This is Chapter 9 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 9 – An Introduction To Herd Medicine

Farmer Jones has 10,000 head of cattle in his beef herd. He prides himself in staying up to date on all the latest methods, so he knows that adding a certain antibiotic to his cattles’ feed will reduce the incidence of intestinal infections, and will increase his annual overall yield, measured in pounds of beef, by 7%. He also knows that, unfortunately, roughly one in 200 of his cattle will experience a likely fatal allergic reaction to the antibiotic. It is possible to do a blood test to determine which specific members of the herd are allergic, but the test itself is quite expensive, and the logistics of separating the allergic cattle at feeding time and providing them with their own antibiotic-free feed would be so costly it would entirely wipe out his potential savings. What should Farmer Jones do?

Obviously, the cost-effective solution is for Farmer Jones to give antibiotic-treated feed to all his cattle, accepting the loss of a few head as the necessary price for an impressive overall gain in productivity. He would be an ineffective and incompetent rancher indeed if he were to pass up this golden opportunity to achieve cost-effectiveness.

The Hazards of Herd Medicine

If you are a patient or a potential patient (and who is not!), you ought to be especially concerned about two particular hazards that are intrinsic to herd medicine. First, as demonstrated by Farmer Jones, medical decisions that are made on a collective basis rather than on an individual basis may succeed in improving the overall outcome for the herd, but often only at the cost of doing predictable – and avoidable – damage to certain individuals within that herd.

Second, since it is the overall health of the herd which is important, there will always be individuals within the herd whose very existence is seen by Farmer Jones as counterproductive. Individual cattle that are too scawny, too old, or are otherwise unlikely to prove profitable, are still consuming valuable resources and taking up valuable space. So under any system of herd medicine there will always be a natural temptation to cull instead of cure certain inconvenient individuals.

It is extraordinarily politically incorrect to mention this second point, and so I must apologize right away for having done so. Sorry.

In fact, Obamacare, so far, seems to have taken no overt steps in the direction of actively “culling the herd.” But the history of Progressivism, sadly, is not reassuring in this regard. Early Fathers (and Mothers) of Progressivism enthusiastically embraced eugenics as an attractive, science-based method for reducing the sort of undesirable citizens who so obviously hinder the achievement of a perfect society. Certain Progressive societies – led by doctors – have conducted the “humane termination” of people with various disabilities. And collectivist governments (admittedly usually out of frustration at the recalcitrance of human nature than out of any scientific zeal) have been responsible for the deaths of millions of people over the last century. So, if only to keep on the safe side, we members of the Obamacare herd ought to remain alert to any tendency toward culling behaviors. If our Progressive friends are as filled with the milk of human kindness as they insist, our vigilance in this matter may waste some of our time, but otherwise should do no harm. And accordingly, to help focus our vigilance (in order to render it more cost-effective), in later chapters I will point out certain aspects of American healthcare that seem particularly likely venues for culling activities.

In this chapter, however, I will concentrate on the less sinister but more universal hazard inherent to herd medicine – causing predictable and avoidable harm to individuals by insisting on making medical decisions collectively.

A Herd Medicine Hypothetical

Let us imagine that a large clinical trial has shown that a new cancer drug increases the mean survival in women with metatstatic breast cancer by three months. Unfortunately, the drug also causes some very nasty side effects, including some that can be fatal. And again unfortunately, this is one of those fancy designer drugs that cost over a billion dollars to develop, and is very costly to manufacture – so it is quite expensive.

A panel of experts, after carefully studying all the evidence, concludes that, given the relatively short improvement in mean survival, neither the risk/benefit ratio nor the cost/benefit ratio justifies approving the drug. The news media, while expressing sadness and compassion for breast cancer patients, solemnly concurs that the experts, of course, are right – that, while the drug has shown promise, it’s just not effective enough to justify the risk of side effects, or the cost of the drug. So better luck next time, with the next drug.

I think we must agree that it cannot be society’s duty to buy this new drug for all women with breast cancer. Under any publicly funded healthcare system that is run in fiscally sound manner (at least sound enough to avoid causing a catastrophic financial collapse), some line will need to be drawn, somewhere, regarding what expenses public funds can bear. And very possibly, a cancer drug that only extends the mean survival by three months may not make the cut.

In Chapter 4 we discussed the four possible methods for running a fiscally sound healthcare system. If we were under a Method Three healthcare system, where public spending is strictly limited but where individuals have the option of supplementing the public system with their own private insurance products, or even paying for desired healthcare services themselves, then many individuals would still have access to treatments like this new cancer drug, if they wanted to try it.

But under a Progressive, Method Two healthcare system, public funding is all there is. In this case one centralized coverage decision must fit all, and the result is herd medicine. Under herd medicine the new cancer drug cannot be approved, for anyone, once a panel of experts determines that its herd effect is insufficient to justify approval.

But determining the herd effect of a therapy (i.e., the average response to that therapy across a herd of patients), does not really tell the whole story.

Going back to our hypothetical, if you look at what actually happened in the clinical trial with our imaginary cancer drug, it turns out that very few of the women with breast cancer actually experienced three additional months of survival. Instead, some had a truly remarkable response to the drug, and are still alive a year or more after their predicted demise. In fact, it appears that a few might even have been completely cured. Some women, on the other hand, had very bad experiences with the drug, and side effects hastened their deaths. When you average all of these responses together, you get a mean benefit of three months.

But “three months additional survival” is not actually what we would expect to happen with most individual women who take this drug, and in fact this happened with relatively few of them.

In general, the reason people with cancer subject themselves to the ravages of chemotherapy is not to gain a few more weeks of life. The chemo itself often produces several weeks where life is barely worth living, so that would be a bad trade. Rather, they subject themselves to chemo on the hope – often a slim hope – that by doing so they are gaining some realistic chance at surviving for a long, long time.

If you were to give women with metatstatic breast cancer – an incurable disease that invariably causes death – the option of taking our hypothetical new cancer drug, some would opt for it and others would not. But in making their decisions, most of these women would not be thinking about the average of three additional months. Rather, most would be considering the fact that this new drug offers them some chance to beat back their cancer for substantially longer than that. They would be hoping to beat the average. They would be making the same calculus that cancer patients always make.

This new cancer drug represents a new chance at long-term survival, and faced with a fatal disease that is difficult to treat, taking that chance would have been a reasonable choice for many women – even though the drug produces only a tepid herd effect.

Herd medicine removes this option. When our hypothetical panel of experts decides not to approve this new drug – for anybody – what they have concluded is that, because the drug does not produce a sufficiently favorable effect across the herd, individual women should not have the option of using it. This is the only thing expert panels under a herd medicine paradigm can do. They cannot deal in nuances. They must determine whether a new therapy merits application to the entire herd, or to nobody.

Furthermore, if the answer is “nobody,” then the message the experts must convey – the only acceptable message they can convey – is that the new therapy simply doesn’t work. Either they will say it is ineffective, or that its modest average effect is completely negated by the risk of side effects. They cannot let on that the actual data suggests that some individuals will have a truly remarkable benefit from the drug, and that on an individual basis, deciding to take the drug despite the risks would not be unreasonable.

It is worth noting that as a general rule, progress in cancer treatment has been a slow, painful and incremental process. Very few therapies have been devised that have single-handedly led to major gains in survival. Rather, progress has come from a long series of small steps – improving the average survival by three months with this drug regimen, then adding another six months with another drug regimen, and so on. Once expert panels begin deciding that adding another three (or six, or nine) month increment to the average survival of the herd does not meet the threshold for approval – that is, once it becomes evident that only “home run drugs” are sure to be approved – then drug companies will become quite reluctant to invest in the development of new cancer drugs. And medical progress will slow drastically.

Herd medicine will remove individual choice, will take away hope, and will stifle the slow, steady progress we have made in treating some of the most deadly diseases we face.

Patients, Widgets and the Axiom of Industry

The hallmark of herd medicine is that it systematically and officially devalues the worth of the individual, essentially declaring that patients can be treated all alike, as if they are interchangeable members of a homogenous group. This devaluation of the individual, however, was not produced out of whole cloth by the Obamacare legislation. Rather, it is something that has been in the works for several decades, the natural, evolutionary result of a philosophy of healthcare that was all the rage until just a few years ago, but which – mysteriously – we seem to hear very little about these days. I refer, of course, to managed care.

Like many of the travesties that have taken place within our healthcare system, managed care began with a pretty reasonable idea; namely, to apply certain management principles to the healthcare system that have been used successfully in other industries, thereby injecting logic, organization, and accountability to what had been a bastion of disorganization and inefficiency.

The unifying idea behind managed care boils down to one word: standardization. Standardization is virtually a synonym for industry. In industry, standardization is the primary means of optimizing the two essential factors in any industrial process: quality and cost.

This proposition can be stated formally as the Axiom of Industry:

The standardization of any industrial process will improve the outcome and reduce the cost of that process.

If you had a widget-making factory, you would break your manufacturing process down into discrete, reproducible, repeatable steps and then optimize the procedures and processes necessary to accomplish each step. To further improve the quality of your finished product (or to reduce the cost of producing it), you would reexamine the steps, one by one, seeking opportunities for improvement. You would need to understand the process thoroughly, and you would need to collect data about how well the process works. But with the right information, you could almost certainly identify a few minor changes to improve the manufacturing process. The beauty in such a system is that you have only to make one change — to the process itself — and every widget that comes off the line after you make that change will be improved.

So standardization is good. It leads to higher quality and lower cost. Conversely, variation is bad. It reduces quality and raises cost.

Proponents of managed care argued that standardization should be just as useful in healthcare as it is in other industries. As medical care has traditionally been individualized, highly variable, and without any semblance of standardization, there must be a huge opportunity to improve the processes of care and to make them both cheaper and more effective. There is obvious merit in such an idea.

Perhaps the most direct, and the most successful, application of managed care practices to modern medicine was the adoption of “critical pathways” in the 1990s.

Critical pathways are blueprints for delivering standardized care to patients with specific medical problems. Consider a critical pathway for hip replacement surgery. The critical pathway is a specific schedule laying out which services are to be provided for the patient and when, from the date of hospital admission until the date of discharge (which is, of course, predetermined). Checklists are created itemizing which laboratory tests to order and when, which medications to administer at which times, and which specific complications to check for. Everyone involved in the patient’s care has their own relevant checklist. From the moment of the patient’s hospital admission, the critical pathway predetermines when to take vital signs, when to get the patient out of bed, when to begin physical therapy, and when to provide standardized instructions to the patient before discharge. Every vital medical service is included, and all extraneous medical services are omitted.

A “case manager” monitors the care each patient receives under the critical pathway. Every deviation from the prescribed procedure is tabulated as a “variance.” Variances are tracked not to decide who to punish, but to identify areas of the process that need improvement. If too many instances of a particular variance are seen in a critical pathway, then either medical personnel need to be retrained on following the pathway appropriately, or the pathway itself should be changed to reflect more realistic expectations.

Critical pathways, in fact, proved to be extremely helpful in managing many medical conditions. But of course there were some drawbacks and limitations.

First, critical pathways are only useful for delivering medical services, like elective surgery, in which the process of care can be broken down into a predictable series of discrete, reproducible tasks that generate reproducible results. In other words, industrial management tools only work when the process of care is similar to the process of making widgets.

Critical pathways are almost worthless when you are dealing with medical illnesses in which neither the diagnostic procedures nor the treatments that may be employed can be predicted or, therefore, standardized. For instance, it has proven impossible to develop workable critical pathways to manage patients with congestive heart failure (CHF). Knowing only that a patient has been admitted to the hospital with CHF tells you nothing about whether that patient will require cardiac catheterization, a stent, bypass surgery, valve replacement, a pacemaker, an implantable defibrillator, a mechanical ventilator, a prolonged and complicated stay in the intensive care unit, or just a couple of diuretic tablets and overnight observation. No two patients with CHF are exactly alike; and there is no such thing as a standard patient. Unfortunately, most non-surgical medical services fall into this category.

Second, it turns out that when you are taking care of patients, the Axiom of Industry simply does not hold true. Standardization does not always improve outcomes and reduce cost. The reason for this is: Patients are not widgets. And while in theory everyone seems to agree that patients are not widgets, the implications of this fact appear to escape many of our public health experts.

If you’re a widget maker, deciding between two manufacturing processes is a matter of economics. Nobody expects you to consider the widget itself. The outcome by which you are judged has nothing to do with how many individual widgets get discarded during the manufacturing process or even the quality of the widgets that pass final inspection. Instead, it’s the bottom line: how much profit you make in relation to whatever level of quality you put into the widget. So the quality of the widget is not necessarily maximized, instead it’s optimized, tuned to the optimal quality/cost ratio as determined by the market forces of the day. This is why, for a widget maker, the axiom holds: standardization, by rooting out variability, reduces the cost of making the widget (at whatever quality level you choose). This automatically improves the outcome, because the outcome the manufacturer cares about is overall profit.

If instead of running a widget company you’re practicing medicine, the calculus is supposed to be different. You’re supposed to be more interested in how things turn out for individual patients than you are in the bottom line. So an expensive process that yields a better clinical outcome is one most people (patients, at least) would expect you to use, even though it only gets you a healthier patient and doesn’t help your bottom line. A process that increases patients’ mortality rate by five percent is one you should disregard, even if it is substantially cheaper than the alternative. The clinical outcomes experienced by patients — the measure of success you’re supposed to be concerned about — may move in the same direction as costs, or in the opposite direction. But because you’re dealing with patients instead of widgets, the Axiom of Industry doesn’t hold – and outcomes and costs do not always move in the same direction.

So the push to strictly apply managed care techniques to healthcare created a dilemma for doctors. Doctors – the widget-makers in this scheme – tried diligently to apply standardized procedures such as critical pathways to the care of their patients. But the more un-widget-like the medical services they were providing, the more often they were compelled to make variances to the prescribed standardized process, in order to best serve their individual patients.

Such variances are a legitimate and valued aspect of any industrial process. In the widget-making world, variances reveal that the process needs to be tweaked to make it more usable. Variances lead to further iterations and refinements of the process, and a steadily improving result. Exceptions are what allow these industrial processes to become self-correcting.

But in the messy world of patient care, the variances revealed instead that industry-like standardization only works for a minority of medical services. No amount of tweaking can standardize the management of complex patients with complex combinations of illnesses.

It did not take long for doctors to simply stop attempting to use critical pathways for un-widget-like medical services. They did this because they actually cared about what happened to the individual widgets in their charge.

Similarly, it did not take long for our public health experts to recognize the same problem. From their standpoint, however, the problem was not that patients are not widgets. The problem was that the doctors on the scene cared about the widgets. Further analysis revealed that the root of the problem was that classic managed care techniques like critical pathways were administered locally, and therefore the misguided loyalties of the doctors on the scene were allowed to rule the day.

The reason we don’t hear about managed care anymore is that such terminology refers back to those locally-administered, iterative, self-correcting, continuously improving industrial processes. And our public health experts have now realized that this model does not work, and must no longer be encouraged.

The solution to the widget-makers dilemma is to remove the dilemma. Since a dilemma requires one to choose between two options, any dilemma can be resolved by simply removing the choice. And this is what has now been accomplished.

There is no dilemma for physicians any more. Clinical decisions are now to be made centrally, by expert panels appointed by the government, through the mechanism of what is euphemistically called “guidelines.” Guidelines are sacrosanct rules that will determine precisely who is to get what, when and how. Doctors are now enjoined, both by law and by their new medical ethics, to follow those “guidelines” to the letter, without exception.

So instead of the locally-controlled, iterative, self-correcting quality improvement processes like critical pathways – the same kind of processes that have so significantly improved American automobiles over the past three decades – under Obamacare we are reverting to a central-directive-style of management, far more reminiscent of the old Soviet collective farms.

Why the Experts Insist They’re Right This Time

Complex systems controlled by expert-generated centralized directives have never worked and never will. The fact that experts always seem to espouse such systems – apparently under the theory that they are so much more clever, or have better information, or better systems, than those other experts who tried before and failed – is just one of the reasons we should always be afraid of experts.

And sure enough, the experts who are going to determine which medical care we in the herd will receive (and not receive) do indeed have a new and infallible system – a magic bullet – upon which to base those decisions. They call it “evidence-based medicine,” which certainly sounds like a useful thing. And further, the “evidence” featured in this new formulation, virtually by definition, must come from a specific kind of rigorous study called the randomized clinical trial, or RCT.

