Why Big Health Insurance Supported Obamacare, Part II

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 Why the Health Insurance Industry Supported Obamacare [14:52m]: Play Now | Play in Popup | Download (15)

The fact that the health insurance industry supported Obamacare from the very beginning was entirely missed by the mainstream press. This is perhaps understandable, since a) the mainstream press does not understand the dynamics of the healthcare system, and b) during the Obamacare drama, the health insurance companies had been assigned, and had graciously accepted, their vital role as the Forces of Evil. To the famously credulous members of the mainstream press, it was easy to imagine that the insurers were actually among the opposition.

But the insurance industry supported Obamacare from the start – and even before the start. During the Presidential race of 2008, for instance, managed care companies donated far more money to both Barack Obama and Hillary Clinton than to any Republican candidate, even though both of these Democratic candidates publicly castigated the insurance companies for producing most of the problems in American healthcare, and promised to institute reforms that would drastically cramp their style and reduce their profits.

Why would the insurance industry support the very candidates whose chief healthcare strategy was to demonize them? Quite simply, it was because the insurance industry had nowhere else to go.

By the time Mr. Obama became president, the once proud, self-confident, and even arrogant American health insurance industry had been completely humbled. Like the old Soviet Union twenty years earlier, it still may have looked formidable from the outside, but it was really an empty shell.  The industry had run out its string; it was entirely bereft of ideas. Its business model was completely broken, and it desperately needed an exit strategy. And it was due to the need to find a serviceable exit strategy that the industry supported Obamacare.

To understand what landed the insurance industry in this sad state of affairs, it is necessary to review its recent history.

The Rise of the For-Profit HMOs

When the Clintons set out to reform the American healthcare system in 1993, the health insurance industry initially claimed to support them. The Clintons had promised them a vast new market – the millions of heretofore uninsured Americans whose premiums would be paid, presumably, by the government.

But the alliance fell apart the moment the insurance industry began reading the massive tome of regulations the Clintons finally produced, and found in it much they didn’t like. Chiefly, they they didn’t like the parts that ceded full control of their industry to the government. So Big Health Insurance immediately turned against the Clintons, and spent millions of dollars introducing us to Harry and Louise (a “typical” American husband and wife who were viewed in numerous TV commercials discovering various appalling provisions of the Clinton plan). In the end, when the Clinton’s reform plan went down to ignominious defeat, the powerful health insurance industry, appropriately, got most of the credit.

Most of us Americans were happy at the time that the Clintons’ plan had been defeated, but during the debate over healthcare reform we had become convinced that the old way of doing healthcare wasn’t any good either. The healthcare system, we all knew by now, was bankrupting us.  And something needed to be done about it. But with the Clinton plan off the table, what were our options?

In the ashes of the Clintons’ failed effort, the health insurers saw their golden opportunity.  And they presented the American people with a savior. The savior was, of course, them.

The insurance industry made its pitch in a new guise which we Americans had never seen before. For the big fee-for-service insurance companies had transformed themselves into HMOs, and had fully assimilated the language of managed care. These were not the touchy-feely, non-profit HMOs that had been puttering around in the healthcare system for a decade or so.  These were meat-and-potatoes, for-profit HMOs, run for the most part by hard-nosed business executives, and newly formulated for a new era of American healthcare.

And here is what they said: “Citizens! We all – employers, patients, physicians, hospitals, manufacturers and insurers – 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 the continued profligacy of traditional fee-for-service medicine on the other. And we cannot countenance either. But here,” they continued, “is a third way. A painless way, based on the sound principles of managed care, open markets, and free enterprise. Let healthcare become a business like any other business, and the market forces will find ways not only to cut costs but also to improve quality, and with no government intervention.”

The offer, in other words, was to turn healthcare over to the business professionals now running the New Model HMOs, who were cocky with the certainty that they could harness the efficiencies of the marketplace to control costs, make a big profit at the same time, and be feted as saviors to boot. Because we’re Americans and we know the benefits of capitalism, and because the other choices we faced looked even worse, we all said, “Go for it.”

This change led to the most rapid transformation the American healthcare system has ever seen, and within a few short years, the majority of Americans were enrolled in HMOs, or some other species of corporate managed care.

So HMO executives set out to control the cost of American healthcare, and to make a spectacular profit doing it. And for a few years, they seemed successful. Healthcare inflation slowed dramatically in the late 1990s, and HMO profits soared.

But it was all an illusion.

The Fall of the For-Profit HMOs

The initial impressive profitability of New Model HMOs was due to the one-time reduction in cost you always get when you implement efficiencies of scale (made possible by merging enterprises), and by instituting the new standardization techniques favored by managed care theory. These steps reduced the cost of healthcare for a while, but the underlying rate of healthcare inflation (which is mostly caused by new medical technologies and an aging population, neither of which are cured by managed care) was pretty much unchanged. So by the early 2000s, when these one-time cost reductions had been fully realized, healthcare inflation was right back on the same unsustainable trajectory it had been on before.

Unfortunately for the HMOs, the big profits they enjoyed throughout the 1990s could not last. Their rapidly expanding valuations were attributable not to their efficient management of healthcare, but instead, to the frenzy of mergers that rapidly ensued, and to the acquisition and privatization of not-for-profit public assets for a tiny fraction of their true value.

So not long after the turn of the century the for-profit managed care companies were getting very nervous. For the very first time in their history, HMOs were faced with the prospect of having to earn their profits, profits sufficient to satisfy their shareholders, by actually managing the healthcare of sick people. This is something they had never accomplished before, and, by the time the election of 2008 approached, they knew they never would.

By that time they had tried everything. Beginning in 1994, filled with confidence and enthusiasm and cheered on (initially, at least) by the public and by public officials alike, the health insurance companies had more than 15 years of more-or-less unfettered freedom to institute any efficiencies it wanted to. In the ensuing years insurance companies tried all kinds of legitimate ideas for reducing healthcare costs, such as managed care, gatekeepers, clinical pathways, disease management programs, pay for performance, wellness programs, medical homes, and even a ruthless consolidation of the industry to achieve “efficiencies of scale.”

They also tried every sneaky and underhanded idea they could think of for reducing costs, like 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, 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 get sick, based on trumped-up technicalities. Indeed, they tried everything short of dispatching teams of Ninjas in the dark of night to slaughter their most expensive subscribers in their beds.  And finally, when all else failed, they instituted 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.)

All these efforts were to little avail. The cost of healthcare continued to skyrocket, entirely unabated. And 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.

What Health Insurers  Get From 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 be seeking a government bail-out today. 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 liberals fervently desire. In this case, there may very well be some final compensatory buy-out (or a buy-off) for the insurance companies. 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 much better than where they would have ended up without Obamacare. Which is why they supported it from the start.

Now that we know why the insurance industry supported Obamacare, in the next post we will explore how the industry, at no small cost to its own public image, supported the President when it counted most.

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Why Big Health Insurance Supported Obamacare

Part I – Another Reason He Should Have Kept the Bust

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Now, read the whole story.

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

Now on Kindle!

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

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

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

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

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

To which DrRich replies, “Indeed.”

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

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

But alas, DrRich must tell you otherwise.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Now, read the whole story.

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

Now on Kindle!

Sure, nobody’s read the bill, and even if they had, what Nancy said is true: To find out what’s in the bill, they first had to pass it (so the bureaucrats could translate it into the hundreds of thousands of regulations that would finally determine its meaning). But there’s no need to wait for the regulators to sort it all out. DrRich can tell you what you need to know about our new healthcare system right now!

