During World War II, the government imposed wage and price controls.  In an effort to attract and retain workers, companies offered health insurance in lieu of wages.  These benefits were not taxable for either the employer or employee.  When the war ended and controls lifted (everywhere except in New York City, where rent controls persist to this day), the tax subsidy for employer-sponsored health insurance was retained.   This explains why the majority of working Americans buy health insurance at work, at the “company store.”  This accident of history underlies much of what has gone wrong with health care in America.  

Since insurance is “in kind” payment in lieu of wages, it sustains the illusion that “someone other than you” is paying for your medical care and creates an incentive to use the benefits.  Along with low-deductible, “first dollar” coverage, this clearly led to overutilization of health care services, which drove up both prices for services and insurance premiums.  Most people are unaware of how much their insurance costs.  It is probably between $10-20,000 per year.  This money would be added to your paycheck, taxable, if there was no insurance provided.  When your employer deducts money from your paycheck for premiums, what they are really doing is shifting wages into non-wage benefits.  Assuming you are healthy and don’t use much health care, this is a bad deal financially and leaves you poorer.  

Employers naturally want healthy and happy workers, but they have bottom line requirements that compel them to shop for inexpensive policies.  This created a market for health maintenance organizations (HMOs) with their gatekeepers and intensive micromanagement that doctors and patients find so distasteful.  Employers must limit options for their employees, who are stuck unless they change jobs or refuse to buy “company store insurance.”  In the latter case, they will pay in after-tax dollars for an outside insurance policy.   

Employees, or their families, with chronic health issues may be quite reluctant to leave a job with a health plan, particularly if they have relationships with hospitals and doctors in that plan.  There are undoubtedly millions of Americans who are trapped in jobs they no longer like simply because they are worried about the consequences of changing health plans, or going without.  These people have “sold their soul to the company store” and are, at least partially, enslaved. 

Imagine how transformed the landscape would be if individuals purchased their own health insurance (as we do for all other types of insurance).   As proposed by George W. Bush and others, this could be done immediately and painlessly by transferring the tax break on health insurance from the employer to the individual.   A competitive market for individual health insurance policies would spring up overnight.  The majority of consumers would likely prefer a high-deductible policy to cover against a significant illness, coupled with a Health Savings Account, from which routine care could be financed.  Groups could form to enhance purchasing power, and to cover those with significant pre-existing conditions.  

According to 2008 Census data, of 45.6 million uninsured, 32.1 million earned over $25,000 per year (including 9.1 million earning over $75,000).  Many of these people chose not to buy health insurance, seeing it as the bad deal it is.  Many would likely buy a catastrophic policy were one available.  Far from being unable to get care, they can freely choose any physician they like and pay cash.   In many ways they enjoy more freedom than the 200 million covered by private insurance and the 87.4 million covered by government insurance.   Too bad we will all soon be enslaved under ObamaCare, and will “owe our soul” to the federal government.

 Richard Amerling, MD, is a nephrologist practicing in New York City.  He is an Associate Professor of at Albert Einstein College of Medicine in New York, and the Director of Outpatient Dialysis at the Beth Israel Medical Center.  Dr. Amerling studied medicine at the Catholic University of Louvain in Belgium, graduating cum laude in 1981.  He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania.  He has written and lectured extensively on health care issues and is a Director of the Association of American Physicians and Surgeons. Dr. Amerling is the author of the Physicians’ Declaration of Independence (http://www.aapsonline.org/medicare/doi.htm).

In addition to the audio interview, at the above link, you can watch a video clip of Ms. Pipes discussing these topics at the August 7th National Doctors Tea Party.

Dr. Orient's annotated copy of the PPACA aka "ObamaCare".

AAPS Executive Director, Jane Orient, M.D. also read the Patient Protection and Affordable Care Act and summarizes her findings in an upcoming article in the Journal of American Physicians and Surgeons.  Download the pre-publication version: www.jpands.org/vol15no3/orient.pdf .