Bias in clinical trials has long been recognized as a problem. All clinical trials are inherently biased. A research study is biased from the moment it is conceived. And those who conceive of, plan, conduct, and analyze the clinical study have every advantage. (This, indeed, is the very reason why everyone is so indignant about the studies conducted by medical industry and their minions in the medical academy.) That advantage of bias is now, under law, defaulting to the government’s expert panels.

The formulation which our leaders would have us believe is that first, such government panels will be completely objective and unbiased, and second, even if they were biased, the fact that they are basing all their decisions on RCTs will eliminate any possibility of acting on that bias.

The idea that government-controlled expert panels will be unbiased, of course, is absurd. The reason these panels exist in the first place is to control healthcare costs. Since the main mechanism by which these experts will drive a reduction in spending on medical services is through the application of clinical trials – whose results the experts themselves will officially interpret – panelists obviously will be strongly biased toward interpreting those results in a way that will justify withholding expensive medical services.

And while they are busily spinning the results of RCTs, the same experts will be assuring us that RCTs provide a guarantee against bias. For, according to the Gospel of the RCT, the chief advantage of this sort of clinical trial is that it eliminates bias altogether, and produces a completely objective result. So, in order to do the right thing, one merely needs to follow the results of RCTs.

This gospel is incorrect. An RCT, like any clinical trial, is inherently biased from the very beginning.

Many clinical researchers believe in their hearts and souls that bias can be eliminated through the use of RCTs. In such trials, “like” groups of research subjects are divided randomly into two or more groups, and each group receives (for instance) a different therapy, whereupon differences in outcomes among the groups are attributed to the different therapies to which they were randomized. Indeed, the widespread belief that RCTs are the necessary and sufficient means to achieve “clinical truth” has become so deeply ingrained within the medical establishment that when anyone (such as your humble author) suggests otherwise, he immediately reveals himself to be a scientific Neanderthal.

The widespread belief in RCTs has become nearly a Cult in the medical establishment, whose creed can be reduced to three main tenets:

1) Data derived from randomized clinical trials represents Truth.
2) Data derived from non-randomized trials represents Falsity.
3) If you don’t believe this, you are a heathen.

Objective observers should find it at least a little ironic that an attempt to claim the scientific high ground has so obviously resulted in a new religion, replete with its own dogma.

The sad truth is that the results of RCTs are invariably dependent on the bias built into their design, and even if internally they are statistically legitimate their interpretation can usually be twisted to suit one’s preconceived notions – and for these reasons RCTs, like any clinical trial, can often send us down the wrong path.

Those who design RCTs (the smart ones, at least) know this. Like smart trial attorneys, they know the answer before they ever dare to ask the question. So they tailor their “question” in such a way as to yield the answer they want to get. Indeed, if a lawyer should end up asking a question in court that produces an unexpected answer, he or she is completely incompetent and ought to be sued for legal malpractice. In more cases than one might think, the same is true for those who design RCTs.

For instance, if you are an insurance company and want to limit the use of an expensive therapy, you design your RCT so that patients likely to respond favorably to the therapy are diluted within a broad population of enrolled patients, many of whom are less likely to respond favorably. This tactic will tend to make the average response of the whole population quite unimpressive. (In many instances the clinical characteristics of the likely responders and the likely non-responders will be reasonably apparent to the study designers.)

On the other hand, if you are a drug company that wants to encourage the use of your expensive new product, you design an RCT that preferentially enrolls the relatively small subset of patients who are most likely to respond favorably. Once your product has gained approval through the results of your RCT, you can then trust the marketplace (with a tweak from your direct-to-consumer advertisements) to “extrapolate” the results to broader categories of individuals.

So it is immediately obvious that RCTs do not eliminate statistical bias, as the dogma suggests. Rather, they simply offer an opportunity to control the statistical bias in your favor.

Sadly, it is often child’s play for interested parties (both government and private) to twist and spin RCTs to create the desired impression. The conceit of Obamacare – that industry-sponsored research is invariably biased, while government-sponsored (or government-interpreted) research is entirely objective, and therefore, that the only thing we need to assure accurate clinical research is to have it all controlled by the government – is dangerously wrong.

Since all clinical research entails bias, the appropriate way to approach any clinical problem would be to acknowledge that neither RCTs nor any other kind of clinical trial will reliably distinguish between Truth and Falsity, and that no (inevitably conflicted) group of experts should be given the exclusive authority to interpret clinical results. Then, given the possibly competing results from various studies – which often will not yield a firm “answer” – the individual doctor and individual patient can weigh the evidence and review list of risks and benefits most pertinent to that patient, and determine the optimal course of action given that patient’s particular circumstances and proclivities. Driving such a process, in fact, is what doctors are supposed to do.

But herd medicine does not allow for such individualized decisions, nor does it allow that there may be grey areas in clinical medicine, or that what’s right for one patient may not be right for another. Instead, it insists that RCTs must yield the Truth, that panels of very smart experts can discern that Truth, and that these panels can determine the one Right Answer that is applicable to the entire herd.

In the next few chapters I will demonstrate more specifically how expert-driven herd medicine can cause extreme harm to individuals, and to our society. I will finish this chapter by showing a recent example of how an RCT, even a straightforward one, can be twisted quite easily into a pretzel by biased interpreters.

Spining an RCT In Order To Shed Inconvenient Results

In 2010, the Archives of Internal Medicine published four (four!) articles assaulting the legitimacy and the importance of the JUPITER trial, a landmark clinical study published in 2008, which showed that certain apparently healthy people with normal cholesterol levels had markedly improved cardiovascular outcomes when taking a statin drug.

Superficially, at least, the JUPITER study appears to have been pretty straightforward. Nearly 18,000 men and women from 26 countries who had “normal” cholesterol levels but elevated C-reactive protein (CRP) levels were randomized to receive either the statin drug Crestor, or a placebo. CRP is a non-specific marker of inflammation, and an increased CRP blood level is thought to represent inflammation within the blood vessels, and is a known risk factor for heart attack and stroke. The study was stopped after a mean follow-up of little less than two years, when the study’s independent Data Safety Monitoring Board (DSMB) determined that it would be unethical to continue. For, at that point, individuals taking the statin had a 20% reduction in overall mortality, a dramatic reduction in heart attacks, a 50% reduction in stroke, and a 40% reduction in venous thrombosis and pulmonary embolism. All these findings were highly statistically significant.

This study is noteworthy because it was the first large randomized trial to show that taking a statin can markedly reduce the incidence of some very harmful cardiovascular outcomes in people who are considered to have “normal” cholesterol levels.*

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* Notably, typical LDL cholesterol levels among primitive hunting/gathering cultures is around 50 mg/dL, instead of the 100 – 120 mg/dL we consider to be normal. These primitive folks have an extremely low incidence of cardiovascular disease, so maybe humans’ optimal cholesterol level is much lower than we now think. On the other hand, the low risk of cardiovascular disease among hunters/gatherers may instead be related to the fact that many more of them than of us are consumed by various species of carnivores before they’re 30.
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To be sure, the JUPITER trial was far from perfect. Because of its design, it could not (and did not) tell us whether the beneficial outcome is specific to Crestor, or is a class effect of all statins (which seems very likely). It did not tell us whether reducing CRP levels is itself beneficial, or even whether using CRP as a screening tool is actually helpful. (The people enrolled in this trial tended to have several other risk factors, such as being overweight, having metabolic syndrome, and smoking, and it is not clear how much additional risk elevated CRP levels really added in this population.) And this trial did not tell us the risks of lifelong, or even very long-term, Crestor therapy.

But JUPITER did tell us something that is very useful to know, and with a very high degree of statistical surety: Giving Crestor to patients similar to the ones enrolled in this study can be expected to result in significantly and substantially improved cardiovascular outcomes, and in a relatively short period of time.

If medicine were practiced the way it ought to be – where the doctor takes the available evidence, as imperfect as it always is, and applies it to each of her individual patients – then the incompleteness of answers from the JUPITER trial would present no special problems. After all, doctors never have all the answers when they help patients make decisions. So, in this case the doctor would discuss the pros and cons of statin therapy – the risks, the potential benefits, and all the quite important unknowns – and place the decision in the perspective of what might be gained if the patient instead took pains to control their weight, exercise, diet, smoking, &c. At the end of the day, some patients would insist on avoiding drug therapy at all costs; others would insist on Crestor and nothing else; yet others would choose to try a much cheaper generic statin; and some would even opt (believe it or not) for a trial of lifestyle changes before deciding on statin therapy. In other words, there is an entire range of reasonable options given the limitations of our knowledge, as there often is in clinical medicine. As time goes by, more scientific evidence is often brought to bear and clinical decisions can become more informed. But whatever the state of the evidence, doctors and patients can generally get by without violating too severely any ethical or medical precepts that would cause objective and neutral observers to complain very much.

But this kind of individualized give-and-take between doctor and patient, in which the pros and cons are discussed in light of the patient’s own leanings, is no longer how doctors will practice medicine. Instead, they will practice herd medicine. Expert panels will decide whether people ought to take Crestor, or some other statin, or nothing – and that decision must apply to everybody.

And this makes the stakes very high when it comes to a clinical trial like JUPITER. For herd medicine does not permit a range of actions tailored to fit individual patients (consistent with the uncertainties inherent in the results of any clinical trial). Instead, under herd medicine the results of clinical trials generally cannot be permitted to remain imperfect or nuanced or subject to individual application, but must be resolved by a central panel of government-issue experts into a binary system – yes (do it) or no (don’t do it). In the case of JUPITER, the guidelines which some expert panel is going to have to produce will have to say whether or not to recommend Crestor to patients like the ones enrolled in the study, at a potential cost of several billion dollars a year.

It should be obvious that the answer which would be more pleasant to the ends of the Central Authority, and by a large margin, would be: No, don’t adopt the JUPITER results into clinical practice.

However, the expert panels which are called for by Obamacare have not been formulated yet, and we are still operating under the “old” rules. So, still subject to all the duress which is created by unfortunately-resolved clinical trials like this one, the FDA, somewhat reluctantly, approved the use of Crestor for JUPITER-like patients in late 2009. That approval, of course, is subject to review by the new expert panels, once they are actually in operation.

This, I submit for your consideration, is likely what instigated the almost violently anti-JUPITER issue of the Archives. It might even be suggested that the production of this extraordinary Archives indicates that we may be dealing here with a bunch of wannabe federally-sanctioned experts, auditioning for positions on the expert panels. What better way to get the Central Authority’s attention than to let them know that you are of the appropriate frame of mind to assiduously seek out scientific-sounding arguments to discount the straightforward and compelling, but fiscally unfortunate, results of a well-known clinical trial?

Of the four papers appearing in the Archives, three are more-or-less legitimate academic articles that make reasonable points, but do no harm to the main result of JUPITER. The fourth is a straightforward polemic, which has no place in a peer-reviewed medical journal, and whose very presence, I believe, strongly suggests that the editors of the Archives themselves may be auditioning for spots on an expert panel.

We can make short work of the three reasonably legitimate articles. One pointed out that JUPITER did not tease out the real importance of CRP levels, or whether lowering those levels is useful. This is true, but that fact does not touch the main conclusion of JUPITER. The second article was a meta-analysis which incorporated several other primary prevention trials using statins, and concluded that there is no overall benefit to statins in primary prevention patients. Aside from the usual problems inherent in meta-analyses, a) the JUPITER study looked at a specific sub-population of primary prevention patients unlike those addressed by these other studies, so whether these studies can be legitimately pooled is an open question, and b) since JUPITER is the first study to show a benefit in using statins for primary prevention, it is a foregone conclusion that if you assemble enough of the previous, negative studies and lump them together with JUPITER in a meta-analysis, you will be able to dilute the results of JUPITER sufficiently to achieve an overall negative result. Actually doing such a meta-analysis, then, is merely an exercise in math, not in revelation.

The third article criticized the JUPITER DSMB for stopping the trial earlier than originally planned. The DSMB, however, had no real choice in the matter – ethically or legally – given the striking statistical significance of the benefit seen with Crestor. When a patient signs an informed consent agreement to participate in a clinical trial, part of that “contract,” a part required by law, is a statement to the effect that if information comes to light during the course of the study that might impact a patient’s willingness to continue participating, that information must be made available. The fact that the Crestor branch of the study was found to have markedly and significantly improved survival, fewer strokes and heart attacks, &c., than the placebo branch, clearly constitutes such information. Indeed, it is the job of the DSMB to monitor the study for this kind of information, and to stop the study whenever it becomes certain that continuing it would expose study participants to unreasonable risks. This is why independent DSMBs exist in the first place – to protect the rights and welfare of the research subjects under the fiduciary agreement that comprises informed consent. Stopping the study when they did was not “premature;” continuing the study would have been illegitimate.

This same argument – that RCTs should never be stopped prior to the original stopping point – has been raised in the intervening years by several other experts. It is a viewpoint one perhaps ought to expect from purveyors of herd medicine. The DSMB, after all, is an artifact from a time when the patients agreeing to be enrolled in an RCT were considered to be individuals, who of their own free will volunteered to participate in a clinical trial where some aspect of their therapy would be determined by chance, and whose interests, accordingly, ought to be protected. The notion that a trial ought to be driven to its pre-set conclusion, even after it is shown that doing so will cause predictable and measurable harm to individuals in one arm or another of the trial, derives naturally from a herd medicine paradigm. Such a notion ought to give anyone pause before agreeing to participate in an RCT today.

The fourth article is more striking (and more fun) than the other three. Interestingly, it was categorized by the Archives as an “Original Investigation,” despite the fact that it describes no investigation of any kind whatsoever – original or derivative. It merely revisits the data from JUPITER (in a spectacularly biased manner), and offers a spate of ad hominem attacks, alleging bias to the point of corruption, without any supporting evidence, against JUPITER’s sponsor, its investigators, and most astoundingly, the chair of the DSMB (who is a well known and highly respected figure, especially known and revered for his complete objectivity and lack of bias). If such an article has any place at all in a peer-reviewed medical journal – which I doubt – it ought to be clearly labeled as an opinion piece, and not as a piece of original research. Whatever it may be, it’s not that.

But the most delicious aspect of this fourth article is that two of its authors, including its lead author, are members of a fringe medical group known as The International Network of Cholesterol Skeptics (THINCS), whose stated mission is to “oppose” the notion that high cholesterol and animal fat play a role in cardiovascular disease. Members of THINCS also take an extraordinarily strong position opposing statins for any clinical use whatsoever. (One might actually assume that, since JUPITER shows that cardiovascular outcomes can be improved by statins in people with normal cholesterol levels, the THINCS would embrace the study as evidence that perhaps cholesterol is not as important as it’s cracked up to be. But apparently, this argument is completely negated by the fact that statins were the vehicle for making it. Many in the anti-statin crowd would object to statins even if they were proven to cure heart disease, cancer, baldness, and obesity AND produced fine and durable erections upon demand.)

The best part of all this is that the astounding anti-cholesterol, anti-statin bias of the authors was not disclosed in their article – whose main thrust, again, was to criticize the disclosed biases of the JUPITER investigators.

The venerable Pharmalot blog noted this irony, and contacted Dr. Rita Redberg (editor of the Archives) and Michel de Lorgeril (THINCS-master and prime author of the fourth article) to ask them why the association with THINCS was not disclosed.

Redberg: “I’m not clear this is an undisclosed conflict. The policy mentions a personal relationship that could influence one’s work. I think that could be a big stretch. My initial impression is the group has an intellectual message, but doesn’t fit as a personal relationship that could effect the authors’ work.”

de Lorgeril: “[While it is] very important to disclose financial conflicts of interest that can influence our way of working and thinking about cholesterol and statins, there is so far no obligation to provide a CV each time we publish any thing…May I underline the fact that being a member of THINCS – not a group of terrorists, mainly a club of very kind retired scientists with whom I have interesting and open discussion – is not a conflict of interest?”

I may be old fashioned, but I think that being a member of an “out there” group like THINCS, which appears to advance selected and distorted data on its own website aimed at furthering its stated mission of “opposing” (not investigating or questioning) the cholesterol hypothesis and the use of statins, might make one prone to a bit of bias when writing a broadside critiquing a study like JUPITER, and loudly criticizing anyone associated with that study for their bias.