Healthcare Reform Explained – An Updated Guide For The Perplexed

PCP’s: Here’s All You Need To Know About Our New Healthcare System

Why the Health Insurers Saved the Day

The Individual Mandate Will Stand

The Audacity of Perpetuity

Some Powers of the Immutables

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 Hillary Started It (Limiting Individual Prerogatives, Part 2) [15:16m]: Play Now | Play in Popup | Download (4)

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Part 1 of Limiting Individual Prerogatives

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Have you ever wondered where Obamacare came from? From where, exactly, did those 2700 pages of undecipherable prose arise?

It is clear that our Congresspersons never read it, let alone wrote it. At the President’s “Health Care Summit” in late February it seemed pretty plain, to DrRich at least, that the only people in the room who had read the bill carefully were Republican Congresspersons Ryan and Cantor. The proponents of the bill stuck to generalities, platitudes, and vignettes about recycling dead people’s dentures. When Ryan and Cantor used their knowledge of the bill to question the President about its details, they were admonished to stop using “props.” The President was not just being mean; he needed to avoid getting into the details because he himself had only a broad general idea of what the bill actually said. This is not a slam at the President; the bill is designed to be fundamentally indeterminate in its meaning, so that the regulators who will later translate it into rules, regulations and guidelines, under which healthcare providers can then be prosecuted, can at that time interpret it as directed. This is what Nancy Pelosi meant when she said, a few days later, that Congress would have to pass the bill so that we all could find out what was in it. (This also explains why none of our legislators read it – except for those 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 sorted out later?)

So, DrRich asks again, where did this bill – whose actual 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 piece of legislation?

We may never know the name(s) of the person (people) who held the pen(s) 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 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 our new healthcare law.

The Q Document for President Obama’s Patient Protection and Affordable Care Act, was, of course, Hillary Clinton’s Health Security Act, which went down to ignominious defeat in 1994.

DrRich, who is rapidly developing an expertise in forensic diplomatics, and having spent significant time examining aspects of the Obamacare bill, decided to go back in time, and re-examine Hillary’s original proposal for fundamentally transforming the American healthcare system.

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, DrRich, after spending some time with Obamacare, found Hillarycare to be a model of legislative brevity and clarity. In fact, DrRich believes, its very straightforwardness is what killed it.

For instance, Hillarycare is only 1368 pages in length. How could they be so concise?

Even more remarkably, Hillarycare spells out pretty plainly what it actually means to do. For instance, in the Obamacare bill, in order for a reader to assemble the information that the  Independent Medicare Advisory Board is actually to be called the Independent Payment Advisory Board, 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. In the Hillarycare bill, in stark contrast, the analogous National Health Board (which, like the Immutables, was to have been the 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 all in one place.

And now, having immersed himself once again, however briefly, in the relatively refreshing model of clarity and precision that was Hillarycare, DrRich is convinced that the people who actually wrote the Obamacare bill (and may God keep these invaluable masters of legislative poetry 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, puzzle-like, into the exceedingly difficult-to-read document that became Obamacare.

That is, Hillarycare is demonstrably the Q document to Obamacare.

Obamacare’s debt to Hillarycare is obvious. Hillarycare included individual mandates requiring everyone 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 omnicient 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.

DrRich, therefore, formally advances the thesis that if you want to understand what Obamacare is actually getting at – what with its inherent and intentional obscurity, obscurity designed with care to provide its proponents with plausible deniability – simply examine the much more straightforward model from which it was derived, namely, Hillarycare.

And this brings us, finally, to the theme of this current series of posts. For Hillarycare strictly limited, in practice, the ability of individuals to spend their own money on their own healthcare.

In this instance even Hillarycare had to be a bit obtuse. For, as DrRich’s critics have pointed out to him so very many times, Americans are jealous of their own personal liberties, and are not likely to simply tolerate a frontal assault on their right to guard their health with their own resources. And of course DrRich agrees with this idea. Indeed, the fact that Hillarycare was insufficiently obtuse on this matter had a lot to do with why it ultimately failed to become law.

The attempt at limiting individual prerogatives under Hillarycare was, to be sure, devious (though not devious enough to fool people). So it began with a straightforward statement declaring that it was not doing what it was actually trying to do: “Nothing in this Act shall be construed as prohibiting…an individual from purchasing any health care services.”

Now first of all, for readers who persist in thinking that restrictive language like this, when it appears in federal legislation, actually means anything in particular, let DrRich disabuse you of that notion with two examples. 1) 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). 2) Obamacare contains language that prohibits healthcare rationing.

In any case, after making this broad promise in favor of individual liberty, Hillarycare went on to limit individual liberties. It attempted to do this in the Fraud and Abuse section of the proposed law, which sought to dry up most of private medical practice, and criminalize the rest. It provided for strict governmental controls over the fees that could be charged by fee-for-service doctors or private practitioners. And if the feds decided that a private doctor’s fees were too high, they could charge him/her with bribe-taking, a serious federal crime under the new law. Indeed, Hillarycare attempted to make illegal most of the ways patients could go outside the approved system to get “extra” healthcare. Criminal penalties could accrue to both the doctor and patient. 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.”

While none of this got much publicity in the general media in 1993-1994 (which goes to show that things really haven’t changed that much), you can be sure that doctors were aware of it. That Hillarycare would make it so very easy to inadvertently commit a federal crime – which would lead to massive fines, loss of license, and jail – was, in fact, one of the main reasons most physicians were so violently opposed to it.

The point DrRich is trying to make here is to demonstrate just how deeply reformers feel the need to control the behavior of physicians (and through physicians, the behavior of patients) in order to gain the control they need over individuals, and just how far they are willing to go to this end. It was partly because the Clintons showed their hand in this regard that their healthcare plan failed.

DrRich will now make two final points, and then end this already-too-long post. First, while Hillarycare failed to become law, many of the over-the-top anti-fraud provisions within Hillarycare actually became the law of the land a few years later, in the HIPAA legislation. DrRich has discussed this in detail in his book, and demonstrated how, during the rest of the Clinton administration, the healthcare police worked diligently to let doctors know that their careers, life savings, and physical freedom were dependent on making the happiness of the government – and not of their patients – their chief concern. This activity stopped during the Bush presidency, and has not yet picked up again under President Obama. But the infrastructure is in place already for an unusually effective coercion of doctors, in order to keep them from providing services, and thus to keep patients from buying those services, that the government does not like. There was, in fact, no need to add this infrastructure to the Obamacare legislation. The only thing that’s necessary is for the government to decide (as it did for a few years during the 1990s) that it’s time to take off the gloves.

And second, the intent of the people who brought us Hillarycare – the same people, in philosophy if not in person, who brought us Obamacare – ought to be very plain to all of us. We know their mindset. They may not have gotten away with limiting individual prerogatives in 1994 – but they certainly tried to.

And while it is true that Americans greatly value their liberty, and will chafe at overt restrictions on their ability to use their own resources for the sake of their own health, DrRich reiterates that actually preventing these restrictions will depend on our continued vigilance, and our willingness to stop the people who so plainly want to stifle our individual prerogatives, for the sake of the control they must have.
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Part 3 of Limiting Individual Prerogatives

Part 4 of Limiting Individual Prerogatives

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

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

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

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

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

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

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

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

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

Why Individual Prerogatives Must Be Restrained

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

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

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

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

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

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

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

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

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

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

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

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

Covert rationing demands it.

