It’s difficult to choose a starting point when discussing a problem this large and complex, but we have to start someplace. First we have to admit that even the best possible solution will have something for everyone to dislike. In other words, every group involved will have to make some sort of sacrifice to make the system work. We also have to recognize that the current system is working extremely poorly, both in an absolute sense, and in comparison to the systems in other countries.

Next, we have to believe (as I do) that the proper regulations and planning can create a health-care system that is a quantum leap improvement over what we have now.

Finally, we must understand that the main obstacles to improvement come from special interest groups, and that the consumers of medical care (that’s us) are one of those special interest groups.

A prerequisite for any successful system is the elimination of frivolous lawsuits. American Panthers Newsletter Issue #3, Page 2 has already addressed this problem and, I think, has presented a workable solution.

The toughest part of any solution that might be proposed here is to discuss the sacrifice that the healthcare consumers (us again) must make. If we can get through that hurdle then we are well on our way to finding a solution that our members, and the nation, can agree on.

Patients will not decline a medical procedure for cost reasons if the cost of that procedure is entirely in the hands of the insurance company. If the patient is only responsible for a fixed co-payment, then procedures that do not add to that co-payment will not be controlled or limited in any way. The only way to make the system work is if the insured pays a fixed percent of the cost. This can be done, and there are ways to dramatically simplify this apparently cumbersome process, but we will discuss that in the next newsletter.

Currently, every two doctors must hire one full-time employee just to handle collections and dealings with the insurance companies. Much of what doctors are owed is never collected. If doctors are paid immediately, and in full, they will be able to eliminate unnecessary staff, and they will be able to charge much less for an office visit. Of course we would not expect them to charge less voluntarily, but that will be for the next newsletter also.

Hospital costs are totally out of control if you are not insured. A recent two-week visit to a hospital by a friend of mine (the visit did not include a surgery) was billed to the insurance company at approximately $94,500, but the hospital accepted $18,500 as complete payment! That could mean that the $18,500 was all that the hospital needed and that all patients are billed the higher amount and the hospital tries to collect whatever it can. It seems obvious that all patients, or their insurance companies, should be billed the same amount for the same services, and the hospitals should be paid in full. Of course, hospital charges will have to be monitored and controlled. There are ways to do this that will be discussed later.

There is plenty of blame to be spread around in this discussion. The drug companies, the HMOs and insurance companies, the testing labs, the doctors, the patients and the hospitals all carry their share. We will discuss each of these culprits in their turn.

One thing that has to go is that cumbersome and idiotic referral system. If a doctor is allowed to practice in the United States, then no referral should be necessary. This implies that it must be somebody’s job to take away the licenses of doctors who abuse the system. That’s where our government comes in. An adequate and efficient system must be put in place to make sure there is no cheating. This monitoring system must be effective, and efficient. Even if the cost is high, no health-care system can possibly work if it can easily be abused.

If these problems are properly addressed, and if modern computer technology is used to keep it current, then any properly insured patient should be able to see any legitimately licensed doctor.

LHS

To be continued in issue #7.

The above article outlines some of the necessary prerequisites for creating a reasonable solution to the healthcare problem in the United States:

• Frivolous Lawsuits must be dramaitically curtailed.
• The insured must pay a percent of the costs.
• Doctors must be paid immediately for their services.
• Hospital, drug and testing charges must be controlled.
• The referral system must be eliminated.
• The system cannot be vulnerable to dishonesty.

We propose a single government run insurance program that makes healthcare insurance affordable to the vast majority of American citizens. Participation in the system does not have to be mandatory, but the system will quickly become unaffordable if only the ill are allowed to join. There must be an initial signup period, after which any new insured people must pay at least triple the standard rate, for at least five years. Any new citizens must also be required to pay the higher fee for at least five years. Newborn American citizens can start at the lower rate only if coverage is begun at birth.

The cost of the insurance hopefully can be brought down to $100 per month per person. After that, the patient is responsible for 20% of the first $25,000 of medical costs per year, and 5% of any costs above that. Medicare patients can be responsible for costs at the same rate, but would not have to pay the monthly cost. Medicaid patients can be responsible at a straight 2%.

The key to this new insurance system will be a Medical Credit or Debit Card. The insured can put money in the account, or work with an institution willing to lend them money.

For an office visit it would work as follows:

When a doctor’s office visit is paid for, the patient is responsible for 20%, which amount is paid for with the Medical Card. The entry of the payment information automatically triggers the payment of the other 80% by the insurance. There is to be no questions asked by the insurance system at the time of this payment. Any objections must be handled after the payment is complete.

The act of payment automatically feeds the patient, doctor and medical service information into a database run by the government insurance company. The doctor’s front desk is allowed to ask for the Medical Card in advance of any treatment. The validity of the Medical Card can be checked against the government insurance company database. If the card is invalid, or will not pay the required amount, the doctor can refuse treatment. If the doctor treats the patient, and the card proves invalid, the government insurance company has no responsibility.