The irony here is amazing. The lack of embarassment is astounding.

This sort of bias (demonstrably rooted in a willingness to select/ignore/distort data in order to make a preconceived point) is likely to be as strong as any that might accompany, for instance, receiving a stipend from a statin company for participating in clinical research. Membership in THINCS may not preclude one from writing such an article, but I think the association at least ought to be disclosed, just as financial relationships must be disclosed.

I have a hard time explaining how this can happen with a prestigious medical journal like the Archives. But like Sherlock Holmes says, when you have eliminated the impossible (such as, the idea that this article deserved to be published in its current form), whatever remains, however improbable, must be the truth.

And this is why I am forced to suggest that several of the authors appearing in that issue of the Archives of Internal Medicine, along with its editors, may be in the mode of ingratiating themselves to the sundry officials and czars within the govenment who will be assembling the expert medical panels which will be making the momentous decisions that will determine the flow of hundreds of billions of dollars, and (forgive me) of life and death.

Admittedly the issue of the Archives I have been discussing does not accurately reflect the general tenor of criticism the JUPITER trial has engendered in the academic community, which has been far calmer and less polemical. The fact is that the implications of this trial, when straightforwardly interpreted, are very disturbing to payers, both private insurers and the government. So in the years since this study was published there has been a general effort to diminish its results, from several fronts, that, taken together, should give future expert panels plenty of legitimate-sounding resources with which to deny its application to the herd.

This larger group of critics of the JUPITER trial all come from the legitimate medical establishment, and are proponents of using RCTs to make medical decisions. They claim to be willing to follow the data from RCTs to wherever they may lead.

For these critics, it seems pretty clear that the chief concern regarding JUPITER is its cost implications. That is, these people feel strongly that it would simply be too expensive to follow the results of the JUPITER trial to their logical conclusion. This, indeed, would be a very reasonable position to take – as long as their argument went something like this: “Yes, the JUPITER trial shows that many lives would be saved if people like those enrolled in the study would take Crestor, but it’s just too expensive to buy Crestor for all these people.”

But this sounds like rationing, and Americans don’t ration. So instead critics, even those pure thinkers in the academy, have tried to attack the results of JUPITER, arguing that the results of the study actually do not support the use of statins in these patients.

Unfortunately, turning aside the results of a statistically definitive RCT can be a challenge. In fact, the need to discount the results of JUPITER leaves critics little choice but to engage in statistical legerdemain. There are several useful techniques they can employ to this end.

Many of the arguments that have been ginned up in this effort have derived not from data published in the JUPITER trial itself, but instead from statements made in an editorial written by Dr. Mark A. Hlatky, and published in the same issue of the New England Journal of Medicine in which the JUPITER study itself appeared.

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

This statement, at least taken at its face value as a stand-alone analysis, is statistically naive, and fundamentally wrong.

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

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

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

But as misleading as this summary statement may be, let us accept it at face value for a moment just for the sake of discussion, since that’s the data the JUPITER critics have chosen to latch on to.

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

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

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

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

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

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

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

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

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

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

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

The fact that so many respected academics are making such spurious statistical arguments is disconcerting and discouraging. Among other things, it means that the Central Authority will have many, many fully-domesticated experts to choose from when they assemble their all-powerful expert panels.

Summary

Herd medicine will follow naturally from any centrally-controlled Progressive healthcare system. Unless you are lucky enough to be included in the expert class, or are a part of the government leadership that controls the expert class, this is not a good thing.

Medical services that give substantial benefit to a minority of people will not be offered to any people, since the “herd effect” will likely be below an arbitrary cut-off value. Medical services that do make the cut will be prescribed for everybody, even though (since herd medicine is tuned to the average response across the population), something like half the population will respond less favorably than average. Herd medicine will stifle medical progress. And herd medicine will entice medical experts, who need to curry the favor of Progressive leaders in order to be recognized as legitimate experts, to abuse the science and the statistics of clinical trials.

It is important to note that while those of us who reside within the herd will find these features of herd medicine problematic, for our Progressive leaders herd medicine – which offers the centralized control they find absolutely necessary – is an unalloyed boon.

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.

I have been working very hard on my book-in-progress, and, given my time constraints (which must take into account the various organizations that are actually paying me to do things), have tried to ignore everything else that would normally induce me to post on this blog. But it is difficult to ignore the Supreme Court.

The Supreme Court of the United States heard arguments last week on whether the individual mandate provision of Obamacare is constitutional, and if it is not, whether the whole bill must be overturned (or just the mandate itself).

Readers will know that I think the mandate should not stand. I agree with Justice Kennedy, who last week observed that the individual mandate fundamentally changes the relationship between the federal government and the individual. My belief is that this would be a negative outcome. The fact that healthcare is really, really important should not trump the freedom of individual action guaranteed by the Constitution, especially since it is entirely possible, in many different ways, to fix our healthcare problems without tossing out individual liberty or killing the Great American Experiment.

The Court’s decision appears to hinge on whether five justices will agree that either A) fundamentally changing the relationship between the federal government and the individual is a good thing, or b) overturning the largest legislative effort in history is a bad idea. Our political punditry tells us that four justices are locked into position A by virtue of their Right Thinking regarding the Constitution, so the outcome will hinge on whether one of the remaining five, who most often lean toward Wrong Thinking, can be convinced that position B is true (and that, for instance, overturning Obamacare would diminish the credibility of the Court).

It was interesting to listen to the left-leaning commentators lamenting the presentation made to the Court by the Solicitor General. Despite having more than two years to spiff-up the government’s arguments, and despite several “practice sessions” in the lower courts to fine-tune the message, the government’s lawyer was strikingly inarticulate when explaining the constitutionality of the individual mandate. This, of course, is because there is no good constitutional argument for it. If the government is allowed to promulgate this mandate, then one is hard pressed to articulate a cogent limit to the government’s power over the individual. And so, the government’s lawyer could not articulate one (despite pointed attempts at coaching from the Bench by few of the Justices partial to position A).

If the mandate is overturned, this unfortunate man will be scapegoated to the Progressive’s Perpetual Penalty Box.

President Obama, it should be noted, could have easily kept this issue from reaching the Supremes until after the election, but he did not. Rather, he opted for a risky path that would result in the Supreme Court rendering a possibly negative decision on his signature legislative accomplishment a mere four months before the election.

And this leads me to speculate on why he would do such a thing. I agree with those who say President Obama is a very smart man, and so I have to believe that he is gambling that any decision the Court makes can be turned to his benefit.

There are, in essence, three possible outcomes: 1) The mandate, and Obamacare, will be upheld. 2) The mandate will be overturned, but the rest of the legislation can stand. 3) The mandate will be overturned, and so will the entire package.

If Outcome One occurs, not only will Obamacare stand, but also the Supreme Court of the United States will have agreed that the government can direct the economic activities of individuals, to the extent that the Central Authority can force individuals to enter into contracts with private companies against their will. (Until now, in order to form a valid contract both parties had to enter the contract voluntarily.) This would be such a fundamental change in the relationship between the government and individuals as to entirely negate the basic premise underlying the Constitution. And while Outcome One might galvanize the Tea Party to sweep Republicans back into power at all levels, this fundamental victory for Progressives would dwarf the mere winning of an election by the opposition. President Obama would become a Perpetual Hero of the Progressive Pantheon, and, in fact, would be a strong candidate again in 2016. (By that time, the mess Obamacare will have become will be blamed on the Republicans’ mismanagement of it.)

If Outcome Two occurs, the issue upon which President Obama will base his re-election campaign will be set. Instead of having to rely on bogus issues like a Republican War on Women, he can run on healthcare.

Outcome Two leaves Obamacare intact, except for the mandate. The mandate is “merely” the funding mechanism for the legislation. The whole package can then be salvaged simply by re-instituting the mandate, but this time explicitly calling it a tax. (If they would have called it a tax in the first place, there would not have been any grounds for a constitutional challenge).

To do this, of course, the President will have to be re-elected, and will have to hold the Senate and gain a majority (or near-majority) in the House. In engineering this electoral sweep, healthcare will be his ticket.

His campaign would likely be based on three elements related to healthcare. First, of course, he will remind us of all the good stuff we will lose if we don’t put Democrats back in power – the uninsured will remain uninsured, people with pre-existing conditions will again be unable to get insurance, and our 25-year-old “children” will have to fend for themselves. Second, he will point to the Republican’s alternative healthcare plan which (unless some miracle occurs between now and the summer) is no plan at all; it’s chaos. Third, he will rely on the assistance of the Evil Health Insurance companies. The health insurance industry, as I have pointed out, is desperately relying on Obamacare, which is their only path to a viable business model. This is why they pulled out all the stops to see that Obamacare was passed in the first place. If saving Obamacare depends on electing Democrats, electing Democrats is what the industry will try to do.

So the moment the Supreme Court chooses Option Two, the insurers will do everything in their power, once again, to demonstrate their fundamentally ruthless, evil natures. They will raise their premiums 90%; or rule that they will no longer pay for newer cancer therapies; or announce that they are doubling their rescission efforts. Whatever it takes to demonstrate that, if you people elect Republicans, when you get sick you will have hell to pay. “Welcome back into our tender mercies, ” the heartless health insurance executives will laugh. “We, who have no sense of human decency or compassion, are very pleased to wallow once again in your pain and suffering and despair, in the name of profit.”

The Republicans will not know what hit them.

Outcome Three throws out Obamacare altogether. This outcome (like Outcome Two) re-establishes healthcare as the President’s only necessary re-election issue.

President Obama might. of course, take the same tact as he would take under Outcome Two – that is, re-instating Obamacare as originally written, but fashioning the mandate as a tax. He could then enlist the help of the Evil Insurance Industry, as above.

Or, he could go for the Brass Ring.

President Obama, it will be recalled, was originally against an individual mandate, and invoked as reasons for opposing it all the reasons the Conservatives argued before the Supreme Court. The mandate was placed into Obamacare as the only viable funding mechanism for a reform plan that included private insurers; and private insurers were included in the plan as the only feasible way to pass any reform plan at all.

But what Progressives – and President Obama himself, according to his own words – have wanted all along was a universal, single-payer healthcare system run by the government. (And indeed, in my view, Obamacare was designed to evolve to just that outcome after a few years.) Outcome Three will give the President a real chance of getting what he really wants, right now, in one giant step.

To this end, the President could address the nation, saying:

“My fellow Americans, we tried! Nobody can say we didn’t. We presented our nation with a healthcare plan that would cover almost everybody, and which would have saved the private insurance industry. But now, thanks to the the actions of the Republican naysayers, the Supreme Court has ruled out the only mechanism that would have allowed our healthcare reform plan to include the participation of the private insurance industry. And now, with this ruling,  and with the Republican-led demise of our visionary healthcare plan, the insurance companies tell us that in order to remain in business they will have to price their products so high that the number of uninsured Americans will soar – my advisers tell me that soon, over 100 million of you will be without health insurance. You and your loved ones and your neighbors face imminent death or disability, thanks to Republican nihilism.

Republicans should know that it may be easy to destroy, but it’s difficult to create. Where is their plan to save our healthcare system, and spare the lives of our citizens? All they have to offer are platitudes and chaos, and vague mutterings about “the markets.” This is all they have, after destroying our new centrist, market-based healthcare plan, which was made law by your elected representatives, and which would have brought high quality healthcare to everyone.

But thankfully, we still have a choice. And thankfully, the time to choose is now.

I and my Democratic colleagues did not want it this way. We fought hard against it. But our Republican opponents and their allies in the reactionary Court leave us with little choice. My fellow Americans, re-elect me, and send Democrats to the Senate and the House, and we will act to save the American healthcare system. If you re-elect me, and give me a Democratic Congress, I pledge that within 60 days, we will pass into law my new program to expand Medicare to cover all Americans. This is not the path I would have chosen if there was a real choice, and indeed it is not the path I chose. But our opponents saw to it that all the other paths have been closed to us; such was their blind zeal to destroy.  And if you don’t like it, as I myself do not, you know who to hold responsible at the polls.”

If the individual mandate is overturned, the Republicans had better have an alternative healthcare reform plan ready to go that they can articulate immediately, simply, compellingly and often. If they do not, the President will play them like a fiddle.

This is Chapter 4 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 4 – The Four Ways To Control Healthcare Spending

In the first three chapters of this book, I have attempted to show how and why our nation’s healthcare expenditures have become entirely untenable, and why the heroic measures we have taken so far to contain those expenditures have been not only an abject failure, but also quite counterproductive. Indeed, the cost-containment measures at which we have been flailing away for twenty years (primarily employing the multfarious techniques of covert rationing) have left more than merely our treasury in a “spent” state.

Our health insurance industry has worn itself down to a still-blustering but empty shell. And our physicians have allowed themselves to be reduced to an abject community of supplicants. In neither the insurers nor organized medicine are we likely to find the ideas, the energy, or in any manner the wherewithal that will be necessary to lead us toward a real solution to the mess we have made of our healthcare system. At best, they will be followers.

It is true that our political leaders are certainly not spent. Our Progressive leaders, using their typical end-justifies-the-means approach to the Constitution, have made Obamacare the law of the land. And our Conservative leaders are invigorated with the idea of nullifying that law in the courts, or repealing it after the next election.

But amidst all the accusations and counter-accusations, vituperations, abuse, and scurrility that passes for debate between these two factions, neither faction has clearly articulated its plan for controlling our healthcare expenditures.

Any Progressive healthcare system – including Obamacare – will of course have an inherent, built-in methodology for reducing expenditures. Namely, government-approved experts will determine that some healthcare services will not be provided to anyone, and that other services will not be provided to some. But our Progressive leaders do not like to talk explicitly about that methodology in public. So instead, they talk about fairness, reducing the number of uninsured, and stifling the greedy doctors and biomedical companies.

With a few notable exceptions, Conservatives seem to be in an even sorrier state, since they seem to be relying on the health insurance industry and a vague notion of “free markets” to take care of everything once they get rid of Obamacare. They seem not to realize that we have already tried this strategy, and it has failed abysmally. This kind of talk most likely frightens health insurance executives more than anyone else.

Worse, the less-than-useful debate that has taken place between the two parties – with neither party forthrightly addressing the kinds of actions that will really be necessary to rescue our healthcare finances (and thus our society) – has created a general sense among the public that the problem is so confused and chaotic, so rifled by conflicts of interest, and so very complex, as to be fundamentally unsolvable. If that were the case, it would mean that our society is doomed, and in the relatively near future.

I myself have suggested, just a chapter or two ago, that this outcome does not seem particularly unlikely at this moment.

However, there are, in fact, solutions to our healthcare spending crisis, and so descending into chaos is not the only possible outcome. In fact, I will assert in this chapter that there are actually four (but only four) entirely different ways to meaningfully reduce our healthcare expenditures.

By understanding these four methods of solving the problem, it is entirely possible – as we listen to all the debating, fighting, and reciprocal castigations, aspersions, distortions and lies being exchanged by and amongst the various interest groups – to understand which method is actually being espoused by which parties.

We have, obviously, already settled upon one of these methods, at least for now. Obamacare is a nice example of Method Two – the Progressive plan. We have settled on it above the others, I believe, because it is easiest (if you do not dig too deeply) for its proponents to make Method Two sound a lot less difficult, a lot less painful, and a lot more fair than the other methods. Indeed, while the people “selling” Method One or Method Three (nobody is trying to sell Method Four) usually make it sound like they’re asking us to pick the least bad of all the bad choices, proponents of Method Two are true proselytizers. They honestly believe that their option will represent a pinnacle of human achievement (and thus, that people who disagree with them are tools of the devil).

As I have already stated, I believe the Progressive viewpoint is dangerously incorrect. Before giving a detailed picture of why I think this is the case, it is only fair for me to briefly review all the alternatives that will remain to us if we should decide to turn away from the Progressive style of healthcare reform.

And so, without further ado -

Method One: Make All Healthcare Spending The Responsibility Of The Individual.

That Method One, when baldly stated as I have just done, seems so outlandishly inappropriate and hard-hearted today is a tribute to just how far down the Progressive path all of us have already traveled. But it is, in fact, a legitmate method for getting control of our national healthcare expenditures.

Further, the necessity of paying ouselves for products and services we consume ourselves, as we have seen, is a fundamental law of economics. And, as our society is about to learn, while we can get away with violating this law for a couple of generations, we cannot get away with it forever.