Dr. Orient also made an appearance at the National Doctors Tea Party on August 7th.  Watch the video clip of her explaining the opposing priorities of private free-market medicine versus government-controlled health care at http://www.aapsonline.org/newsoftheday/001230 .

He has promised that his first priority is to have ObamaCare repealed.

He also supports: 

• Making all out-of-pocket medical expenses tax deductible.
• Making insurance premiums paid by individuals tax deductible.
• Eliminating legal impediments that restrict companies from opening Health Savings Accounts for employees.
• Repealing government imposed requirements on what insurance companies must cover.
• Using the Commerce Clause of the Constitution, which allows the Federal government to make interstate commerce "regular," to repeal state laws preventing insurance companies from competing across state lines.

Read more about Mr. Dennis at www.johndennis2010.com.

Since our Imperial President installed Donald Berwick at the head of the Center for Medicare and Medicaid Services (CMS) in the dead of night before the July 4 weekend, bypassing even so much as a hearing, the American people know little about him. They have not been helped by the mainstream press, with a few exceptions.  Yet this man will have a profound effect on how health care is delivered in the years to come. What can we expect from him, and how can we prepare?

We’ve heard his anti-free market, pro-big government sound bites, his “love” for the British National Health Service and their central rationing board, the National Institute for Clinical Excellence (NICE). But what has he actually done that qualifies him for this position and why was the President so eager to grab him?

For one, Donald Berwick is already an accomplished bureaucrat.  He’s been toiling for years as CEO of the Institute for Healthcare Improvement (IHI; www .ihi.org).  Lawrence A. Hunter, Senior Fellow at the Institute for Policy Innovation and Chief Economist at the Free Enterprise Fund reports that Dr. Berwick’s annual  salary averaged $600,000, jumping to $2.36 million in 2008, a year the non-profit ran a >$600,000 deficit! Where was Kenneth Feinberg?

Dr. Hunter writes that IHI receives about $40 million yearly in grants, fees and consulting contracts from managed care companies, academic medical centers, hospitals and healthcare foundations, many of which are “already participating or seeking to influence boards and panels established by ObamaCare to cut Medicare spending, ration new technologies, and only pay doctors when they meet the government’s definition of quality care.” 

Available from the IHI website is a white paper entitled “Reducing Costs Through the Appropriate Use of Specialty Services.”  This document is a roadmap showing where Dr. Berwick and his ilk will be driving us. They begin with the claim that 30% of health costs ($700 billion) can be eliminated without reducing quality!  The source quoted for this claim is a paper presented at the National Quality Forum in 2008 that I will thoroughly deconstruct in a future Op-Ed. For now, let me state that while there certainly are cost savings to be had, the notion that a handful of geniuses could possibly bring this about without loss of quality is beyond arrogant—it’s delusional.

They state, “payment incentives such as fee-for-service are a strong driver of overutilization.”  Well, not exactly. Fee-for-service is what ensures the prompt availability of care, rather than long waiting lines. It is the third party payment system that leads to unrestrained consumer demand and overuse of services. Careful, your bias is showing! The authors decry variability in utilization of services and quote a paper by Atul Gawande, “The Cost Conundrum.” The idea that variations in care and use of services is somehow bad pervades the groupthink of the central planners. There is no evidence for this, just as there is no evidence that applying rigid standardized care improves hard patient outcomes.

How will standardized care be implemented?  One route will be the electronic health record (EHR).  They cite the example of HealthPartners in Minnesota who, in order to cut down on the use of high-tech imaging procedures “incorporated appropriateness criteria for radiological tests into the EMR as a reminder to primary care doctors.” 

There will also be a “primary focus on changing professional practice culture through the engagement of physicians in developing and implementing practice standards. The framework derives partly from known principles and methods of guideline or protocol development.” They suggest starting small with “selective, smaller scale efforts to reduce overuse,” as this will “prepare the local culture for broader changes in the future.”

