 1970s when Medicare was up and running full-bore. With a bit of sputtering, it continues until this day. Except for the Manhattan Project and the moon shot (whose fruits medical researchers strongly relied upon in doing their work), the kind of concentrated scientific effort that was applied to advance the science of medicine during this interval is unsurpassed in human history.

And like the Manhattan Project and the moon shot, it was ultimately funded by the taxpayer.

The medical technology that has been developed since the 1950s has done immeasurable good. Uncountable heart attacks and strokes have been prevented or aborted; cancers have been cured or beaten back; people who formerly would have been crippled can conduct normal daily activities without assistance; and some scourges of mankind (such as smallpox and polio) have been nearly vanquished altogether.

But there is a problem. Coincident with this explosion in medical progress has been an explosion in medical spending, spending to such a degree that, unless we bring it under control, we are headed for societal chaos.

The Magnitude of the Problem

A fundamental principle in economics is that when we are buying consumable products that we are consuming ourselves – like Caribbean cruises, sports cars, ice cream, or healthcare – we should spend no more on those products than we individuals are able to pay ourselves.

I realize that by adding healthcare to this list I have probably angered a lot of readers. But I assure you that I am not making a political statement here; I am simply stating an economic principle, which (as is the unfortunate case with principles) is inherently true even if inconvenient.

It is certainly true that some societies, including ours, have decided to purchase some of these consumable products (healthcare, for instance) collectively, so that individuals don’t pay for them at all. And the collective purchase of consumables constitutes a somewhat different situation that I will address in a moment.

But for consumable products that everyone agrees ought to be paid for by the individual (let’s just take Caribbean cruises as a relatively non-controversial example), the individual must arrange to cover the cost. The reason for this principle is obvious. If individuals could arbitrarily decide to go on a cruise whenever they’d like, but leave the cost to others who have no say in whether the cruise takes place, the economic system would soon collapse.*

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*Like most laws, principles, and ethical mandates, this one can be systematically violated by certain, small, well-defined groups of people without crashing the whole system, as long as the rest of the population (for whatever reason) decides to overlook, tacitly approve of, and pay for the irresponsible behavior of this elite group. I am referring, of course, to our political leaders.
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But what about those societies which have decided to collectively purchase certain products and services (like healthcare) that are consumed by individuals? It turns out that these societies must operate under a very similar economic principle: A society should spend no more on products which are consumed by individual citizens than it can pay without incurring long-term, multi-generational debt.

In the United States as we have seen, we have decided to pay for healthcare collectively. Whether your healthcare is provided directly through government payments or through tax-deductible insurance premiums, to a great extent society is collectively footing the bill.

This would not be a problem, economically, if we were doing it on a pay-as-you-go basis. But we’re not. We’re running a huge national debt today, and largely because of healthcare obligations that debt will reach stupendous proportions in the foreseeable future.

Reasonable people can argue over whether having a large national debt is good or bad, but the answer lies at least partially in what it is that the debt has been incurred to pay for.

The ability to borrow money, and carry debt, is important to a vibrant economy. Individuals can borrow even large amounts of money as long as they promise to pay it back and their credit rating is sufficiently high. But if a person fails to pay back what they owe according to a predetermined schedule, society takes steps to stop further borrowing and to force them to repay. If they get in too deep, society ushers them into bankruptcy, and allows them to slowly make themselves whole again. But society does not allow them to simply keep borrowing indefinitely.

This is because individuals die. If we were to allow individuals to simply accumulate as much debt as they want until they die, leaving it to somebody else to pay it back, the economic system would soon disintegrate. So before people can borrow money, they need to demonstrate their ability to repay it, or to have their estates repay it upon their death. In this way there is a natural limit to how much individuals can spend on consumable products in their lifetime.

Societies, like individuals, must borrow no more than they can eventually pay back. The difference is that, unlike individuals, society lives “forever.” That is, the accumulation of debt that cannot be paid off in a single generation is not necessarily alarming, because society will “always” be there to pay it off.

As it turns out, the ability to accumulate even huge amounts of debt is vital for complex societies like ours, as it permits us to maintain a buffer for economic stability, to smooth out boom-bust cycles, and to maintain reasonable predictability, stability, and steady growth. The ability to carry multi-generational debt enables the government to borrow the money it needs to make multi-generational investments, things like building up the nation’s infrastructure, providing for national defense, advancing medical research, and engaging in other forms of non-commodity spending that will allow society to progress, to grow stronger, and to steadily improve the lives of successive generations of its citizens.

The “right” kind of long-term national debt, then, is a chief enabler of economic growth and prosperity, an investment in the nation’s future. It is appropriate to ask future generations of Americans to share the financial burden of that debt, since they will reap the benefits of the investment.

Things go very wrong, however, when we burden society with the “wrong” kind of debt, the kind that represents an open-ended promise to purchase products and services that are consumed by individuals, such as healthcare. There are two problems with this kind of debt.

First, this kind of debt is not an investment in the future, whose fruits will be realized by our children and grandchildren, and whose returns will more than compensate for the overall debt obligation. Instead, it benefits only the individuals currently alive who are the direct recipients of the consumable services, leaving no direct benefits but only an ever-increasing debt burden to those who will be left paying the bills decades later.

Second, while there is a natural limit on how much an individual can spend for products and services they consume during their lifetime, once the responsibility of paying for those consumables shifts to society there is no longer such a natural limit (since societies live forever). The debt can now be borne by multiple generations. Because there is no longer an inherent limit to what an individual can consume, and because it is to the advantage of present and would-be officeholders to eliminate any remaining arbitrary limits, individuals are eventually encouraged to consume as much as they want. And without these limits (whether natural or imposed by rules) the provision of such services to individuals rapidly becomes an entitlement, whereupon the natural checks and balances that (in past times, at least) apply to other parts of the federal budget are no longer available.

When society faces an accelerating debt burden that is completely open-ended and is not subject to normal checks and balances, that society is dealing with a “disproportionate economic variable” (DEV) – that is, an economic obligation that grows without limit and completely out of proportion to the growth of the overall economy. Healthcare spending, which unrelentingly consumes an ever-increasing proportion of our GDP, is such a DEV.

DEV’s are inherently destructive to a society, and for that reason they are typically rare. Indeed, in viable societies the only commonly encountered DEV is wartime spending, where a disproportionate amount of a society’s wealth must be spent in the violent struggle for survival (or, alternatively, in the violent struggle to take away valuable resources of the opponent in order to power future growth, in which case war is analogous to a high-risk start-up). Indeed, the disproportionate spending in wartime is tolerable only because war itself is temporary. It should be noted, however, that one reason war is temporary is that in a prolonged war, a runaway DEV can cause a country to spend itself into oblivion. (See: the multi-decade Cold War and the demise of the Soviet Union.)

Until the time we began to collectivize our healthcare expenditures, healthcare spending in the United States acted like any well behaved economic sector. That is, until the 1950s healthcare spending remained at a steady 4% of the GDP. But by 1960, healthcare spending had become a DEV. Healthcare spending was at 5.3% of the GDP in 1960, 7.3% in 1970, 10.2% in 1980, 13% in 1993, 14.9% in 2002, and 17.6% of the GDP in 2009.

We already cannot afford to pay-as-we-go for all the healthcare we’re consuming. Instead, we’re violating that economic principle I mentioned earlier, and accumulating massive amounts of federal debt to cover the cost ($16 trillion at last count, enough that we’re already flirting with fiscal brinkmanship), which we are leaving to future generations to figure out how to pay off. And it’s about to get much worse.

Assuming we survive credit downgrades, the European debt crisis, oil disruptions in the Middle East, and other more routine difficulties, the most immediate fiscal threat to our economic survival becomes apparent when you think about all the expensive medical technology we’ve managed to accumulate over the last 50 years, and imagine applying it to our rapidly aging population, that is, to the baby boomer generation – which (I can personally assure you) is planning to make exuberant use of all this stuff. The magnitude of this problem is actually pretty easy to estimate.

Consider: All the people who will constitute our population of Old Farts for the next 30 years (a group which already claims your humble author as a proud member) are alive today. We can count them. We can also enumerate the quantity of many of the various illnesses and ailments they will suffer – the strokes, heart attacks, heart failures, Alzheimer’s disease, hip replacements, cancer, drooping body parts and ED – with fair accuracy. And we can estimate reasonably closely (if our leaders succeed in stifling medical progress, and therefore medical technology is held at its current level) what kinds of drugs, devices, nursing care and other expensive medical appurtenances they will require. And with this information we can add up all the sums and multiply all the multipliers to estimate what it’s all going to cost us.

Indeed, the GAO has done this. It’s looking like it will cost $30 – 40 trillion over the next several decades, just to cover the medical entitlements which we have promised current and not-too-distant-future older Americans, Americans who have themselves been paying taxes for many years, and who have arranged their affairs according to the expectations created by those promises.

That’s way more money than it will take to cause societal collapse.

Can’t We Just Eliminate Waste and Inefficiency?

In Chapter 4, I will talk about the four ways that are available to reduce this dangerous level of healthcare expenditures. You may be surprised to learn that none of these four methods is to eliminate all the waste and inefficiency in our healthcare system.

I am in favor of eliminating waste and inefficiency, of course, and I applaud most efforts to do so. But eliminating waste and inefficiency did not make the list of four for a simple reason. It will not work. That is, even if we somehow got rid of all the wasted healthcare expenditures taking place today (and there truly is a tremendous amount of it), that won’t be enough to rescue us from economic oblivion.