Also consider the fact that, just a few decades ago, this is exactly how we all paid for healthcare. Indeed, this is the method by which all of mankind has paid for its healthcare for all but a few brief decades out of the millions of years we have graced (or plagued, if you must) the planet. It has always been thus: If you want or need healthcare (and if it exists), simply pay for it yourself.

Those few brave souls who remain proponents of this method – who often count themselves as Libertarians – offer two general arguments to support their position; an ethical one and a practical one.

It is fundamentally unethical to insist that your own individual healthcare services must be provided by others – claiming, as you do so, that healthcare is somehow intrinsically different from any other product or service which you may wish to acquire (such as food, clothing, housing, and iPads). Proponents of Method One quaintly cling to tne now-outmoded idea that there is no such thing as a right that creates an obligation upon another person. So to them, insisting that healthcare is a right that must be provided by others is, a priori, unethical. Furthermore, they point out, much of a person’s health (and therefore, a person’s healthcare needs) is determined by lifestyle choices, so it is only right and proper for the individual to bear responsibility for those choices. But more importantly, demanding any “right” that creates a burden on one’s fellow citizens will inevitably lead to tyranny by some Central Authority. Therefore, this demand is unethical.

Method One also holds that, by returning to the individual the responsibility of paying for healthcare, we would be achieving a great good – namely, we would be returning healthcare back into the realm of actual market forces. When that happens, the laws of supply and demand will kick in once more, and will determine which services are actually needed, and what the rightful price for those services ought to be.

So from a practical standpoint, Method One will truly recruit the efficiencies of the marketplace into the workings of the healthcare system. (In contrast, placing dictatorial powers into the hands of insurance executives, which is what the HMO movement of the 1990s actually did, accomplished no such thing.) And the cost of healthcare services will at last come back down to a level which individuals can actually afford. As an added bonus, since everyone will know that paying for future illnesses will be their problem, people will suddenly become more likely to begin making lifestyle choices that will lower their odds of having to do so.

But whether or not individuals can afford medical services, at least the spending on those services will no longer be the burden of society – and the fiscal doom we now face will be cured.

Opponents of Method One point out that, inevitably, there will be individuals – and likely many, many individuals – who simply will not be able to afford to pay for healthcare services which are needed, and which are readily available for the right price, and will therefore suffer preventable pain, disability, and death. Without some kind of public support for healthcare, heart-rending tragedies will abound, our civilization will become coarsened, anger will build, and insurrection will become a constant threat. Such a result, of course, would be suboptimal.

Method Two: Make All Healthcare Spending The Responsibility Of A Central Authority.

Proponents of Method Two hold (because of ethical reasoning that is as obvious to them as the opposite ethical reasoning is to proponents of Method One), that healthcare is a fundamental right; that whether one receives a healthcare service – a service that can relieve pain or prevent disability or death – ought not to depend on one’s ability to pay, but instead, that such services, so fundamental to human life, ought to be equally available to everyone. And the only way to achieve this goal is to collectivize and centralize healthcare decisions and healthcare spending.

This is what I have called the Progressive plan.

For proponents of Method Two, healthcare services are indeed fundamentally different from all other human needs – food, clothing, etc. – since the kind and the amount of healthcare services one needs are most often not a matter of individual choice, but are very often foisted upon one by fate. Burdening individuals with the need to pay for such arbitrary and uncontrollable costs is not only unethical, but destabilizing to our society.

Requiring individuals to pay for their own healthcare is destabilizing because, if a person’s lifetime of work and saving can be wiped out in an instant by an unexpected illness, people will be much less willing to work hard, take risks, and otherwise engage in the economic activities that drive our society. “Healthcare security,” which can only be provided by collective efforts, is thus necessary to a robust and sustainable civilization.

The methods by which healthcare costs can be controlled under a centralized system are straightforward. Obamacare, for instance, does so by explicitly empowering a (nearly) all-powerful Independent Payment Advisory Board with all macro-level healthcare spending decisions. Furthermore, “guidelines” promulgated by various other government-approved expert panels will control spending at a more granular level, by determining which specific services doctors will be permitted to offer to which patients, and under what circumstances. Doctors will be strictly held, under the threat of criminal prosecution, to these guidelines. Finally, recognizing implicitly that many healthcare needs are indeed determined by individual lifestyle choices rather than purely by chance, public health experts will advance enforceable policies that will determine what individual Americans will be permitted to do and not do, purchase or not purchase, eat or not eat. (The public health experts are off to a very good start in this effort!) If everyone within the healthcare system (and in our society) will simply follow the multitudinous directives laid out by the legions of sanctified experts, everybody will have their healthcare, costs will at last be contained, and all will be well.

Proponents of Method Two obviously do not sell their plan to the public by saying such things. Rather, the emphasize that the benevolent, caring, non-conflicted, government-approved experts will make sure that all the inefficiency and greed are squeezed out of the system, and that by doing so, everyone will get what they need, and costs will be controlled.

I will spend Part II of this book showing why Method Two is a bad choice. Here I will only state the bottom line: Implementing Method Two requires an all-powerful Central Authority, which will inevitably lead to tyranny (or anarchy), and will necessarily destroy the Great American Experiment.

Method Three: Provide Strictly Limited Public Support For Some Healthcare Services, With Individuals Responsible For The Remainder.

Method Three attempts to combine the benefits of Methods One and Two, while avoiding the major disadvantages of each.

Method Three recognizes that paying for all of one’s own healthcare is beyond the means of many individuals, and that therefore a modern, civil society ought to provide at least some healthcare to at least some of its citizens. At the same time, Method Three recognizes that the public funding of all healthcare is beyond the means of society, leads to tyranny, and that (both for these practical reasons and for ethical reasons) individuals ought to be responsible for paying for as much of their own healthcare as they can, within reasonable limits.

The key to controlling costs is that the dollars which society will spend on healthcare for individuals must be strictly defined and strictly limited, and cannot be open-ended. Economic principles dictate that public healthcare spending must be limited to pay-as-you-go, and cannot accumulate inter-generational debt. Any other healthcare expenditures beyond those which society is able to provide in an economically responsible way must be paid for by individuals. Therefore, most individuals should not and cannot rely entirely on public funding for their healthcare.

At the same time, Method Three seeks to assure that individuals will have ready access to, and the means to pay for, basic healthcare services, and that the chances of being financially ruined by a catastrophic illness are very low.

Numerous configurations are possible under Method Three, and indeed, the creativity it allows (in distinction to Methods One and Two) is one of its attractions. Possible configurations might include something like the plan Congressman Ryan proposed in 2011, which would place a strict limit on Medicare expenditures by providing seniors with a fixed amount of money – on a means-tested sliding scale – with which to purchase their health insurance of choice.

But a more radical (and I humbly submit) a more complete Method Three configuration would be that which I proposed in my 2007 book, Fixing American Healthcare. That book describes my plan at great length, but in outline here it is:

 

My model calls for a 3-tiered healthcare plan. (See the figure.)

Tier 1 consists of a modified Health Savings Account. Each individual has his or her own HSA, into which they can deposit some amount of money each year (say, $2000) tax-free. For people in lower income levels, HSAs will be funded by the government on a sliding scale. Funds in the HSA can also grow tax-free, are the property of the individual, and cannot be taken away. Unspent funds that have accumulated above $10,000 can be transferred to an IRA at age 70.

The HSA is there for a very specific purpose: All individuals are responsible for paying for all their own healthcare expenses, up to $2000 per year. The HSA is aimed at providing funds for these annual personal expenditures.

Tier 2 is a Universal Basic Health Plan (UBHP), which will cover every person who resides in the United States legally. The UBHP kicks in after the individual has maxed out his or her $2000 annual personal healthcare expenditures. The UBHP I described in my book would operate under a system of completely open, completely transparent healthcare rationing. That is, it would cover all healthcare services that achieve a target level of cost-effectiveness, and would not cover anything else. The methodologies used to determined what is covered and what is not must be objective, measurable, and fully transparent to the public. My book describes such a rationing methodology in great detail*. However, the kind of open rationing system I described in my book is admittedly very complex, would likely be difficult to operate, and would certainly be difficult to explain to the public. There are simpler ways to administer Tier 2, and these simpler ways should be entertained.

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*My earlier book employed a novel method of calculating Quality Adjusted Life Year (QALY) values for various medical services, in order to rank the cost-effectiveness of those services. That section of my book was extremely boring and tedious and full of math, and I am led to understand that several individuals who actually tried reading that section died in situ. I am only mentioning it here because the term QALY shows up in the figure. For the purpose of the present discussion you can think of the QALY values in this figure as indicating “some defined amount of money that can be spent on your healthcare.”

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The key point, however, is that the UBHP must indicate, very openly and plainly and for everyone to see, which medical services are covered, and which are not. It will not pretend to cover all beneficial healthcare services, or that uncovered services are necessarily worthless. It is a basic health plan, and not a comprehensive one. Its mission will be to cover all the proven healthcare services it can afford to cover without unreasonably jeopardizing the security of future generations of Americans.

Tier 3 is optional for individual Americans. It consists of insurance products which will be designed to cover healthcare services that a person wants or needs, but which are not covered (for whatever reason) under the UBHP. Accumulated funds in HSAs may be used to help pay premiums for Tier 3 coverage. Among other things, Tier 3 insurance products would resurrect our moribund health insurance industry. It would give them the opportunity to develop an array of products that do what insurance is actually supposed to do – to provide financial protection against the unlikely chance of something prohibitively expensive occurring.

If you don’t like my plan, that’s fine. I’m merely offering it as an example of the kinds of schemes that are possible under Method Three. The main points I want to emphasize are: a) This plan strictly limits the amount of public funding that will be spent on healthcare (and therefore solves our healthcare fiscal crisis). b) At the same time, it provides for both basic and advanced healthcare for every American (The advanced healthcare is provided with limits, to be sure, but those limits are completely transparent, and can be mitigated by electing to participate in Tier 3.) c) Since everyone will be paying out of pocket (from their HSAs) for basic healthcare services, those basic services will become subject to normal market forces for the first time in a half-century, and as a result their cost will inevitably drop.

How Will We Choose?

At this moment it appears that we have chosen Method Two. This is perfectly understandable. Progressives, in promoting their solution, have been able to make it seem far more desirable to the average American than have any proponents of Methods One or Three. Their message is: We will make sure that fair-minded, dedicated government agents (who care nothing for the evil of profits) will squeeze all the waste and inefficiency out of the system, and distribute just the right amount of healthcare at just the right time, and everyone will get exactly what they need. Even better, the rich people (i.e., the profit mongers) will bear most of the freight by paying high taxes.

That’s a far more pleasant message than the ones that have been tried by those who favor Method One or Three, both of which require different – but significant – degrees of personal responsibility on the part of every American. Therefore, these other two methods, on the surface at least, sound a lot riskier, more difficult, and a lot more complicated than the easy, Let-Uncle-Sam-Do-It Method Two. In fact, given the way these choices have been sold to the public, it’s hard to imagine we would choose anything except Method Two at this critical juncture.

Still, one can always hold out hope that we might reconsider. The main point of this book is to induce such a reconsideration by showing what Method Two will really be like for all of us.

And, if we do reconsider, I suppose it is obvious by now that I am partial to Method Three.

Method One is simply a non-starter. For all practical purposes, and for good or for bad, we moved irreversibly beyond a purely self-pay healthcare system over 60 years ago. So if there is to ba a real battle, it will be between Method Two and Method Three.

The key difference between these two methods, both practically and philosophically, is whether individuals are to be expected – indeed, whether they are to be permitted – to pay for at least some of their own healthcare with their own money. Progressives, for reasons I will describe later, are absolutely adamant about the answer to this question – by no means will individuals be expected (or permitted) to pay for any of their own healthcare. It is absolutely imperative, if we are to achieve the perfect healthcare system that Method Two promises, that all healthcare decisions and all healthcare spending be centralized. There can be no compromise on this.

Indeed, the moment a compromise is made, true Progressives understand, we will inevitably wind up under a Method Three healthcare system. So Progressives are in no mood to compromise.

I will be delving into this crucial question – whether some amount of personal responsibility should be expected, or even allowed – later on in some detail, as I believe it is the most pivotal as-yet-unaswered question we will have to face going forward. For, while we have ostensibly chosen Obamacare, we have not all agreed on what that ultimately means for each of us. And once we do understand what it means, I believe we may be in the mood to reconsider our decision.

For now, I will simply make a simple assertion which I would like you to begin thinking about.

Here it is: If I am correct that Progressives will fight very hard – possibly to the death – to prevent individuals from spending their own money on healthcare, that fact carries with it an unavoidable implication. The only logical reason Progressives would fight so extremely hard to prevent such a thing is that their actual prime objective must be something other than merely fixing the healthcare system and controling healthcare expenditures. Rather, their actual prime objective must be to employ our healthcare system’s fiscal crisis as the most immediate and expeditious, and indeed the most ideal, vehicle for achieving their overall Program.

If you will allow even the remote possibility that this is the case, then we had better take a look at what the Progressive Program actually is. In the next chapter, that is what we will do.

Wait! What about Method Four?

Oh, yeah. I forgot to talk about Method Four.

There’s really very little reason to talk about the fourth and final method for controlling our healthcare expenditures. This is because nobody likes it. There are no proponents for it, so nobody discusses it.

Still, Method Four, at this moment, seems to be the most likely outcome for us. Indeed, at this moment it appears to be our default method of choice.

Method Four is formulated as follows: Our skyrocketing healthcare expenditures are the chief driver of our national debt. Our national debt burden, unless we get control of it by controlling healthcare expenditures, will inevitably destroy our civil society. At the same time, our modern, sophisticated and very expensive healthcare system utterly requires a complex, modern, highly organized, high-tech society in order to function.

Therefore, our skyrocketing healthcare expenditures ultimately provides its own cure. Once society collapses, “healthcare services” will revert back to the roots-and-poultices methodologies that served mankind so well for millions of years. Healthcare will ecome very cheap again. And healthcare, as well as other modern geegaws like cable TV, Internet, iPhones and automobiles, will no longer be considered by so many to be fundamental human rights, but will become a mere afterthought (if thought of at all), in a more primitive kind of society where life is nasty, brutish and short.

If we neglect to settle on any one of Methods One, Two or Three, or if we pick one and execute it poorly, we will, Chutes-and-Ladders-like, be deposited right back to Method Four where we all started.

Method Four is therefore only important in the way of helping us to keep things in perspective. For, whatever the outcome turns out to be, our current fiscal crisis in healthcare will ultimately be viewed by posterity, should any record of it remain for posterity, as a temporary matter of not much immediate concern.

This is Chapter 3 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 3 – The Cowing of the Medical Profession

“Did you really think that we want those laws to be observed? We want them broken. You’d better get it straight that it’s not a bunch of boy scouts you’re up against . . . The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted and you create a nation of law-breakers.”

- Floyd Ferris, bureaucrat – Atlas Shrugged

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The doctor who tells his patient to open wide and say moo is, in fact, projecting.

For the once proud, once ethical medical profession has been officially broken and domesticated. This, of course, is incredibly sad for the profession.

But it is life-threatening for patients.

And while it began a long time ago, the gradual destruction of the medical profession became a headlong rush in the 1990s, and ended with a final, formal capitulation in 2002. To be sure, doctors did not go voluntarily, but were coerced – by both the avaricious insurance companies and the ruthless government – to sacrifice their professional autonomy for the sake of their personal comfort and safety. The coercion was intense, but still, their resistance was remarkably feeble. In the end they did not fight as they might have to protect either their profession or their patients’ welfare. When the time came they chose not to defend their professional integrity with their lives, their fortunes or their sacred honor.

It is a sorry tale, but it must be told.

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After the collapse of the Clinton healthcare reform plan in 1993, both the triumphant HMOs and the beaten-back government plotted their moves. For the insurers, the pathway seemed open and clear. For government policymakers, chastened as they were, the pathway forward seemed no less clear – but it would have to be negotiated in a somewhat less open manner than they had originally hoped.

When these two powerful entities sat down in their respective bunkers to figure out next steps, they each came to the same conclusion: At the end of the day, the key to controlling the healthcare system was to control the behavior of physicians.

This became apparent the moment the accounting experts from the HMOs and various government agencies studied the matter in order to determine where all their money was going. What they saw horrified them.

