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.

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 How Fat People Reduce Global Warming [15:25m]: Play Now | Play in Popup | Download (64)

When DrRich was a little tyke, he always loved it when Uncle Harry came to visit. Uncle Harry was a large, rotund man with a ready smile and a jolly laugh, who was genuinely delighted to spend hours entertaining little DrRich and all the other children with his jokes, stories, magic tricks, and samples from the large stash of candies he always kept in his coat pockets. We all loved Uncle Harry.

But we were deceived.

Little did DrRich know, in his youthful innocence, that far from being the cheerful and beloved amateur prestidigitator delighting us with his his egg trick, Uncle Harry was actually a menace. For Uncle Harry was obese.

We now know, of course, that obese people, through their gluttony, sloth and lack of self-control, are causing untold harm to our society. They are unpleasant to sit next to on buses and airplanes. They use more than their rightful share of healthcare resources. They snore. They cause excessive tire wear (and if they sit in the same seat all the time, the tire wear will be asymmetrical, probably leading to an increase in automobile accidents).

And now, thanks to a recently published academic article, we know that the obese are largely responsible for global warming.

That global warming is taking place, and that it is being produced by mankind, of course, is a settled issue. DrRich is led to understand that a great council of hand-picked environmental scientists, taking a lesson from the Council of Nicaea, has met and has decreed it to be so. The entire body of scientific evidence has been formally considered, and like the Holy Scripture has been carefully locked down into its final form, and has been divided into orthodoxy (the study of which is holy) and heresy (the study of which leads to perdition). And having accomplished this task, the scientific community will hereafter countenance no dissension on the matter, and will admit no further debate or even any further data (unless it is corroborative data). For this is how science is supposed to work, at least for matters as critically important as global warming.

DrRich calls it Environmental Scholasticism, and believes it is about time we returned to a system of thought that was good enough for some pretty important Saints. The notion that scientific viewpoints should never be considered “closed,” and should always be open to challenge as new evidence and new ideas come to light, is a relatively recent invention initiated by the likes of Galileo and Newton, and has led to nothing but trouble (such as, for instance, global warming).

In any case, now that we know once and for all that global warming is man-made, it behooves us to figure out which men (and women) are causing it. And now, according to two eminent scholars at the Department of Epidemiology and Population Health, at the London School of Hygiene & Tropical Medicine, we know that among the chief culprits are the fat. That is, fat people, through the office of their obesity itself, are responsible for a significant degree of the carbon emissions that are unarguably (and officially) destroying our planet.

This fact, heralded by radio and newspaper reports proclaiming, “Fatties Cause Global Warming,” was revealed in a “scientific” paper written by Professors Edwards and Roberts and published by the prestigious Oxford Press in the International Journal of Epidemiology.

The paper really ought to be perused directly to appreciate the elevated level of scholasticism employed by the authors, which would make even Thomas Aquinas and Albertus Magnus themselves sit up and take notice. For this paper, which indicts a whole class of individuals with the supreme crime of global warming, a crime whose disastrous effect on our planet eventually will make the atrocities perpetrated by even Hitler and Stalin seem mere trifles in comparison, reaches its conclusions without ever offering even one tiny glimmer of actual data or evidence.

Rather, the authors rely (as true scholastics must) on the approved body of scientific work, choosing from that body an array of assumptions based on bits of sanctified data from physiology here (e.g., Basal Metabolic Rate = 11.5 X body weight in KG + 873kcal), and behavioral science there (e.g., that the average daily activities of humans consists of 7 hours sleeping, 7 hours of office work, 4 hours of light home activities, 4 hours sitting, 1 hour standing, 30 min of driving and 30 min of walking at 5 km/h), then applying these bits to an incredible chain of assumptions and estimations, to demonstrate that the negative impact of the obese on our society goes far beyond what we currently think. Indeed, through such machinations it can be concluded that the obese are melting the ice caps, killing polar bears, flooding the seacoasts, and turning our farmland, forests and fields into hot, dry, desert.

Anyone with a cheap telescope can conclude from all this that Martians, when they existed, must have been really fat.

This information, of course, will come in very handy when we are forced at last to reduce our healthcare costs, and we find we need somebody to blame. We can already discriminate against smokers with a clear conscience. And now discriminating against the obese can be accomplished not only with a clear conscience, but with a sense of duty. For, far from merely costing the healthcare system a lot of money, they are killing us all and ruining our planet.

