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HPUSA Quarterly Newsletter, April 2004
Thank You for Joining the Medical/Professional/Business Gatherings on MedicalTuesdays. On the First Tuesday of Each Quarter, We Review the Ideal HealthPlan for the USA, and by Extension for All Countries, and What Prevents Its Implementation.
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In This Issue:
1. Medicare and Medicaid Have Doubled HealthCare Costs
2. What Do Government Mandates Do to Insurance Premiums?
3. CodeBlueNow - But What did the Resuscitation Produce?
4. Germany's Gloom
5. Government HealthCare in California
6. Quality in HealthCare
7. Overheard in the Board Room
8. Our Quarterly Review of HealthPlanUSA - Regaining Control
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1. Medicare and Medicaid Have Doubled HealthCare
Nobel Laureate Economist Milton Friedman states that if Medicare and Medicaid had not been implemented in this country, health care costs would have been approximately half of what they are today. Thus health care would have been affordable and on par with one’s grocery bill and less than one’s mortgage. Unfortunately, this error cannot be corrected politically. So we must look to the open and free Medical MarketPlace to restore responsible behavior. Welcome to this exciting journey.
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2. What Do Government Mandates Do to Insurance
Whatever happened to NJ Health Insurance? Dr Alieta Eck gives us an important printout of the New Jersey BC/BS new rates for individuals (self-employed) buying insurance. The absolute cheapest monthly outlay for a family seeking coverage is $592.76. And for that, they are buying a $10,000 deductible plan that pays 50% of the charges up to $30,000! If you would like to purchase an HMO plan that has a $30 co-pay for office visits, and many restrictions on medications, doctors, procedures etc., the monthly rate is $1179.65. If a family prefers the old fashioned $500 deductible that pays 80% of bills, the monthly premium is $5319.79.
Why are rates so high? Well meaning politicians have set up an array of insurance regulations and mandates. Here are six examples: 1) "Community rating." Every person, male or female, age 18 or 64 gets charged the same rate. The young and healthy do not value insurance enough to pay the high rates, so only the older, sicker people remain. The rates rise. 2) "Guaranteed issue." Insurance companies are forced to take on everyone, regardless of risk. People thus have an incentive to wait until they get sick to buy. Someone who has an illness can buy insurance and, after the obligatory one-year pre-existing condition waiting period, have all expenses paid. This makes the rates rise. 3) Mandated $300 per year allowance per person for "preventive care." This adds $500 in insurance costs per person when factoring in administrative costs. 4) Government mandating coverage for many things - e.g. in-vitro fertilization - which jacks up the price of insurance for all. 5) Making high-deductible insurance illegal. No one is allowed to purchase more affordable high-deductible insurance unless they have a medical savings account. 6) Government regulations are different for individuals, small businesses, large businesses and HMO's. This is very confusing and few understand it enough to fix it. (See Newsletter updates at www.zhcenter.org.) For more on HealthCare Inflation, see Dr David Gibson's article at http://healthplanusa.net/DGHealthCareInflation.htm.
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3. CodeBlueNow and Harris Interactive®
Kathleen O'Connor is trying to resuscitate American Health Care through a “CodeBlueNow!” network. She sends a progress report on “where we are, what we've done and where we're going. CodeBlueNow! was founded on our conviction that the American public is vastly smarter than they are given credit for when it comes to health care.” As many proponents of health care reform, she still feels the government should be involved. However, if the government controls health care after the resuscitation, it will continue moribund, only more so.
She had an interview with Humphrey Taylor, Chairman of
The Harris Poll, Harris Interactive®, who outlined the potential benefits of
making consumers responsible for payment:
a. Consumers have been isolated from health care costs for some 40+ years.
b. They would use it less if they were more aware of the costs.
c. They would take more responsibility for being healthy if they paid more.
d. They would have more choice and negotiate for quality with their own money.
e. Rational consumer choices will have a significant impact on the marketplace.