They saw, 1.5 million times per day, a single doctor sitting down with a single patient, and – just between the two of them – deciding which extraordinarily expensive healthcare resources they would like to consume for the possible benefit of that individual patient. And, once reaching a decision, the doctor then would calmly scribble something on a prescription pad, or write a line in a hospital chart, and instantaneously all the resources of the massive, mindless healthcare system would heave into action, bending to the doctor’s will. And, seeing all this, the HMO executives and the government policymakers, separately but with equal fervor, each sat up and cried, “My God! They’re spending MY money!”

Something had to be done to get these doctors – the engines of all healthcare spending – under control. The strategies the insurance industry and the government used to control the behavior of doctors were quite different from one another – but both were effective. And as a result of these efforts, as we enter the era of Obamacare, the Central Authority will find the medical profession to be quite compliant and docile to its needs. To be sure there will be a bit of whining from physicians, and expressions of dissatisfaction and similarly ineffectual complaints, but these are easily dealt with. Doctors will not pose any real obstacle to Obamacare. They have been fully domesticated.

What The HMOs Did

HMO executives, being businessmen, set out to control doctors the only way they knew how – by attacking them in their wallets. Promise them riches beyond belief (or at least the wherewithal to make a decent living) if their behavior pleases you, but make sure they know that destitution awaits if they should displease you.

It did not take long for these smart business experts to figure out that to control the physicians’ wallets, you need simply take control of the flow of their patients.

Doctors in the early 1990s were used to getting their patients by the hard work of establishing their professional reputation, and relying on referrals from appreciative colleagues and by word of mouth. When the HMOs suddenly moved in, before physicians ever realized what was happening, that model disappeared virtually overnight.

Under the HMOs, insurance products no longer covered patients for whichever doctor they chose to see. Instead, in exchange for reduced premiums, their health insurance covered them only if they received their care from doctors who had been admitted to the HMO’s “physician panel.” Doctors all over the land quickly learned that patients they had cared for, sacrificed for, and worried over for years, and who (they thought) regarded them as part of their family, dropped them like a hot potato the moment they had the opportunity to choose a health insurance plan which was marginally cheaper, but which did not include them on its panel of physicians.

And it quickly dawned on doctors that, if they were going to maintain themselves in anything like the style to which they had become accustomed, they needed to get on every panel of every HMO that served their area. It was the only way to allow all their patients to continue to have access to them.

But once doctors were “captive,” (i.e., completely dependent upon their position on HMO panels for their livelihood), the game was was all over except the shouting. Physicians were cooked virtually before they knew what had happened to them.

At first, the HMOs were happy to have all physicians on their panels. This is because at first, the HMOs’ major priority was signing up just as many patients as they could – so including as many doctors as possible on their physician panels was an important aspect of recruiting subscribers.

But once this initial sign-up phase was over, the HMO executives no longer had use for all those doctors on their panels. Some were expendable. They let their doctors know it by terminating a few of them from time to time, apparently arbitrarily and without explanation – leaving the surviving doctors to guess the reason for it.

But since doctors are generally pretty smart, they were good at guessing the heart’s desire of the HMO executives.

It should be obvious that HMO executives would be anxious to get rid of doctors who spent a lot of their money, and retain the ones who did not. To distinguish between the two, HMOs set up “performance standards.” These standards, following the usual fiction, were billed as “quality” measures, but in general they actually seemed aimed at determining how much money various doctors were spending. Often, something like 10% of the physician’s annual reimbursement was held back as a “withhold,” payable to the doctors only if they met the published performance standards. Doctors who failed to meet performance standards not only did not get the rest of the money they had earned, but worse, were in danger of being cut loose from the HMO’s panel altogether, thus jeopardizing their livelihood.

This system quickly got physicians into the right frame of mind, and focused them quite nicely on whose interests they actually needed to keep at the forefront when they were making clinical decisions for their patients. It also prepared them to put up with more of the HMOs’ new management techniques.

Once each quarter, some men in dark suits would come to visit. They were “practice consultants,” and they were there to help. The practice consultants would use data the HMO had accumulated to assist the doctor in re-titrating his or her decision-making processes, in order to guarantee they were practicing medicine to everyone’s best advantage.

For instance, the practice consultants might say, “Dr. Smith, we notice that the patients in your practice cost our HMO an average of $342 each last quarter. This is unfortunately higher than the target we set for you of $315. We are distressed to have to mention that this puts you in some jeopardy regarding your “withhold,” and possibly of further action as well. But we are here to help. Let’s see how we can do that. Ah! Here’s something. Notice that you sent four patients last quarter to Cardiologist Jones, and Cardiologist Jones spent an average of $4300 doing whatever it is he did to evaluate and treat those patients. And you sent three patients to Cardiologist Wilson. And she only spent $2100 per patient. That is quite a difference, isn’t it, Dr. Smith? Hmm. Well, Dr. Smith, you know we would never tell you how to practice medicine – you’re the doctor! – but we thought you might find this cost differential interesting, as you decide where to refer your next patient.”

And while Cardiologist Jones and Cardiologist Wilson have entirely different areas of expertise, which Dr. Smith had formerly taken into account when deciding where to refer his patients, his new-found wisdom now dictates that it might be best if Cardiologist Wilson would become his new go-to cardiologist for all cardiac-related problems his patients might have. And Cardiologist Jones, when he notices a marked decrease in his referrals during the following quarter (since the men in suits visited lots of primary care offices in the area), will probably never know that he (as well as many patients) has become the victim of trickle-down covert rationing.

Another common methodology to improve the quality of care, in a manner that would save the HMO money, was to institute Pay for Perfomance programs. P for P initiatives provided primary care doctors with a checklist of 10 or 12 items that they would need to accomplish during each patient visit, if they would like to be paid. The checklist consisted mainly of things that everyone would have to agree are useful – things like checking and discussing blood pressure and cholesterol levels, and reviewing their dietary and exercise habits, smoking habits, &c. There would be nothing on the list that anyone could possibly object to. However, the lists were so constructed that it was impossible to complete them in less than 10 minutes or so. And that, too, would have been fine, except that in order to meet the patient load the HMOs required, doctors needed to see a patient every 12.5 minutes. And here you can begin to see the true brilliance of P for P.

P for P saw to it that the routine health maintenance stuff got done each and every visit. But P for P also saw to it that there would be little or no time for “ad libbing,” that is, for the patient to bring up new, potentially-expensive medical issues, or, if the patient managed to blurt something out, for the doctor to adequately assess it. At best, the patient would have to reschedule another visit, for perhaps a month or two later. By that time the problem might be resolved, or might have run its course. Or perhaps something else might happen to make the new medical issue, well, moot.

Severely limiting the doctor’s face time with patients, then carefully scripting, down to the minute, what is to take place during that limited time, creates an opportunity for real cost savings. This is the kind of benefit you get when you apply modern management techniques to a trade whose processes really hadn’t changed much since the Middle Ages.

Through these and other creative applications of business principles, in a matter of a couple of years the HMOs owned doctors, lock, stock and barrel. And to make it official, in the middle years of the 1990s (once doctors realized that being retained on HMO physician panels was a matter of life or death), HMO executives invented the “gag clause,” which they added to the doctors’ contracts when it came time for renewal. Gag clauses said something like this:

“The physician agrees not to take any action or make any communication or representation to patients or patients’ families, potential patients or potential patients’ families, employers, unions, the media, or the public that would tend to undermine, disparage, or otherwise criticize the healthcare coverage provided by [insert name of HMO here]. The physician further agrees to keep all proprietary information such as payment rates, reimbursement procedures, utilization-review procedures, or other processes and procedures related to billing, collection, or review, strictly confidential.”

Agreeing to keep such potentially vital information from their patients – information which might materially affect a patient’s decisions regarding his or her own healthcare – was of course a direct violation of medical ethics. Medical ethics, however, had long since gone by the boards. The moment they had acceded to “performance standards” that enticed them to withhold medical services – and also acceded to sundry other coercions which HMOs had dreamt up to make sure physicians answered to their needs instead of their patients’ – doctors had already become deeply complicit in bedside healthcare rationing, essentially, rationing by omission. The gag clauses just put it in writing. So, apparently believing they had no good options, and already having lost the professional integrity which they ought to have held dear, doctors signed contracts by the thousands with gag clauses in them.

After a few years the gag clauses were noticed by “patient advocates” and other species of troublemakers, and strong objections were raised to them. The objections were based on the notion that it’s not nice for HMOs to gag physicians from telling their patients things that they ought to know. So, gag clauses were finally removed from HMO contracts.

But the damage had been done; the essential point had been made. When HMOs had asked doctors for a declaration of fealty that superceded all pre-existing professional obligations, doctors gave it, and with barely a protest. Whether or not gag clauses continued to appear in the contracts was immaterial. Once a dog learns to heel you can get rid of the leash, and the dog still heals just fine.

What The Government Did

The defeat of the Clintons’ healthcare reform plan certainly set the government policymakers back. The Progressives’ plans for a government takeover of the healthcare system, all in one grand campaign, had been foiled. But Progressives always take the long view, and they were undismayed. They quickly regrouped, and began stealthily instituting as much of the defunct Clinton plan as they could, piece by piece, through various laws, budgets, executive fiats and riders on Congressional bills.

Like the health insurance companies, Progressives in the government also recognized that it was imperative for them to gain control of the behavior of doctors. Hillary probably had said it best: “The problem with our healthcare system is too many greedy doctors using too much expensive technology.” So the name of the game was controlling the greedy doctors, the decision-makers on the ground.

The methodology they employed to do so was fundamentally different from the methods used by HMOs. HMOs naturally concentrated on controlling physicians by the power of economics, through simple threats to their livelihood. But as Ayn Rand taught us so many years ago, the power of the government over its citizens derives from regulatory (ultimately, prosecutorial) intimidation.

There is no need for the government to go all Robespierre, however. Actual bloodshed can be minimized. The Feds can usually get the effect they need by sending in the regulators – always backed by the threat of legal violence, of course – to harass a few people, ideally for what appear to be entirely arbitrary reasons. This action always proves wonderfully intimidating to the rest, and is an effective way to focus people’s attention on that which you would like them to focus.

I will be devoting much of the rest of this book to the abuse of government power with regard to healthcare, and don’t want to get too distracted by that topic here. So I will simply describe a single foray the government made in the time frame we’re talking about – the late 1990s – aimed at teaching doctors what is expected of them, and letting them know who they really work for. By doing so, I hope to make a bit more understandable why the medical profession made a complete and disastrous capitulation in 2002.

The E&M Guidelines

During the second Clinton administration, a new set of tortuous documentation requirements were imposed on American physicians by our government. The E&M guidelines, for “evaluation and management,” apply to the documentation that physicians are obligated to provide in support of their Medicare billing. The E&M guidelines, first instituted in 1995 and revised in 1997, were part of the Clintons’ great healthcare fraud reduction initiative. Ostensibly, the new, very strict documentation requirements would reduce the opportunity for fraudulent billing.

However, the E&M guidelines were, from the very beginning, a Regulatory Speed Trap of the first order. Regulatory Speed Traps work like this:

1) Over a long period of time, regulators will promulgate a confusing array of disparate, vague, poorly worded, obscure and mutually incompatible rules, regulations and guidelines.
2) Individuals or companies which need to provide their products or services despite such hard-to-interpret regulations, will necessarily render their own interpretations (usually with the assistance of attorneys, consultants, and the regulators themselves), and will act according to those interpretations.
3) By their apparent concurrence with, or at least by their failure to object to, such interpretations of the rules, the regulators over time allow de facto standards of behavior to become established.
4) When it becomes to their advantage, the regulators will reinterpret the ambiguous regulations in such a way that the formerly tolerated de facto standards suddenly become grievous violations.
5) Regulators aggressively, but selectively and arbitrarily, prosecute newly felonious providers of those products or services.

The E&M guidelines are so convoluted as to be unworkable in any objective way. Through their utter opacity and complexity, only partially reflected by the 48 pages of dense prose that comprise them, the E&M rules (for “rules” is what they are) in fact greatly magnify the doctor’s opportunity for making inadvertent documentation errors, and thus of producing a “fraudulent” bill.

Under the E&M rules, writing what used to be a simple progress note in a patient’s chart requires the physician to assemble a complicated set of “elements” from Column A and Column B, as from a Chinese menu, for each of four subject areas of the patient “encounter” – the history, the physical exam, the assessment, and the plan. Then somehow, one must translate the result (which reads like – and often is – a computer-generated form letter) into a billing code.

Despite the morass of confusion caused by the E&M guidelines, any failure to follow them to the complete satisfaction of the Central Authority is a priori evidence of Medicare fraud or abuse. And therefore, the E&M guidelines assure that with each and every patient encounter, the thing that will be foremost in the physician’s mind is not the needs of the patient, but how to fill out the complex documentation in such a way as to avoid the appearance of committing a crime.

In practical terms, this means filling out the documentation so as to blend in with the masses, so that one’s records will be passed over by the sharp eyes of the greedy forensic accountants (who are paid by commission for detecting instances of substandard documentation, now construed as “fraud or abuse”), or even worse, by the sophisticated software now being deployed to detect ever-more nuanced gradations of “outliers.”

The bottom line is that virtually any doctor who uses the E&M guidelines, and virtually all doctors do, are always guilty of healthcare fraud. It’s just a matter of who gets investigated.

Even if this documentation mess resulted in a straightforward means of determining proper billing codes (which it does not), it results in a medical progress note that is virtually undecipherable. This means that when another doctor (or even the same doctor on a different day) tries to read the progress notes to figure out what’s been going on with the patient (which used to be the point of medical progress notes, before they became primarily a vehicle for auditors), they cannot. Compliance with the E&M guidelines often actively confounds patient care.

The E&M guidelines were recognized immediately by doctors as a complete abomination. Indeed, the great hue and cry from angry physicians caused the Secretary of HHS to appoint a special commission to review the E&M guidelines in 2001. The special commission reviewed the evidence and concluded that indeed, the E&M guidelines were entirely counterproductive to patient care. In June, 2002 the commission voted (20-1) to recommend abandoning them altogether.

But HHS declined to follow the recommendations of its own commission, instead leaving the E&M guidelines in place “temporarily,” and vaguely promising to revise them “soon” in order to make them less dangerous to patient care – knowing full well that the saurian lassitude of the bureaucracy would easily outlast the fleeting indignation of the medical community. And, as the bureaucrats predicted, there has not been any substantial noise from doctors about revising these guidelines for several years now. A whole new generation of doctors has been weaned on them, and does not know any better. The E&M guidelines have become as permanent as the IRS.

(This simple example ought to teach us how difficult it will be to roll-back any of our new healthcare reforms in the future, even ones that are officially deemed to be harmful.)

Not only has HHS failed to take (or, alternately, succeeded in not taking) the steps it promised to take to revise the E&M guidelines, they also have vigorously pressed forward with audits and prosecutions for the federal crime of healthcare fraud, based on physicians’ inadequate compliance with them.

In a well-publicized test case, instituted by the government shortly after the E&M guidelines were first implemented – apparently to let doctors know they were deadly serious about this – criminal charges were brought against a Montana family doctor, alleging medical coding violations. But the government’s own expert concluded that the prosecutors were holding the doctor to standards that were not yet in force at the time the bills were submitted, and that the government was applying its new rules retroactively. The expert was so disturbed by his findings that he even offered to switch sides and testify for the defendant. Unfazed, the government simply switched tactics, dropping criminal charges and instead initiating a civil suit against the doctor for $37 million – which is way more money than the average family doctor has on hand. The defendant, breaking from the usual pattern, fought the government instead of settling. And after a long, long time, she was finally cleared – but not before she had spent over $300,000 out-of-pocket in legal fees.* Nonetheless the Feds had made their point to the physician community, loud and clear: We intend to vigorously prosecute physicians for violation of these guidelines, whatever you may think of them, and whether we’re acting fairly or unfairly.

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*Paul Rosenzweig, Senior Legal Research Fellow, The Heritage Foundation, testimony on “Sentencing and Enforcement of White Collar Crimes,” Subcommittee on Crime and Drugs, Committee on the Judiciary, U.S. Senate, June 19, 2002, p. 9.
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Every doctor in America suddenly realized just how serious the Feds were about enforcing these ridiculous, clinically counterproductive coding guidelines.