This is not a pleasant thing to hear, nor is it a common thing to hear. Indeed, it is a central assumption of all of the healthcare reform plans ever proposed that we can get our spending under control simply by eliminating – or at least substantially reducing – the vast amount of waste and inefficiency in the healthcare system. Conservatives propose to do this by incorporating the efficiencies of the marketplace, thus eliminating the waste and inefficiency imposed by government bureaucrats. Progressives propose to do it by adopting and enforcing strict, top-down regulations (ideally, through a single-payer system which employs the officially-perfect wisdom of various expert panels) that will control the wasteful and inefficient behaviors of greedy and/or ignorant healthcare providers. But one way or another, schemes for reforming healthcare all propose to bring spending under control by eliminating waste and inefficiency.

Another way of describing what all the reformers across the political spectrum are telling us is: There is so much waste in the system that we can avoid healthcare rationing by getting rid of it. Most Americans believe this. Most policy experts believe this. They have to believe it, because nobody wants to even think about healthcare rationing.

But this is unfortunately false. No matter how much waste and inefficiency you think might be gumming up our healthcare system today, there’s not enough to explain the uncontrolled rise in healthcare spending we have been seeing for decades, and therefore, not enough to allow us to avoid rationing altogether in any economically feasible, publicly funded healthcare system.

To understand why this is the case, we must first recognize the fundamental problem with our healthcare spending. The real problem is not simply that we’re spending a lot of money on healthcare, or even that we’re spending a larger proportion of our GDP on healthcare than any other country. If that’s all the problem was, we could with modest difficulty adjust the rest of our spending to accommodate it, and get our national budget under control that way.

Rather, the real problem is that our healthcare expenditures for decades have been growing at double digit rates, several multiples faster than the overall inflation rate, and each year consumes an ever-greater proportion of our national spending. Unless this disproportionate rate of growth is stopped, eventually healthcare spending will cannibalize our entire economy. (What will really happen, of course, is that the debt we are accumulating to pay for our healthcare will grow to the point of producing societal upheaval, sending us back to a more typical era for mankind, where healthcare is a little-thought-of luxury, and not a necessity or a right. This will happen well before healthcare consumes 100% of the economy.)

To reiterate, it’s not the amount of spending on healthcare that is creating a fiscal crisis, it’s the rate of growth of that spending.

Once we understand the problem – that it’s the rate of growth of healthcare spending that threatens our society – then demonstrating that waste and inefficiency cannot possibly account for that rate of growth is a matter of simple mathematics.

There are only two things that can possibly account for the excessive growth rate of our healthcare expenditures. Either it is caused by unrelenting growth in wasteful spending (as we are assured by our political leaders), or it is caused by unrelenting growth in useful healthcare spending. If it is the latter, then in order to get spending under control in a collectivized payment system we must cut back on or ration useful healthcare. This is why we all fervently pray, and most of us choose to fervently believe, the excess rate of growth must be caused by wasted spending.

This desired conclusion, unfortunately, leads to mathematical absurdities, and therefore (for anyone who eschews magical thinking) turns out to be utterly false.

I am going to show you some data from a spreadsheet. My spreadsheet illustrates what would have to happen in order for wasteful spending to account for our current level of healthcare inflation. The spreadsheet is based on the following four assumptions:

Assumption 1) The annual growth rate of spending on useful healthcare (discussed further below) is economically well-behaved. That is, it matches the rate of overall inflation. The spreadsheet therefore assumes a 3% annual inflation rate for useful healthcare spending.

Please note that this is the very assumption which politicians invoke whenever they say that all we need to do to control healthcare costs is to eliminate waste and inefficiency. In fact, the whole point of this spreadsheet is to test the logic of this assumption. For, if useful healthcare spending is not economically well-behaved, then eliminating all the wasteful spending would still leave us with disproportionate healthcare inflation.

Assumption 2) 25% of healthcare expenditures at Year 1 of this spreadsheet are wasteful. I have picked 25% arbitrarily, a value that happens to fall within the range of popular estimates. As it turns out, the initial value we choose for the level of wasteful spending at Year 1 in this spreadsheet has very little influence over the outcome. So if you don’t like this number, feel free to pick your own.

Assumption 3) The annual rate of growth of overall healthcare spending (i.e., healthcare inflation) is 10%. This is a rough average of what we have actually seen for the last few decades.

Assumption 4) Total healthcare inflation is the sum of healthcare inflation due to the growth of “well-behaved,” useful healthcare spending, and the healthcare inflation accounted for by spending on waste and inefficiency. Given that the inflation rate for useful healthcare spending is 3% (Assumption 1), this spreadsheet simply calculates the cumulative annual inflation rate for wasteful spending that would be necessary to account for an overall rate of healthcare inflation of 10% (Assumption 3).

Before I show you the spreadsheet, we should discuss the difference between “wasteful” and “useful” healthcare. In actual practice, this is not a distinction which is straightforward. It depends, for one thing, on who gets to define “wasteful.” If I’m a 92-year-old man who gets a $12,000 stent procedure to eliminate my angina, I and my doctor might consider it money well-spent, while you might consider it wasteful.

But for the purposes of this present analysis, I am defining “wasteful” healthcare in the way our politicians define it – or at least in the way they want us to think they are defining it. That is, wasteful healthcare is completely wasteful – it is a totally useless expenditure, and is no more beneficial than flushing money down the toilet. In contrast, useful healthcare is that which is likely to provide at least some of its intended benefit to patients.

Any other definition of useful vs. wasteful healthcare would require us to place a value judgment on just how much benefit a healthcare service must provide before we consider it to be useful, and thus worthy of paying for. Another name for such a process is “rationing,” and we all know that we’re not going to do any rationing. No, sir.

So, the definition we must use for “useful” vs. “wasteful” healthcare, by process of elimination, can only be the definition I have just laid out.

Here is the spreadsheet:

Year	Index of overall Dollars Spent per year	% wasteful spending	% of annual increase due to useful spending	% of annual increase due to wasteful spending
1	100	25%	-	-
5	146	42%	18%	82%
10	236	59%	13%	87%
20	612	78%	7%	93%

We can immediately see several things. First, as expected, the amount of money we’re spending on healthcare, assuming a rate of healthcare inflation of 10%, is doubling roughly every 8-9 years. It’s this growth rate that threatens our survival as a society.

Second, in order to account for this unsupportable growth in healthcare spending by invoking waste and inefficiency, the proportion of healthcare spending that is caused by waste must increase to ridiculous proportions very rapidly, such that (for instance) by the 10th year we will have more than doubled (59%) the proportion of all healthcare expenditures that are wasteful; and by the 20th year, nearly 80% must be wasteful.

Similarly, the proportion of the annual increases in healthcare spending that would have to be due to waste and inefficiency rapidly climbs to equally ridiculous proportions. By year 5, wasteful spending will have to account for 82% of the annual increase in healthcare expenditures, and that proportion continues to climb, eventually approaching 100%.

To me, these numbers seem absurd on their face. But if you still need to be convinced, consider that in real life, runaway healthcare inflation has already been taking place in the United States for decades – so our position on such a spreadsheet would not be at Year 1; we are much closer to Year 50. And no matter what value for wasteful spending we might have plugged in at Year 1, by Year 50 wasteful spending would have to be well above 80%, and more likely approaching 100%. In order for waste and inefficiency to account for the situation in which the American healthcare system finds itself today, therefore, one would have to believe that virtually all healthcare spending is wasteful. (And if you believe that, then solving the crisis would be a simple matter of discontinuing all healthcare.)

Now let us illustrate the same point in a slightly different way. This time, let’s pretend that as recently as 2009, when President Obama was inaugurated, our healthcare system was 100% efficient. That is, only three years ago there was no waste whatsoever. Then let’s allow that the remaining three assumptions given above are still operative. The following table results:

Year	Index of overall Dollars Spent per year	% wasteful spending	% of annual increase due to useful spending	% of annual increase due to wasteful spending
2009	100	0%	100%	0%
2010	110	7%	30%	70%
2011	121	15%	28%	72%
2012	133	17%	26%	74%

We can see from these results that, even if only three years ago we had a completely efficient healthcare system, in order for waste to account for the excess growth in healthcare spending we’ve experienced since that time, then after just three years as much as 74% of today’s annual increase in spending has to be due to waste and inefficiency.

Any way you cut it, the spreadsheet leads to nothing but absurdities. Assumption 1 – that useful healthcare spending is economically well-behaved – therefore cannot be true.

Wasted spending may and likely does account for a significant proportion of our healthcare expenditures, but it simply cannot account for the sustained, disproportional growth in healthcare expenditures that threatens to collapse the system.

So yes, by all means, let’s try to eliminate waste and inefficiency from our healthcare system. But if we hope to survive as a culture, we will, at the same time and as an entirely separate endeavor, have to figure out how to get the growth in useful healthcare spending under control.

Summary

It is critical to understand that a fundamental, nearly intractable, doomsday-magnitude fiscal problem with our healthcare spending preceded Obamacare, and continues today. That fiscal problem will remain whether we proceed with Obamacare or not. Simply striking it down in the courts or repealing it will not help fix the underlying problem.

Podcast:

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(In what has become a tradition over the past few years, DrRich proudly reprises his annual Thanksgiving message to his beloved readers.)

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Gathered around the Thanksgiving table, DrRich’s large extended family, carrying out a longstanding tradition, each offered in their turn one reason for being thankful on this most reflective of American holidays. DrRich listened respectfully as each of his loved ones, and each of the ones he was obligated to tolerate benignly because they had married (or in some other manner had committed to) one of his loved ones, recounted a cause for thanks. There is no need for DrRich to recite their utterances here, because they were all perfectly predictable and fairly mundane, having mostly to do with items such as maintaining good health, finding a job, being able to afford one’s mortgage payments, getting a passing grade in French, receiving a new puppy, Mr. Obama’s remarkable Presidency, the apparent continued structural integrity of the Universe despite Mr. Obama’s Presidency, &c., &c.

