Why You CAN'T Keep Your Current Coverage

No time to write a post myself on this important topic--especially as Chris Jacobs has already written on it so well.

From today's email:

The Wall Street Journal has coverage today of Monday’s McKinsey study suggesting that more than half of all employers could decide to drop coverage by 2014 – both a news article and an op-ed by Grace-Marie Turner (copied below).  The op-ed notes that if half of all employers dump their employees in Exchanges, that will meanabout 78 million Americans would lose their current plan.  As the news article notes, this potential change by employers is entirely rational: While the health care law does include a modest $2,000 penalty for employers who do not offer “affordable” coverage, as the article notes, “Health-policy experts have questioned whether that is high enough to discourage companies from health coverage.”  Indeed, Credit Suisse in a Monday note to clients reiterated that employers dropping coverage is “exactly what was intended” by the law in the first place.

The White House was quoted in the news article as saying the McKinsey study was “an outlier amid other research suggesting that employers overwhelmingly would keep coverage.”  But in reality, the studies saying that employers will drop coverage continue to mount:

·         A PWC survey of employers released just two weeks ago found that nearly half of all employers “indicated they were likely to change subsidies for employee medical coverage” thanks to the law.

·         Former Congressional Budget Office Director Doug Holtz-Eakin’s analysis confirmed that many more firms than originally projected will have a rational economic basis for dropping their plans come 2014 – resulting in up to $1 trillion more in new federal spending on insurance subsidies than official estimates.

·         An Associated Press story from last fall, titled “Employers Looking at Health Insurance Options,” included quotes from a Deloitte consultant saying that “I don’t know if the intent was to find an exit strategy for providing benefits, but the bill as written provides the mechanism” and from the head of the American Benefits Council claiming that the law “could begin to dismantle the employer-based system.”

·         Former Tennessee Governor Phil Bredesen – a Democrat – wrote an op-ed explaining very succinctly why employers will drop their existing coverage options.  Gov. Bredesen noted that Tennessee could drop coverage for its state employees, pay the $2,000 per employee penalty to the federal government, give their workers cash raises to compensate for the loss in health benefits, and STILL come out at least $146 million per year ahead.

Even worse than the prospect of 78 million Americans losing their current health coverage would be the trillions of dollars in new federal spending on the taxpayer-funded insurance subsidies many of these individuals would receive.  At a time when America faces a looming entitlement crisis regarding Medicare and Medicaid, these recent developments illustrate just how significantly worse Obamacare will make our fiscal predicament.

Chris Jacobs

Health Policy Analyst

Republican Policy Committee

(202) 224-2946

Book Review: In Defiance of Death

In Defiance of Death: Exposing the Real costs of End-of-Life Care
by Kenneth Fisher, MD with Lindsey Rockwell, DO and Missy Scott


End-of-life care has tragically been lumped together with the bruha over "death panels." Given the dire need to reign in the rising costs Medicare, and the looming threats of rationing under the auspices of "comparative effectiveness" and cost-control via the Independent Payment Advisory Board, these concerns are understandable but misplaced. But, assuring that people have humane and appropriate end-of-life care in line with their own wishes should have nothing to do with government rationing and everything to do with good medicine.


Drs. Fisher and Rockwell along with free-lance writer Scott  have written a compassionate, extensively researched appeal for rational end-of-life care. Their long over due discussion has the potential to improve the quality of medical care, while at the same time help eliminate wasting our wealth on futile treatments.

We spend a very large proportion of our health care dollars at the end of our lives. The reasons for this are multiple, but include an inadequate legal definition of death, the shifting of decision-making away from medicine and into the legal realm, lack of adequate communication between patient and medical care-takers about end-of-life wishes and realities (aggravated in part by the Patient Self-Determination Act), unrealistic expectations of what medical science can accomplish, and the divorcing of medical decisions from economic considerations. 

Dr. Fisher offers some very intriguing solutions which are worth further discussion. 

Death should be defined not as "absence of all brain activity" but the absence of cerebral cortex functioning. This would clarify the futility of continuing to keep bodies alive when the person who once inhabited them no longer exists. 