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

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Part 2 of Limiting Individual Prerogatives

Part 3 of Limiting Individual Prerogatives

Part 4 of Limiting Individual Prerogatives

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 An Ounce of Prevention Costs A Pound of Cure [16:10m]: Play Now | Play in Popup | Download (3)

As DrRich has noted many times over the years, “preventive healthcare services” cost the healthcare system far more money than they can ever save, and for this reason, any healthcare system engaged in covert rationing is going to have to find a way to stifle these preventive services.

Now, dear reader, before you go away angry, DrRich understands that some preventive measures are indeed very cost-effective. In fact, DrRich will now engage in a bit of cost-effective preventive healthcare: Don’t smoke. Don’t eat so damned much. And get some exercise.

There. DrRich has just successfully administered pretty much all of the truly cost-effective preventive measures known to modern medicine. (And it’s only cost-effective because the advice was free.)

All the other preventive stuff we do in medicine tends to bend the cost curve in the wrong direction.

Reasons that preventive healthcare services increase the cost of healthcare include: a) The preventive measure itself costs money. b) The preventive measure may not be effective. c) Many “preventive healthcare services” consist of some kind of screening test for “early detection,” and these screening tests almost always produce more false positive results than true positive results – leading to the need for more definitive, more expensive, and often invasive confirmatory tests. d) “Early detection” of any medical condition often detects “occult” disease, that may or may not have become manifest if it had remained undetected. e) Treating the diagnosed – and often occult – medical condition is often very expensive, produces complications, and/or is ineffective. f) Successfully preventing the target medical condition may give patients more time to consume healthcare resources for all their other medical conditions.

Please note that DrRich is not arguing here that preventive services are useless or undesirable. Often they are quite useful and very desirable. Rather, he is arguing that the healthcare system will spend more money by offering these preventive services than if it did not offer them.

This fact ought to prove embarrassing to our leaders, who have spent the last few years assuring us otherwise. Indeed, they have doggedly insisted, not only are preventive healthcare services cost-effective, but also it is precisely because of such preventive services (delivered in the remarkably efficient manner which will be achieved by our new healthcare system) that we will enjoy tremendous cost savings over the next decades.

Like Nancy Pelosi says, it’s all about “prevention, prevention, prevention.”

And having taken this bold and very public stance on prevention, our leaders are going to have to walk very gingerly (now that they have finally been successful in giving us the gift of healthcare reform), as they seek ways of cutting back on those selfsame preventive services.

They know this, of course, and have taken steps to provide themselves with the tools they will need to accomplish this feat. Their chief tool, based on what DrRich can find in the new healthcare law, is our old friend, the United States Preventive Services Task Force (USPSTF).

Readers may remember that it was the USPSTF that released the controversial new “recommendations” on breast cancer screening last fall. Readers will also recall that the USPSTF’s new recommendation, that women under 50 no longer need screening mammograms, proved quite shocking to many women – women who had been urged for over a decade by various cancer societies, by the government, and by their doctors to get regular mammograms beginning at age 40, because the early detection of breast cancer was the best way not to die from breast cancer. Indeed (readers will again recall), the outcry was so great that Secretary Sebelius quickly issued a statement reminding us that the recommendations of the USPSTF were merely that – non-binding recommendations – and that women should continue getting their screening mammograms as they and their doctors thought best.

DrRich wondered at that time whether Secretary Sebelius (who was simultaneously urging all of us to support the healthcare reform bills which were then making their way through the House and Senate) actually knew that both of those bills contained language making the recommendations of the USPSTF legally (and retrospectively) binding.

In any case, DrRich wishes to take this opportunity to remind his readers that the healthcare reform which is now the law of the land indeed makes the USPSTF the arbiter of which preventive services are to be covered by private insurers (Section 2713), by Medicare (Section 4105), and by Medicaid (Section 4106). To be sure, presumably to bail out Ms. Sebelius, new language was added (Section 2713) to say that the recent recommendations on mammography do not apply, at least not for private insurance plans. (Similar language, however, does not appear in the Medicare or Medicaid sections [4105 and 4106], so patients covered by these programs may indeed be subject to the new mammography recommendations .) New mammography recommendations aside, for the rest of the preventive healthcare services that exist in the universe, only those that have achieved a grade of A or B by the USPSTF will be covered.

Now 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 ways to withhold expensive preventive services – DrRich would like to very briefly restate his objections to the USPSTF’s recent mammography rulings.

In a word, DrRich’s problem with the USPSTF’s revised mammogram recommendations has nothing whatever to do with whether mammography is really useful or not, but rather, with the methodologies the panel used to make those recommendations. For, if those methodologies are deemed legitimate, unfortunate precedents will have been set. Specifically, by analyzing the USPSTF’s own justifications for making its new mammogram recommendations, it is possible to derive at least four new “rules” under which the panel can operate in the future.

1) The USPSTF now recommends that breast cancer screening no longer be done for women under age 50. But by the panel’s own words, screening mammography in women in the 40 – 49 age group appears as effective at reducing mortality as it is in women 50 and older, and the panel indicates this fact several times within its own document. And as nearly as DrRich can tell, the panel’s only concrete rationale for dropping mammography for women under 50 is that it has found “a new systematic review, which incorporates a new randomized, controlled trial that estimates the ‘number needed to invite for screening to extend one woman’s life’ as 1904 for women aged 40 to 49 years and 1339 for women aged 50 to 59 years.”

This rationale implies the following rule, Rule 1: If you have a preventive measure which is equally effective across a large population of patients, you can withhold that preventive measure from any arbitrary subgroup within that large population, as long as performing the effective measure in that arbitrary subgroup is more costly than it is for some other arbitrary subgroup.

2) In its public justification for withholding mammogram screening for women aged 40 – 49, the USPSTF did not emphasize cost savings, but rather, emphasized the fact that screening in this age group results in more false positive tests than for older age groups, and thus in more unnecessary biopsies, and the potential for more unnecessary emotional trauma. While this is true, the traditional response to such a circumstance would be for doctors to carefully review the pros and cons of screening with each woman, so as to allow the individual to decide whether the possibility of needing an unnecessary biopsy outweighs the possibility of diagnosing breast cancer while it is still curable.

But instead, the panel established Rule 2: Rather than allowing individuals to apply their own values when weighing healthcare decisions which reasonable people could decide either way, it is legitimate for the panel to make those decisions from on high for all patients; and furthermore, it is legitimate for the panel to make different decisions for different and arbitrary subgroups of patients (e.g., one decision for women 40 – 49 years of age, another decision for women over 50).

3) The USPSTF now recommends that women not be taught breast self examination (BSE). In point of fact, since most doctors stopped teaching BSE a long time ago, this recommendation will probably have little actual impact. But the panel came to this recommendation based on clinical trials conducted in backward, 3rd world healthcare systems (Russia and China), where outcomes with breast cancer have little to do with outcomes in the U.S.

Perhaps more to the point, a similar tactic was used in deciding to withhold mammogram screening for women under 50. That is, the “new randomized controlled trial” the panel invoked to justify this decision was conducted in England, where outcomes for the treatment of breast cancer are substantially – and famously – worse than they are in the U.S.