Indeed, DrRich himself was sharpening his pitchfork, when a thought occurred to him.

The paper in the International Journal of Epidemiology comports to the classical scholastic practice of “lectio,” whereby a learned person expounds on a certain interpretation of the approved texts, and allows no dissension or questioning. But scholasticism also offers a process for “disputatio,” whereby alternative interpretations of the approved texts are permitted to be offered, and the two viewpoints are then subjected to logical analysis through which the truth is determined. (Though in classical scholasticism, the “truth” is ultimately determined by the scholar who delivered the original lectio, and the disputant is put in his/her place.*)

So in the spirit of Environmental Scholasticism (but for the ultimate purpose of discovering whether the healthcare system ought to cure, ignore or euthanize the obese), DrRich would like to propose an alternative interpretation of the argument that the obese are causing global warming. That is, he will offer a disputation.

The logic of the two eminent scholars Edwards and Roberts, once you wade through the incredible morass of scientific-sounding language they have produced, essentially rests on two arguments. First, that the obese require more food energy for their basal metabolic requirements, and second, that because they are so fat they travel in cars (and very big cars at that) much more than normal people do. For these two reasons the obese produce way more carbon emissions than they are supposed to. The authors go on to calculate the excess carbon emissions produced by the obese via the aforesaid impressive chain of assumptions and estimations, and the magnitude of that excess shows us plainly that the fat are largely to blame for global warming.

This is when it occurred to DrRich that both of the basic arguments of Professors Edwards and Roberts can be easily countered, well within the bounds of the scholastic arts, using only the approved texts and without introducing any new (which is to say, heretical) data.

So, to their lectio, DrRich advances this disputation:

First, DrRich asserts that while the basal metabolic rates of the fat are indeed higher than those of the thin, one reason the thin are thin is that their non-basal metabolism is high. That is, often they habitually engage in exercise, even running marathons and triathalons, which burns many calories and produces much CO2. Scientific studies have shown that the obese tend to be still, serene, relatively inanimate. On the other hand thin people are fidgety, they pace about, wave their hands, bounce their legs, and excrete much CO2 through largely habitual and non-useful activity. Perhaps we should punish the calorie-burning thin rather than the fat. At least when the obese burn calories they are generally doing something useful.

Second, while thin people do ambulate more than the obese (indeed, this is DrRich’s first point), the assumption that the obese must make up that mileage by driving cars is entirely ridiculous. The thin actually drive far more than the obese, because they have places to go and things to do, and they’re in a hurry to get there and do it. In contrast the obese are efficient in their movements, they preserve their energy. Thus, they do not drive to the grocery for a pint of milk on a whim. They plan their trips carefully, and shop for the entire week with one trip. There is no evidence that the obese require more support from internal combustion engines than do the thin, and simple observation in fact suggests the opposite.

DrRich could, with some effort, produce a paper just as scientific-sounding as that of the Professors to “prove” his points, but will not do so here. Instead, he will just state his points as bald assertions – which (despite all the fancy math they attached to it) is just what his opponents have done.

DrRich maintains that his two assertions – which entirely counterbalance those of his opponents – make his argument equally compelling to theirs. So thus far we have a draw. But DrRich’s third assertion, which follows, wins the day.

To wit: The obese are unarguably sequestering carbon.

Storing fat, in fact, is simply a relatively efficient way to store carbon. The obese consume massive amounts of carbon in the form of food, and then they fail to burn it off (unlike thin people, who convert their food to CO2 immediately through their habitually wasteful activities). Instead, the obese store their carbon intake in massive reservoirs of fatty tissue, taking it out of circulation forever, and removing it from the carbon cycle which (we find) is so fatally damaging to the earth. Indeed (at least according to the zero-sum crowd for whom redistribution is invariably the answer to all problems), the more food consumed by the obese, the less food remains available for the thin people who would just go ahead and metabolize it, with all their jogging and whatnot, excreting lots of excess CO2 in the process.

When we finally institute our cap-and-trade economy, the obese should get a tax break based on their weight.