There can no longer be any doubt that this is what the future holds should ObamaCare survive the dozens of legal challenges. The underhanded recess appointment of this devoted central planner confirms our grim predictions. There is also no question this approach will fail, and fail on a grand scale. There will be shortages, dislocations, more massive bureaucracies, huge cost overruns, and what may be an irreversible loss of quality. Along the way, thousands, if not millions of patients will be harmed.

The only way to prevent this scenario, barring regime change, is if enough patients and physicians abandon this sinking ship and create a true free market for healthcare. This is the safe route to deliver high quality care and control costs.

 Richard Amerling, MD, is a nephrologist practicing in New York City.  He is an Associate Professor of at Albert Einstein College of Medicine in New York, and the Director of Outpatient Dialysis at the Beth Israel Medical Center.  Dr. Amerling studied medicine at the Catholic University of Louvain in Belgium, graduating cum laude in 1981.  He completed a medical residency at the New York Hospital Queens and a nephrology fellowship at the Hospital of the University of Pennsylvania.  He has written and lectured extensively on health care issues and is a Director of the Association of American Physicians and Surgeons. Dr. Amerling is the author of the Physicians’ Declaration of Independence (http://www.aapsonline.org/medicare/doi.htm).

In the recent AMNews, June 7, 2010, pp 6-7, we physicians were given talking points on how to tell our patients about ObamaCare.  It was so full of “happy-speak” that one must wonder if the AMA has paid lobbyists for the Administration.

A typical question might be, “What’s in it for me?”   We are to say “For many patients who don’t have coverage and can’t afford it, the government in 2014 will offer sliding scale credits to buy a plan… Employers also are going to be expected to step up to the plate, offering coverage or kicking in part of the premium for employees who sign up for plans through the insurance exchanges.”  

Of course, that is assuming that our patients still have jobs.  But we must not say that.

Barack Obama’s recess appointment of Dr. Donald Berwick as head of the Center for Medicare and Medicaid Services (CMS) marks a new low in his destructive presidency, and that is saying something!

After forcing the Orwellian Patient Protection and Affordable Care Act (PPACA) onto an unwilling populace and through a reluctant Congress, he installs an elitist who admits to being “in love” with Britain’s National Health Service into a position of incredible power without so much as a hearing.

Transformer-in-Chief Obama is rolling right over Congress to appoint his pick to head CMS, the agency that runs Medicare and Medicaid, without opening a discussion of the New health care agenda.

Dr. Donald Berwick is not a newcomer; he’s been hovering with the academic elite “reformers,” biding his time, for more than a decade. His book New Rules, with coauthor Troyen Brennan, was published in 1996.

On July 1, Barack Obama spoke of the immigrants who helped build our country—such as my great-grandparents. They passed through public health screening, obeyed the law, worked hard, and never got welfare benefits. They learned the English language and American history. Some even carried the Constitution of their beloved adopted homeland in their pocket throughout their lives. They asked only for the opportunity to contribute.

Should we, as Obama suggested, break down the bureaucratic barriers that hinder such people? Absolutely. That is not what the controversy is about.

The issue is illegal immigration—lawbreaking. Controversy is inflamed by marches of angry people, aggressively waving a foreign flag, insulting Americans in a foreign language, and demanding to “take back” the property and earnings of Americans.

From the patients in my office we can learn why Medicare and Medicaid cannot control costs. Neither the President, the Congress, nor learned journals are telling these stories.

A spry, cheerful patient told me that she had fainted under the hair dryer in her beauty salon. The rescue squad rushed her to the emergency room of the nearest hospital. On the way, she was alert and speaking clearly with no weakness of her arms or legs. She told the rescuers that this had happened once before a few years ago.

All indications pointed to a simple fainting spell. Maybe she was dehydrated. The warmth from the hair dryer probably caused blood vessels to dilate and her blood pressure to drop.