So Rule 3 is established: It is legitimate to take the results of clinical outcomes trials conducted in backward countries with poor healthcare systems, or in less backward countries which nonetheless have demonstrably inferior outcomes, and directly apply those results to coverage decisions affecting American patients who are being treated in the American healthcare system. This is like performing a careful statistical analysis of outcomes from a Pee Wee football league, then telling the New England Patriots to abandon the forward pass, because the percentages just aren’t there.

4) The USPSTF now recommends that women 75 and older not get breast cancer screening, despite the fact that (from the panel’s own words) breast cancer is the leading cause of death in this age group. The panel justifies this recommendation by noting that there are insufficient data from randomized trials in these patients, and further, that “women of this age are at much greater risk for dying of other conditions that would not be affected by breast cancer screening.”

It is, perhaps, convenient that very few randomized clinical trials assessing preventive measures have ever been conducted in elderly populations, and further, that if such trials were conducted, any actual benefit that might accrue to the subset of relatively healthy older people would be diluted by the inclusion of large numbers of less healthy elderly patients. And, while doctors usually have little problem identifying those healthy 75-year-olds who are likely to survive another 10 – 15 years, and in whom detecting early breast cancer would likely be beneficial, the large, long-term, randomized clinical trials “proving” to the satisfaction of the USPSTF that these women deserve screening will, for all practical purposes, never be done.

So, Rule #4: Preventive measures should not be offered to old people, because they’re probably going to die soon anyway.

Those who want to criticize DrRich  because they feel the USPSTF’s actual recommendations on breast cancer screening are appropriate may, of course, do so. But you will be revealing yourself as a dunderhead. For, as DrRich has just made quite plain, he is not necessarily criticizing the substance of the new recommendations, but rather, the dangerous methodologies the panel used to reach those recommendations, and the four new rules those methodologies have established. These precedents are very troublesome indeed – especially now that we’re no longer dealing with the quaint USPSTF of old. The new USPSTF has acquired broad new powers, and is no longer making mere “recommendations,” but rather, definitive coverage decisions which will directly affect all of us.

And this, it appears, will be the primary means by which our leaders will get out of providing us with all those robust preventive healthcare services they always insisted they were dying to implement.

Podcast:

 

 Some Powers of the Immutables [12:27m]: Play Now | Play in Popup | Download (10)

As DrRich helpfully pointed out in his last post, our new healthcare law (Section 3403) creates a new and apparently immutable entity called the “Independent Medicare Advisory Board,” whose job is “to reduce the per capita rate of growth in Medicare spending.” This, in fact, is the right goal. For it is the rate of growth in healthcare spending (and not the absolute amount being spent) that threatens us with societal disintegration within the next couple of decades.

But it is mathematically impossible to attribute this explosive growth rate in healthcare spending to waste and inefficiency. Most of that growth must necessarily be caused by healthcare expenditures that are actually producing some benefit (though, to be sure, some of that benefit is marginal). And this means that in order to reduce the rate of growth, we have to ration healthcare (i.e., to withhold at least some beneficial healthcare from at least some of the people who would benefit from it).

We can only conclude that, in order for the new IMAB to do its designated job, it must ration healthcare. But since the same law that creates the IMAB also stipulates that it must not ration care, the IMAB must necessarily perform that unavoidable rationing covertly. This is a very difficult job, as demonstrated by the fact that the private health insurers (even with the wonderful incentive of profits, and with the full support of Congress) have utterly failed to develop a sustainable business model based on the covert rationing of healthcare.

But still, this is the job that our leaders have now assigned to the IMAB. And so, DrRich has attempted to tease out some of the options which remain available to the Immutables as they embark on their difficult but necessary assignment of covertly rationing our healthcare. (As DrRich will shortly explain, the legal nomenclature for the IMAB is actually a bit confusing and misleading. So for clarity’s sake, DrRich will hereafter refer to this Board as the Immutables.)

DrRich has found, so far, at least three powers which our new healthcare law grants to the Immutables, that will give them at least a fighting chance at success.

1. The most fruitful pathway to covert rationing remains open to them.

The new healthcare law specifically does not allow the Immutables “to ration health care, raise revenues or Medicare beneficiary premiums. . ., increase Medicare beneficiary cost-sharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria.” While these prohibitions might appear on the surface to greatly limit the options available to the Immutables, in fact all this language does is to formalize their directive to ration covertly instead of openly. Since covert rationing has long been our society’s policy regarding healthcare, these prohibitions actually change nothing.

What is left to the Immutables, of course, is the most time-honored pathway to covert rationing – coercing the healthcare providers to place the needs of the payers ahead of the needs of their patients. DrRich has posted innumerable examples over the years showing how payers do this. He is confident that the Immutables will employ all the methodologies which have been devised to date for coercing providers, and (with the awful power of the sovereign authority behind them) they will invent some really useful new ones.

2. The Immutables have been granted near-dictatorial authority.

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

Indeed, one might get the impression that the main difference between the Immutables and this blog is that the former is appointed by the President, and has a travel budget.

Nothing could be further from the truth. Once the Chief Actuary of CMS determines that the projected per capita growth rate for Medicare exceeds the target growth rate, the Immutables are required to submit a “proposal” which will cut costs sufficiently to bring the growth rate back in line. Then, the Secretary of HHS is required to implement that “proposal” in its entirety, unless Congress acts to block implementation. However, Congress is forbidden from taking any action “that would repeal or otherwise change the recommendations of the Board,” unless it replaces those “recommendations” with its own legislation that would cut Medicare spending to the same target level.

For all practical purposes, then, the cost-cutting “recommendations” which the Immutables would “propose” for “consideration” will be implemented nearly automatically, with the full authority of the Federal government.

And, for all practical purposes, the Immutables will become a new agency of the executive branch, with near-dictatorial authority to cut Medicare spending as it sees fit.

3. The Immutables have been granted the authority to limit private health-care expenditures.

Those who paid attention to the process that brought us our new and transformational healthcare system might recall that the Senate bill, which ultimately became law of the land, was never designed to be actually implemented. It was designed solely to assure 60 votes in the Senate, after which the Joint Conference with the House was to meld the House Bill and the Senate Bill into a workable law.

As part of the negotiations to gain those original 60 votes in the Senate, five or six Democrat Senators cobbled together a list of amendments to the original Senate Bill – the so-called Manager’s Amendments. It is in the Manager’s Amendments that one can find such famous niceties as the bribes paid to Nebraska. But the Manager’s Amendments (which, contrary to the expectations of the actual Managers, are now part of our new healthcare law) contained lots of other stuff as well.

One of the more interesting parts of the Manager’s Amendments (Section 10320) is entitled, “Expansion Of The Scope Of, And Additional Improvements To, The Independent Medicare Advisory Board.”

Section 10320 (which can be found way down on page 2210 of the new law) grants the Immutables (beginning in 2015) the authority to limit all healthcare expenditures, and not just expenditures by Medicare or government-run programs.

To emphasize this expanded authority, Section 10320 changes the name of the Immutables from the Independent Medicare Advisory Board to the Independent Payment Advisory Board. It directs the Immutables (and now readers will understand why DrRich has resorted to this more descriptive name), at least every two years, to “submit to Congress and the President recommendations to slow the growth in national health expenditures” for private (non-Federal) healthcare programs. Furthermore, it allows that these “recommendations” may be implemented by the Secretary of HHS or other Federal agencies administratively.