Carbon sequestration, of course, is one of the holy grails for environmentalists. Lots of methods for sequestration have been proposed, but none seem particularly practical. One method that has been considered is called “Biomass Burial,” in which we would take some form of biomass (plants have been the main source proposed) and bury it under the earth. The carbon from the buried biomass will stay in the ground, and will not contribute to global warming, at least not for a long time. (This is how fossil fuels were formed in the first place.)

As long as we insist that fat people are buried (preferably after they die), and make cremation of the obese illegal, then putting the obese into the ground will constitute the much-sought biomass burial. When we bury deceased fat people, it is plain to see that we are removing tons and tons of carbon from the carbon cycle and thus from the atmosphere, and instead sequestering it in the ground. It brings a tear to DrRich’s eye to imagine that his king-sized Uncle Harry, gone now for the better part of three decades, by virtue of all that carbon he took with him under the earth continues to make the world a better place for all us former kids he used to delight with his card tricks and his stupid jokes.

And finally, this happy conclusion at which we have arrived – that the obese actually reduce global warming – at last informs those of us who are interested in healthcare how we ought to behave toward the obese. As long as fat people are maintaining (or better yet adding to) their weight – that is, as long as they continue to remove large amounts of carbon from circulation – we should encourage their continued good health. If, however, they start exercising or in some other fashion begin to burn off their large carbon deposits, then of course we might logically withhold medical care from them, or even encourage euthanasia.

But please, for the love of our precious planet and for the sake of our polar bear citizens, let us not discriminate against the obese, or discourage them from their important work.

*This, of course is where Martin Luther went wrong. The 95 Theses he nailed to the church door at Wittenberg was essentially an offer to engage in a classical scholastic “disputatio.” He was merely inviting a debate, like any other scholastic debate, and nothing more. The clergy, however, proved a bit too easily offended, and Luther proved a bit too tetchy, and the intended academic exercise turned into 300-years of bloodshed. DrRich sincerely hopes to avoid such a result here.

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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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 Let Us All Praise Medical Woo [13:35m]: Play Now | Play in Popup | Download (667)

It is quite popular for certain medical bloggers who count themselves as scientifically sophisticated to disparage so-called “alternative medicine.”

Indeed, some have built entire websites to demonstrate (Penn-and-Teller-like) that various forms of alternative medicine – such as homeopathy, therapeutic touch, the medical application of crystals, Reiki, naturopathy, water therapy, bio-photons, mindfulness training, energy healing and a host of others – are completely devoid of any scientific merit whatsoever; are pablum for the uneducated masses; are, in short, irreducibly and irredeemably woo.

These same bloggers are scandalized into virtual apoplexy by the fact that the NIH has funded an entire section to “study” alternative medicine, and worse, that some of the most respected university medical centers in the land now seem to have embraced alternative medicine, and have established well-funded and heavily-marketed “Centers for Integrative Medicine,” or other similarly-named op-centers for pushing medically suspect alternative “services”.

(An astounding list of prestigious institutions of medical science now sporting Centers of Woo is maintained by Orec.)

Until quite recently, DrRich counted himself among the stalwarts of scientific strict constructionism. He was truly dismayed that the NIH and some of our most well-regarded academic centers (under the guise of wanting to conduct objective “studies” of alternative medicine) have lent an aura of respectability and legitimacy to numerous bizarre ideas and fraudulent claims masquerading as legitimate medical practices. To DrRich, such developments were yet another clear and unmistakable sign of the End Times.

Furthermore, DrRich (a well-known paranoid when it comes to covert rationing) saw a more sinister advantage to the official and well-publicized support that government-funded institutions were giving to the alternative medicine movement. Namely, fostering a widespread impression among the unwashed rabble that alternative medicine is at least somewhat worthwhile (and plenty respectable) advances the cause of covert rationing. That is, the more you can entice people to seek their diagnoses and their cures from the alternative medicine universe, the less money they will soak up from the real healthcare system. With luck, real diagnoses can be delayed and real therapy put off until it’s far too late to achieve a useful outcome by more traditional (and far more expensive) medical means.

So, for several years alternative medicine was seen by DrRich pretty much as it is seen by all of the anti-woo crowd – as an unvarnished evil.