Frightened by the prospect of prosecution for Medicare fraud, many doctors adopted the tact of systematically “downcoding” their Medicare bills, figuring that they are unlikely to be brought up on fraud charges for underbilling. And normally one might think that the Feds would consider this a victory, since it would result in their keeping money they should be paying out. But the Feds’ purpose here was only secondarily to save money. Their primary purpose was intimidation – showing those doctors who’s the boss. So Medicare let doctors know that systematic downcoding may also be considered a fraudulent act, since it shows contempt for the law, and doctors suspected of doing so will be audited.

Because of the clear and present danger the E&M guidelines pose to every doctor, a multi-million dollar industry has sprung up to help physicians better comply with these coding guidelines. Physicians across the country are spending the time and money allotted for their continuing medical education learning to become better accountants, rather than better physicians.

Which brings me to a very interesting point about the E&M guidelines: It is not actually possible to follow the E&M guidelines accurately.

It turns out that coding correctly is impossible. This was proven in a formal study conducted a few years after these guidelines were instituted. A group of government-sanctioned coders took a sample of typical doctor-patient visits, coded them according to the E&M guidelines – and they all got different answers. If government-approved coders, using the government’s own guidelines, cannot figure out how to arrive at what prosecutors will always insist is the singular correct answer, then what hope do mere doctors have? (The results of this study were published in the Annals of Emergency Medicine in September, 2002.)

Obviously, then, since there is no “right” way to comply with the coding rules, all a doctor needs in order to become guilty of abusive billing, if not outright fraud, is for the fickle finger of the Feds to point his way, and initiate an audit. Violations are virtually guaranteed to be found during any audit. So what we’ve got here is a well-documented, openly acknowledged, published-in-peer-reviewed-literature Regulatory Speed Trap.

Here’s what happens to doctors who are suspected of committing coding abuse (which is to say, to any doctors who are visited by Federal auditors):

1) A small sample of their patients’ charts is audited.
2) The coding error rate (which is determined by the auditor) will be calculated for that sample, then that error rate is applied by extrapolation to every Medicare bill the doctor has submitted for the past 6 years (the statute of limitations).
3) For each violation in coding the doctor is estimated to have committed during those six years, the doctor must pay: a) triple the amount of restitution, plus b) $11,000.00 per coding violation.

It is not unusual for audited doctors to be hit with hundreds if not thousands of coding violations over a 6-year period, and the fines will almost always amount to well over 7 figures, if not 8. However, if it’s just abuse the doctor has allegedly committed and not fraud, often the Feds may offer a settlement deal in the low 7 figures.

And here’s what happens if the coding violations are judged by the auditor to be fraudulent (which involves the determination of intent, and therefore, unfortunately, often appears a somewhat arbitrary designation):

1) All the above.
2) Jail

And, as we have seen, if you somehow escape being convicted on criminal charges, the government still has the prerogative to come back at you with civil charges, where the burden of proof is lower.

Any doctor who has come anywhere near such a process wishes fervently for the good old days, when it was only the HMOs making your life miserable. Yes, HMO executives can be nasty sons of guns. But they can only decide not to pay you what you are owed, or perhaps throw you off a panel. They cannot decide to wipe out your life savings, take your professional license, or put you in jail.

The Feds know that the E&M guidelines are harmful to patient care. Their own commission came to that very conclusion in 2002. The Feds know that failing to comply perfectly with the E&M guidelines in each and every case does not really indicate fraud and/or abuse, but is the necessary outcome when you institute a complex set of rules that not even the government’s own approved coders can interpret.

That the Feds continue to impose the E&M guidelines on physicians, despite the harm that they know this causes, tells us something very important about their underlying motives. When you are in the business of covertly rationing healthcare, controlling the behavior of physicians – getting them under your thrall – is Job One. And as George Orwell observed for us, when you want to control the behavior of some people, a critical step is to control the mode, the rules, and even the very language of communication.

That physicians continue to comply with such oppressions, despite the harm they know this causes, and (with notable exceptions) without serious complaint, tells us something important about them, too.

What The Doctors Did

Despite the intense, unrelenting attacks against them by the health insurers and the government, it remains striking how completely physicians capitulated to the pressure and abandoned their professional responsibilities, and how quickly they did it. And in doing so, physicians threw away two thousand years of tradition, jurisprudence and ethics.

Medicine was one of the three original professions, the other two being the clergy and attorneys. Today, anyone working in any area of endeavor, as long as they have sufficient expertise that that somebody is willing to pay them to do it, calls themselves a professional. So we have professional hairdressers, chefs, sanitation workers, hit-men, and athletes. And by this definition, I suppose doctors can still call themselves by that name as well.

But by the original definition of the word, they gave up that privilege in 2002.

Originally, the term “professional” was defined not merely by somebody’s knowledge or expertise, but rather, by the special quality of the fiduciary relationship they had with their clients – a relationship marked by an absolute duty to place the needs of the client ahead of the professional’s own personal interests, or the interests of any third party.

In the case of physicians, this relationship is called the doctor-patient relationship.

To really understand what the doctor-patient relationship is supposed to be like, it is quite sad that today it might be necessary to have a look at a different profession, one whose members are often despised by physicians, but one that has managed to hang on to its professional integrity to this day – namely, the lawyers.

Say you are arrested for robbing a bank. Say the arrest was not unexpected, since you actually did rob a bank. Say that while you didn’t actually mean to do it, you shot a teller in the process, and the teller subsequently died. And finally, say you were caught red-handed.

Given this series of unfortunate circumstances, what rights can you expect?

It turns out that under the law, you have many rights. Despite the overwhelming evidence against you (the surveillance tapes, the eyewitnesses, the being-caught-at-the-scene-with-the-smoking-gun-in-your-hand, &c.), you have the right to a fair trial; you have a right to be considered innocent until a jury of your peers declares you guilty; and you will have the right of appeal (assuming you won’t like the verdict). But more importantly than anything else, you have a right to counsel, to an advocate, a knowledgeable professional who is obligated to defend you to the limits of her abilities, and to fully protect all of your interests under the law.

Society recognizes that the legal system is a morass of rules and regulations that ordinary citizens cannot hope to navigate on their own. Society acknowledges the need for any citizen caught up in the complex legal system to have a personal advocate who will hold that citizen’s interests above all others. Even when the accused party is as obviously guilty and as deserving of punishment as you obviously are, most of us would shudder to think of the abuses that would occur if people (even the likes of you) had to face a hostile legal system without the guidance of their personal attorney.

When you are sick, you are no more capable of navigating the complex healthcare system than is the accused felon of navigating the complex legal system, and you are no less in peril if you run afoul of that system. And your need of a personal advocate, a professional whose job is to protect your interests against the conflicting aims of a hostile healthcare system, is no less acute.

When you are sick, you should be entitled to at least the same protections as when you rob a bank. And this is what the doctor-patient relationship is actually for.

In recent years the “doctor-patient relationship” has been taken in hand by certain “experts,” who (in the way of teaching doctors to work more “effectively”), have reduced the whole thing to a series of tricks from the interpersonal-relationship trade. These may include looking your patients in the eye; displaying sympathetic expressions (practicing with the use of mirrors may be necessary); nodding as they speak (with all the sincerity of a Dr. Welby bobble-head); freely showing them your emotions (even if you have to manufacture them); remembering their birthdays and childrens’ names (yet another benefit of computerized medical records), and similar strategies for convincing patients that they have your full attention, and that nothing can be more important to you at this moment than their welfare. Such techniques are designed to get your patient’s thinking to the right place – which is to say, to get them to understand without too much fuss or muss why the efficient course of evaluation and treatment you have selected for them (with the kind assistance of various government expert panels) is the correct one.

I think it’s the same training they give annuity salespersons.

Obviously, none of that has anything to do with the real doctor-patient relationship. The real doctor-patient relationship is a sacred covenant, one which is formed when a patient goes to a doctor for help, and the doctor agrees to give that help. Under that covenant, the patient agrees to take the physician into his confidence, and to reveal to her even the most secret and intimate information related to his health. The physician, in turn, agrees to honor that trust, and to become the patient’s advocate in all matters related to his health, placing his personal best interest above all other considerations. This strong relationship of mutual trust is what patients have always expected, what most doctors have striven for, and what everyone else (medical ethicists, professional societies, and those who enforce the law of the land) have traditionally agreed – and even demanded – must be the standard.

And for over 2000 years, the precepts of medical ethics were aimed squarely at guaranteeing the integrity of that relationship. Fundamentally, these ethical precepts held physicians to the high standards of behavior embodied in the classic doctor-patient relationship, and further, gained physicians admittance to the small society of “professionals.”

Unfortunately, by the late 1990s, perceptive physicians noticed a big problem. Namely, thanks to the various perfidies being visited upon them by HMOs and the government, doctors could no longer act in accordance with their fundamental ethical precepts. They were being pressured to place the vital interests of the insurers and the government ahead of the vital interests of their patients. They were coerced into violating their sacred duties under the doctor-patient relationship. And, as we have seen, doctors gave in to that pressure.

Soon, influential thought leaders in medicine and medical ethics expressed alarm at what was going on. Clearly, they said, something needed to be done about it. And they decided to act.

But the action which the medical thought leaders finally took was not to fight back against the pressures being placed on physicians to violate their most fundamental ethical principles. Instead, the medical thought leaders launched an effort to change the precepts of medical ethics, to make medical ethics comport with the actual behaviors which modern doctors were being coerced to adopt.

Changing millenia-old ethical precepts proved to be surprisingly easy. This is because it is surprisingly easy today to find respected ethicists who will sanction just about any nefarious activity you can think of, as long as that activity furthers some higher cause which is to their liking. These ethicists are called utilitarians.

The solution to the physicians’ ethical dilemma was initially proposed as early as 1998, in an article by Hall and Berenson in the Annals of Internal Medicine (volume 128, p 395) which stated: “It is untenable for the medical profession to continue asserting an idealistic ethic that is contradicted so openly in clinical practice. . .We propose that devotion to the best medical interests of each individual patient be replaced with an ethic of devotion to the best medical interests of the group. . .”

This influential article, among other things, led to the formation of a commission to formally study the issue (the issue, again, being that if it becomes difficult to follow ethical precepts, then one ought to go ahead and change them).

This effort was led by the American College of Physicians, the main professional organization of experts in internal medicine, and this organization was quickly joined by virtually every other major physician organization in the world. Physician-leaders completed their ethical overhaul of the medical profession impressively quickly, and published it in 2002. They called it “Medical Professionalism in the New Millennium: A Physician Charter. “(Annals of Internal Medicine, February 5, 2002). With its publication a two-thousand-year tradtion of medical ethics was ended. It is the suicide note of the medical profession.

The innovation of the Millennialists was to proclaim a new ethical precept: the precept of Social Justice. The precept of Social Justice charges physicians with effecting “the fair distribution of healthcare resources.” That is, it renders it ethical for doctors to decide which patients ought to get those limited resources, and which ought not to get them; it specifically and directly justifies covert bedside rationing by physicians.

The reason this new ethical precept was deemed necessary is explicitly because doctors cannot any longer adhere to the old ones. (“It is untenable. . .to continue asserting an idealistic ethic,” according to Hall and Berenson. “Indeed, the medical profession must contend with complicated political, legal, and market forces,” according to the Millennialists themselves.

Ostensibly, the precept of Social Justice gives doctors who are too introspective (admittedly, not a big problem with many of us) an out when they find themselves having to place the interests of payers ahead of the interests of their patients by, say, failing to mention certain medical options that might be available. “Sure, I’m violating classic ethical principles,” they can now tell themselves, “but I’ve got to do that to honor this new one.”

The bottom line is that, having been coerced by the the insurers and the government (both of which control the doctors’ professional viability, and one of which also controls their status regarding incarceration vs freedom) to place the payers’ needs ahead of the needs of patients, doctors found themselves in utter violation of their fundamental ethical precepts. The proper response of physicians (and their professional organizations such as the ACP) would have been to reassert those ethical obligations, to push back against the payers, and enlist the cooperation of their patients (who, after all, have a particularly vital interest in the matter) in doing so. Instead, they have taken a path of lesser resistance, re-defining medical ethics to comport with their new, coerced behavior.

What Does This “New Ethics” Do To the Doctor-Patient Relationship?

The addition of the precept of Social Justice to the ethical obligations of the physician renders the classic doctor-patient relationship inoperative.

The New Ethics breaks the covenant from the outset. It renders “ethical” the divided loyalty of the physician. Today, when patients go to a doctor for medical advice, they do not know – and cannot know – whether that advice is being given to advance primarily the patient’s own well-being, or the well-being of the society that desires a “fair distribution of healthcare resources.”

With the formal adoption of this New Ethics, patients essentially have been cut loose, and set adrift to fend for themselves in an increasingly hostile healthcare system, without being able to rely on the kind of personal advocate they’ve been conditioned to expect, the same kind of advocate an accused murderer is still granted without question or hesitation. What’s worse, nobody has told patients that they have been abandoned in this way. They think their doctor is still working for them.

Less obvious, but no less profound, are the consequences this New Ethics has on the profession of medicine. Abandoning their primary obligation to the individual patient means that physicians have committed the “original sin.” They have abdicated their traditional, ethical, and legal roles as patient advocates; they have broken a sacred pact. They have fully compromised themselves as professionals; indeed they have become professionals in name only, and not in fact. And as a result, to their utter frustration, they find themselves standing naked before their enemies, the very insurers and regulators who forced them to abdicate their sacred obligation in the first place.

And it is in this utterly subservient position that we find our doctors – our protectors, our advocates – when Obamacare comes to town.

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.

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The American College of Physicians published the Sixth Edition of its Physicians Ethics Manual yesterday. Regular readers may find it surprising to hear DrRich say that there is little objectionable in it, and actually much to admire – that is, when it is considered as it is written, as a stand-alone document.

But of course, when it comes to statements of medical ethics in the New Millennium, one cannot rely on the face value of the written word. For the purpose of the modern medical ethicist is to supply a plausible justification for the covert rationing of healthcare. That is, they need to make it ethically justifiable (if not ethically mandatory) for doctors to ration their patients’ healthcare at the bedside. Because statements of medical ethics cannot just come out and say that, ethicists must compose these statements quite artfully, so that when somebody (like DrRich) calls them on it, they can indignantly deny any such thing.

Therefore, DrRich submits, an accurate interpretation of the ACP’s New Ethics Manual requires an exegesis – that is, it requires that we go beneath the actual words, that we explore the derivation of this text, in order to discover its true underlying meaning. Fortunately, this process will be pretty straightforward, and will not require us to have a working knowledge of Latin, Greek or Hebrew. Plain English will do, as long as we keep the true aim of the modern medical ethicist in mind.

Accordingly, we need to begin this exercise by reminding ourselves of what that true aim is. This was probably stated most clearly in a quote DrRich has used before, by Dr. Berwick and his co-author Dr. Troyen Brennan (another ACP ethics maven) in their 1995 book, “New Rules.” To wit: “Today, this isolated relationship [between doctor and patient] is no longer tenable or possible. . . Traditional medical ethics, based on the doctor-patient dyad, must be reformulated to fit the new mold of the delivery of health care. . . The primary function of regulation in health care. . .is to constrain decentralized individualized decision making.”

That is, the primary aim of the new medical ethics is to get doctors to stop focusing on the specific, unique needs of their individual patients, and instead to focus on what is best for society – which means acceding to centralized, collectivized decision making (the opposite of the decentralized, individualized decision making which the ethicists are pledged to constrain). For doctors to do so, of course, will utterly violate the primary ethical precept which the profession has followed for more than two millennia, and so, obviously, if only for the sake of appearance, will require some revision of those ethical precepts to accommodate the new reality.

And that is the program of the modern medical ethicist.

They have been at this for a long time (at least since the early 1990s), and the Sixth Edition of the ACP Ethics Manual – despite its largely benign language and even occasional retrograde pledges to the needs of the individual patient – advances the true aims of the medical ethicists to a new level. DrRich will provide three lines of evidence to support this contention.

First,

in its section on “Professionalism,” the new Ethics Manual defers specifically to a foundational document written by the ACP and published in 2002 entitled, “Medical Professionalism in the New Millennium: A Physician Charter.” That Charter, which DrRich has critiqued in detail, established a new ethical precept which physicians must now follow – and to which they must give equal weight to their ancient duty to the best interests of their patient. That new precept is to social justice – to a just distribution of healthcare resources.