When it was at last DrRich’s turn, he, in retrospect perhaps somewhat inadvisedly, was unable to refrain from displaying his keen insight and superior analytical abilities on matters related to healthcare (a topic, anyone would have to admit, about which most of us would very much like to feel thankful). Lifting his glass, DrRich pronounced that he was most deeply and humbly thankful for the 47 million Americans without health insurance; and further, especially thankful that their ranks  must surely be growing, given the recession, advancing unemployment, imminent collapses of businesses and indeed entire industries, &c. And even though Obamacare promises to significantly reduce that number, DrRich went on to express his fervent wish that large numbers of the uninsured might still be with us a year and two years and even ten years hence, for the great and good benefit of us all.

Enjoying the remainder of his Thanksgiving meal out on the back porch with the new puppy, DrRich composed in his mind this explanation which you now behold for the keen appreciation he has developed for the uninsured. He now offers this explanation both to his readers, and to the few members of his extended family who, he believes, might have been inclined to hear him out, had Mrs. DrRich not offered at that moment to consider remaining married to him only if he would retire from the table immediately. (Believing his marriage to be a union sanctified in heaven, he did so.)

In any case, for those who have an open mind, there are two compelling reasons we should be thankful for the uninsured, and should be particularly loath to allow them to disappear.

The first reason is that it is largely thanks to the uninsured that we are able to maintain the fundamental and dearly-held American fiction that there need be no limits on healthcare. (The image DrRich conjures up when he says “dearly held” is that of Gollum caressing the Ring.) Simply put, when we have tens of millions of uninsured Americans who don’t have ready access to regular and routine healthcare, then it’s relatively easy to pretend that “healthcare” should include everything we might want it to include.

Our current healthcare system relies heavily on using the uninsured as a huge fiscal safety valve. That is, in lean times (such as now), we open up the valve, increasing the number of people who are ineligible to consume routine healthcare. Increasing the number of uninsured Americans has become perhaps our most effective mechanism of covert healthcare rationing.

This simple expediency alone goes a long way toward enabling us to avoid having to consider or discuss limits. Openly recognizing the unavoidable limits to healthcare, much less having to figure out how to implement such limits fairly and rationally, would be exquisitely painful and disruptive. (Just ask Gollum how unpleasant it is to be forcibly separated from that which we love and deeply value.) For helping us to avoid such pain and societal disruption, we clearly owe a great debt of thanks to our uninsured brethren.

The second reason came to light recently in an article in the Journal of the American Medical Association.* This article showed that – contrary to both popular lore and to stern pronouncements by policy experts bent on convincing us that (next to global warming) reducing the number of uninsured Americans is the most important task of mankind – the overcrowding in American emergency rooms is NOT due to the uninsured. Rather, it is due to insured Americans who cannot get in to see their primary care physicians.

DrRich has discussed at some length the primary care crisis and its causes. That is a very important topic, but it’s not the topic of this particular posting. This posting is about the great and abiding value of the uninsured.

It really should not be a great surprise that emergency room overcrowding doesn’t have all that much to do with the uninsured. While it is difficult to generalize about such things, a large proportion of the uninsured are people who have assets. (If they had no assets they likely would be eligible for Medicaid.) That is, they are people who have jobs, homes, cars, &c., but their employers (who, in many cases, are themselves) cannot afford to provide them with health insurance. The chief point being, of course, that these individuals have something to lose.

These are not the people who will voluntarily enter an emergency room for their healthcare, at least, not for a medical problem that they can somehow convince themselves might go away on its own if they give it a chance (such as, perhaps, crushing chest pain, or paralysis of the left side, or some other such eventuality which might cause some of us less circumspect, more insured people to just go ahead and dial 911, all willy-nilly). They realize that the moment they set foot into an emergency room they will generate a bill of at least several thousand dollars, which they will either have to pay, or spend months or years fighting off the increasingly aggressive bill collection professionals being dispatched these days by their local hospitals. They are putting their assets and their futures at risk if they come to the emergency room.

Rather, the overcrowding is due to people who have insurance – whether it’s Medicare, Medicaid or private insurance – and who are therefore entitled to their healthcare by whatever means they calculate is the most convenient for them. Increasingly, because primary care practices are hard to find, are booked for weeks in advance, and are less and less user-friendly by the day, the convenience calculation tends to default (incredibly) to the emergency room. (That insured people are choosing emergency rooms – notoriously one of the most unpleasant experiences American citizens can encounter in peacetime – instead of the offices of their primary care physicians should itself set off major alarms about the state of American primary care.)

This is all fairly intuitively obvious, and the JAMA article really should surprise only those who habitually believe all the prevarications being promulgated as Gospel today by politicians, media, and various authorities on healthcare.

It should be plain that suddenly providing tens of millions of Americans with health insurance will decidedly not relieve emergency room overcrowding, as the policy “experts” all promise us (the same experts, apparently, who promised us that the stimulus package would rescue the economy and prevent increased and prolonged unemployment, and who confidently spout a host of predictions which fly in the face of history, common sense, and laws of economics, physics, and human nature). On the contrary, creating tens of millions of newly insured individuals, without simultaneously revolutionizing our attitudes and policies toward primary care medicine, will quite obviously make our already overcrowded emergency rooms absolutely burst at the seams, and render even more hellish than it is today – even deeper down within “grief’s abysmal valley” – the prospect of entering such a place. Indeed, if we suddenly insure all these people, the rest of us who currently have insurance really won’t have anywhere to go to get our healthcare.

So. QED. As DrRich said at the Thanksgiving meal, thank God for the uninsured.

Clearly if DrRich had been permitted a mere five minutes to explain himself, not only might he have avoided eating runny mashed potatoes in a steady drizzle, but he also might have salvaged his reputation among some of the more remote members of his extended family, who really don’t know what a swell and reasonable guy he can be. Next year when his turn comes, DrRich will choose to be thankful for some more traditional value, in the hopes of being allowed to eat his meal in a warmer, drier, friendlier environment – perhaps he can be thankful for the growing number of obese Americans, and the great service being provided by these patriots-to-mankind as they reduce global warming.

* Newton MF, Keirns CC, Cunningham R, et al. Uninsured Adults Presenting to US Emergency Departments: Assumptions vs Data JAMA. 2008;300(16):1914-1924.

Podcast:

Last week, President Obama took unilateral Presidential action to fix the drug shortages that have been plaguing American hospitals since 2005.

He has been taking unilateral Presidential action quite a lot lately, in his effort to publicly emphasize the recent unwillingness of Congress to do his bidding, and to illustrate to us in the great unwashed how much better things would be if only the President could just go ahead and do all the stuff that needs to be done, without having to take the legislature into account.

For problems like this (i.e., drug shortages, lack of jobs, loss of “spirit,” &c.) are the price we pay when we insist on holding our leaders to the constraints imposed by some old, dusty, outdated document, written by someone else’s ancestors. (For how many of us, really, descend from either the Roundheads or the Cavaliers who wrote the thing?)

There are other ways one might run an enterprise, you know, that Adams or Jefferson probably never thought of.

In any case it is somewhat surprising that this time the President failed to take full advantage of the occasion. Namely, he did not blame George Bush for the drug shortages. He missed a real opportunity there, because had he done so he would have been more correct than usual.

Shortages of certain critical drugs have become a serious problem over the past six years or so. Generally speaking the drug shortages have involved sterile, injectable generic drugs. Sterile injectables are relatively expensive to make, and because the requirement for sterility dictates they must have a finite (and relatively short) shelf life, they are relatively expensive to manage logistically after they are made.

The shortages are in some of the more important and critical drugs used in medicine, including “crash cart” cardiovascular drugs, antibiotics, and important chemotherapy agents used for cancer. In recent years increasing numbers of patients with life-threatening illnesses have not been able to receive the drugs they need to optimize their odds of survival, and they have had to receive some substitute therapy, that is, instead of getting the drug they ought to have, they get a drug that is available. When your life is in the balance this is not a pleasant thing.

The FDA keeps an on-line list of current drug shortages, which can be found here. The list is impressively long.

Many experts (the usual suspects) have looked into the problem of drug shortages, and have come up with many explanations for it. Typically, after analysis, the reason for the shortages is said to be “multifactorial,” and includes: insufficient production space, disruptions in the supply of raw materials, several drug makers opting out of the generic drug business, and a spate of manufacturing quality issues that have resulted in prolonged production interruptions. The term “drug company greed” often hovers just beneath the surface of such explanations, and sometimes actually breaches.

Here is the formal position the FDA has taken to explain the growing drug shortages. Readers will note that it invokes all of the above multifactorials.  (And since none of these manifold causes are under the direct control of the FDA, the agency concludes, clearly it is not to blame.)

This sort of scattershot explanation for the drug shortages seems unsatisfying. It seems unfocused and random. We are to believe that a series of disparate, unfortunate events suddenly began happening to the drug industry six years ago (since prior to that there was no particular problem with these drugs), with no underlying explanation, and that all these unwanted happenstances, quite miraculously, mainly affected only one kind of product – sterile, injectable generic medications. Go Figure.

Must be one of those Black Swan deals.

Undeterred by the lack of a unifying theory to explain the problem, the President has now taken action.

He decreed the following steps.  He told the FDA to ask drug companies for earlier notice when there will be a new shortage. He asked the FDA, after the agency has ordered a halt in production of a drug due to quality issues, to speed up its reviews when the drug company says it is ready to get back on line.  And he asked the DOJ to crack down on “grey markets” that have now appeared to provide these critical drugs to hospitals for exorbitant prices.