Hospitals could form Appropriate Care Committees to assist families and physicians provide the best possible care for individual patients. We must actually apply what we already know about which interventions are futile in which contexts, and when further treatment is merely prolonging suffering and death. Where I part ways with Dr. Fisher is his recommendation that these committees extend into a government-managed hierarchy. I can see them as a selling point for hospitals ("We provide only the best, appropriate care.") but it frightens me to think of the government making those determinations. 

Another idea of Dr. Fisher's  is to eliminate CPR as the default action for cardiopulmonary arrest. Upon hospital admission, each patient fills out a fresh advance directive form (a good idea), and if CPR is desired, an order for its use would have to be expressly written. The danger, of course, is that the order for CPR could be absent due to oversight rather than as a true reflection of the patient's wishes--and potentially lead to an irreversible error. Dr. Fisher points out that CPR-as-default was instituted when most hospital patients had acute, reversible problems. That is no longer the case. A growing proportion of hospitalized patients are admitted with debilitating chronic illnesses and aggressive treatment is frequently not beneficial.  I am still not sure what to think on this issue--but it is a discussion which needs to occur. 

A useful clarification in the book is the differentiation between the absolute right of individuals to refuse any and all treatment and the non-existence of a right to demand treatment that is not medically indicated. The tricky part is who gets to define what is "medically indicated." Dr. Fisher recommends only limiting treatments which are not controversial (such as attmepting to keep an anencephalic infant alive via mechanical ventilation.) These non-controversially futile actions are where there is no right to demand treatment. 

Dr. Fisher also calls for more training of medical personal in end-of-life matters and palliative care. The goal is to do our best to assure patients do not pointlessly suffer by receiving futile treatments, and families do not deplete life savings for inappropriate care. I heartily agree that a deeper understanding of this aspect of medicine is sorely needed. 

In summary, I support the following improvements recommended by the author: 

1. Implement a mechanism to keep advance directives fresh and timely. 
2. Develop Appropriate Care Committees for hospitals and long-term care facilities. 
3. Alter medical education to emphasize continuity of care. 
4. Increase training in palliative care/end-of-life 
5. Redefine death to loss of cerebral cortex functioning. 
6. Consider changing CPR away from being the default action. 
7. Address the issue of a shortage in nurses through expansion of 2-year hospital-based nurse training programs.

Some of the recommendations with which I differ: 

1. Making the Appropriate Care Committees a government function. 
2. Create a central agency to mandate uniform insurance billing (with the rationale that it will decrease administrative costs.) This is properly a market function. 
3. Government support of primary care over specialists, or vice versa. Again, the balance of primary care to specialists needs to be a market discovery by free individuals choosing what is of value for themselves. 
4. Legally restricting or eliminating the direct advertising of drugs and medical devices. Yet again, this is an appropriate free market activity. 


These areas of disagreement in no way detract from the over all value of the book. Dr. Fisher presents much valuable information accompanied by a number of concrete practical actions we could take to address a very real and serious problem within our current health care system. This book is an excellent place to start several long over-due conversations.

In the end, the way for us to assure the most cost-effective use of resources is by doing what is best for the patient in his or her entire context: medically, psychologically and economically. This can not be achieved in the collectivized, centrally controlled system of a medical commons where treatment decisions are divorced from economic consequences. As physicians, we can do a better job by understanding and then communicating the limits of beneficial treatment. As a society, we need to return personal responsibly and a respect for property rights, which means accepting the consequences of living in a world of limited resources and limited life. 

There is a time to defy death, but in the end, no one gets out of here alive. And nothing in life, not even death, is free.

Medicare Reform: Paying for the Cake You Want to Eat

Today's post is up on PJ Media.

Since Medicare and Medicaid became law in 1965, people have been told: “You can have your cake and eat it too.” You can have the medical care you need and not have to pay for it. (You may think you are paying for Medicare with your payroll taxes, but in fact those taxes cover less than 1/3 of your projected health care costs.) 

For decades, Medicare and Medicaid have been paying for health care with no one facing the difficult question: “Is what we are purchasing worth the cost?” Not the doctors, nor the “beneficiaries” — and especially not the politicians. Doctors get income; patients get health care; politicians get votes — all with the carefree ease of paying for it with other people’s money.

Check it out--and leave lots of comments!!

Doctors Speak to Congress on behalf of Patient Care

Dr. Jane Orient, executive director of AAPS, congressmen Dr. Burgess (TX-R)  and Dr. Amerling testified last week before the House in support of freedom of choice for doctors and patients.