Taylor also confirms that health care is on the rise again as a major concern for employers, but notes there is little consensus about change. “Employers don't want to change, despite the costs, because the devil they know is better than the devil they don't know." This may not be a true statement, since if an employer no longer provides insurance, there is no devil to know - unless Mr Taylor plans to involve the government, the devil we all know. The answer continues to be: Let the employees be in charge of their own health care. If the employer wants to contribute a certain amount as an employee benefit based on longevity or productivity, should that not be an option? Why is that so complicated?
She was also struck by Taylor's comments about the social contract. . . . we have as a society in this country. "While it seems to be shrinking," Taylor said, "a majority of Americans believe we should have a system that subsidizes the sick.” Others have made the point that when one subsidizes the sick you also subsidize illness. For more on what happens when the state subsidizes illness, see Lew Rockwell http://www.lewrockwell.com/rockwell/sickness.html.
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4. Germany's Gloom: That Malaise Thing
The Economist last week reported that German voters (and politicians) are depressed about the future. Germans have never been cheery - Angst is a German word. Yet what explains today's malaise is, in part, what followed the second world war: the Wirtschaftswunder, and a generous welfare state which has driven German national income per person to below the EU average for the first time. Part of the malaise is, however, the fault of politicians who have not sold the case for reforms well. The gloom might be helped if it led to a jolt that shook up the country. But it is unlikely to change Germans' contradictory attitude to reform: they accept the need for change but scream blue murder when they have to pay to see their doctor. Even though the present administration has only 25 percent support, as many as 80 percent of voters do not think the opposition would do a better job.
The younger generation is rebelling at having to pay for grandpa’s new hip when a cane will allow him to get around his house adequately for the few remaining years of his life. When the welfare state’s entitlements are firmly entrenched, neither party is willing to bite the bullet and save the country. No one will verbalize that they made a mistake with the first entitlement during the last century. One might even be fearful for his life if he suggested eliminating federal entitlements. There is a lesson there for us in the US. Are we beyond the point of no return?
Remember G B Shaw’s observation: “A government that robs Peter to pay Paul can always depend on the support of Paul.” Sounds like in Germany, even Paul is getting worried that if Peter goes broke, there may be much less to rob.
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5. Government HealthCare in California
Assemblyman Ray Haynes in this week’s San Francisco Chronicle points out that government health programs “become their excuse to profit at taxpayers' expense. Worse, they threaten to deprive people who really are hurting in order to protect their $100,000-a-year salaries.
“Take the Department of Developmental Services. The department deals with developmentally disabled people: some who need a wheelchair, some with mental challenges, all relying upon government to help them. California provides many services to those with such disabilities. However, every time anyone suggests we look at these services, the craven administrators try to protect their phony-baloney jobs by hiding behind the wheelchairs.
“This year, the governor proposed to change how the state deals with disabled people, so the Capitol is filled with frightened people in wheelchairs. Of course no one wants to throw them out of their wheelchairs. They are being scared by the profit-fattened administrators who are the real targets of the governor's spending controls.
“Consider some facts: In 1998-99, the state spent $9,500 on each person with a disability served by a regional center. Today, the sum is $13,400. In addition, in '98-'99, the state spent $124,000 on each person who lives in a state-run disability facility, called a developmental center. Today, the cost is $205,000.
“In addition, we are running a 20 percent vacancy rate at the centers. We could close two or three centers, deliver the same quality service and save money.
“As for regional centers, they are a mess. At least one lobbyist has privately indicated that of the 21 regional centers, seven are adequate, seven are bad and seven are evil. They have become dominated by the providers who profit from the system.
“They've gone from service center to profit center -- at whose expense? The disabled people. Providers have approved services such as a pool (built at taxpayer expense) at a house supposedly to help a disabled person, but, of course, everyone else got to use it, too.
“Providers have approved house additions at taxpayer expense and have talked about approving expenses for dolphin therapy -- swimming with dolphins -- as can be done in Hawaii for $300 per hour.
“With all due respect, cutting out those ‘services’ and controlling bureaucratic expense won’t throw anyone out of his wheelchair. It may cost a bureaucrat or two their jobs.
“And because these bureaucrats draw up and approve their own budgets, somehow they just can’t see the wisdom of eliminating their jobs, so they scare already frightened disabled people into protesting. It is shocking; it is distressing, but it is true.”