See what kind of quick action we would get if we would just suspend the Constitution?

The problem is that the things the President is doing won’t help much, and the things that would help a lot the President is not doing.

It should not be this difficult to figure out why we are having drug shortages. Yes, DrRich agrees that the proximate reasons are multifactorial. But the proximate reasons for product shortages are always multifactorial, because when the root cause of a shortage is itself beyond their control, the product-makers will always try multiple, marginally effective and often counterproductive ways to mitigate the root cause, thus creating a multitude of potential proximate causes for problems. And if an analyst does not look beyond those proximate causes he might not see the root. This often happens when seeing the root would be inconvenient or embarrassing.

The root cause of any persistent product shortage is almost always the same. For one reason or another, the cost of providing the product has outstripped the price the product-maker can get for selling the finished product.

In a free market, when the cost of production goes up the price of the finished product rises accordingly. As long as the customers can pay the higher price there will be no shortage of the product. If the price rises so high that customers won’t pay it, the demand for the product drops – and production is adjusted to reduce the supply in accordance with that reduced demand. But even in this case, there is no product shortage, because even if more product were available nobody would buy it.

Sometimes a sudden increase in demand for a product will create a product shortage. But the higher prices enabled by this new demand will entice the product-makers (greedy bastards!) to increase their manufacturing capacities, and will attract new product-makers to go into business, and eventually the shortage will be resolved. In free markets, shortages are usually temporary and self-adjusting.

In general, truly persistent shortages will only occur when the product-makers cannot increase the price they get for their finished product sufficiently to keep up with a rising cost of production. In this case profit margins shrink or even become negative, and the incentive to expand production, or even to stay in that business, disappears. This is a true shortage – the demand is still there, and customers are willing and able to pay the price being asked, but the product-makers are no longer able to supply the product at that price. Unless the mismatch between the cost of production and the price of the finished product is repaired, the product shortage becomes persistent or even permanent.

Such a persistent cost/price mismatch does not occur in a free market. It occurs when some Central Authority acts to control prices (often, to be sure, while simultaneously acting to increase the cost of production). A Central Authority can cap effective price a product-maker can get for his/her product by implementing overt or hidden price controls; by increasing marginal tax rates high enough to push the product-maker’s risk/reward calculation to favor inaction; and by instituting windfall profit taxes that do the same thing. DrRich is certain that Progressives have thought up a number of other ways to bolix-up the supply/demand relationship as well.

We do not need to know anything in particular about manufacturing generic, sterile injectable drugs to know that it is very likely that the persistent shortages we are seeing in these products are probably due to a persistent, externally-imposed mismatch between the cost of production, and the prices the companies can get for selling these drugs. And whatever caused that mismatch must have occurred before 2005.

And lo and behold! We find that a recent Medicare law (Section 303(c) of the Medicare Modernization Act of 2003) strictly limits the price Medicare will pay for “injectable” generic drugs. Prices for these drugs can still rise, but only by 6% or less, and only once every six months.  Congress (in its great wisdom and expertise in matters economic) made the judgment that this kind of price rise would be sufficient to balance market forces. But Congress was wrong.

This law took effect January 1, 2005.

The margins companies get for generic drugs are already low. And the cost of making (and managing the distribution of) sterile, injectable drugs is inherently higher than for most generic drugs. So the profit margins for these drugs, already low, was severely challenged by these new price controls.

The industry reacted quite rationally and predictably to this new law.  The big companies, which could maximize their profits by devoting their manufacturing space to other products, got out. And new, generic drug companies got in. These generic drug companies do not have to bear the cost of research and development, so their overall cost of production is substantially lower than for the big companies – their business models indicated they could pull a reasonable profit even with the price controls, if all went well. But to do so, they had to employ cheaper manufacturing processes, with less quality control and less production redundancy. So, quite predictably, there were quality issues, and when these issues occurred there was no redundant production capacity available to pick up the slack. And stringent new FDA standards meant that each time such an issue occurred, their production would be off-line for months, or even a year or longer.

But for DrRich to belabor the story from this point would only be to elaborate on the multitude of proximate causes for the drug shortages, all of which are merely artifacts of the ways the industry chose to respond to the root cause – i.e., to government-imposed price controls.

The President’s executive order ostensibly aimed at fixing the drug shortages will of course be ineffectual. While it implies new regulatory zeal which will further increase the cost of production and worsen the cost/price mismatch, it does not acknowledge let alone address the root cause.

In this light, the President’s attitude toward the grey market that has sprung up in response to the drug shortages is particularly instructive.  A grey market, as DrRich understands it, is like a black market but less illegal.  And we know a lot about black markets.

A black market acts outside the legal economy to provide customers with products they cannot get within the legal economy. The price a black market dealer gets for the product simply reflects current market forces, given the product shortages which exist within the legal economy, the risk the black marketeer takes in providing the product extra-legally, the additional “security” they require, &c.  So the customer pays through the nose, but at least he can get the product he wants or needs.

The very presence of grey/black markets generally indicates that the shortages which are present within the legal economy are not inherent but artificial – that is, the products are demonstrably available, for the right price. That product’s abundance would increase and the price would adjust to some more reasonable value if only the customer were permitted to pay what the market will bear. (The true free-market price for any black market product will always be far higher than the legal economy allows, but far lower than the black market demands.)

Fulminating about the greed of the grey marketeers does not hide this truth.

No wonder the President’s new decree attempts to convert the grey market for sterile injectables into a true black market, and in this way aims to snuff out this extremely embarrassing, all-too revealing, spectacle.

Podcast:

 

While Grand Rounds is normally the highlight of everybody’s week here in the medical blogosphere, this time it’s different. This week, we are all – each and every one of us  – completely distracted by the most wonderful sense of expectation and joy, to the exclusion of virtually every other human emotion. For DrRich, at least, the feeling puts him in mind of the giddy anticipation he experienced on, say, his 5th Christmas eve, when he was still young enough to consider Santa Claus a magical-but-real agent of earthly delights. (This was before DrRich realized that Santa, being obese, is actually a great menace to society.)

For this, dear reader, is the week when President Obama will turn his considerable powers of intellect, at long last, to the issue of jobs. The President indicated to us more than a month ago that he would, in his own good time, present to us his program for fixing the horrific and prolonged unemployment problem which now affects most American families in some way. And thus realizing that a solution is finally at hand, we in the great unwashed masses have waited, as patiently as we could, through earthquakes, hurricanes, Martha’s Vinyard vacations, and numerous pre-season football games, for the President to tell us the Answer. And, summoning together a Joint Session of Congress – a venue most often reserved for declarations of war and similar life-altering policy initiatives, thus confirming the momentous nature of his coming words – he will finally proclaim to us the Good News, a mere two days from now. One can cut the anticipation with a knife.

So, while it is indeed an honor to be hosting Grand Rounds during this historic week. DrRich must admit to finding it a little difficult to concentrate his efforts. No doubt readers will likewise find it a challenge to turn their attention away from the Big Event long enough to peruse the following posts – the best of the medical blogosphere this week.

But be assured that there is good stuff to follow. So, if you find yourself incapable of focusing your attention on Grand Rounds at the moment, simply bookmark this page, and return to it once your sense of soaring happiness returns (as it inevitably must) to a more normal state. Be assured that this week’s entries are timeless enough to outlive your ecstasy (an emotion which – alas! – to be effective, must always be transient).

So let us begin.

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DrRich – having been informed not long ago, by an actual U.S. Attorney who at that moment had him under a form of official duress, that the DOJ is well aware of this blog and the general tenor of its content – always likes to mention early in any long post (so that his minders do not have to read the whole thing) any items that might be helpful to the Administration. Accordingly, we open Grand Rounds this week with the announcement, posted in The Examining Room of Dr. Charles, of the 2011 Charles Prize for Poetry. Dr. Charles has been hosting this prestigious contest – which seeks and awards excellence in poetry touching on health, science or medicine – for some time now, and it has proven to be an exceedingly popular annual event.

In addition to the significant intrinsic merits that accompany the Charles Prize for Poetry, DrRich must note that Dr. Charles is also awarding a not-inconsiderable cash prize to the winners. That is, he is creating what, in our present economic environment, must be considered damned-near jobs. Encouraging employment in the career of poetry is something, DrRich thinks, the President should seriously consider before Thursday night, lest he be tempted to make the huge mistake of attempting to whip up enthusiasm yet again for Green Jobs. (In the wake of the collapse just last week of the heavily-government-subsidized and heavily-Obama-promoted Solyndra Company, and of at least two other companies that received large federal funds for Green Jobs, treading that dead ground again would merely reveal that he is entirely bereft of ideas.) The Administration ought to thank DrRich, and especially Dr. Charles, for this critically important advice. Encouraging poesy, instead of Green Jobs, would demonstrate the kind of new thinking we are all looking for from our President at this critical juncture.

At Dr. Malpani’s Blog, Dr. M. outlines his 3-step approach for helping his patients understand the intricate concepts of in-vitro fertilization. First, you describe how the thing is supposed to work when everything is functioning normally (the “thing” in this case being the human reproductive system). Then, you describe to the patient where the system is breaking down in his/her case. And finally, you describe the options available for mitigating the breakdown. Dr. Malpani’s system, which he points out is generalizable, is aimed at creating a consensus for action when faced with a complex problem.

DrRich will only remark that Dr. M’s system, which works well enough for problems based in human physiology, is proving pretty worthless for problems based in the more social sciences, such as economics. This is because of a fundamental disagreement, among the debaters, on how the economy is “supposed to work when everything is functioning normally.” Progressives and conservatives have very different ideas about this. So Dr. M’s approach, which requires both logic and a fundamental consensus on what constitutes “normal” behavior, is unsuitable to non-physiologic systems.