But in recent days the scales have fallen from DrRich’s eyes. He now realizes he was sadly mistaken. Rather than a term of opprobrium, “alternative medicine” may actually be our most direct road to salvation. Indeed, DrRich thinks that far from damning alternative medicine, we should be blessing it, nurturing it, worrying over it, in the precise manner that a mountaineer trapped in a deadly blizzard would worry over the last embers of his dying campfire.

What turned the tide for DrRich was a recent report, issued by the U.S. Centers for Disease Control and Prevention, estimating that in 2007, Americans spent a whopping $34 billion on alternative medicine. That’s $34 billion, for healthcare (in a manner of speaking), out of their own pockets.

The implications of this report should be highly encouraging to those of us who lament the impending creation of a monolithic government-controlled healthcare system, and who have been struggling to imagine ways of circumventing the legions of stone-witted, soul-eating bureaucrats now being prepared (Sauron-like) to descend upon us all, doctor and patient alike.

This is why DrRich has urged primary care physicians to break the bonds of servitude while they still can, strike out on their own, and set up practices in which they are paid directly by their patients. Such arrangements are the only practical means by which individual doctors and patients can immediately restore the broken doctor-patient relationship, and place themselves within a protective enclosure impervious to the slavering soul-eaters.

One reason so few primary care doctors have taken this route (choosing instead to retire, to change careers and become deep-sea fishermen, or simply to give up and become abject minions of the forces of evil) is that they do not believe patients will actually pay them out of their own pockets.

Well, ladies and gentlemen, this new report from the CDCP demonstrates once and for all that Americans will, indeed, pay billions of dollars from their own pockets for their own healthcare – even the varieties of healthcare whose only possible benefits are mediated by the placebo effect. DrRich believes that many of the people buying homeopathic remedies are doing so less because they believe homeopathy works, and more because they feel abandoned by the healthcare system and by their own doctors, and realize they have to do SOMETHING. The CDCP report, in DrRich’s estimation, reflects the magnitude of the American public’s pent-up demand for doctors whose chief concern is for them, and not for the demands of third party payers.

Perhaps more importantly, this new report implies that it may be somewhat more difficult than DrRich has thought for the government to outlaw private-sector healthcare activities. As DrRich has carefully documented, a government-controlled healthcare system will require the authorities to make it illegal for Americans to spend their own money on their own healthcare, thus rendering direct-pay medical practices illegal, and putting the final stake into the heart of the doctor-patient relationship.

But the rousing success of the alternative medicine universe will make such laws difficult to enact.

To see why, consider just how encouraging this new CDCP report must be to the third-party payers. Thanks in no small part to the efforts of the government (and the academy) to legitimize alternative medicine, Americans are spending $34 billion a year on woo. This amount indicates tremendous savings for the traditional healthcare system. The actual amount saved, of course, is impossible to measure, but has to be far greater than just $34 billion. Some substantial proportion of patients spending money on alternative medicine, had they chosen traditional medical care instead, might have consumed expensive diagnostic tests, surgery, expensive prescription drugs, and other legitimate medical services. Furthermore, those legitimate medical services (as legitimate medical services are wont to do) often would have generated even more expenditures – by extending the survival of patients with chronic diseases, by identifying the need for even more diagnostic and therapeutic services, and by causing side effects requiring expensive remedies. (While alternative medicine is famous for being useless, it is also most often pretty harmless, and tends to produce relatively few serious side effects – except, of course, for causing a delay in making actual diagnoses and administering useful therapy, but if you’re a payer, that’s a good thing.) So the amount of money the payers actually save thanks to alternative medicine must be some multiplier of the amount spent on the alternative medicine itself.

What this means is that payers (which, let’s face it, will soon mean the government) will be loathe to do anything that might discourage the success and growth of alternative medicine, and this fact alone may stop them from making it illegal for Americans to pay for their own healthcare.

Still, we musn’t be too sanguine about these prospects. Under a government-controlled system, the imperative to control every aspect of healthcare (in the name of fairness) will be very, very strong, and it will be very tempting to the Feds to declare at least some varieties of alternative medicine to be covered services.

But the alternative medicine establishment (bless it) will be largely impervious to government control. Practitioners of alternative medicine are expert at designing vague products and services whose techniques, theories, processes and protocols are fluid, nebulous and ill-defined. So if the Feds declare, say, homeopathy and therapeutic touch to be legitimate, covered services under the Fed’s health plan, why, the alternative medicine gurus will simply come up with entirely new forms of alternative medicine, specifically to remain outside the government plan. (New varieties of alternative medicine already appear with dizzying speed, and can be invented at will. No bureaucracy could ever hope to keep up.)