Ostensibly, the justification for this expansion of the Immutables’ authority is that controlling private healthcare expenditures will directly impact Medicare, since the “target” Medicare growth rate which the Immutables are charged with achieving will be determined by overall healthcare expenditures. More practically, if Medicare patients (who are subjected to arbitrary cost-cutting measures) see their younger counterparts enjoying less restricted healthcare, the old farts are likely to become rowdy. But DrRich suspects there was an even stronger reason to give the Immutables this authority over private healthcare expenditures.

DrRich has often speculated that the real fight regarding healthcare reform will come when the government attempts to limit the ability of American citizens to spend their own money on their own healthcare. This limitation is absolutely necessary if we’re to have a single-payer healthcare system, since if you can spend your own money on your own healthcare, that would be at least two payers. (It would also be “unfair.”)

Many of DrRich’s readers think it’s absurd to think we’re headed toward a single-payer system. DrRich hopes these readers are correct. But he also thinks there’s plenty of evidence that some of our leaders are intentionally taking us there. The new healthcare law, at least arguably, is entirely consistent with such an ultimate goal. And if we are ever to have a single-payer system, the government ultimately will need the authority to limit private expenditures.

DrRich does not believe that the Immutables will act immediately to limit the ability of private citizens to spend their own money on their own medical well-being. Such an action would create a great uproar today, and likely for several years to come, at least until those of us who still cling to the quaint notion of individual autonomy are finally worn down, or re-educated, or otherwise made to see the light.

But whenever that time comes, Section 10320 of the new healthcare law appears to give the Immutables all the authority they will need.

(At the same time, those who castigate DrRich for paranoia might consider reading just how far our healthcare system has already come in limiting the prerogatives of individuals.)

Podcast:

 

 Healthcare Reform Explained - An Updated Guide For The Perplexed [15:42m]: Play Now | Play in Popup | Download (5)

Now that the great campaign to transform the American healthcare system has passed a critical milestone – the passage of President Obama’s healthcare reform legislation – many Americans find themselves confused about what it all means. What just happened here? What will happen to our healthcare insurance? How much will it cost, and who will pay for it? Why does the whole process seem so darned difficult and confusing?

The confusion is quite natural, since, in fact, nobody really understands what the new legislation says. It is common knowledge that only one or two of our legislators actually read the whole 2700 pages, and those who did only read it so they could make trouble for the President at his Bipartisan Healthcare Roundtable this past spring. (You know who you are, Paul Ryan.)

Remember when Nancy Pelosi said, “We have to pass the bill so we can all find out what’s in it,” and all the Republicans jumped all over her for making such a stupid remark? Well, DrRich is here to tell you that Nancy was displaying uncommon wisdom. Because DrRich now has read large parts of the legislation himself, and can say with confidence that the bill is not merely lengthy, convoluted, and difficult to understand. Rather, its meaning is fundamentally indeterminate.

The indeterminacy of the bill’s language was, of course, intentional. It was done so that, for instance, some legislators could be assured that the bill disallowed Federally funded abortions, and other legislators could be assured that the bill encouraged Federally funded abortions, while the actual language of the bill could be construed to bolster either assertion. Therefore, Speaker Pelosi’s silly-sounding statement was not only correct, but also was probably the most insightful commentary on the bill we’ve heard from any public official.

The bill is now being torn into bits by multitudes of officious bureaucrats, and translated into millions of pages of rules, regulations and guidelines, and then key aspects of those new rules, regulations, &c. will be fought over in courts of law. Once all that is finished, we can all find out what was in it. Just like Nancy said.

In the meantime, whatever the details of our new healthcare system turn out to be, there is a certain clear narrative to our ongoing healthcare saga that, once you understand it, will go a long way toward enlightening you about what’s really going on.

And so, as a public service, DrRich will now explain all this to you in a very simple way, so that – whatever jive you’re hearing from politicians or journalists – you will always get it. For, once you understand a few key concepts, this thing is really pretty easy to follow.

The Fundamental Problem

The fundamental problem with American healthcare is this: None of the pools of money we have created (or ever could create) to pay for our healthcare – whether those pools of money reside with the insurance companies or the government or both – can possibly buy all the healthcare that might benefit all Americans. This means we have to ration healthcare (i.e., intentionally withhold at least some beneficial healthcare from at least some of the people who would benefit from it). But because we’re Americans and Americans don’t ration, we (and in particular, our political leaders) are unable to address this need to ration openly and forthrightly. Therefore, the unavoidable rationing is being conducted covertly.

Until now, most of the covert rationing has been overseen by the health insurance industry. This, indeed, from the very beginning was the primary purpose of modern health insurance companies, as determined by Congress itself when it legislated the formation of HMOs. (See the ruling of the U.S. Supreme Court in Pegram et al. v. Herdrich (98-1949), 530 US 211, 2000.) So, when the health insurers engage in cherrypicking patients, denying medically necessary services, coercing doctors to ration at the bedside, retrospectively canceling the policies of patients after they get sick, and doing everything short of dispatching teams of Ninjas in the dark of night to slaughter some of their more expensive subscribers in their sleep, they are not really being evil. They are only carrying out the job that had been assigned to them by our society. Covert rationing is a dirty, thankless job, but somebody’s got to do it.

The major sin of the health insurers is that, despite their Herculean efforts to harness covert rationing to control costs – and despite the wondrous incentive of greater profits if they do so – they have utterly failed in their assignment. Healthcare costs continue to rise at 3 – 4 times the rise in the cost of living, and within the next couple of decades promises to bring our republic to its fiscal knees (even without all the other stuff that’s making our deficit explode).

This is the healthcare crisis, and it’s real. We simply cannot actually spend $40 trillion on Medicare patients over the next three or four decades (as we’ve explicitly promised the baby boomers). The only real question is whether we will avoid spending all that money thanks to societal disruption and revolution, or by some more civilized means. (The fiscal implosion of our society would of course finally fix our healthcare crisis. Healthcare, far from being an essential and indispensable human need, actually is a luxury, a recent artifact of our advanced, stable, and affluent culture. Runaway healthcare costs, by bringing down our societal stability, will eventually provide its own cure.) Our current “healthcare reform process,” such as it is, is our stab at a more civilized means of addressing our looming impossible fiscal obligations.

What Is Healthcare Reform Actually Going to Reform?

What we are witnessing today is merely a rather messy changing of the guard. The primary responsibility for covert healthcare rationing is going to shift from the health insurers to the government.

The health insurance industry has run out its string. They have had 15+ years of virtually unfettered opportunity to get healthcare costs under control, and they have utterly failed. Over those 15 years, their attitude has evolved from arrogance to concern to abject fear. They finally and starkly realize that they have no clue as to how to control costs. As DrRich has pointed out for three years, the insurance industry has not been looking to block healthcare reform, but rather, was partnering with the reformers in the hope of finding for themselves a graceful exit strategy. They hope to gain one last windfall in profits and stock prices (from mandates and insurance subsidies for the tens of millions of currently uninsured Americans), and once that happens, they hope to settle into the business of administering, and processing transactions for, government controlled healthcare. That is, the insurers hope to become public utilities, since that’s way better than collapsing into oblivion.

So the overriding aim of healthcare reform, with the complete support of the insurance industry, is to conduct an orderly transfer of the pools of money with which we pay for our healthcare – along with the responsibility of managing “risk” and controlling the cost of care (i.e., covert rationing) – away from private insurers and to the government.