Dr. Val at Better Health posts a recent interview with Dr. Dori Carlson, president of the American Optometric Association, regarding the importance of screening children for subtle but significant vision problems. (Dr. Val and Dr. Dori are referring here to the kinds of vision problems that involve optics, and not the kind suffered by our political leaders.) The type of gross vision screening which is conducted by most schools misses the majority of these vision problems in children, and those undetected vision problems not infrequently lead to impaired learning. Also, they often lead to misdiagnoses and inappropriate treatment, likely including the misdiagnosis of ADHD. (Missed vision problems constitute only one of the causes for the explosion in ADHD diagnoses in recent years. A more common cause, in our overly-feminized schools, is being a boy. Indeed, as nearly as DrRich can tell, being a boy today is a disease; they have drugs for it and everything.) In any case, if you are a parent of a school-aged child, you should strongly consider having your child’s vision checked by an ophthalmologist or optometrist – especially if somebody wants to put him on Ritalin.

Henry Stern at InsureBlog tells us the good news and bad news about a new study related to heart attacks. He notes that heart attack victims are receiving definitive therapy in American hospitals much more quickly than they were just a few years ago. And when you are having a heart attack, minutes count – the longer that coronary artery is occluded, the more permanent damage is done to your heart, and the higher your odds of death or disability. So the diminished delay to treatment is good news. As usual, though, there is bad news attached. DrRich, always the sunny optimist, does not wish to repeat the bad news. You can go to the InsureBlog to read it for yourself.

The ACP Internist reports a study showing that 80% of today’s doctors look up on-line information in front of their patients. DrRich, who admits to being an Old Fart, does not find this surprising, since young physicians these days are, well, young. And young people are on-line all of the time, reporting their every trivial thought and mundane action instantaneously to the Cloud. (If Andy Warhol were alive today he’d be talking about our 15 minutes of anonymity.) But you don’t have to be a young doctor to take up these new habits. It appears from this new survey that doctors of all age groups have ritualistically placed an LCD screen between themselves and their patients. In so doing, they have awarded to those distant, expert panels – the ones spinning out all those guidelines, pay-for-performance checklists, marching orders, &c – their appropriate and rightful physical position, that is, directly interposed between doctor and patient. This is more than mere symbolism, but the symbolism is delicious.

But, dear reader, please do not be too critical of today’s doctors. If you yourself were a savvy modern physician, realizing that you could go to jail if you do what you think is medically appropriate before checking with the Authorities to find out if it is also allowable, you’d have a computer screen in front of your face too, and you’d be looking stuff up in front of your patients the entire time they were blathering on about their symptoms or whatever. DrRich worries for the 20% of doctors (likely, his fellow Old Farts) who haven’t “gotten it” yet.

Beth Gainer at Calling the Shots makes an important observation about the two classic narratives to which all victims of breast cancer are assigned – the narrative of the triumphant hero, and the narrative of the courageous and noble victim. Ms. Gainer’s observation is that most women with breast cancer do not fit either of these prescribed narratives. Many women are thus left feeling guilty or diminished when they find that their experience is not meeting with society’s expectations. Ms. Gainer is absolutely correct, and indeed, her observation is generalizable. The same thing occurs whenever society’s designated narrative-makers assign a range of permissible attitudes, thoughts and behaviors to any defined group. Mercy on any member of the group who falls outside those designated norms.

David E. Williams at the venerable Health Business Blog addresses the question of how we – society – will cope with the next big trend in the drug industry – the development of “niche” drugs, drugs that are suitable for only a relatively small number of patients and which, therefore, are exceedingly expensive to develop and market. David goes directly to the real question – the problem of niche drugs makes the issue of healthcare rationing unavoidable.

So far, of course, we are doing our healthcare rationing covertly, and in the case of niche drugs that usually means interpreting clinical results in such a way as to minimize their potential benefits. We do this by saying that Drug X “only increases survival by 4 months,” and ignoring the fact that “4 months” is an average value, and that while many patients have no benefit at all, a non-negligible minority may live a lot longer. The question, “Is it worth $50,000 for only four more months of life?” is different from the question, “Is it worth $50,000 to have a realistic shot at living several extra years?” Covert rationing causes us to frame the question in such a way that the answer to any question beginning with “Is it worth. . .” is always, “no.”

At the Road to Hellth, Douglas Perednia, one of the best analysts of health policy writing today, looks at the rationale for the onerous penalties which are required under Obamacare for hospitals whose patients are readmitted at higher than the average readmission rates. Perednia describes the bogus math which the Feds are apparently using to determine what appropriate readmission rates ought to be – and points out the irony of requiring doctors to behave in an “evidence-based” fashion, while the Feds themselves are using frivolous statistics to dole out the equivalent of the NCAA Death Penalty to our hospitals.

Steven Seay, PhD discusses what ought to be second nature to any clinician – applying the principles of the scientific method to clinical practice. That is: gather the necessary data to formulate an hypothesis; institute therapy based on that hypothesis; measure the results of that therapy; revise the hypothesis to reflect this new data; repeat as necessary. This is the way clinical practice should be done. DrRich is happy to learn that it is still apparently OK for clinical psychologists to function in this manner. For physicians, especially PCPs, the scientific method has become forcibly compressed to: make a diagnosis; treat according to the guidelines. While the patient might not do so well with this new method, the physician will be OK, since “quality” will be measured according to one’s compliance with the guidelines. Measuring the actual results of the treatment, of course, would only lead to trouble, and in most cases will be avoided.

James Gault, MD, of the blog Retired Doc’s Thoughts, is a long-time champion of classical medical ethics (as opposed to the New Age medical ethics now formally espoused by all the major professional organizations).  As such, Dr. Gault often deconstructs arguments being published by modern medical ethicists supporting these New Age ethics, which require doctors to act for the benefit of the collective rather than for the benefit of their individual patients. In this post, Dr. Gault gives a very effective what-for to Professor Fuchs of Stanford, who, once again, has published a paper advancing the bankrupt argument that what’s good for the collective is necessarily good for the individual. These kinds of vapid arguments may fool the Whippersnappers, but they’re not fooling us Old Farts.

The ACP Hospitalist notes that, according to the Institute for Safe Medication Practices, a “grey market” is developing for life-saving medications that have been in severe short supply for the past few years. A grey market, DrRich thinks, is like a black market, but less illegal – though it is possible they are referring to Old Farts who are merchants. In any case, the ISMP says the grey market is price-gouging hospitals that need those important drugs, and have nowhere else to buy them. The solution, according to the ISMP, is (among other things) to empower the FDA to manage drug shortages and tighten regulations for drug distribution.

The growing, widespread shortage of important medications is indeed a bad problem. We should look for a solution to this problem. Shortages of any product occur when it costs companies more to make the product than they can get for it in the marketplace. Onerous regulatory policies by the FDA which, in the name of product safety, have greatly increased the cost of doing business for pharmaceutical companies, along with recent de facto price controls on generic drugs, have combined to make it economically unfeasible for drug companies to expend large resources to manufacture these drugs. It seems doubtful that piling on even more regulations will improve the situation. And attacking the grey markets will simply drive them further into the dark (since black markets are nature’s way of providing a product when governments act to limit it). Given the expected 500,000 pages of new regulations being conjured up out of the Obamacare legislation, drug shortages are merely the first of many critical medical shortages we will be seeing in the coming years. So it will be instructive to watch how our leaders handle this problem.

In any case, from the job-creation standpoint, DrRich believes there will be many employment opportunities in coming years in sundry black markets related to healthcare. Many skills will be needed, some of which should be quite exciting!

At the Prepared Patient Forum, Trudy Lieberman writes a post entitled “Health Insurance, Meet the Jolly Green Giant,” in which she discusses the new, patient-friendly labels that are supposed to accompany health insurance policies under Obamacare beginning no later than 2014. The labels sound like a good idea, but as Ms. Lieberman points out, there will be problems. For instance, for the Feds to mandate transparency in labeling is unlikely to be all that helpful when, at the same time, they often mandate utter secrecy on the part of providers (for instance, in creating severe anti-trust penalties for doctors who reveal the fees they have negotiated with insurance carriers). But as always, results are far less important than simply meaning well.

Sharp Incisions, a blog written by a self-described “fledgling” medical student, has sent in an affecting post about scrubbing in on a unique surgical case – the harvesting of six vital organs for transplantation from a patient who has been declared brain dead. DrRich prays that Dr. Incisions will maintain for a long time the same sense of wonder and gratitude, expressed in this post, for the gift of life.

A medical student who blogs anonymously at the D.O.ctor Blog, describes her first experience participating in cardiopulmonary resuscitation when it actually counted. DrRich, who in his days as a cardiac electrophysiologist ran hundreds of these things, and who became convinced over the years that three people was the optimal number to run a “code,” admits to being a little taken aback by this student’s description of the event, which sounds like it must have been as complex to coordinate as a Busby Berkeley production number. No wonder she was a little astonished by her experience. DrRich supposes that this must be the new-style CPR mandated by some new guideline or other, and would not be surprised to learn later this week that CPR procedures requiring 15 participants is part of the President’s new Jobs Plan.

Speaking of sudden death, one of DrRich’s recurrent themes here on the CRB is that sudden death is a great boon to our healthcare system (since not only is sudden death itself very cheap, but also it tends to remove individuals who would otherwise continue collecting Social Security, and who tend to have expensive chronic heart disease), and that therefore the government will tend to stifle the prevention of sudden death any time it can. Accordingly, Dr. Wes tells us that the Feds are about to further limit the use of the Zoll wearable defibrillator. Doctors have taken to using this device in high-risk patients during the first month or so after a heart attack, since guidelines specify that ICDs (implantable defibrillators) must not be implanted during this interval. Since sudden death is particularly likely during that first month, the Zoll device is being used as a “bridge to ICD.” Obviously, sudden death being the healthcare system’s friend, this must not be permitted. And so, Dr. Wes points out, soon it will not be.