To understand the real import of this new ethical precept – which is introduced in the Charter in a determinedly bland manner – we must do a brief exegesis of the Charter itself. Notably, the first sentence of the Charter, which attempts to explain just why such a new charter on medical professionalism is needed in the first place, says, “Physicians today are experiencing frustration as changes in the health care delivery systems in virtually all industrialized countries threaten the very nature and values of medical professionalism.”

While this sentence obviously expresses the utter frustration doctors were feeling at being coerced – at the time mainly by health insurers – to withhold expensive but potentially useful healthcare services from their patients, the document itself never spells this out. Indeed, after this passionate opening sentence, no reference to any particular frustration is made again. Rather the document immediately retreats into a bland prose, and one looks in vain for the authors to spell out the cause of the dire frustration that demands a restatement of medical professionalism.

But even though the document seems strangely reticent to say what frustration produced the very impetus for its creation, we can rely on the fact that the document must be designed to cure this mysterious frustration (whatever it is), and further, that the only substantial change in the document was an addition to the code of medical ethics, adding the requirement that physicians work for social justice. Making social justice an ethical mandate for individual physicians, one can only surmise, might help relieve some of the guilt (and some of the frustration) physicians feel when they are forced to engage in bedside rationing against their patients.

The blandness of the Charter is intentional, and was added at the last minute to “soften” the blow. In an ACP policy conference held in the summer of 2001, a much more inflammatory draft of this new Charter was presented to the membership for discussion. That penultimate version made the actual intent of the document far more explicit. It said that when making decisions regarding individual patients, doctors must “be aware that the decisions they make about individual patients have an impact on the resources available to others.”  In other words, it explicitly instructed bedside rationing. To the dismay of the ethicists who had presented the draft, several ACP members at that conference reacted quite negatively to it. (Who knew that doctors still gave so much weight to ancient, outdated ethical precepts?) Because of the uproar, the language of the document was softened before its official publication. While its import remained entirely unchanged, the document was “blanded-up.” In particular, the sentence explicitly spelling out just what the authors meant by “social justice” was removed. In making their final revision, however, the authors of the Charter managed to overlook the passionate tone of that (suddenly incongruent) opening sentence, and thus left an everlasting clue as to what the document was really intended to do.

To summarize, by the turn of the millennium doctors were being coerced to withhold healthcare from their patients at the bedside, and thus to violate their time-honored primary professional directive. The intent of the 2002 Charter on medical professionalism was to repair the problem (i.e., to cure the “frustration”), not by confronting the forces of evil doing the coercion, but rather, by simply changing medical ethics to make bedside rationing OK. And that’s just what the document did, though only after careful re-editing to make this radical change to medical ethics sound as benign as possible.

By explicitly endorsing the 2002 Charter on medical professionalism, the Sixth Edition of the ACP Ethics Manual thereby endorses healthcare rationing at the bedside – but it does so quietly, at arm’s length, so as not to stir up unwanted passions.

Second,

the publication of the new Ethics Manual is accompanied by an editorial written by Ezekiel Emanuel, MD, a celebrated medical ethicist, the brother of Rahm, and a special advisor on health policy to the White House. It is widely believed that Dr. Emanuel will have a lot to say about which medical experts are going to be appointed to Obamacare’s GOD panels (Government Operatives Deliberating) – the panels that will establish the formal “guidelines” to determine which patients will get what, when and how, “guidelines” which doctors will have to follow in every particular, or be subject to fines, loss of profession, and imprisonment.

It is therefore instructive that Dr. Emanuel is effusive in his praise of this new ACP Ethics Manual. He is especially delighted that the authors have placed a statement into a special “call-out” box, so nobody can miss it, demanding that physicians, as an ethical duty owed to society, must practice efficient, parsimonious, and cost-effective healthcare.

Emanuel notes that “These positions on efficiency, parsimony, and cost-effectiveness constitute an important shift, if not in ethics then in emphasis.” Dr. Emanuel need not dissemble. It’s a shift in ethics all right – just look at the title of the document.

In other words, dear reader, we have Dr. Emanuel, one of the Supreme Beings who will be directing the GOD panels, declaring that, thanks to the new ACP Ethics Manual, doctors have now fully accepted the proposition that it is a matter of medical ethics for “cost-effectiveness” – as determined by panels of hand-picked experts – to decide whether their patient will receive a potentially beneficial medical service.

(Judging from Dr. Emanuel’s reaction to their work product, if any of the authors of this new Ethics Manual had hoped their participation might serve as their audition for one of the GOD panels, it appears their strategy might work out just fine.)

Third,

the Ethics Manual contains the injunction that doctors practice medicine “parsimoniously.”  While Dr. Emanuel is enamored by and delighted with this word, DrRich finds it at least a little disturbing.

One might speculate that by this word the ACP’s medical ethicists mean to say that doctors ought to arrive at a care plan by applying the “theory of parsimony,” best known as Occam’s Razor. If so, they are urging doctors to error.

The theory of parsimony says that when a series of observations has more than one plausible explanation, the simplest of the available explanations should be considered the “best.” This method usually works quite well when one is devising a theory to explain some phenomenon whose explanation is not a matter of dire urgency. So, for instance, any cave man from the Paleolithic Age who was fond of Occam’s Razor would have concluded, from available observational data, that the sun revolves around the earth. This conclusion was wrong, but little harm was done by it. And when it became important for us to get the movements of the heavenly bodies right (for instance, when we decided to send men to the moon), we first took care to collect additional observational data (just to make sure), and thereby we discovered just in time (a mere few hundred years before launch) that, for a million years or so, our original conclusion had been mistaken.

But Occam’s Razor is less well suited for making medical decisions, that is, in cases where current clinical evidence is consistent with more than one explanation. Here, it is likely that with some effort a discoverable, definitive, correct answer could be achieved, and it is at least possible that always choosing the “simplest” possible explanation would lead the doctor to take action (or more likely, to withhold medical services) that would cause the patient to suffer harm. Sometimes the theory of parsimony can be applied to good effect in the practice of medicine; other times it will be a disaster. Deciding when to use it is a matter of medical judgment and medical experience, best decided locally by a specific doctor on behalf of a specific patient.

The theory of parsimony clearly should not be applied as a matter of course to all medical questions, perhaps not even in most medical questions. So it would seem a shame for the ACP’s Ethics Manual to decree (“without qualifiers,” as Dr. Emanuel approvingly notes) that as a matter of medical ethics, doctors must always do so.

But perhaps the authors were not referring to the “theory of parsimony” at all. Perhaps they were just using “parsimonious” as a synonym for “efficient.” If this is the case, their error was more along the lines of a Freudian slip. For “efficient” and “parsimonious” are simply not good synonyms. Better synonyms for parsimonious would include:

• excessively unwilling to spend,
• ungenerous,
• penurious,
• penny-pinching,
• miserly,
• sparing,
• grasping,
• tight,
• close,
• niggardly,
• illiberal,
• mean,
• avaricious,
• covetous, or
• tight-assed.

Efficient is to parsimonious as fondness is to lust, or as a gentle spring rain is to a deadly deluge. They may be in the same genus, but are of entirely different species.

Since the real synonyms for parsimonious are all quite descriptive of bedside healthcare rationing, DrRich submits that this carefully chosen and strongly praised word is every bit as appropriate to the occasion as Dr. Emanuel indicates. This is EXACTLY how our Central Authority wants doctors to practice medicine – parsimoniously.

In conclusion,

the wording of the new ACP Ethics Manual itself may be, with a few notable exceptions, inoffensive. But when we take the time to explore the derivation of this text, when we consider it in light of the overarching program of modern medical ethicists, and in light of the interpretations now being assigned to it by agents of the Central Authority, it is not difficult to discover its true meaning and its true significance. This document helps establish an ethical mandate for doctors to follow centralized clinical directives to the letter, and doctors who fail to comply will be guilty not only of some legalistic violation of “guidelines,” but also of behaving unethically. And almost anyone will tell you that unethical doctors are the lowest form of life; for them no punishment is too harsh, and the tiniest mercy is too kind.

This, of course, is just what we should have expected.

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Progressive Americans have this much going for them: they can, without any reservations, second thoughts (or perhaps even first thoughts), enthusiastically and wholeheartedly support Obamacare’s individual mandate. For them, the individual mandate is an unalloyed good. Not only does it enable Obamacare to proceed, thus giving the government unprecedented control over every aspect of American healthcare, but it also establishes the authority of the government to control the economic activity of individuals. This new authority will come in very handy as our leaders continue working toward redistributive justice. So if you’re a Progressive, what’s not to like about the individual mandate?

Conservative Americans do not have it so easy. In principle, of course, the very idea of an individual mandate is constitutional heresy to a conservative, since it violates not only the letter but the very spirit of the Constitution. This is why, over the past three years, opposing the individual mandate has become for conservatives a more fundamental litmus test than opposing abortion. Accordingly, it is conservatives who have launched the constitutional challenge to the individual mandate, and who have now succeeded in bringing it before the Supreme Court, and who have based their chief strategy for bringing down Obamacare on the idea that the Supremes will agree with them about it.

DrRich, like most conservatives, is aghast at the idea that the Court might actually find the individual mandate to be compatible with the Constitution. Such an expansion of the power of the Central Authority over the lives of individuals will essentially gut the main idea behind our founding, and send us even more rapidly down the path toward tyranny.

But as he contemplates how he might feel on the day the Supreme Court finally strikes down the individual mandate, DrRich can’t help conjuring up the last scene from The Graduate. In that scene, Dustin Hoffman, who has just burst into the church and fought through a horde of wedding guests to grab his girl from the altar, and, with her in tow, has fought his way past the stunned groom and back through the angry crowd, and having at last jumped with her onto a city bus, is now sitting breathlessly, his hard-won love at his side, as the bus pulls away leaving their pursuers behind. And as that last scene fades, his look of elation at finally winning his heart’s desire gradually slackens, and transforms into a look of utter panic, a look that silently beseeches, “Now what?” Or, perhaps, “What have I done?”

DrRich thinks that’s what will happen to Republicans on the day the individual mandate is declared unconstitutional.

There is a reason, dear reader, that Mitt Romney, Newt Gingrich, and the Heritage Foundation, all of whom claim to be conservatives, at one time or another supported something very much like Obama’s individual mandate. That reason is: it is very difficult to conceive of a workable, market-based solution to our healthcare mess without one.

Any scheme for reforming healthcare that is based on private health insurance will fail if a substantial proportion of the population declines to purchase health insurance. Whether people have chosen to acquire health insurance or not, they will still get sick. And when the uninsured get sick there are only two choices.

The first choice is to refuse them care. Libertarians have no problem with this. They believe that if you want some healthcare, you should pay for it yourself. If you choose not to buy health insurance, or otherwise fail to make arrangements to pay for healthcare should it turn out that you need some (as well you might, if you engage in all the activities and abuse all the substances that libertarians say is your right), well, that’s too bad for you. Let your painful and untimely demise serve as an object lesson to everyone else, so that perhaps they will make better personal choices. Most non-libertarians, however, find this option abhorrent.

The second choice is to take care of the uninsured anyway. If you do that, not only do you drive up the cost of health insurance for people who have chosen to buy it, but you also create a huge incentive for people to not buy it in the first place.

This is why Republicans or conservatives who have thought deeply about healthcare reform (Gingrich, the Heritage Foundation), or who have actually instituted healthcare reform (Romney), will often settle upon a solution that incorporates something very much like President Obama’s individual mandate. Unless everyone is strongly “incented” to buy health insurance, a market-based healthcare system will collapse.

More to the point, Republicans ought to recognize that, while it seems to have wound up that way, the individual mandate in Obamacare did not start out as a sneaky way to undermine the Constitution. It was, in fact, a necessary concession to the more conservative of the Democratic members of Congress. President Obama and his minions (or handlers, depending on which talk show hosts you listen to) are on record as saying that their real goal is a single-payer, government-controlled healthcare system. And there is no reason in a single-payer, government-controlled healthcare system to invoke anything like an individual mandate to purchase insurance. The President would have been quite happy without any individual mandate, if he could have gotten his way in the first place.

The individual mandate was inserted into Obamacare purely as a necessary component of healthcare reforms that are ostensibly based on private health insurance, which is the only kind of reform the President could possibly get through even a Democratic Congress in 2010.

If the Supreme Court declares the individual mandate to be constitutional (which will violate everything DrRich holds dear about America), then it’s a huge win for Obamacare.

But if they declare it unconstitutional, that will trigger the Republican’s real problems.

Republicans, Democrats and federal judges all seem to agree that without the individual mandate, Obamacare is infeasible. The moment the mandate is declared unconstitutional, Obamacare disappears.

And this will create a “Graduate” moment. There the Republicans will be, sitting on the bus with the healthcare system they have just saved from the handsome-but-arrogant groom who had Big Plans for it, and heading to – where?  They can’t just go back to the old healthcare system; we’re past that. The health insurance industry has made it plain that their business model is broken, which is why they acceded to and even campaigned for Obamacare (a system under which they are to become federally-regulated public utilities) in the first place. Should Republicans institute their own market-based healthcare reforms? Good idea! But what do they do about the people who choose not to buy private insurance, now that they have had mandates to purchase declared unconstitutional? And even if they have an answer to that question (which they do not), do they have a plan ready to go, one that can be implemented quickly, before the healthcare system implodes? (Remember, Republicans, you will be dealing with a health insurance industry that has run out its string, and that will be at least angry if not panicked at the demise of its public-utility end-game.)

As it happens, DrRich himself has proposed a fix for the healthcare system that addresses all these problems – a system that is based on individual choice and incorporates private insurance, and at the same time covers everyone without any individual mandate, and controls healthcare costs to boot. The details are entirely irrelevant at the moment, and DrRich will not bore his readers with them now. (If you’re interested you can buy a copy of his book in Kindle format for five bucks, or if that’s too steep you can read an outline of his plan here for free.) The point is that workable solutions to our healthcare problems are indeed imaginable. The likes of DrRich has imagined such a thing, and so have others. But Republican candidates for President, and Republican congressional leaders, are not creating these solutions. Instead, they are steering us into a blind alley.

Here is what DrRich fears. When the individual mandate is declared unconstitutional next June, the Republican celebration will last all of 7.5 minutes. The insurance industry will make it very clear very quickly that they simply will no longer be able to function, and to have any hope of survival they will have to resume cherrypicking healthy patients, massively increasing premiums, denying recommended care, and dropping subscribers when they get sick. Even with these drastic steps, they will say, there’s no guarantee that health insurance will still be available for most Americans in a year or two. And at the time these astounding revelations are made, the Republicans won’t even be finished choosing a nominee, let alone be able to articulate a coherent plan for replacing Obamacare. By Independence Day panic will reign across the land.

The President will then make a speech. He will say, “We tried, America. In the spirit of bipartisanship we tried to give Republicans a system of market-based healthcare reforms, just like they say they wanted. But that kind of system requires an individual mandate, and our misguided friends on the right have now shot the individual mandate through the head. And when the American people ask those same Republicans who brought this disaster upon us, “Now what?” the American people get no answer. The Republicans are quite good at destroying healthcare solutions, but are hopeless when it comes to creating them. And you can hear for yourselves what the health insurers are now threatening to do to all of us when we get sick. It will be just like it was before, but much, much worse.

“We tried, America. We tried to create a market-based healthcare system that would be fair to all. But the Republicans, caring for nothing but their own selfish political fortunes, have blocked our efforts, and have left us all for dead.

“Fortunately, in a few short months you will be able to exercise your God-given right as Americans to choose. If you want to, you can vote into office the Republicans, the people who have traded your healthcare security and that of your family in favor of the chaos we are all witnessing today. Or you can re-elect me, and you can give me a Congress I can work with, and let us try to salvage something good from the ruins of the glorious reforms we fought so hard for the last time. Let us try to give you the best healthcare system that is still possible, given the new constraints the Republicans have now made for us. While you and I might not have started out wanting a healthcare system run entirely by the government, today our choice is either that, or the chaos, pain, suffering, disability and death that, thanks to the good offices of the Republicans and their friends in the health insurance industry, are now staring us in the face. But this is not the first time Americans have stared evil in the face. We have done it before, and we have always prevailed.