Understanding the Players

Government control of healthcare, of course, is precisely what the Republicans accuse the Democrats of wanting, and what the Democrats angrily deny they want.

Understanding the Republicans. Republicans as a group cling to the quaint notion that competition among insurers is all that is needed to reduce healthcare costs; that given the right market incentives, the insurance industry – in its wisdom – will bring healthcare inflation under control. They utterly fail to hear what the insurance companies themselves have said (by their actions): “No mas!”

The Republicans’ arguments ring hollow. It is useless to protest that the Democrat plans will lead to rationing, when not only do we already have rationing, but covert rationing in fact has been the official cost-cutting “plan” assigned to HMOs for decades now. It is useless to protest that 85% of Americans like their current health insurance, when the fiscal reality is that health insurance will change drastically for all Americans over the next decade or so, whether we change it by design or not. It does not matter that a lot of Americans like the health insurance they have now. Keeping it over the long term is not an option.

To a very large extent (DrRich is sorry to say, what with his conservative leanings and all), with such arguments the Republicans have made themselves nearly irrelevant in the current discussion.

Understanding the Democrats. The Democrats were handed the opportunity of a generation. They had a major advantage that Democrats of the Clinton era did not have: the health insurance industry is finished, and the industry knows it. The insurance industry was not going to let this effort fail.

The chief difficulty remaining for the Democrats is that (for their own survival) they must pretend they are not engineering a government takeover of healthcare, when in fact they are. As we have seen, there is not really much choice here. They must take over healthcare even if they don’t want to (though many of them do), because the health insurance industry is finished. The pretense is necessary, however, because the notion of government-controlled healthcare is not something the people – or even many Democrats – want, or are willing to tolerate.

Like the odious job of rationing healthcare (which they have now inherited in entirety), the Democrats must attempt to keep the complete government takeover of the healthcare system as covert as possible.

Which brings us to the biggest problem of all for the Democrats. They now have to take control of covert healthcare rationing. Covert rationing will be much more difficult for a government-run system than it has been for insurance companies. A government healthcare system will not have the opportunity to incorporate the most effective rationing techniques that have been available to the insurance industry – cherrypicking patients, for instance, or canceling the policies of people who get sick. Nor will the government be able to get away with summarily denying patients needed medical services – a standard tactic of HMOs. This is especially true now that chief Republican intellectuals have called everyone’s attention to the possibility of death panels. The unwashed masses, having been duly alerted to the government’s intentions of withholding life-saving healthcare, will now be on the lookout for “unreasonable” denials of care. Any move by the government to refuse to pay for a particular medical service will have to be supported by extremely convincing clinical data (which itself will be very expensive to collect), and even then Americans may not quietly accept such denials. The “death panel watchdogs” will be alert for every move the government makes, and will be quick to howl an alarm.

So the Democrats have won a huge and historic victory. But they are just beginning to figure out what a tiger they have by the tail.

The Bottom Line

As long as we pretend we don’t have to ration our healthcare, any reforms we invent – whether we do it as Republicans or Democrats – will merely add to the confusion, inefficiency, waste, inequity, and ineffectiveness of our healthcare system. How anyone can think that a process so fundamentally grounded in obfuscation and deception as the one we’ve just witnessed will result in anything good is quite beyond DrRich’s comprehension.

Real reform would require us to:

A) Minimize the necessity of imposed rationing by having patients themselves make as many of the spending decisions as possible, using their own money. (Subsidies could be provided to people who don’t have enough of their own money to pay for routine healthcare.)

B) Provide everyone with a high-deductable, catastrophic insurance product to cover non-routine medical expenses. This is where the necessary rationing would take place, but the rationing would be open, transparent, and determined through a public process.

C) Create a private market for “extra” health insurance for those who choose to supplement the universal catastrophic plan with their own funds.

But of course, any plan that relies on both personal responsibility and open rationing is a non-starter. Which is why we are going to get what we are going to get.

Loyal readers will know that DrRich has long believed that passage of healthcare reform was inevitable – but not because the President wanted it, or because Democrats controlled Congress, or because the people wanted it. It was inevitable because the American health insurance industry absolutely needed it.

Health insurance companies find themselves at the place in their industry’s life cycle where, for the very first time, they have to try to make a profit by actually taking care of sick people. They have never done that successfully, and never will. They have tried every underhanded trick imaginable to avoid paying benefits to their subscribers, and have already raised insurance premiums to the very breaking point. But patients are getting older and sicker, and expensive drugs and medical devices and other technologies keep coming on line. The insurance industry’s profit margins (already small) are rapidly eroding. Its business model is irreparably broken. What the health insurers need more than anything else is a graceful exit strategy – whether it’s a buyout from the government, or a conversion to a public utility. And the only way they’re going to get such an exit strategy is through a fundamental reform of the American healthcare system. Hence, this is what they must have.

It is already difficult to remember how remote the possibility of healthcare reform seemed only two months ago, immediately after the election of Scott Brown in Massachusetts. Conventional wisdom at that time was that the kind of sweeping reforms the President wanted (and that we’ve now received) had become impossible. And the President himself seemed to confirm that opinion in his State of the Union message, in which he gave healthcare reform only a few, almost wistful paragraphs, and only after talking for 20 minutes about more pressing concerns. NPR’s take was, “Obama Treads Lightly On Health In State Of The Union,” and reported that the President seemed now “willing to reopen the discussion to accommodate better ideas on how to remake the nation’s health system.”

DrRich believes he was the first to point out, on February 18, that the health insurance companies, faced with a broken business model and in imminent crisis, would not allow healthcare reform to die, and must necessarily act in some dramatic way to resurrect it, and indeed – with the announcement of a 39% premium increase by Anthem Blue Cross in California – had just done so. While other, more mainstream pundits entirely missed its significance, DrRich patiently explained to his readers that Anthem’s ostensibly ill-timed announcement was actually a purposeful strategy, carefully calculated to inject new life into healthcare reform. And of course, it worked.

Now, belatedly (i.e., on March 20), lesser pundits (such as those who work for the New York Times) have come around to DrRich’s way of thinking, and have pointed to the Anthem announcement as a major turning point in the healthcare reform saga. Indeed, some reporters (who, admittedly, are even more on the fringe than DrRich) claim to have uncovered a conspiracy, in which Angela Braly (the CEO of Wellpoint, parent company of Anthem) is claimed to have actively conspired with the Obama administration to save healthcare reform.

This is an interesting allegation, but DrRich generally does not believe in conspiracies, at least, not in conspiracies which are larger than those necessary to cheat at bridge. The fact is, one does not need to invoke any kind of conspiracy here. Anthem/Wellpoint was merely acting in its own corporate best interests. If their announced rate hike proved insufficient, we would have heard of even more astounding rate hikes by other insurance companies. Whatever it took.

DrRich has been saying since 2007 that the health insurance industry, more than any other player in the healthcare system or in the government, absolutely needed healthcare reform, and needed it now, and for that reason alone, in one way or another, we would get healthcare reform.

And that’s exactly what happened.

DrRich is not smart enough to predict what specific bribes, threats or subversive parliamentary maneuvering will finally win passage of the President’s healthcare reform. However it comes about, DrRich thinks the result will be bad.