At the HealthAGEnda Blog of the John A. Hartford Foundation, Marcus Escobedo describes how his father is coping with the decisions that need to be made as he deals with recurrent prostate cancer. Helping elderly patients deal with health issues is the thrust of Mr. Escobedo’s work at Hartford, and his new personal experience, he tells us, drives home the point. Specifically, Escobedo works to assure that elderly patients are considered to be more than just the sum of their disease and their age. DrRich is sorry to have to point out that no less an expert on American healthcare than President Obama has explicitly disagreed with this approach, and on national television to boot. Perhaps when he said this the President was suffering under the influence of teleprompterpenia, and perhaps if he had an opportunity to meet with Mr. Escobedo over a beer in the Rose Garden, he would possibly begin to revise his position to one that is more compatible with the mission of the Harford Foundation. On behalf of America’s Old Farts, DrRich would certainly hope so.

Dr. Thomas Pane writes in the Business, Surgery & Medicine Blog about tantrums, specifically, the kind occasionally thrown by surgeons in the operating suite. His post carries an important Labor Day lesson for anyone who hopes to make a career in the medical field in the coming years, so pay attention:

Everyone can agree that throwing tantrums in the operating room is never a good thing, and that quite often, it is a very bad thing. But Dr. Pane points out that, counterproductive as tantrums often are, they are nonetheless not the worst possible way in which a surgeon can express his/her utter frustration at a bureaucracy that blithely conspires to disrupt surgical procedures at critical moments. He reminds us, once again, that the biggest handicap one can ever have when working in an environment in which bureaucratic mud has fouled every gear is: giving a sh*t. So, while Dr. Pane may or may not agree, here’s the lesson: If surgeons would simply adopt the apathetic, indifferent attitude that classically characterizes long-term survivors in work environments mired by bureaucracy, all would be well.

Jaqueline writes Laika’s MedLiblog, a blog dedicated to medical information science. She submits a post entitled, “PubMed’s Higher Sensitivity than OVID MEDLINE… & other Published Clichés,” in which she shows how medical researchers doing literature searches for, among other things, meta-analyses, will stumble upon various “anomalies” in their searches of the PubMed and OVID databases, and then write additional, CV-padding papers about those anomalies. Jaqueline points out that these so-called “anomalies” are actually well-documented “clichés,” which are well-known to information specialists and anyone else who is competent in doing comprehensive literature searches. In other words, Jaqueline has documented that these meta-analysis researchers are rank amateurs at doing the most critical step in conducting meta-analyses – searching the literature for all the appropriate published studies. DrRich has always mistrusted meta-analyses, and Jaqueline has helpfully identified yet another reason to justify such mistrust. He thanks Jaqueline, and whoever planted those database anomalies which allow us to identify potentially incompetent meta-analysis researchers.

Nicholas Fogelson of Academic OB/GYN writes about taking care of the dying Jehovah’s Witness patient, or rather, taking care of the Jehovah’s Witness patient whose illness is potentially curable but who is dying because he or she refuses to accept blood products. DrRich can attest to how very difficult it is for a doctor to respect a patient’s religion when doing so results in their death. Dr. Fogelson’s description of his evolving attitude regarding this dilemma is compelling.

Need to be uplifted after reading the above post? Read Jordan Grumet’s submission from his blog, In My Humble Opinion. It’s brief and beautifully written, and it reminds us that sometimes our efforts as doctors – which all too often seem futile – can pay off in unimagined ways.

Pranab at the Scepticemia blog points to a news story about a medical school in Mumbai selling seats (that is, entry to medical school) to the highest bidder. He strongly objects to this practice, even though he postulates that his objection will make some of his readers call him “a leftist commie” (which DrRich finds to be the most common kind). DrRich does not agree with Pranab’s (tongue-in-cheek) conclusion that it is America’s fault that Mumbai medical schools are selling seats. (It is actually only George Bush’s fault.) But DrRich does agree entirely that the practice itself is an abomination. Indeed, we can all agree that entry to any career which requires a high degree of skill, talent, and/or intelligence ought to depend on merit, and nothing but merit. Can we not? Good.

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DrRich will end by noting that he is finishing this Jobs! Jobs! Jobs! Edition of Grand Rounds during the waning moments of Labor Day, which causes him to fondly recall those long-ago days of yesteryear, when the U.S. still had plenty of steel mills and DrRich was a card-carrying member of the United Steelworkers of America, and the thought of attending medical school had not yet penetrated his still-empty head. And he recalls how, while he was working one day as a lowly laborer, a union boss came over to him to explain (after DrRich had complained about it) the utility of his spending three painful days moving a large pile of slag, employing only shovel-and-wheelbarrow technology, from one location to another – AND THEN BACK AGAIN.  Now, those were the days when we knew how to make jobs!

Say, whatever happened to those steel mills, anyway?

Podcast:

The recent announcement that President Obama would dispatch “secret shoppers” – agents of the government posing as patients with either private insurance or Medicare/Medicaid, who would call primary care physicians’ offices to document how long it takes to receive appointments – had many PCPs quite upset.

PCPs were upset despite the fact that the administration assured them that the President’s spies were only aiming to help. In particular, the secret shoppers were going to document that America has a PCP shortage, presumably so that government programs of some sort could be devised to fix that shortage. (They would also document, bye the bye, that patients with government insurance have a more difficult time getting appointments with PCPs.) Apparently, however, the outcry from insulted PCPs was so great that the administration quickly decided to scrap the secret shoppers program – for now, at least.

It is obvious that what the administration claimed they wanted to measure is already well known. Yes, there is indeed a PCP shortage. And yes, PCPs (being, on average, intelligent persons) are relatively slow to schedule patients whose insurance is known to result in a financial loss – if they schedule them at all.

Therefore, equally obviously, there must be some other motive for the administration to have devised this secret shopper program.

The real motive, DrRich submits, was to establish with actual data that: a) we have a two-tiered healthcare system, in which patients on government insurance plans sometimes have more difficulty obtaining medical care, and b) doctors (even the universally-beloved PCPs) are greedy and untrustworthy. Such results, with expert handling, would have served to move some American citizens a little closer to accepting a single-payer healthcare system. It would also serve to convince a few people that, seeing as how physicians behave so badly, perhaps it is not really necessary to have a doctor as your PCP.

All in all, the secret shopper program would have been a few hundred thousand dollars well-spent.

Still, DrRich can only shake his head in wonderment that his PCP friends expressed such great dismay over such a small thing as the secret shopper program. It is as if, after the Titanic struck the iceberg, a delegation of passengers was dispatched to berate the Captain because the turn-down service seemed slow that night.

How is it possible for PCPs to be so indignant about such a trivial thing as secret shoppers, when the very means of their livelihood – their chosen career – is at an end? For it is plain to anyone who cares to look that primary care medicine as we know it is dead. It lingered for years in a moribund condition, and its obituary was finally published last year in the Obamacare legislation.

Primary care’s cause of death was a culmination of two fatal disorders. Firstly, the healthcare system itself – well before the Obama administration came along – slowly smothered primary care into oblivion.

Consider the reduced condition to which the healthcare system – especially the government payers – eventually drove the primary care doctor: Their pay is determined arbitrarily by Acts of Congress, like workers in the old Soviet collectives. They are directed to “practice medicine” strictly according to directives (quaintly called “guidelines”), handed down from on high by panels of sanctioned experts, and accordingly PCPs are enjoined from taking into account their professional experience, or their specific knowledge of their individual patients. They are limited to 7.5 minutes per patient “encounter,” and the content of this brief encounter is determined by sundry Pay for Performance checklists, so as to strictly limit any interactions with their patients that do not meet the approved agenda. Their every move must be carefully documented according to incomprehensible rules, on innumerable forms and documents, that confound patient care but that greatly further the convenience of the stone-witted bureaucrats who are employed specifically to second-guess every clinical decision and every action they take. Worst of all PCPs have been charged with being the primary mediators of covert, bedside healthcare rationing, and to this end have been pressed to nullify the classic doctor-patient relationship by the healthcare bureaucracy that determines their professional viability, by the United States Supreme Court*, and by the bankrupt, new-age ethical precepts of their own profession.

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*Pegram et al. vs Herdrich(98-1940), 530 US211 (2000)
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By such insults, even before Obamacare became the law of the land, primary care medicine had been reduced to one of the most frustrating, enervating and demeaning endeavors a physician could imagine.  Many if not most practicing PCPs are looking to either retire early or change careers, and medical students – even the most idealistic ones – are avoiding primary care in droves, especially if their training exposes them to the palpable despair radiated by actual primary care physicians.

But the second fatal disorder has nothing to do with policy or politics. Even if doctors had perfect control of the healthcare system and the political realities, primary care medicine (as we know it) would still be in trouble. This is because of an axiomatic truth revealed by the annals of human progress, to wit: As knowledge increases and technology improves, activities that used to require the services of highly-trained experts become available to non-experts who have much less training. A lot of what PCPs have traditionally done – check-ups of well patients, screening for occult disease, controlling cholesterol, advising on diet, weight loss and exercise, managing routine hypertension and diabetes – really can be reduced to a series of guidelines and checklists, which can be adequately followed by individuals with much less training than these doctors receive.

