Morality — Not Costs — As the Proper Basis for Health Care Reform

John David Lewis died January 3rd after a heroic battle against cancer. He was a relentless advocate of healthcare freedom and the morality of the free market.



(HT Freedom and Individual rights in Medicine)

The ACA vs. Insurance Brokers

The arbitrary restrictions on Medical Loss Ratios (MLR) established by the ACA are having a number of detrimental effects, including destruction of the business of insurance brokers. By serving as experienced and educated advisers, these small businessmen provide a valuable personalized service to purchasers of insurance. Claims that such "administrative activities" of insurance companies are wasteful are quickly debunked when you compare the amount of fraud and waste within Medicare and Medicaid to the the fraud and waste in the private insurance industry.

Analyzing, aggregating and disseminating both information and products are activities which add value and contribute to overall economic efficiency. Putting arbitrary caps on how much a business can spend to make their business function efficiently is just one of many ways that central planners demonstrate their ignorance of basic economics.

The new limits on MLRs are forcing insurance companies to cut expenditures in ways which will reduce consumer choice and in the long run lead to greater waste and expense.

The National Association of Insurance Commissioners has submitted a resolution to HHS explaining this detrimental effect and requested the following corrective actions:

The Department of Health and Human Services should take whatever immediate actions are available to the Department to mitigate the adverse effects the MLR rule is having on the ability of insurance producers to serve the demands and needs of consumers and to more appropriately classify independent producer compensation in the final PPACA MLR rule. The potential options available to HHS include: (1) approving state MLR adjustment requests; (2) placing an immediate hold on implementation and enforcement of the MLR requirements relative to independent agent and broker compensation; and (3) considering the NAIC’s finding that a significant portion of insurance producer activities are dedicated to consumer advocacy and service and therefore classifying an appropriate portion of producer compensation as a health care quality expense for purposes of Section 2718 of the PPACA.

It is an outrage that companies have to beg government officials for the freedom to operate their businesses as they see fit. Americans must not be blinded to how the ACA ramps up this inappropriate use of government power.

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Calling All Doctors

Docs-4-Patient-Care

National Annual Meeting

Washington DC

November 2-4 2011

Dr. Lee Hieb explains how regulation hurts patients

When is rationing not rationing?

When is rationing not rationing, a mandate not a mandate and price-fixing not price fixing?

When the government says so.

Supporters of the PPACA react to opponent’s charges of rationing by claiming that the Independent Payment Advisory Board (IPAB) can't ration because the law says it can't. 

"The proposal shall not include any recommendation to ration health care, raise revenues or Medicare beneficiary premiums under section 1818, 1818A, or 1839, increase Medicare beneficiary costsharing (including deductibles, coinsurance, and copayments), or otherwise restrict benefits or modify eligibility criteria. [Emphasis added] Pub. L. 111-148, § 3403"

But when the government takes your money to fund a program (e.g. Social Security and Medicare) and then in any way limits your access to the benefits of that program, that's rationing. Since the law prohibits restricting benefit restriction and increased cost sharing by patients, the only effective way left for the IPAB to achieve mandated spending decreases is to lower payments to doctors and hospitals. But if you end up with less access to doctors and medical care because the government pays them less, that’s rationing. No matter how much you try to deny it, or what you call it instead of rationing: a rose is a rose...and government controlled health care is rationing.

The same people who say the IPAB cannot and will not ration will tell you that markets ration through prices. This is a complete misrepresentation of the role of prices in a free market. Free market prices are a signal. They provide information. Prices do not ration any more than a bathroom scale makes you fat or thin. Free market prices give you information about the relative scarcity of resources and then allowyouto decide how to allocate your own private resources. Free market prices are a reflection of what individuals voluntarily pay. Government rationing is an act of force. It's a fundamentally different kind of interaction when the government determines for you how your resources are to be allocated--whether the government expropriates them first, as in the case of Medicare, or simply mandates how you must spend them, as in the case of the individual mandate to purchase health insurance.

While we are talking about mandates—in the legal challenges to the PPACA, the government is currently arguing before the courts that the “requirement to maintain minimal essential coverage” is not a mandate to buy coverage. The government’s top lawyer, Solicitor General Neal Katyal, argued in court:

Congress is not regulating the failure to buy something, but the failure to secure financing.

The New York Times reports:

Mr. Katyal…argued that the law’s insurance mandate, which takes effect in 2014, does not so much require individuals to buy coverage as it does regulate the way they pay for health care they will inevitably consume. 

This is a distinction without a difference. Lawyers are good at word games, but if you look at the actual real life effect of the law, it is a mandate which offers you no real choice: you can either obtain a government-defined product or you can break the law and pay a penalty.

In language similar to the restrictions placed on the IPAB, the new heath care control law also forbids the use of quality-adjusted-life-years (QALYs) “as a threshold to establish what type of health care is cost-effective or recommended.” But thousands of cost-utility studies use QALYs to determine cost-effectiveness.  Realistically, QALYs are the yardstick currently used to measure and compare outcomes to various medical treatments. It is hard to imagine how this ban could be any more meaningful than the ban on rationing discussed above.