Therefore, as long as the central authorities depend on alternative medicine as a robust avenue for covertly rationing healthcare, the purveyors of woo will always be able to flourish outside the real healthcare system. And this, DrRich believes, represents the ultimate value of woo, and establishes why we should all be encouraging and nurturing woo instead of disparaging it.

DrRich has speculated on various black market approaches to healthcare which could be attempted by American doctors (and investors) should restrictive, government-controlled healthcare become a reality. But now, thanks to the success of alternative medicine, there is a direct and straightforward path for American primary care physicians to re-establish a form of now-long-gone “traditional” American medicine, replete with a robust doctor-patient relationship, right out in the open – the kind of practice where patients pay their doctors themselves.

Simply declare this kind of practice to be a new variety of alternative medicine. Likely, PCPs will need to come up with a new name for it (such as “Therapeutic Allopathy,” or “Reciprocal Duty Therapeutics”), and perhaps invent some new terminology to describe what they’re doing. But what’s clear is what they will be doing is so fundamentally different from what PCPs will be doing under government-controlled healthcare as to be unrecognizable, and nobody will be able to argue it’s not alternative medicine. In fact, it will seem nearly as wierd as Reiki.

The success of medical woo, in other words, can provide American doctors who want to practice the kind of medicine they should be practicing with the cover they need to do so. And this is why we must support medical woo, and celebrate its continued growth and success.

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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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 Even Dermatologists Have Skin In This Game [15:44m]: Play Now | Play in Popup | Download (176)

Recently, DrRich wrote a series of posts detailing how the American healthcare system – even before the new reforms kick in – is taking steps to prevent individual citizens from being allowed to spend their own money on their own healthcare. Part of that effort, of course, is to restrict physicians from offering direct-pay medical services to their patients.

DrRich may have given the impression that only primary care doctors are affected by efforts to restrict their practices in this way. If so, he apologizes.

He particularly owes an apology to his friends the dermatologists. Indeed, DrRich has been reminded of an article that appeared in the New York Times a while back, which castigated dermatologists for the sin of establishing direct-pay practices, and in particular, for creating their own brand of a two-tiered healthcare system – one for patients with skin disorders, and one for “cosmetic dermatology.”

As the Times describes it, patients who wish to see a dermatologist for, say, possible skin cancer are put on a waiting list, and when their appointed time finally arrives (generally several months later) they are subjected to modern medical hell. To wit: Upon arriving in a lackluster office, the patient is shelved for a while in an unattractive, poorly lit waiting room equipped with a broken TV, fuzz balls on the floor, old magazines, the unruly children of other patients, and surly office personnel. Eventually the now-even-more-disheartened patient’s name is called by an indifferent nurse practitioner, who, operating from a checklist of questions, will “triage” her to the appropriate patient-category (e.g., acne, fungus, cancer, warts- you know, dermatology stuff), then have her strip in order to fully expose the large organ (i.e., the skin) for which she has sought assistance, hand her a scratchy yellow paper gown to cover her nakedness, and have her wait for some time in a chilly exam room to see His Holiness, the actual doctor. At last the dermatologist arrives, mutters a greeting (or some other ritual uttering), glances at a clipboard, and announces, “Show me your [acne, fungus, cancer, warts];” whereupon, having regarded the cause of cutaneous concern, and having made a professional determination, he either signs the prescription that has been pre-written for him by the nurse practitioner, or schedules a procedure. Then, placing her bundle of clothing into her arms and wishing her a good day, the doctor shoves her out into the hall to finish dressing, as the formal interview is completed, and the exam room is at a premium.

Presumably, one hopes, some dermatology practices not visited by the New York Times might not be quite so bad. Still, anyone who’s been seen by an American PCP lately will nod sympathetically at the dermatology patient’s ordeal.

Now observe what the Times observes when the patient, instead of having an actual skin problem, merely is sagging here and there and wishes to be shorn up. That is, the patient has a cosmetic issue. That is, the patient wants Botox.