DrRich arrived at this opinion through a long process, lasting many years, that changed his thinking on the proper role of our government in our daily lives. One key event within this long process, which he related in his book, first opened DrRich’s eyes regarding the essential benignity of our government as it administers its assumed role as guardian of the people’s healthcare.

DrRich reproduces this vignette here:

One afternoon in June of 1994, I was summoned to a meeting by a vice president of the hospital for which I worked at the time. Meetings, especially unannounced ones, are the bane of employed physicians; but this one, I was led to understand, was mandatory.

I found the meeting room filled with high-ranking hospital administrators, hospital attorneys, and my clinical chairman. A gathering of luminaries such as these, especially on short notice, was decidedly rare. As I walked into the room all eyes were on me. I knew all these people; they’d been my friends and colleagues for years. We’d been fighting the healthcare wars side by side. But now they studied me as if seeing me for the first time.

“Who died?” I asked, just to break the ice.

“To be determined,” responded one of the lawyers.

They got right down to business. The chief hospital attorney explained: The federal government, in the guise of the Office of the Inspector General (OIG), had launched a major investigation of allegedly improper Medicare billing practices related to the use of investigational implantable cardioverter defibrillators (ICDs) in the late 1980s. This investigation, I was told, had begun as a whistleblower law suit out on the west coast, and the feds were now expanding their inquiry. The OIG had just subpoenaed records from approximately 120 of the largest hospitals in the country that implanted ICDs. We were one of the 120.

Now I understood why I was here. As Chief of Cardiac Electrophysiology, research with the ICD was one of the major endeavors of my career. The ICD is a device that is designed to prevent sudden death in patients whose cardiac disease makes them susceptible to such an event. Once implanted, the ICD recognizes the sudden, lethal heart rhythm disturbances that cause nearly instant death, and automatically delivers a shock to the heart to restore it to a normal rhythm. It is a remarkably effective device, and was obviously so from the very beginning. Seldom, in fact, has a more dramatically effective life-saving therapy ever been devised for any illness or disease. For this reason, as long as I had access to these devices I (and most electrophysiologists), felt morally obligated to offer them to any eligible patients who were at high risk for sudden death.

So now I understood why I had been summoned to the meeting. What I didn’t understand was why the Feds thought we’d done anything wrong.

“We shouldn’t have any problems there,” I protested. “You’ll recall that we looked into the legality of billing for ICDs back in ’87 when I first started working here. And Medicare said it was okay.” While I was an employed physician (and so the hospital handled all the billing for my services), I’d had enough concern about billing Medicare for investigational devices that I’d insisted the hospital get clarification from our Medicare Intermediary (the local agent and representative for Medicare) on the matter.

One of the attorneys answered. “That’s right. The Medicare Intermediary indicated at the time that there was nothing illegal about billing for the ICDs, but couldn’t guarantee they’d pay for them. As it turns out, they’ve paid for each one we’ve implanted, and never questioned our using them.”

“Then what’s the problem?”

“Medicare now says we’ve been in violation by sending the bills,” the lawyer replied. “There’s apparently an obscure instruction in the Intermediary’s guidebook that prohibits billing for some investigational devices.”

“But we got clearance from the Intermediary,” I protested.

“And that’s the defense we’ll take. The Intermediary itself didn’t know about this instruction. But unfortunately, Medicare operates a little like the IRS. If you call the IRS with a tax question and they give you bad advice, it’s your fault if you follow that advice. The fact that the Medicare people were unaware of their own rules, and apparently told us the wrong thing, doesn’t absolve us.”

“So what’s the worst case scenario?” someone asked. “That we’ll have to pay all the money back?”

“The monetary penalties are much worse than that,” intoned the CFO. “We’re looking at over 100 investigational ICDs that the good doctor here has implanted,” he said, glaring at me. “And at about $25,000 each, that’s a pretty penny right there. But the Feds are also talking about a $10,000 fine per incident, plus triple damages, so we’re really looking at several tens of millions of dollars we can’t afford. What’s worse, the fact that the OIG joined the whistleblower’s actions suggests that they’re going to claim we intentionally violated Medicare regs – which could mean jail time.” He was looking at me again when he said “jail.”

“Don’t worry,” a vice-president said to me sympathetically. “We’re all in this together. We’ll help you as much as we can.”

“What do you mean, you’ll help me?” I shot back. “I just work here. You do all the billing, keep everything you collect, and pay me a paltry salary.”

“Like I said, we’re all in this together. But those bills do go out under your name, Dr. Fogoros. As far as Medicare is concerned, they’re your bills.” As I’ve since learned, when the feds begin pointing their fickle finger, it’s customary for everybody to dive for cover.

For the next two years my life was plagued by a series of complex machinations – legal probes and parries – made in response to the Feds’ investigation of our supposed “fraudulent” submission of bills. I won’t bore you with the details – I’ll just hit a few highlights.

First, my hospital threw in with two dozen other large hospitals from all over the U.S. that were also affected by the OIG’s subpoena, and together we hired a fancy inside-the-beltway law firm that specialized in healthcare law. These attorneys ultimately determined that the obscure regulation the OIG was invoking against us had itself been illegally promulgated, and therefore should not be enforceable. Accordingly, our hospitals sued Donna Shalala, Secretary of Health and Human Services (HHS) in federal court to prevent her from enforcing this obscure, previously unknown, and (we held) illegal rule. “We have maybe a 50-50 chance of winning this suit,” I was told by one of our attorneys, “but it won’t be settled for years.”

While all this was going on, the subpoenaed hospitals also lobbied Congress to act on the essential unfairness of it all. “Look,” the hospitals said, “we’ve got one agency of the federal government (Medicare) coming after us for doing research that had been duly approved by another agency of the federal government, the Food and Drug Administration (FDA). We need laws to make the Feds behave consistently. When the FDA approves clinical research, Medicare should allow patients to avail themselves of that approved research.” Finally, in November of 1995, Congress passed just such a law. “So we’ve won!” I exulted when the hospital attorney called me with the good news. “Not exactly,” was the reply, “The OIG prevailed on Congress not to make the law retroactive. So the OIG is still coming after us for what they say we did in the 1980s.”

Then, in January of 1996, the Feds launched a new attack. Senator Roth, Chair of the Senate Finance Committee, decided it would be in somebody’s best interest to have a showcase hearing, highlighting the grievous crimes against Medicare that are being promulgated by avaricious physicians and institutions like me and mine. So the Permanent Subcommittee on Investigations sent subpoenas to the CEOs of several hospitals from the OIG’s list of 120, mandating that they appear before that committee on Valentines Day (i.e., heart day) to answer questions regarding the allegations that we’d committed Medicare fraud in our use of the ICD. It was to be a real circus – it was to be covered on C-SPAN, with major networks in attendance and lots of national publicity. The works.

Immediately, there was a mad rush to have the subpoenas quashed. All the hospitals from states whose Senators were members of the Finance Committee managed to be excused from appearing. At the end of the day, only four hospitals remained. Mine was one.

I was sure my career had ended. My family, friends, patients and colleagues were about to see the CEO of my hospital appearing before a hostile Senate Investigational Committee answering questions on the Medicare fraud that I supposedly had committed. I knew it didn’t matter that I hadn’t done anything wrong. Truth is only a compilation of some facts, whereas perception is everything.