When any area of expertise evolves to this level, it is inevitable (in a free economy) that lesser-trained individuals will inherit it. This event greatly increases productivity, makes the services in question more readily available to many people at lower cost, and (ideally) frees up the experts to take on more challenging endeavors. While this kind of transition is nearly inevitable, it is often painful and disruptive. The pain and disruption are being experienced by PCPs today.

DrRich agrees with fellow blogger Wade Kartchner that primary care medicine has advanced to the point where it really would make sense to turn over many of the routine, mundane, and reducible-to-checklist tasks that PCPs typically perform to non-physicians. PCPs who are fighting against this inevitability are wasting their time and energy. They are fighting both history and the laws of economics, so in the end it is a losing battle. It is time for PCPs to move on.

It is of course immaterial whether you agree with DrRich on this point. It is immaterial because this is how the Central Authority sees it.

Having painstakingly reduced you PCPs to tools of the state – whose chief job is to follow the guidelines and place chits on the checklists, &c. – it is only natural for the Central Authority to eventually notice that you really don’t need all that training to do the kind of job they have invented for you. Nurses – who can be “trained up” much more rapidly than you, who will work for much less money than you, and who (they think) will be much less recalcitrant about following handed-down directives than you – will fill the gap. And you, doctor, can go pound salt.

So it was really only a formality for the Obamacare legislation to make the death of primary care official. And the new law, accordingly, did so by stating explicitly that PCPs and nurse practitioners are now equivalent, one and the same. They are both PCPs under the eyes of the law. The actual language of the obituary is as follows:

The term ‘primary care practitioner’ means an individual who —

(I) is a physician (as described in section 1861(r)(1)) who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine; or

(II) is a nurse practitioner, clinical nurse specialist, or physician assistant (as those terms are defined in 9 section 1861(aa)(5))

What this means is that today there are two pathways to becoming a PCP. You can spend four years in college, four years in medical school and three years in a clinical residency – or you can go to nursing school and do another year or two of clinical training. Given this established fact, one could hardly fault patients for questioning the common sense (if not the intelligence) of a healthcare worker who, at this point in the history of medicine, would choose the former pathway.

And so the issue is decided. PCPs: by virtue of your specialty you have been formally (and legally) reduced to the status of a nurse-equivalent. Your specialty, as you have known it, is dead.

Among other things, this means that the secret shopper gambit – when it is finally implemented – is just not worth worrying about. It’s only a way to convince a few more Americans that their PCPs are essentially worthless, and that they’d be just as well off having a nurse practitioner do the job. So don’t sweat the secret shoppers. Forget them.

Instead, you need to decide what you’re going to do about the demise of your chosen career.

In his next post, DrRich offers you some friendly advice in this regard.

Podcast:

In 2007, when the results were published from the COURAGE trial, all the experts agreed that this study would fundamentally change the way cardiologists managed patients with stable coronary artery disease (CAD).*
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*”Stable” CAD simply means that a patient with CAD is not suffering from one of the acute coronary syndromes – ACS, an acute heart attack or unstable angina. At any given time, the large majority of patients with CAD are in a stable condition.
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But a new study tells us that hasn’t happened. The COURAGE trial has barely budged the way cardiologists treat patients with stable CAD.

Lots of people want to know why. As usual, DrRich is here to help.

The COURAGE trial compared the use of stents vs. drug therapy in patients with stable CAD. Over twenty-two hundred patients were randomized to receive either optimal drug therapy, or optimal drug therapy plus the insertion of stents. Patients were then followed for up to 7 years. Much to the surprise (and consternation) of the world’s cardiologists, there was no significant difference in the incidence of subsequent heart attack or death between the two groups. The addition of stents to optimal drug therapy made no difference in outcomes.

This, decidedly, was a result which was at variance with the Standard Operating Procedure of your average American cardiologist, whose scholarly analysis of the proper treatment of CAD has always distilled down to: “Blockage? Stent!”

But after spending some time trying unsuccessfully to explain away these results, even cardiologists finally had to admit that the COURAGE trial was legitimate, and that it was a game changer. (And to drive the point home, the results of COURAGE have since been reproduced in the BARI-2D trial.) Like it or not, drug therapy ought to be the default treatment for patients with stable CAD, and stents should be used only when drug therapy fails to adequately control symptoms.

When the COURAGE results were initially published they made a huge splash among not only cardiologists, but also the public in general. So cardiologists did not have the luxury of hiding behind (as doctors so often do when a study comes out the “wrong” way) the usual, relative obscurity of most clinical trials. Given the widespread publicity the study generated, it seemed inconceivable that the cardiology community could ignore these results and get away with it.

But a new study, published just last month in JAMA, reveals that ignore COURAGE they have.

In a registry-based survey that covered over 500,000 patients treated in over 1,000 hospitals, the new article reports that there has been little change in the use of drug therapy in patients with stable CAD since the COURAGE study was published. Prior to the publication of COURAGE, only 43.5% of patients who received stents had been tried on optimal drug therapy; two years after publication of COURAGE, that number had “increased” to 44.7%. And while the increase was statistically significant, observers have agreed that it is nonetheless trivial, and that the COURAGE trial apparently has made next to no impact on the practice patterns of cardiologists.

This revelation is proving embarrassing to even the usual spokespersons for the cardiology community, the luminaries who are always trotted out to explain the nuances of their colleagues’ sometimes odd behaviors, and to explain why those behaviors, actually, are not only reasonable but commendable. This time they are at a loss.

The best they can do, according to their commentary on TheHeart.org, is to offer two speculations: a) that, sometimes and for mysterious reasons, it can take several years for the results of important randomized trials to “disseminate” down to practicing physicians, and that apparently even the highly-sophisticated cardiology community is not immune to this phenomenon, and b) the cardiologists are waiting for their professional organizations to issue updated “guidelines” on stable CAD that take the COURAGE results into account. (The last official guidelines were published in 2002.)

Regarding this first explanation, DrRich can assure his readers that the results of the COURAGE trial were not slow to disseminate to American cardiologists. The results (and their implications) were, in fact, known immediately to every one – indeed, the buzz was palpable. It was, perhaps, the biggest news in the cardiology world in several years. If any cardiologists missed this seismic event, they are among that tiny, disconnected minority that is still out making house calls and distributing foxglove leaf, and likely would not know what a stent is, let alone be using them indiscriminately.

Regarding the “guidelines” excuse, DrRich is speechless. Since when are cardiologists guilty of following clinical guidelines to a fault?  If doctors, especially cardiologists, are already sticking strictly, in every particular, to sets of guidelines promulgated by committees of distant experts, even when they know those guidelines are out of date and, frankly, wrong, then (if you are an American patient) all is already lost.

DrRich does not buy either of these explanations. So what, then, is the real reason?

Is it greed? This is likely part of the explanation, and is all of the explanation for some cardiologists. (Self-interest plays as large a role in determining the actions of some practicing physicians as it does in determining the actions of those physicians whose reputations and hoped-for futures as “policy experts” requires them to denigrate the motives of practicing physicians every chance they get.) Indeed, DrRich would not be surprised to learn that some cardiologists of a certain age, realizing that the days of wine and roses are rapidly drawing to a close, are scrambling to insert every stent they can – and any other medical accoutrement they can justify deploying – as rapidly as possible, and then get the hell out.

But DrRich is certain that most cardiologists are genuinely trying to do what is best for their patients, and he believes that the failure to respond to the COURAGE trial is too generalized and too widespread to attribute entirely to greed.

Rather, DrRich believes that the results of the COURAGE trial simply fly in the face of your typical cardiologist’s world view. And while they undoubtedly understand those results intellectually, and even accept the results explicitly, they are simply having trouble incorporating those results into their conceptual framework for CAD. And since CAD is their livelihood, their philosophy, their sun, moon and stars, this amounts to an existential crisis.

When Galileo championed the Copernican view of the universe, and backed it up with sound scientific observations, he felt his views would receive approbation from the highest authority. After all, his old friend, the intellectual cleric Barberini (who had supported the publication of his book), was now Pope Urban VIII. But, while as Barberini his old friend could afford to be intellectually pure, as Pope Uban he could not. For Urban to accept Galileo’s work would formally call all Scripture into question, and seriously undermine the integrity and authority of the organization that had provided structure to western civilization for 1000 years. So Galileo had to suffer.

DrRich thinks that cardiologists find themselves in the position of Pope Urban – having the intellect to understand and accept certain surprising scientific results, but unable to put those results into practice without wrecking an entire way of life, and indeed, an entire way of looking at the world. They can either ignore (with, no doubt, some discomfort) the clear results of COURAGE, or abandon the world view that provides their sustenance and gives their lives meaning. That, DrRich thinks, is the real problem.

Regular readers will know that DrRich is not one to articulate a problem, and then simply walk away, leaving everyone to wonder what to do about it. So, as usual, DrRich has a suggestion.

The cure for the cardiologists’ existential problem is to articulate and accept a new world view, one that incorporates the results of COURAGE (and other clinical trial results that may seem puzzling under the old world view), and which places the proper usage of drugs and stents for CAD into a serviceable framework. While adopting this new world view will not be pain-free, it is one to which cardiologists can adapt – just as the Church eventually adapted to the heliocentric view of the cosmos.

And so, as a public service to his cardiology colleagues (and to their patients), DrRich will articulate a new world view on CAD. DrRich has not himself invented this new world view – most academic cardiologists, he believes, already endorse it, at least implicitly. But an explicit statement of the new world view – and an explicit rejection of the old – may help a few of DrRich’s cardiology friends to begin to accept the new “heliocentric” view of CAD, and thus to cure the existential crisis which (he postulates) is holding them back.