The same dermatologist will often have an entirely different setup for these patients. This time the patient is seen immediately, possibly the same day, as dermatologists are sensitive to the needs of their clients who have an impending public engagement, and thus need to look their best. If this patient is to wait at all, she will wait in a modern, tastefully decorated private room. She will then be seen not by a mere nurse practitioner but by an aesthetician, who will do a careful assessment of the sagging parts, and, aside from suggesting more injection sites than the patient might originally have had in mind, will offer a complete program for long-term cosmetic maintenance, which naturally will include quarterly Botoxification. At just the proper moment the dermatologist comes in, greets the patient warmly and reassuringly; then reviews the recommendations of the aesthetician and discusses those recommendations at length with both the aesthetician and the patient, studying the patient’s face in depth as he does so, pointing, nodding, studying, adjusting, all the while smiling confidently. Yes, he indicates, we will all be very happy indeed with the results. Finally the doctor begins to make the now-thoroughly-discussed-and-agreed-upon injections, doing so with the greatest solicitude and sensitivity. The patient is then given as much time as she needs to collect herself, and is invited to “recover” in a room set aside for this purpose, with flattering lighting, soft music, a cappuccino machine, and perhaps a glass of wine. She leaves the office a new person. And, just as the dermatologist has promised, all are indeed very happy with the outcome.

Naturally, the New York Times is scandalized by the dichotomy which its discerning readers will note here. Why should a patient with a mere cosmetic issue be treated so well, when a patient with an actual medical problem, possibly even skin cancer, is treated so shabbily? How can dermatologists openly encourage such a two-tiered system?

DrRich has a word of advice for the scandalized reporters of the New York Times, and any other concerned Americans who are worried that dermatologists, by setting up separate-but-not-equal practices for their two kinds of patients, are moving us one step closer to the dreaded two-tiered healthcare system we all abhor. That word is: Chill.

Allow DrRich to support this friendly recommendation with two observations.

1) We already have a multi-tiered healthcare system, and little or none of it is the fault of dermatologists. It is the fault of human nature. All countries have at least a two-tiered healthcare system, including countries (like Cuba and China) that have specifically embraced egalitarianism (rather than individual autonomy) as the fundamental operating principle. A second tier is necessary if for no other reason than political leaders and other individuals critically important to the collective effort must have somewhere to go for their healthcare.  The second tier, like the poor, will always be with us.

2) When a dermatologist spends Tuesday afternoon in her run-down office, treating people who come to her for bona fide skin disorders like they’re not really patients but widgets on an assembly line, then spends Wednesday in her other, much more amenable offices, treating the merely cosmetically-challenged like they are minor nobility, she is not really engaging in two-tiered healthcare. Not at all. Instead, on Tuesday she is practicing real, true, prescribed-by-society, by-the-book American healthcare, just as our leaders (in their wisdom) have carefully set it up for us, and on Wednesday she is doing Something Altogether Different.

Injecting Botox is officially and formally not part of American healthcare. How do we know this? Because it is not covered by Medicare or health insurance. If you want Botox you’ve got to pay for it your own self, just as you do if you want a TV or a car. So by all that is sacred, injecting Botox is NOT American healthcare.

Furthermore, when one looks at it objectively, injecting Botox is not even really practicing medicine, at least not in any true sense. In actual truth, it takes very little training or expertise to inject Botox. There’s no reason one must go to college, graduate from medical school, or do several additional years of training in dermatology (or any other specialty) to do this. Anyone with a needle and syringe, an alcohol wipe, and access to Botox could do as well. Just find the wrinkle and stick it. If they made the materials available over-the-counter, most folks would do just fine with it.

The sheer arbitrariness by which injecting Botox is deemed by the authorities to constitute the practice of medicine can also be illustrated by considering a somewhat different, equally well-known cosmetic procedure, one that also involves injecting substances through the skin via needles, and that has much more to do with the actual skin itself than Botox injections (which do not really affect the skin itself, but only the muscles under the skin). DrRich speaks, obviously, of the tattoo. But unlike making Botox injections, tattooing requires real skill, knowledge, training, expertise and artistic talent. Most dermatologists simply could not manage a highly technical skill like that.  The point being, of course, that if you were to describe Botox injections and tattooing to a visitor from Mars, then ask him/her/it which of these two dermatological procedures ought to require a medical license and board certification, the Martian would get it wrong every time.