This clip is just shy of an hour long but is well worth the time to watch. The PPACA is tragically misnamed: it neither protects patients, nor will it bring down costs. Entitlements are driving federal and state budgets over the cliff, and the PPACA adds significantly to the momentum.These three doctors provide explanations for why this is true.

The new law is specifically designed to disrupt the direct doctor-patient relationship which is the foundation of private practice medicine. This fact is illustrated by what Dr. Berwick, the current head of Medicare, wrote in his book New Rules:

Today, this isolated [doctor-patient] relationship is no longer tenable or possible. Health care has become an industry, with numerous loci of authority well beyond the doctor’s office. In many ways, the relationship of the patient to the doctor is less important. Traditional medical ethics, based on the doctor-patient dyad must be reformulated to fit the new mold of the delivery of health care.

In place of a direct doctor-patient relationship, Berwick advocates (and the PPACA strengthens) our current dysfunctional third party payment system which places a bureaucrat into the middle of our medical decisions. More and more, doctors are being required to make treatment decisions based on population-based clinical guidelines rather than the customized needs of individual patients.

Regulatory requirements  are making it more difficult for physicians to survive as small businesses, driving physicians to either retire early or work as employees. It is possible that the physician-as-employee model is less expensive (which is not the same as more efficient or cost-effective,) but shifting to that model should occur voluntarily through a free market, not by the government stacking the deck against the option of private medicine.

For more details on how the new health care control law will take away freedom of choice without solving problem of rising costs, watch the video clip below.
If you prefer to read their statements instead of watch, you can find them here: Dr. Orient's, Dr. Amerling's. I don't have a link to Br. Burgess' statement, but he comes first in the video after a brief introduction by Dr. Orient.

Advancing Liberty, Creating Change, Part 2

See here for Part 1

Randy Barnett was the speaker I came to hear at the recent symposium, Advancing Liberty, Creating Change, --and he did not disappoint.

Mr. Barnett is a constitutional law professor, author of Restoring the Lost Constitution, argued before the Supreme Court in Gonzalez v. Raich (a key case in Commerce Clause precedent), written multiple amicus briefs in support of the unconstitutionality of the individual mandate, and is now the legal representative for the NFIB in the appeals case of Florida v. HHS (the same case in which Docs4PatientCare has filed an amicus brief).

Barnett briefly summarized how the case against the mandate developed, illustrating how a small number of people can make a big difference. A conversation between Barnett and someone from the Heritage Foundation led to a paper on the unconstitutionality of the individual mandate. The paper was published just before the bill was passed Dec. 23, 2009, setting out the terms of the debate, and providing Senate Republicans with a basis to place on record a constitutional objection to the mandate.

Currently, there are five individual mandate legal challenges on expedited repeal. The government has ramped up the seriousness with which it is defending the mandate by having the Solicitor General argue the case at the appeals level. This is a very unusual move as the government's top lawyer usually only becomes involved, if at all, when a case is before the Supreme Court.

Barnett expects the cases on appeal will wrap up around August or September allowing for a petition to the Supreme Court in the fall. Oral argument would then be heard by SCOTUS in January of 2012 with a decision by the end of its term in June. You can read Barnett's estimate of how the judges may rule in his article Commandeering the People.

Barnett emphasized the importance of having a viable alternative to the PPACA pass in the House. It doesn't have to become law, but something must exist as an expression of Congress' will and a potential means to prevent the total dislocation of health care reform. He also maintains that if we win, the gains are important but not that large. If we loose this battle, however, we lose the nature of this country as one of limited government (and I would argue, because of the gigantic regulatory power delegated by the PPACA, Rule by Law takes a crippling blow.)

At the reception after the talks ended, I spoke briefly with Mr. Barnett, thanking him for all of his work defending health care freedom. He recommended the ACA Litigation Blog as a good source of information for those interested in following this case closely. The site also has links to the official documents of the 5 legal challenges making their way to the Supreme Court.

If you are interested in delving further into the constitutional issues, I would recommend starting with three documents: Judge Vinson's ruling of FL v. HHS (which provides a concise and cogent summary of the history of Commerce Clause cases), Barnett's brief to the 9th Circuit Court of Appeals (which presents the key arguments of the unconstitutionality of the mandate consistent with current legal precedent), and his article "Commandeering the People" which takes a closer look at the role of the Necessary and Proper Clause in light of the current constitutional debates.