I spent two days in Washington helping the fancy beltway lawyers prepare our CEO for his testimony. I failed miserably in my emotional pitch to be allowed to testify in his stead (the CEO had been subpoenaed, not me; and besides, anyone who seemed eager to testify before Congress must be crazy enough to get us in trouble). But at least I managed to convince the CEO that we should take a hard line with the subcommittee. After all, we had truth, righteousness, ethics, and possibly even the law on our side. We shouldn’t allow ourselves to be intimidated.

Each witness was to be permitted to read a statement into the record before the questioning began. Our attorneys had prepared a 10-page statement that was vague, wishy-washy, filled with legalese, and as nearly as I could tell, didn’t deny wrongdoing as much as it promised we’d be more careful next time.

So I prevailed on the CEO to tear up this lawyered-up document and instead use a one page statement that I wrote for him, saying, in essence: 1) We implanted investigational ICDs in Medicare patients because they were at high risk of dying without them, and to withhold such life-saving devices when they were available to us would have been unethical and would have constituted malpractice. 2) Before implanting the investigational ICDs, approval for their use was obtained through the FDA. 3) Before billing for the investigational ICDs we asked for and received clearance to do so from our Medicare Intermediary. 4) The records and documents we sent Medicare in support of our billing for these ICDs clearly indicated that the devices were investigational, and yet Medicare reimbursed us each time, over a period of several years and without questioning our actions or our bills. 5) The rule Medicare is now invoking was unknown to us during this period of time, and also, apparently, was unknown to the Medicare Intermediary. 6) In any case, as we have asserted in federal court, that regulation was illegally promulgated, and is therefore not a legal rule. 7) Congress has agreed that regulation to have been at least an ill-advised one, as evidenced by the fact that Congress recently passed legislation that now renders that regulation illegal, whatever its previous legality. 8] If they now assert that our actions constitute fraud, then the message the OIG, Medicare and the Senate subcommittee is sending to the public is that doctors and hospitals are expected to discriminate against the elderly, and will be called to task by the federal government if they refuse to do so. 9) Thank you for your attention.

The hearing was indeed quite a show. The whistleblower himself was the first witness, and he entered the chamber wearing a hood to hide his face, sat behind a screen, and spoke with his voice electronically distorted. This was the first time in history, I was told, that a witness had appeared before Congress disguised in this way, except in hearings featuring Mafia turncoats, drug lords, and the like. The implication, I presume, was that I and my fellow cardiac electrophysiologists were no less evil or potentially violent than other, more famous sorts of felons; and that if we learned this guy’s identity his life wouldn’t be worth a nickel.

Then it was us perpetrators’ turn to testify. The CEOs of the other three subpoenaed hospitals, after reading their lengthy, lawyerly and seemingly contrite statements into the record, were grilled mercilessly by the Senators of the subcommittee. Our CEO was the last witness. Once he read our brief but much more aggressive statement, the Senators seemed not to have any substantial questions for him. His testimony was over almost before it had started. Our hard line had paid off.

One more blessing occurred on that day. Somebody apparently found some Whitewater documents that weren’t supposed to have existed, so ten minutes before the hearing, C-SPAN pulled out and went running down the hall to televise the Whitewater doings. All the other news media went with them. Our hearing, despite the big build-up, the dramatically disguised whistleblower, and the fact that it was Valentine’s Day, barely made the news. The lack of national news exposure (and as a result, the lack of local news coverage) spared my reputation and that of my hospital.

Then finally, later in 1996, a federal judge ruled in our favor in our suit against HHS – the regulation Medicare was invoking, the judge ruled, had indeed been illegally promulgated. The OIG still didn’t give up, but in the end offered a settlement deal to the hospital for a mere million or two (which, by this time, was less than we had already spent defending ourselves), and nobody would have to admit to wrongdoing or go to jail or have a criminal record.

DrRich is not complaining. This episode could have turned out a lot worse. And the whole ordeal provided him with enough amusing anecdotes to last a lifetime. But having the Feds coming after him for more than two years was truly an eye-opening experience.

As DrRich sees it, the rightness of his actions seemed completely obvious. He had used those ICDs because his high-risk patients needed them, and from every indication their usage was legal and proper. But, in the service of his patients he had failed to discover a vague, obscure and difficult-to-interpret rule that existed in the Medicare Intermediary’s guidebook (a guidebook to which he had no access). As a result DrRich had been caught up in the Fed’s great anti-fraud initiative.

For over two years DrRich could never be sure of what was going to happen to him. There were periods of days at a time, usually just after another round of legal punches and counter-punches, when there was little else he could think of. (Would he lose his job, his career, his reputation, all his worldly possessions – would he go to jail?) During those times DrRich was of little use to anybody – colleagues, family or patients.

Of course, in the end it all turned out just fine – but the reason for the favorable outcome wasn’t that the Feds finally agreed that DrRich’s actions had been appropriate and non-fraudulent. It was because his lawyers had found a legal technicality in the Fed’s own actions. Had it not been for this entirely fortuitous discovery, who knows what might have happened?

So DrRich has seen a side of the Feds that most doctors have not, and he is willing to admit to a more robust paranoia on the subject than most would have at this moment. The way it looks from here, the government – at least sometimes – is willing to go to great lengths to prove just how rife with fraud is our healthcare system, and, once the Feds set their sights on an alleged perpetrator, they are pleased go to equally great lengths to bring that supposed perpetrator down. At least sometimes they’re willing to base their prosecution on bad rules that are poorly written, illegally promulgated, and hidden away in obscure manuals; they’re willing to ignore the fact that the alleged perp had relied on advice from the Feds’ own agents before proceeding; they’re willing to summon that perp before a televised, circus-like inquisition to be publicly humiliated for actions that, just a few months earlier, they themselves had passed explicit laws to endorse; and they’re willing, when all legal justifications for their persecutions have at last been taken away, to make a final demand, that some might consider extortionate, for a cash payment before they’ll go away.

At least, that’s how it looks from here.

It is not DrRich’s position that the Feds have been engaging in an unmitigated orgy of illegitimate anti-fraud activities over the past dozen years or more. He is sure they have not. Indeed, most of the anti-fraud activities the Feds have undertaken have undoubtedly been legitimate and useful. Furthermore, DrRich fully understands that any get-tough government initiative – whether it be anti-fraud or anti-terror – has got to have teeth, and that it is natural if regrettable that occasionally, a few innocents will be ensnared in such efforts. DrRich admits the possibility that his frightening experience may represent nothing more than the collateral damage that will naturally happen whenever the sovereign power finds it necessary to wield its great hammer in the overriding interest of the public good.

But forgive DrRich if he believes it is more likely that the experience he has just related represents instead an early glimpse into the government’s methods of intimidating and controlling doctors who, without these kinds of necessary checks, will, in caring for their patients, simply keep doing whatever they’d like with the government’s money. DrRich happens to believe that the utter unpredictability, arbitrariness, doggedness and seeming absurdity of the government’s actions in his own case was not accidental. These techniques are essential to the Feds’ goal of keeping their prey (i.e., physicians) intimidated, completely off balance, and in their thrall.

As evil as we all know the health insurance industry to be, DrRich (and any physician who knows anything about it) would much rather attempt to appeal to/defy/maneuver against/manipulate private insurers for the benefit of their patients (since the worst these entities can do is withhold payment), than do anything whatever – either for the patient’s benefit or for any other reason – that would risk engendering the enmity of the great, slavering, merciless sovereign authority.

Just a thought, as we embark on our new government-controlled healthcare system.