DrRich understands, of course, that while administering Botox is, in practical and objective terms, no more practicing medicine than is applying an ice-pack to a bruised knee, legally it is indeed deemed to be the practice of medicine. Accordingly, doctors in general (and dermatologists in particular), relying on this nonsensical designation, have legally cornered the market on Botox injections. So it’s not like you could just set up a booth at the Mall and hire high school students to do this (as you can for, say, ear-piercing – which, in contrast to Botox injections, is an actual surgical procedure which is intended to result in a permanent structural change in a body part). If you set up a chain of Botox Booths, you would be practicing medicine without a license, which is a serious crime.

But fundamentally, while performing Botox injections may have a certain legal status, in any true sense it is not really practicing medicine.  Not when ear-piercing and tattooing are not. Rather, in real life, injecting Botox is simply an activity some dermatologists may choose to do when they’re not doing real dermatology.

To say it another way, when the dermatologist goes to her “other office” to cater to a self-paying variety of clientele, she is practicing medicine only from the most arbitrary and strictly legalistic viewpoint. In real life, she is doing Something Else. She is engaging in a Pastime.

Doctors, of course, often have Pastimes. That is, they partake in activities other than practicing medicine when they could, in fact, be seeing more patients. Some have taken up golf. Others have started side businesses such as restaurants or software companies. Some do charity work, or go to graduate school for an MBA. Still others have opted to work part time in order to raise their families.

Society generally finds such activities acceptable, and – to this point – does not insist that all doctors forgo all other human endeavors in order to see as many patients as humanly possible, during all their waking hours. While society seems to be moving closer to declaring that doctors owe this duty to the collective, it has not reached this point quite yet.

Until society sees fit to legislate otherwise (which, DrRich supposes, could happen really very soon now), doctors will continue to spend some of their time engaging in hobbies and business or family activities outside of the formal healthcare system. Some may even leave the formal healthcare system altogether in favor of these other activities. DrRich himself has done this. And until society renders it officially illegal for doctors to do so, DrRich respectfully asks that doctors be left alone to celebrate their individual autonomy as granted to them under America’s founding documents, whether it’s by establishing authentic Indian restaurants, setting up Botox clinics, or even becoming direct-pay practitioners.

One last word of advice for DrRich’s dermatology friends: Have fun with your Botox clinics for now, fellas and ladies, but please don’t become too invested in them.  This is definitely a shallow-moat line of business, and the only thing that gives you any protection at all is your aura as highly trained specialists, with special and secret knowledge about an organ (i.e., the skin) which visibly droops when the underlying muscles become lax with age and gravity. A single action by forces entirely out of your control – say, Congress or the FDA – could render your monopoly entirely moot overnight, and you will be instantly priced out of business by hordes of PCPs, nurse practitioners, Botox booths in Walmart, and even home Botox injection kits. So please remember to at least keep your hand in genuine dermatology, or get your MBA, or perfect your long iron shots, or even learn a real skill, like tattooing – but do something that will provide you with a Plan C. Because Plan Botox is definitely a high risk endeavor over the long term.

________________________________

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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 Some Considerations for Black Market Healthcare [9:34m]: Play Now | Play in Popup | Download (40)

DrRich recently finished a four-part series describing our government’s attempt to prohibit individual Americans from spending their own money on their own healthcare. He believes that any open-minded person who reads this series, what with its numerous, well-documented and specific examples, related in DrRich’s own engaging and erudite prose, will become convinced that our government is very serious about, and much dedicated to, affecting this harmful prohibition.

DrRich’s critics have insisted that he is simply making too much of this. Our government, they insist, whatever its tendencies, will not really act in this way, for the simple reason that Americans would never put up with such limitations on their individual freedoms. And in fact, DrRich fundamentally agrees with his critics, at least to this extent: Americans – many of us, anyhow – just won’t put up with it.

Where he quibbles is in the specifics. DrRich’s critics insist that our government (presumably, taking American character into account) would never actually try to limit the freedom of Americans in such an egregious way. In contrast, DrRich (having carefully demonstrated for his readers that the government will indeed use every means at its disposal to make it illegal, infeasible, or both, for Americans to spend their own money on their own healthcare), finds, sadly, that the many Americans who “won’t put up with it” will find themselves having to act counter to the wishes of their government. That is, Americans who insist on exercising their natural right to become “the proper guardians of their own health,” will have to do so extra-legally.