To rid ourselves of this onerous law, popular discontent must be the dominant mood of the country. To maintain discontent, we must avoid resignation by keeping the hope of affecting a change alive. One way to do this is to announce to each other support for repeal by wearing or displaying the Black Ribbons. The more Black Ribbons that are out there, the more people can see they are not alone, that there is hope of change.

Let's make a difference, now.

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Advancing Liberty, Creating Change

Two days ago I had the wonderful opportunity to attend a symposium co-hosted by the Institute for Humane Studies and the Mercatus Center. Held on the 25th floor of the Hotel Nikko, the views were as stunning as the speakers were inspiring.

The formal part of the symposium was opened by economist Dr. David Henderson who described the almost miraculous success of the Liberal Party in Canada which, through real and significant cuts in government spending, brought Canada back from the precipice of economic disaster. In 1995, the WSJ called the Canadian dollar the "peso of the north" and Moody's put Canadian credit on watch. At that time, Canada had a debt-to-GDP ratio of 70%. Following these cuts and important changes in unemployment benefits, Canada then ran budget surpluses from 1997 until the international recession of 2008. The big lessons from this Canadian experience for U.S. politicians are the following:

You can cut spending and still get reelected.

You can cut spending and the world does not fall apart.

You can cut spending and grow the economy.

As our Congress continues the Budget Debates, let's work to remind them that these truths will also hold for health care spending.

Next, Adam Thierer spoke on the very important battle to preserve internet freedom. Although his talk was equally fascinating as the others, it wasn't as directly relevant to health care so I refer you to his written body of work for the details of his ideas.

Adam was followed by Matt Mitchell, speaking on the growing problem of unsustainable trends in state government spending and debt. The two largest contributors to this problem are Medicaid and the effects of public employee retirement benefits. From his talk, I took away two key points.

Unions in the private sector increase the wages of some workers at the expense of other workers, but are limited in what they can demand from their employers because of business' need to make a profit. (What came to my medical mind was the fact that a successful parasite doesn't kill off its host.) If profits decrease too much, the business (and the jobs) will disappear. Unions in the public sector don't have customers paying for goods and services--they have taxpayers, who can't choose to go away. Also, in the public sector, unions get to vote for and select the people with whom they negotiate for their benefits. In the private sector, unions don't get to vote for their employers (other than with their feet.) The fundamental incentives for public unions have no brakes. To improve the situation, we need to change the rules and alter the incentives. Tweaking the numbers will never be enough.

With regard to Medicaid, Matt showed that the problem goes beyond the incentives for expansion that the current system holds. (Because of Federal matching funds which shift state costs to the country as a whole, States have the incentive to continually expand Medicaid programs.) He also pointed out that whenever government funds a program, it creates a powerful vested constituency which pushes for continued spending and expansion. Data shows that when the Federal government reduces payments for state programs--the programs don't shrink or go away. The states just continue to fund them through state debt or raising taxes. A looming danger of the PPACA is the enormous new entitlement constituency it creates, not only through the expansion of Medicaid, but also through insurance premium subsidies.

The formal talks were punctuated with opportunities to talk personally with the speakers and fellow attendees. It was an exciting chance to meet face-to-face several people whose works I have admired from afar, or have met only in the cyber-world of Yahoo groups. In spite of the very real and significant challenge to individual rights which our country currently is facing, the general mood of the speakers and the audience was decidedly optimistic. I left encouraged and inspired, knowing that people of such intellectual caliber and integrity are fighting for the cause of freedom.

(Report on the symposium will be continued next post.)

Update: New paper out from the Mercatus Center-"Public Sector Unionism: a Reivew"
Update: Paper on-line by David Henderson CANADA’S REVERSED FISCAL CRISIS

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Cookie Cutter Medicine

Patient Diana Hsieh relates her personal experience with a health problem to illustrate why "cookie cutter" medicine and government "quality control" through adherence to clinical guidelines is bad for your health.



For a more technical discussion, don't miss the following posts by two practicing physicians who regularly blog on health care policy.

"Dangers of strict adherence to clinical guidelines" by Doug Perendia

and

"Who Writes these guidelines anyway?" by Dr. Rich Fogoros

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