Nevertheless, she spent three days in the hospital with EKG monitoring, and underwent a CT scan, an MRI, an EEG, and endless blood tests— all normal. Several specialists were called in for this “complicated” case. Finally, the patient insisted on going home even though some advised her to stay a little longer. She commented on how she probably would never have even been admitted had she not been covered by Medicare. And Medicare (working people and their as-yet-unborn grandchildren) will probably pay more than $20,000.

A television commercial states, “Last year, 9 out of 10 people got their Hoveround for little or no money.” A perfectly healthy appearing actress, sitting in her fancy scooter, folding her wash, says, “With Medicare and my insurance, I paid nothing out of pocket.” Those commercials ignore the fact that someone is paying for those expensive scooters— just not the actual users.

In a free clinic, one patient told me she preferred the brand name to the much lower cost generic. “Why?” I asked. “My friend told me the brand name is better.” Her prescriptions are covered by Medicaid, so all her medicines are paid for by someone else. I respectfully declined to write, “brand medically necessary,” and explained that although the medicine was free to her, the State of New Jersey is out of money and the generic will probably work just as well.

Are these patients or their physicians committing fraud? No. They are simply acting legally to enhance their own well-being, following the incentives set up by the unwieldy system. People with “coverage” do not care what costs they incur, and those who provide services benefit by providing more. As with the oil rig in the Gulf, there is a lot of pressure behind the leak. Adding more pressure —as with the Democrats’ idea of saving money by covering everybody—is not the answer. It can only make things worse.

We have in fact already tried it-- in Massachusetts. The one-state version of ObamaCare functions only because of heavy federal subsidies. Massachusetts has tried to limit fees, and still the state is hemorrhaging cash. Massachusetts Medicaid went from $1 billion to $1.75 billion in 4 short years and the federal government—actually the taxpayers from the other 49 states— subsidized half that increase.
Will it take a bomb to stop the leak before we are smothered in oil or debt that our grandchildren will never be able to repay? What will be the result of the looming 21% cut in Medicare payments to physicians?

Doctors who have been accepting steadily diminishing payments to care for the elderly are increasingly bolting out of the system. Savvy Medicare recipients will continue to secure their free Hoverounds, but the weaker, more confused, sicker, and more vulnerable will find that fewer physicians will be able to care for them. Once the nation is bankrupt, hospitals have closed, and physicians have found alternate ways to earn a living, real medical needs will not be met. The best medical care in the world will simply cease to exist. Then all Americans, young and old, will feel the pain.
There is a better answer, pointed out by Rep. Ron Paul, M.D. (R-TX):

“We need a system in America where patients pay cash for basic services, and carry insurance only for serious illnesses and accidents. ‘Health maintenance’ is the responsibility of each of us individually. We cannot continue to collectivize the costs of healthcare and expect things to get better.”

Dr. Alieta Eck, MD graduated from the Rutgers College of Pharmacy in NJ and the St. Louis School of Medicine in St. Louis, MO. She studied Internal Medicine at Robert Wood Johnson University Hospital in New Brunswick, NJ and has been in private practice with her husband, Dr. John Eck, MD in Piscataway, NJ since 1988. She has been involved in health care reform since residency and is convinced that the government is a poor provider of medical care. She testified before the Joint Economic Committee of the US Congress in 2004 about better ways to deliver health care in the United States. In 2003, she and her husband founded the Zarephath Health Center, a free clinic for the poor and uninsured that currently cares for 300-400 patients per month utilizing the donated services of volunteer physicians and nurses.  Dr. Eck is a long time member of the Christian Medical Dental Association and in 2009 joined the board of the Association of American Physicians and Surgeons. In addition, she serves on the advisory board of Christian Care Medi-Share, a faith based medical cost sharing Ministry. She is a member of Zarephath Christian Church and she and her husband have five children, one in medical school in NJ.