The Old World View

The old world view of CAD goes as follows: CAD produces localized plaques in the coronary arteries, which gradually grow out into the artery’s lumen, causing partial blockage of the artery. These “significant” plaques (generally regarded as plaques that are blocking 75 – 80% of the artery’s lumen) can produce angina (because during exertion not enough blood can get through the partial obstruction), and more importantly, can eventually cause ACS. The ACS occurs because the ballooning plaque can eventually rupture, causing a blood clot to form in the vessel, and producing sudden, high-grade occlusion of the artery.

Therefore, the cardiologist’s job is to identify these significant plaques and to stent them. Doing so will relieve “stable” angina, and will prevent ACS.

In the old world view, CAD is a localized process, that can be adequately treated with localized measures. If the location of the offending plaques can be identified (by cardiac catheterization) they can be treated. Heart attacks and death are thereby prevented.

The New World View

Whether or not CAD is producing a few localized “significant” plaques, the atherosclerosis that causes CAD is a generalized, and not a localized, process. That is, there are usually many plaques within the coronary arteries, most of which are not only “insignificant” (less than 75-80% blockages), but may even be nearly invisible during coronary angiography. Furthermore, it now appears that the majority of heart attacks (and other forms of ACS) occur when one of these “insignificant” plaques ruptures.

This is why it is not particularly unusual for somebody who has a “clean” coronary angiography to have a heart attack soon thereafter. And this is why aggressively treating stable but “significant” blockages with stents does not measurably reduce the incidence of heart attack and death.

CAD is a generalized, progressive disease. The treatment of CAD therefore inherently ought to be a medical (and not a localized, quasi-surgical) process. Ideally, one ought to use drugs that stabilize plaques and reduce the risk of rupture (statins, possibly beta blockers), along with drugs that reduce the propensity of blood to clot within the coronary artery, should a rupture occur (aspirin). And research should be aimed at identifying unstable plaques and finding better ways to stabilize them, and not at tweaking stents to render them marginally better than the prior ones.

A stent is fine to use on a significant blockage that is producing stable angina, but what it is accomplishing, one must realize, is merely to treat the symptom of angina – and not to prevent future heart attacks.

There.*

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* Under the new world view as well as the old, when ACS is actually occurring – when a plaque has ruptured and acute occlusion of an artery is taking place – inserting a stent often appears to be beneficial.
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Now that DrRich has entirely relieved the existential crisis all you cardiologists out there have been experiencing (you’re welcome!), all that remains is for somebody to address those few outliers among you who still haven’t heard about the COURAGE trial, or who are doggedly committed to following approved clinical guidelines under all circumstances, come hell or high water, even when they know them to be wrong, or who are just too consumed by greed to do the right thing.

While DrRich would consider it far from his method of choice for changing physicians’ behavior, and is in fact appalled by it, the Department of Justice’s new policy of conducting, Urban-like, inquisitions against physicians who are slow to adopt the Central Authority’s preferred practice patterns, and then criminally prosecuting those who are slow to comply, should work wonders in this regard.

Podcast:

In an earlier post, DrRich offered several potential strategies for doctors and patients to consider should healthcare reformers ultimately succeed in their efforts to make it illegal for Americans to seek medical care outside the auspices of Obamacare. To those readers who persist in thinking that DrRich is particularly paranoid in worrying about such a thing, he refers you to his prior work carefully documenting the efforts the Central Authority has already made in limiting the prerogatives of individual Americans within the healthcare system, and reminds you that in any society where social justice is the overriding concern, individual prerogatives such as these must be criminalized. Indeed, whether individuals will retain the right to spend their own money on their own healthcare is ultimately the real battle. The outcome of this battle will determine much more than merely what kind of healthcare system we will end up with.

DrRich, despite his paranoia on the matter, is a long-term optimist, and believes that the American spirit will ultimately prevail. So, to advance this happy result DrRich (in the previously mentioned post) graciously offered several creative options that could be employed to establish a useful Black Market in healthcare, which will allow individuals to exercise their healthcare-autonomy against the day when such autonomy again becomes legal. His suggestions included offshore, state-of-the-art medical centers on old aircraft carriers; combination Casino/Hospitals on the sovereign soil of Native American reservations; and cutting-edge medical centers just south of the border (which would have the the added benefit of encouraging our government to finally close the borders to illegal crossings once and for all).

As entertaining as it might be to imagine such solutions, a readily available, though much more mundane, option exists today, which is to say, medical tourism.

Medical tourism is where one travels outside one’s own country in order to obtain medical care elsewhere. It is becoming a booming business. A number of superb state-of-the-art medical centers expressly aimed at attracting medical tourists have been established in the Middle East, Singapore, India, China and elsewhere in Asia. These institutions cater to citizens of the world whose own healthcare systems cannot (or will not) provide in a timely fashion (or at all) the level of care patients may desire. Many of these institutions offer modern hospitals, numerous amenities, luxurious accommodations, attentive nursing care, and top-notch doctors – and they do it all for a tiny fraction of what the same care might cost (if you can even find it) in the U.S. and other “first world” nations.

Obviously, medical tourism is not particularly feasible for medical emergencies such as heart attack or stroke, or for chronic illnesses such as diabetes, congestive heart failure, or Parkinson’s disease, which require frequent visits and long-term management.  What is feasible is to become a medical tourist for those one-time medical services that can be scheduled and planned, for which there is a long waiting period at home, or which is simply too expensive in one’s own country. Such medical services often include coronary artery bypass surgery, hip replacements, knee replacements, and numerous minimally-invasive and not-so-minimally-invasive surgical procedures. In other words, medical tourism to a large extent is something one does for elective (i.e., non-emergency) surgery.

These are the very procedures, as DrRich has pointed out, which are now being covertly rationed in the U.S. thanks to the “never events” policy adopted by CMS and private insurers. As a result, certain categories of individuals may soon find it more difficult to obtain elective surgical services than they might have just a few years ago, and medical tourism may accordingly become a more compelling alternative.

It ought not be a surprise, therefore, that the first organization of American physicians to issue a formal policy statement regarding medical tourism is the American College of Surgeons.

The reaction of American surgeons to medical tourism ought to be obvious. They hate it. Elective surgical procedures – the very procedures for which Americans become tourists – are the bread and butter of most surgical specialties. It pains them to think of their prospective patients going off to Singapore for their lucrative bypass surgeries. American cardiac surgeons, for instance (already underemployed, thanks to American cardiologists throwing stents at every tiny coronary artery indentation they they can justify as a “blockage”), are nearly apoplectic at the idea.

It’s always a delight to read formal policy statements which attempt to disguise an entirely self-serving message as a selfless public gesture. The actual message of the surgeon’s policy statement, of course, is, “We hate medical tourism, and if you do it we’ll hate you,” but they say so on a manner which is designed to be polite, politically correct, non-judgmental, helpful and even friendly.

The surgeons in general have made a good effort, as you can see if you’d like to read the policy statement for yourself. It’s pretty much what you would expect – “Go ahead and have your knee replaced in Timbuktu if you want to. It’s your right, so go ahead and devil take the hindmost. Just don’t come crying to me when things go south a month later.”  They do so, however, in an extraordinarily collegial way.

The artful style of their policy statement aside, DrRich is struck by two aspects of the actual substance of the document.

First, the surgeons begin with a litany of dire warnings regarding all the medical considerations one must take into account before trusting one’s health to foreign medical hands:

“Some of the intangible risks include variability in the training of medical and allied health professionals; differences in the standards to which medical institutions are held; potential difficulties associated with treatment far from family and friends; differences in transparency surrounding patient discussions; the approach to interpretation of test results; the accuracy and completeness of medical records; the lack of support networks, should longer-term care be needed; the lack of opportunity for follow-up care by treating physicians and surgeons; and the exposure to endemic diseases prevalent in certain countries. Language and cultural barriers may impair communication with physicians and other caregivers.”

Obviously, these are all very important considerations. What strikes DrRich, however, is that these are the very same considerations (even the warning about endemic diseases, when one considers the MRSA infections which are secretly “endemic” in some American hospitals) which patients must also take into account before agreeing to receive care in any American institution. It may turn out that these considerations are more an issue in top-notch foreign hospitals than in your average American hospital, but DrRich is not convinced this is the case, and the surgeons do not provide any evidence that it is. In other words, DrRich sees this very good advice as being equally applicable whether one is considering becoming a medical tourist, or just a typical American patient.

Second, and more astonishingly, DrRich notes – not so much with interest, but more with awe – that the surgeons are beseeching their patients to consider just how difficult it might be to launch a malpractice suit against foreign doctors. (DrRich himself does not know how difficult this would be. Given that we are being so strongly urged these days to merge the American legal system with several varieties of international law, it might not be such a big problem.) Indeed, a careful reading of this policy statement reveals that the potential difficulty in suing foreign doctors is offered as the chief differentiator, and thus it has become the primary argument in favor of good-old-American-surgery. The surgeons, in essence, are saying, “Let us do your surgery, because we’re easier to sue if we screw up.”

This, from the very body of American physicians who are most at risk for malpractice suits, and who traditionally have been most vociferous in favor of malpractice reform.

DrRich can only shake his head in wonderment. If medical tourism is viewed by surgeons as such a dire threat that they have embraced, as their chief weapon against it, a celebration of the ease of suing American doctors, why, one can only conclude that medical tourism must have caught on far more than most of us realize.

As an American physician who has always been proud of American medicine, DrRich’s innate tendency is to lament the fact that Americans are finding it to their advantage to travel to Mumbai for their hip replacements. But as a patriot, he celebrates the fact that his fellow citizens are willing to go to such lengths to exercise their individual autonomy. He finds it a hopeful sign.

Our would-be oppressors might find it more difficult to hold us down than they may think.