It should be obvious, entitlements never stop. And politically it is nearly impossible to slow them down. Since entitlements are difficult to control until it’s too late, it is best that they are only at the state level rather than at the federal level. At least there will be competition between states and a citizen can migrate to a sounder economy without jeopardizing one’s American Citizenship. So if a state’s health care is as bad, expensive and bureaucratic as Assemblyman Haynes states above, it’s where it should be to create the least damage. To have the federal government involved in health care jeopardizes our nation’s very existence.
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6. Quality In HealthCare
A CEO from London wrote: “A business colleague has just delivered her first baby in London using the NHS [National Health Service] instead of Private health care. She had 35 to 40 health professionals tend to her during the process of the pregnancy and delivery. She never saw the same nurse or doctor twice, and she said that they are not particularly good [or better which is what they would have to be] at documenting what the last doctor said [knowledge management]. She also said that they were fairly open about the weaknesses of the system, but that they are 30% short on health professionals and so they have to resort to this kind of system.”
The CEO concluded: “I would never put up with that kind of health care.” Will we in America put up with such inferior quality? As politicians and health administrators tout regulations in order to improve the quality of health care in America, we must recognize this as subterfuge which not only denigrates the medical profession but gains control of quality issues which they do not understand. The quality of care in America already exceeds that found anywhere in the world. We just need to eliminate the lack of patient accountability which administrators introduced through Medicare, Medicaid, third party insurance carriers, HMOs, and managed care organizations which doubled health care costs. With the re-introduction of patient responsibility, such as the HealthPlanUSA proposes, the costs will also become competitive with third world costs but our quality will not dip to the low levels of their care, such as in the NHS as the CEO from the UK mentions above.
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7. Overheard in the Board Room.
CEO: Remember, Quality is our Top priority.
Question: Is it more important than safety. CEO: Ooh... I forgot about that one.
Question: Is quality more important than obeying the law? CEO: Well, probably not.
Question: If selling at a lower quality is more cost effective, wouldn’t we have a fiduciary responsibility to do it? CEO: I’m sure that’s in our top four priority items.
Question: What if we had to lie to achieve quality? CEO: Ooh... I’m not sure. Let me think about that one. (After Scott Adams.)
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8. Our Quarterly Review of HealthPlanUSA - Regaining
Gautam Naik reports in the Wall Street Journal on a way to cut hospital costs: Comfort the dying. He describes the palliative-care unit at Virginia Commonwealth University Medical Center which offers plush carpeting, original watercolors and a kitchen for visiting families. Such perks might seem misplaced, but the unit has reduced hospital costs for those patients diagnosed with incurable illnesses. Palliative care units have increased to 844 community hospitals in 2002, 18 percent more than the previous year. In palliative programs, less money is spent on drugs, diagnostics tests and last-ditch treatments. The cost for the last five days of life for a cancer patient in a standard room averages $12,000 and in the palliative unit it averages $5,000, a 60 percent reduction.
But we don’t need a specially built palliative care unit such as Naik described at the University Medical Center. It can happen in any hospital bed when the patient or his family demand it or when a sensitive doctor, one who is not afraid of retaliation from his hospital, implements it. Years ago, a father came to me stating that his insurance was running out on his son and asked if there was some way that I could reduce the exorbitant charges. He was monitoring the charges in the business office daily. As the primary pulmonary internist on the case, I went through the record and reduced the daily laboratory requests from a number of consulting physicians and surgeons, changing them to alternate days or longer, eliminated the daily chest x-ray and ECG requests, and reduced a number of treatments that were not helpful to a dying patient and only benefited the hospital’s bottom line. He thanked me since the daily charges decreased by 75 percent: a better reduction than that provided by the expensive, specially built palliative unit.
The important incentive was the financial liability that was going to accrue. There is no more important element in reducing health care costs than personal accountability. We can’t depend on a hospital building expensive units to lower costs. That’s a perverse incentive. Medicare and Medicaid have exceeded cost estimates by 700 to 900 percent. We only need the patients to inter-react with their physicians who can essentially control everything as long as they are still the captain of the health care team and work in a free-market environment. As administrators of hospitals, health plans and the government make demands, physicians will not only lose control but will still be blamed for all that goes wrong, including the exorbitant costs that physicians can then no longer control.