“We tried, America. We tried – but the Republicans denied, and babies died.

“My fellow Americans, in November you will have the opportunity to say no to the forces of evil, and to set this travesty right. I know the heart of Americans, and I know that you will do the right thing, not only for your own sake, but for the sake of your children, and your grandchildren, and generations of Americans yet unborn.*”

And when President Obama is finished laying out his argument, the Republican nominee, whoever he or she turns out to be, won’t know whether to cry, “Oops!” or “Nein, nein, nein!”

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*DrRich is a conservative but also a capitalist, and so his speechwriting services are available to the highest bidder. Mr. Obama, mutual “friends” in the DOJ have proven adept at tracking DrRich down when necessary, and will know how to contact him.

Podcast:

Just last week, DrRich wrote a post explaining why medical screening tests, under our new paradigm of centralized healthcare, will always be found to be ineffective and harmful. Therefore, it will be the job of the United States Preventive Services Task Force (USPSTF)*, after making a great show of examining randomized clinical trials as if the result is not a foregone conclusion, to declare such tests useless.

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*Regular readers will recall that the Obamacare legislation has transformed the USPSTF from its former status as a mere (one might say milquetoasty) advisory board, which made recommendations on preventive health that doctors and patients could take or leave alone, into an extraordinarily powerful GOD panel (Government Operatives Deliberating) that determines, definitively, which preventive services are to be covered and not covered by private insurers, Medicare, and Medicaid.
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DrRich thought his observation would be viewed by many as a bit “out there,” and that proponents of Obamacare would accuse him (as they so often do) of being paranoid and reactionary. So imagine his surprise when, just yesterday, the New York Times published a “news analysis” which aggressively begins selling the public on that very notion – that medical screening tests are, by and large, a bad thing to do.

Even DrRich thought the Progressives would be somewhat circumspect about breaking such remarkable and counter-intuitive news to us in the great unwashed – especially considering that they have just spent the last three decades teaching us just the opposite.  But then he recalled their smooth, unapologetic and entirely unremarked transition, around twenty years ago, from sounding the alarm about global cooling to catarwauling about global warming.

And he reminded himself that when you are a Progressive, history always began 10 minutes ago.  And this turns out to be a great convenience.

In this case it is particularly convenient, when you consider the passionate declarations by Ms. Pelosi and others in 2009 that the watchword of Obamacare – indeed, the very key to the dramatically lower costs we would realize with this new legislation – would be “prevention, prevention, prevention.”

It is always risky to speculate on what is actually going on in Ms. Pelosi’s head, but certainly the public health experts who helped devise Obamacare understood the truth all along.  Namely, it is axiomatic that medical screening tests will always, without exception, cost the healthcare system far more money than they can ever save the healthcare system. And therefore, medical screening tests will have to be suppressed – which is precisely why our new healthcare law provides the mechanism for doing so.

While readers should never doubt DrRich, he is aware that, sadly, many do.  And so it may be necessary to review why screening tests are invariably a money-losing proposition:

• The screening tests themselves are often expensive.
• Screening tests often produce false positive results, so additional (often invasive and always costly) testing will need to be done to confirm or deny the diagnosis.
• If the diagnosis is made, treatment will be applied which is often dreadfully expensive.
• The diagnostic testing is often “too sensitive,” such that it may make a positive diagnosis for a very early condition that, if it had been left alone, may not have done serious harm. The cost of treatment will therefore be wasted.
• The screening test, the confirmatory tests, and the treatments that will be applied as a result of screening all carry the risk of complications, and the treatment of these complications can be extraordinarily costly.
• If the patient’s life is saved by the screening test and subsequent therapy, that patient (who is often an Old Fart like DrRich) will persist, for several more years, to soak younger, worthier Americans for Social Security and Medicare payments; and worse, will ultimately develop some other expensive medical problem everyone else will have to pay for.

Q.E.D.

The fact is, the best we can hope for from medical screening tests is that they might save a life here and there, which is hardly a public health victory. But whether they save a few lives or not, they’re inevitably going to cost us a lot of money.

And clearly, from the public health standpoint, a standpoint from which we’re paying for all healthcare collectively from pooled resources (and working hard to deny people the legal right to spend their own money on their own healthcare), it makes no sense to do screening tests.

Screening tests only make sense to the individuals who are at risk for the medical condition being screened, not to the collective.

The New York Times goes on at length to explain how screening for early cancers causes harm and inconvenience for many people in order to help a few. It mentions several of the points in DrRich’s bullet list above. It quotes several public health experts who, shaking their heads sadly, allow as how perhaps the medical profession has “oversold” screening tests in the past decades. These experts lament the fact that the public will need to be re-educated about the limitations and the harm being done by these tests. The Times worries that, perhaps, people will think the new de-emphasis on screening tests is related to healthcare costs, when nothing could be further from the truth.  The worthlessness of screening tests is a new revelation, made clear by recent clinical trials. What can we do but follow the science?

DrRich is not arguing that medical screening tests are invariably a good idea. In fact, he has just given his readers an entire list of reasons they are often not a good idea.

What he is arguing is that the whole framework for our current debate over screening tests is wrong.

The proper way to deal with the imperfections of screening tests is as follows. We should carefully explain to each individual who is a candidate for screening (because they are at risk for the medical condition being screened), all of the risks of embarking on a screening pathway – the potential discomfort, inconvenience, medical risks, and costs of the screening test, of the possible follow-up tests that may be required, and of the treatments that may become necessary if the testing is positive.  The individual can then weigh these negatives against the possibility of failing to discover a treatable disease while it is still treatable. And, taking into account everything that people take into account when making such momentous personal decisions, the individual can do what they believe is right for them. And either decision – to have or not have the test – would be reasonable, rational, and evidence-based – for that individual.

But we are arguing this question as if taking individual preferences into account is not even on the table. We are arguing as if we must make a sweeping decision regarding screening – yes or no – that will apply across the board, to all Americans, regardless of how they would personally weigh the relative risks and benefits.

We are arguing in this way because that’s precisely the approach that Obamacare has codified into law.  Medical decisions from now on will be centralized, and not individualized.  The GOD panelists will determine which decision is best for the collective. And what’s best for the collective is best for us individuals.

But the “screening test debate” graphically illustrates a truth that modern medical ethicists at least implicitly (and often explicitly) deny: What’s best for the collective is NOT always what’s best for the individual. And when we must only make medical decisions collectively, individual Americans will be systematically harmed. And that includes, according to the USPSTF’s own documentation, several thousand women and men each year whose early, currently treatable, but ultimately lethal breast and prostate cancers will no longer be detected early enough to do any good.

DrRich thinks these individuals should be given the opportunity to consider their options regarding medical screening, and make the choice that’s right for them. Progressives – especially the GOD panelists, the public health experts, and most of the American media  – do not.

That’s the debate we should be having.

Podcast:

The United States Preventive Services Task Force created another hub-bub recently when they released their latest, updated recommendations on whether men should routinely have PSA testing for the early detection of prostate cancer. The USPSTF’s recommendation was simple and straightforward: No.

News reports on this new recommendation have fairly accurately portrayed the arguments on both sides. Proponents of PSA testing are in an uproar because prostate cancer kills many men, and its early detection makes it easier to treat. Without PSA testing, the early detection of prostate cancer is difficult and often impossible. But those siding with the USPSTF point to randomized clinical trials showing no significant reduction in mortality in populations of men who have had PSA screening, and further, that men who have PSA screening end up having a lot of very unpleasant and expensive medical procedures which can leave them with life-altering side effects.

DrRich is by no means an expert on prostate cancer or PSA testing, but as it happens he is an American male who is within the age group addressed by this new recommendation. So he indeed has a legitimate interest in whether the USPSTF has made a wise decision or not.

To help him decide whether this new recommendation is a reasonable one, DrRich has gone to the source: to the document published by the USPSTF itself in announcing its new recommendation. Helpfully, the USPSTF has laid out in detail the specific clinical studies it relied upon, and the rationale it used, to synthesize the results of those studies into a concrete recommendation.

The USPSTF document points out two major conclusions which can be gleaned from the medical literature on PSA screening. First, when PSA screening is applied to large populations of men, it is difficult to demonstrate a reduction in mortality. Of two large clinical trials comparing men randomized to PSA screening to those randomized to “standard care,” one found that PSA screening yields a relatively small but statistically significant reduction in cancer-related deaths, but the other showed no mortality benefit. So, given a large population of men eligible for screening, doing PSA testing appears to yield a benefit that is either small or non-existent. And as a result, from a public health standpoint a recommendation to do widespread PSA screening is simply not justifiable based on current evidence. And this finding accounts for the USPSTF’s new recommendation.

But the second major conclusion that is revealed by the medical literature is that, for men in whom screening has actually detected early prostate cancer, subsequent treatment significantly reduces mortality. This result addresses one of the big questions often raised about early detection of prostate cancer, namely, whether the cancers detected by PSA screening actually require treatment. Many of these early cancers apparently never cause death, so many have speculated that “watchful waiting” might be a reasonable course of action rather than aggressive prostate treatment. But the USPSTF’s review of the relevant studies shows that when early-stage prostate cancer is identified, the best clinical trials available show a significant reduction in cancer-related death and all-cause mortality with either surgical prostatectomy or radiation therapy.

As the backdrop for these two major conclusions, the USPSTF strongly emphasizes the drawbacks of PSA screening. This screening often leads men to experience some very bad outcomes from prostate biopsies, or from therapy for prostate cancer. The very nasty complications resulting from these procedures are all too frequent, and are very difficult to even think about let alone experience. Furthermore, pursuing all those  positive PSA tests is extraordinarily expensive for the healthcare system. The reasoning offered by the USPSTF in making their new recommendation relies heavily on the price which men must pay, in terms of complications, in pursuing the results of a positive screening test.

DrRich has long been disturbed by the state of the art of both prostate cancer screening and prostate cancer treatment, by the lack of obvious progress in improving these things, and by the seeming complaisance with which many urologists seem to accept the status quo. PSA screening appears far too sensitive (too many false positives, leading to too many biopsies). Prostate biopsies often yield both false positive results (detecting cancers that are probably clinically meaningless) and false negative results (missing cancers that are clinically important). And the numerous treatments available for treating prostate cancer (all of which are very unpleasant) have not been rigorously compared, leaving the various “camps” of urologists to argue that their pet treatment is the best one, and all those other urologists have their heads up their ass.

All this confusion and uncertainty places the patient faced with the prospect of whether to have a PSA test, or worse, with newly-diagnosed prostate cancer, in a complete quandary, and apparently with no objective means to resolve what he ought to do next. But despite all these shortcomings, the urology community has aggressively turned PSA screening and the cascade of uncertainties (and resultant procedures) that flow from it into a burgeoning industry, to the extent that one must wonder how badly these specialists want to clarify the current muddle. And for this reason, it is difficult to take the loud objections being made by the American Urological Association against the USPSTF’s new recommendations very seriously.

So from a public health standpoint, the USPSTF recommendations on PSA screening seem reasonable to DrRich.

However.

DrRich keeps coming back to the second major conclusion from the USPSTF’s analysis of the medical literature on prostate cancer screening: Even with all the drawbacks associated with PSA screening, and even with all the conjectures about whether these early prostate cancers really need to be treated after all, it turns out that if prostate cancer is detected by some screening technique, then treating that cancer saves lives. And DrRich notes that while the USPSTF dutifully describes this result in the body of their report, they do not mention it in the Abstract of their report, and they do not seem to have given it much weight, if any, in their final recommendations.

But it seems to DrRich that this is an important result, and ought to be taken into account. It should not be simply brushed off as irrelevant, or unworthy of notice. It begs to be explained.

How can it be that, on one hand, offering PSA screening to a large population of men does not seem to result in much overall mortality benefit, whereas on the other hand, if you do find prostate cancer when you screen for it, then treating that cancer significantly reduces mortality?

Most likely the explanation lies in the dilution effect. The moderate (but statistically significant) benefit of treating early prostate cancer is washed out when those patients are included in a much larger population of men who are eligible for screening, and who may or may not have prostate cancer, which may or may not be detected adequately by current screening techniques, and if it is detected may or may not be treated.

To see how such a dilution effect might operate, let’s consider seat belts. Everyone knows that seat belts save lives. So let’s do a study to prove it. One way to do this would be to compare the mortality rates of people who are in automobile accidents, according to whether they were or were not wearing seat belts. Odds are it would be fairly easy to show a mortality benefit with seat belts. But now let’s compare the mortality rate of all drivers over a 5 or 10 year period according to whether they were wearing seat belts, regardless of whether they were ever in an automobile accident. DrRich suspects you would not be able to demonstrate a mortality benefit with seat belts in this second study.

The PSA screening studies that the USPSTF relied on to make their PSA recommendations are analogous to this second seat belt study. The prostate cancer treatment studies that did show a mortality benefit are analogous to the first seat belt study.

Please note that DrRich is not comparing PSA screening to wearing seat belts. Wearing seat belts does not lead to a lot of unnecessary expense, nor does it create life-altering side effects. PSA screening, given the state of the art, is neither inexpensive nor benign.

But despite its major drawbacks, PSA screening does detect early prostate cancer. And if you measure outcomes from the point where the prostate cancer is actually diagnosed (instead of from the point where you decide to do PSA testing), survival is measurably increased by its early detection and treatment.

So the dichotomy is explained. From a public health standpoint, where you have to decide what the result will be on a large population of individuals if some screening test is implemented, it does not make sense to do PSA screening. But if you are an individual who might have prostate cancer, in whom the early detection of that cancer might save your life, then it might make sense to do the PSA screening. (Whether it does or not depends on how you, the individual, assign relative weights to the notion of dying from prostate cancer vs. the inconvenience, expense, pain, and possibly horrible side effects from PSA testing and what it might lead to.)

So while from a public health standpoint it would be a mistake to recommend widespread PSA screening, from an individual standpoint either decision – to have or forgo PSA screening, depending on how you yourself weigh the tradeoffs – would be entirely reasonable.

But individuals are not allowed to decide this for themselves. This is no longer the kind of decision which individual doctors and patients are supposed to be making any more. In fact, it is now illegal to do so.

And this, Dear Reader, describes the problem with the USPSTF decision on PSA screening. For, in fact, the USPSTF is no longer making mere “recommendations,” which doctors and patients might take into account if they wish as they decide whether some preventive healthcare measure is right for an individual patient. Rather, the USPSTF rulings now determine whether you and I, as individuals, will or will not receive that preventive measure.

Obamacare, which is now the law of the land, makes the USPSTF the final arbiter of which preventive services are to be covered by private insurers (Section 2713), by Medicare (Section 4105), and by Medicaid (Section 4106). Only those that have achieved a grade of A or B by the USPSTF will be covered. And if you believe you will be able to purchase for yourself PSA screening (or any other medical service which Obamacare has decided not to cover) you have not been paying attention. Perhaps you can do so today (if you’re not on Medicare or Medicaid), but probably not for long.

What all the news outlets have forgotten to mention, in their coverage of the PSA controversy, is that the USPSTF has been officially converted from a panel that simply makes recommendations which doctors and insurance companies can take or leave alone, into a panel that determines definitively what is covered and what is not – and indeed, into the chief tool by which our leaders will seek to withhold expensive preventive services.

And while in the particular case of PSA testing, he is not particularly sorry to see the new USPSTF recommendation, DrRich submits that, given the general nature of medical screening tests, it is child’s play to set up a clinical trial that would “prove” (given the expense of the test, the false positives, the false negatives, the side effects of the test itself, the side effects and expense of the follow-up tests needed to see whether a positive screening test is truly positive, the expense and side effects of the treatment that will be used if the diagnosis is actually confirmed, the relative efficacy and inefficacy of that treatment, not to mention the dilution effects of having to screen a large number of individuals to find the relatively few who actually have the condition of concern and will benefit from its treatment) that there is no preventive screening test you could name that produces an overall benefit to the population.

DrRich has long predicted that the brilliant people in our news media will be continually “surprised” each time some heretofore sacred medical screening test is declared by the all-powerful USPSTF to be, after all, useless.

This being the case, can we just stop pretending that Obamacare is all about prevention, disband the USPSTF altogether, stop funding any screening tests whatsoever and any research being done to develop new ones, and call it a day? That would be much more transparent, not to mention cheaper, than stifling preventive medicine in the painfully slow and deceptive way we are doing it today.