Just over a year ago, The Christian Science Monitor reported:

[T]he Antitrust Division, [of the Dept. of Justice] joined by Idaho Attorney General Lawrence Wasden, forced a group of Boise orthopedists to accept price controls for worker’s compensation and HMO contracts as part of a settlement accusing the doctors of “price fixing”… [T]he Justice Department has unambiguously stated that refusal to accept government price controls is a form of illegal “price fixing”… The FTC has hinted at this when it’s said physicians must accept Medicare-based reimbursement schedules from insurance companies. But the DOJ has gone the final step and said, “Government prices are market prices.”

Through a simple decree, the government thinks it can turn prices set by voluntary exchange into price-fixing, and government-determined prices into market prices. Who are they trying to convince? Must be themselves because any one with a bit of common sense can see that changing the terminology can not change the reality.

Other equivocations by government officials and their defenders include denying that clinical guidelines accompanied by sanctions and rewards do not amount to promoting “cookbook medicine.” And that as long as you call it “evidence-based care,” you can ignore the fact that much of the “evidence” is controversial and that many of the guidelines are written or funded by those with vested interests in a particular outcome.

Lest you think that this verbal trickery is restricted to health care, you can find much of the same in the politicization of energy policy. Regarding the elimination of the incandescent light bulb, Penelope Green writes in the New York Times:

The [Energy Independence and Security Act of 2007] does not ban the use or manufacture of all incandescent bulbs, nor does it mandate the use of compact fluorescent ones. It simply requires that companies make some of their incandescent bulbs work a bit better, meeting a series of rolling deadlines between 2012 and 2014.

Yet, a short week later, again in the NYT, Andrew Rice informs us:

[O]ne day very soon, traditional incandescent bulbs won’t be available in stores anymore. They’re about to be effectively outlawed…Conservatives like Rush Limbaugh have denounced the “light-bulb ban” — actually, [it’s] a new set of federal efficiency regulations that the traditional incandescent can’t meet.

You see, a ban on light bulbs isn’t really a ban on light bulbs, because the law doesn’t call it a ban.

As Richard Ralston so aptly warns:

“When the clear meaning of words is replaced with government fiat in this way, all limits on arbitrary government power and its use of force are destroyed.”

Rationing, mandates, price-fixing, and bans are al terms with precise meanings in plain English. Shame on us if we are fooled by the deliberate distortion of these simple definitions. Stick and stones can break our bones, and words can actually hurt us --when they are used to obscure instead of clarify our understanding of reality.

(This post was published in Townhall.com in a shorter version here.)

What can medicine learn from McDonald's?

Apparently a lot.




(For some reason I can't resize this to make it fit. You can also view this clip here.)


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Amicus Brief filed to FL v HHS

Docs 4 Patient Care, Benjamin Rush Society, and Pacific Research Institute,

File Amicus Brief Against Obama Care

May 12, 2011 – Docs 4 PatientCare, the Benjamin Rush Society, and the Pacific Research Institute issued the following statements after filing an amicus brief in the U.S. Court of Appeals for the 11^thCircuit supporting the district court’s decision that Obama Care is unconstitutional.

Hal Sherz, MD, FACS, FAAP, President and Founder of Docs 4 Patient Care said: “We believe that it is vitally important for a physician group to stand up and speak out on behalf of all of the doctors in this country who oppose this law, but feel disenfranchised and disheartened. As opposed to other medical organizations that have failed to stand up for its constituents and have instead urged them to accept the onerous changes being forced upon them by a statist administration, we are conveying hope by challenging the legality of this law and the brazen attempt of the government to control healthcare.”

Sally C. Pipes, founder of the Benjamin Rush Society and President and CEO of the Pacific Research Institute said: “We believe that the district court was correct that the mandates imposed by the federal government in the PPACA are not a constitutional exercise of governmental power. Forcing Americans to purchase expensive health insurance or face a penalty is not the responsibility of government. Doctors and patients – not the government -- should be in charge. Only then will America achieve affordable, accessible, quality care for all.”

Google docs web link of amicus brief

(Addendum: better link)  Amicus Brief

That's the official press release.

In my new role as Senior Health Policy Analyst for Docs 4 Patient Care, I was able to contribute behind the scenes by providing a comprehensive bibliography of peer-reviewed articles on cost-shifting in health care, as well as participate in strategy discussions while the brief was being written. Very exciting--and educational--process.

Although the D4PC leadership initially wanted to argue from fundamental principles, we were advised that such arguments, especially at the appellate level, would be dismissed almost out-of-hand because of the past 70 years of Supreme Court rulings on Commerce Clause interpretation. The more effective place for those more fundamental arguments is in the media and the political arena--places we are doing our best to speak out frequently and consistently.

If we are to rid ourselves of the PPACA and its disastrous effects on personal health care freedom, popular discontent must be loud and clear. Chances for complete repeal )after a successful 2012 election), as well as Supreme Court comfort with over-turning legislative action, both depend on public opinion of the law.

I am convinced that the more people know about the details, the more they will oppose the law.

Continue to write letters to the editor.

Speak up and speak out.

Invite conversations by wearing the Black Ribbon.

The battle for the sanctity of the private doctor-patient relationship is still going strong.

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