To say it even more bluntly, Americans wishing to enjoy the individual liberties which our Constitution promises us will, in this instance, need to engage in black market healthcare. DrRich has talked about this before, but finds this a propitious time to discuss it again, and to offer some words of wisdom and caution to anyone who might be inclined in this direction.

Black markets develop naturally whenever a society’s controlling authority attempts to prevent its citizens from acquiring an otherwise available good or service which they very much want (or need). In fact, it is a law of nature that, wherever a group of people exists who badly desire a certain product, and another group of people exists who very much want to provide that product, there is no force in the universe – governmental or divine – which can keep those two groups from engaging in commerce.

To see what is likely to happen when the government institutes its healthcare prohibition, we ought to think about what happened when that same government instituted its alcohol prohibition (i.e., Prohibition). The 18th Amendment (one of the big triumphs of the Progressive Era, and one which, quite typically, relied for its ultimate success entirely on a fundamental change in human nature), went into effect at midnight, January 1, 1920. By noon that day, an entirely new industry had sprung up. This industry – the alcohol black market – eventually employed hundreds of thousands of Americans in various capacities, such as distillers, alcohol “re-naturizers,” bootleggers, rum-runners, speakeasy proprietors, accountants, individuals who today might be called “lobbyists,” and various species of “muscle.”

DrRich’s own dear grandfather, who had only recently arrived from Eastern Europe to work in the steel mills, found more profitable employment instead, through the ’20′s and into the Great Depression, as a gun-toting rum-runner. Each weekend he filled the hidden tank under the back seat of his big Buick sedan with 250 gallons of prime home-made spirits, and would place DrRich’s young grandmother (wearing an impressive hat)  next to him, and seat their three innocent little children (among them DrRich’s toddler mother) over the hidden contraband in the back – the very picture of a happy young family out for a Sunday drive – and in this guise would make his deliveries across northeastern Ohio. DrRich will never understand why, at the end of Prohibition, Grandpa ended up as a laborer for the city street department, instead of the filthy-rich Ambassador to England like his fellow bootlegger, Joe Kennedy. (But on second thought perhaps it is better this way. If Grandpa had ended up like Ambassador Kennedy, DrRich today would be spouting the Progressive mantra, like all those other guilt-ridden souls burdened by unearned wealth.)

In any case, the government took great issue with the new industry that had been created, overnight, by Prohibition, and attempted to end the new black market by employing the ultimate expression of any sovereign authority – the legal exertion of violence. (The enforcers, it happens, were Treasury Agents, the very same enforcers who now will be ensuring compliance with certain mandates being imposed by our new healthcare system.) This effort on the government’s part led to an organized response, and resulted in the maturation of American organized crime. (Interestingly, this organized crime effort happened to be centered in Chicago, a happenstance which resulted in a persistent and evolving thugocracy within that city, whose ultimate ramifications – some say – are now affecting current events on a much broader scale).

When its concerted application of force against the the bootleggers failed to end the black market, our government turned to applying a different kind of force, this time to the consumers. The recalcitrant consumers of illicit alcohol were, after all, guilty of failing to change their behavior, despite all the heroic efforts which were being made to educate them about the pitfalls of demon rum.  The understandable frustration this caused finally led our government resort to deadly force against the obstinate public itself. Author Deborah Blum has recently documented how the U. S. government caused poisonous substances to be added to the alcohol supply, an act that is estimated to have eventually killed 10,000 people. The chief medical examiner of New York City at the time called this action “our national experiment in extermination.” And in 1927, the Chicago Tribune said, “It is only in the curious fanaticism of Prohibition that any means, however barbarous, are considered justified.” It was partly the revulsion against such official atrocities that forced the end of Prohibition in 1933.

DrRich relates this little-remembered episode merely to illustrate the lengths to which our government will go when its attempts to control human nature through legislation fail. It is worth keeping in mind as we conjure up ways to establish what he hopes we will not need, but fears we’ll not be able to avoid, namely, a black market in healthcare.

Black market healthcare will not be for the faint of heart. But then, no great human endeavor ever is.

In his next post, DrRich offers some concrete suggestions for black market healthcare.