Nine times in the past eight years, Congress has, at the last second, delayed the automatic cuts in doctors’ Medicare fees that it decreed some 13 years ago to prevent Medicare spending from outpacing other consumer expenditures.

The AMA threatens that doctors, especially primary care doctors, will stop accepting Medicare patients if the cuts go through. Congress cites the impending bankruptcy of the program.

Every time cuts are postponed, the next scheduled cut gets deeper. It’s like a balloon mortgage payment in reverse.

And the controversy gives columnists another occasion to rail against those greedy overpaid doctors, unwilling to assume a bit of shared sacrifice despite the economic downturn. 

As Steven Pearlstein writes in The Washington Post, Congress and the President should not accede to these “un-Hippocratic ransoms.” So what if Medicare physician fees haven’t quite kept up with the costs of running the office? What he calls a “modest gap” has been “more than offset” by physicians’ working harder. 

What’s a little 21 percent pay cut to someone who already makes much more than the average patient does? Of course, Mr. Pearlstein doesn’t seem to recognize that when overhead is 50 percent or more, a 21 percent cut in revenue means a cut of 42 percent or more in the physician’s actual pay. And if one is losing $23 per patient visit, it is impossible to “make it up on volume.”

Unlike the AMA, the Association of American Physicians and Surgeons (AAPS) has repeatedly said: Let the cuts go through. But don’t cut off benefits to seniors who see the doctors of their choice.

Both Congress and the AMA appear to be in deep denial about several basic facts:

First, Medicare is insolvent. Expenditures will be cut because the government doesn’t have any money.

Second, the access problem is not caused by the “sustained growth rate” (SGR) formula, but by price controls. If doctors can’t collect enough to keep their doors open, they close, like any other business.

Third, physicians could make more money while charging less, if it were not for the costs of filing claims and complying with Medicare rules.

Fourth, more doctors would do primary care if they could charge a fair price—that the patient was willing to pay—and organize their work in the most efficient way. If they could charge $100 for one long enough visit, instead of churning five patients through frantic $20 visits to bring in $100 without being accused of “upcoding,” doctors would find primary care much more attractive.

We are warned that more doctors will “opt out” if the cuts go through, as up to 200 Texas doctors are already doing each year. Exactly. We need more opted-out physicians to take care of seniors who can’t find a physician willing to work under Medicare’s constraints and threats—or who want a non-government physician.

Congress, however, punishes seniors who choose such a doctor by denying them any reimbursement at all for services they receive from opted-out doctors— or that are ordered by such doctors, even if performed by Medicare providers.

While Pearlstein might be shocked to hear it, doctors opt out of Medicare not because they want more money—many stay in just because they fear a serious drop in income—but because they want to be able to do their job. They want to be able to order what a patient needs, not what a Medicare bureaucrat decides he may have.

Congress apparently intends to cut costs by simply not paying them. Then, if doctors see fewer patients, there are fewer bills for tests or procedures. The government not only saves the $15 it might have paid the doctor, but hundreds or thousands of dollars on tests or drugs.

Fixing the SGR may top the AMA’s agenda. But for seniors, the problem is draconian cuts in care. These can be averted only by restoring patients’ freedom to choose an independent doctor, not by a slight easing of their captive doctor’s shackles.

Jane M. Orient, M.D., Executive Director of Association of American Physicians and Surgeons, has been in solo practice of general internal medicine since 1981 and is a clinical lecturer in medicine at the University of Arizona College of Medicine. She received her undergraduate degrees in chemistry and mathematics from the University of Arizona, and her M.D. from Columbia University College of Physicians and Surgeons. She is the author of Sapira’s Art and Science of Bedside Diagnosis; the fourth edition has just been published by Lippincott, Williams & Wilkins. She also authored YOUR Doctor Is Not In: Healthy Skepticism about National Health Care, published by Crown. She is the executive director of the Association of American Physicians and Surgeons, a voice for patients’ and physicians’ independence since 1943. Complete curriculum vitae posted at www.drjaneorient.com.