David Lazarus, an investigative journalist for the San Francisco Chronicle, reported last week on the extortion of medical records in Bangalore, India. Heartland, a subsidiary of HCR ManorCare handles the transcription of doctors’ dictated notes for dozens of U.S. Hospitals. This was similar to the security breach three weeks earlier by a Pakistani woman who was transcribing for UCSF Medical Center. This again shows the results of administrators making decisions on confidential patient files. Even local transcribers want to take patient records out of my office and transcribe them at their place of business. I’ve always insisted that they be transcribed in my office. When the costs became prohibitive, I began using templates and revising them or having my secretary type up the changes from the last visit (which cannot be done off site) to assure confidentiality. I have patients that are nervous even about their confidential information being in my computer, where others in the office can access it. A physician should never transfer that responsibility to an administrator that doesn’t report to him.
HealthPlanUSA with a unique system of graduated patient responsibilities and liabilities, from the inpatient setting, to surgical centers, office practice, home care and convalescent care, will put constant market-based pressure on reduction of costs at any level of health care without an army of reviewers and health care cops. Within a few years after HPUSA is implemented, we will be moving forward to where Milton Friedman says we should have been without the monstrous and unconscionable costs of Medicare, Medicaid, HMOs and other third parties that took health care off the competitive market. We thank those of you who have sent in comments and your Curriculum Vitae and Résumés, for possible future participation in this endeavor, and we invite others to do likewise.
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Stay Tuned to the MedicalTuesday.Network and the HealthPlanUSA.Network and have your friends do the same. To keep up with the latest in the development of HPUSA, please register at the MedicalTuesday.net website for this Newsletter.
If you would like to participate in the development of the affordable HealthPlan, please send your résumé or Curriculum Vita to Personnel@HealthPlanUSA.net.
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If you would like to participate in MedicalTuesday informational and networking campaign on behalf of our patients and the HealthCare community, please send your résumé to Personnel@MedicalTuesday.net.
Send all other comments and suggestions to the address below.
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HealthPlanUSA Quarterly Newsletters
HealthPlanUSA Intro: http://www.healthplanusa.net/NewsLetterIntro.htm
January 2003 Newsletter: http://www.medicaltuesday.net/Dec3102.htm
April 2003 Newsletter: http://www.medicaltuesday.net/Apr2903.html
July 2003 Newsletter: http://www.medicaltuesday.net/July2903.html
October 2003 Newsletter: http://www.healthplanusa.net/October2003.htm
January 2004 Newsletter: http://www.medicaltuesday.net/archives/Dec3003.htm
Latest Medical News Headlines: http://www.healthplanusa.net/MedicalNews.htm
Single-Payer Initiatives: http://www.healthcarecom.net/EditorialNov94.html
David Gibson, MD, National Health Care Consultant: http://healthplanusa.net/DavidGibson.htm
Single Payer: http://www.healthplanusa.net/DGSinglePayer.htm
Why are the uninsured, uninsured: http://www.healthplanusa.net/DGUninsured.htm
What’s behind health care costs: http://www.healthplanusa.net/DGRisingHealthCareCosts.htm
Pharmacy costs: http://www.healthplanusa.net/DGPharmacyCosts.htm
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Tammy Bruce: The Death of Right and Wrong
(Understanding the difference between the right and the left on our culture and
Reviewed by Courtney Rosenbladt.
Del Meyer, MD, CEO & Founder
Government is the great fiction, through which everybody endeavors to live at the expense of everybody else. – Frederic Bastiat, French political economist, (1801-1850) Essays on Political Economy, 1846.
On This Date in History - April 6
The whole world had known for some time it was there, but on this date in history, April 6, 1909, Robert E Peary and Matthew Henson completed that great American adventure and reached, or discovered, the North Pole.
On this date in 1917, the United States entered a world
war and the first war outside of our hemisphere.