The patient must know the cost of the visit before he receives the service. This is not as difficult as it sounds. Doctors have already categorized visits by the work required. They use the terminology “Level One Visit”, “Level Two Visit” etc. and they have a fixed fee for each level. If certain procedures cost above these standard levels, the costs must be posted in the office, and available on the internet. What constitutes each Level or procedure and their costs will have to be standardized across the country for all patients with the government insurance. This will require negotiations between the insurance company and the AMA. The negotiated fees must allow doctors a reasonable profit, and must be periodically adjusted for inflation.

If the office visit turns out to require a higher fee than originally agreed upon at the front desk, the patient must be informed, and the Medical Card must be run through the machine to pay 20% of the additional cost. The timing and responsibility for the additional payment is the doctor’s. The insurance is only responsible for the 80% balance after the 20% has been paid.

Medical Card payment is the only acceptable payment from a person with government insurance. Other forms of payment do not obligate the insurance to pay the balance.

What about hospital costs, drugs, lab fees, dentists, optometrists, chiropractors, hypnotists, dieticians, acupuncture and so on? We will continue to discuss these questions over time.

LHS

We continue the discussion from the front pages of American Panthers’ Newsletters, issues No. 6 and No. 7. It may be best to reread those articles in order to be able to follow this discussion.

The concept of Government sponsored insurance through the use of a Medical Card was introduced in issue No. 7. Its use was discussed for doctor’s office visits. Left open for discussion was its use for hospitalization, surgery, drugs, ongoing therapy and medical testing. Also to be discussed is its use for non-traditional medical treatments.

For consistency, lets call the program Government Medical Card Insurance GMCI.

Hospitalization must be handled in a totally different manner than office visits. There is no way that a hospitalized patient, or their family, can monitor all of the procedures and their costs. The only way to control costs would be through a fixed daily hospital cost, and fixed surgery costs. These daily costs must be negotiated between the GMCI Department, and a consortium of all of the approved and licensed hospitals in the country. It must be mandatory that all hospitals accept the negotiated costs and it must be mandatory that they accept all patients with GMCI. As examples of negotiated costs that I hope will approximate realistic numbers, let us say that each day of hospitalization would cost $1,000. Coronary bypass surgery might be priced at $10,000. Costs would be regularly adjusted for inflation. The daily fee would be constant for any day and would be in addition to the surgery fee. The surgery fee would not vary with each type of procedure, but would be set up in, say, five category levels, with each type of surgery being assigned to a level. Thus the patient will have a good idea of what the hospital stay would cost him, in advance. The patient would pay 20% of these numbers through his Medical Card, and the insurance will pay the 80% balance. The hospital will cover any excess costs, or benefit when its expenses fall below the fixed amounts. This system gives the hospital the incentive to keep costs under control, and the patient incentive to leave the hospital as soon as he/she is able. Hopefully it will also give all parties an incentive to improve surgery techniques to make them more effective, less expensive and less invasive.

The hospital would have the right to check the balance on the GMCI patient’s Medical Card at admission, and also have the right to charge the card each day, or only once when the patient exits. As with a doctor’s office visit, the GMCI is not responsible to pay the 80% unless the 20% is first paid through the Medical Card.

All fees must be included in the designated daily, or surgery costs. This includes a telephone and a television set in each room! With today’s call-anywhere plans, the phone call costs can be easily controlled. I’ve always wondered how hospitals can allow third party personnel to discuss and collect these nuisance fees, but cannot manage to discuss any of the medical costs with the patients or their families. Likewise, the surgery day cost must include everything, including anesthesiology, intensive care, room costs, a mint under the pillow, and so on. Non-surgery day costs must include all tests, therapies, services, etc. No extras means no extras.

One advantage of this system will be that hospitals will have to stop sending a stream of doctors, interns and plumbers (whatever!) into each room to ask the patient a few questions and charge $500. Hospitals must never be allowed to inflate their bills. While we are at it, lets address the outrageous practice of hospitals charging patients for a copy of their medical records! Every patient must be entitled to a free copy of the record of all events during their hospital stay. Also, lets force hospitals to join the 21st century and use computers more efficiently.

A disadvantage of the system would be that hospitals might cut corners to save money at the expense of the patient. To prevent this, minimum standards must be established, and enforced. A GMCI representative must be available 24/7 at each hospital to monitor these minimal standards, and address patient issues directly with the patient and/or their families. This representative is to be paid by the GMCI Department, and rotated regularly and randomly from hospital to hospital to prevent close relationships from developing between them and the hospital administration. The last line of defense would be our “friends”, the lawyers. Regardless of their expenses, hospitals must not be allowed to make errors that endanger patients.

On the other hand, hospitals should not be forced to protect themselves against frivolous lawsuits. Newsletter issue #3, page 2, describes a plan to severely limit these lawsuits. As we have said before, no healthcare system will work unless the problem of frivolous lawsuits, and lawsuits with preposterous claims, is addressed.

If anyone has had a recent hospital stay, or has a close relative who had one, you understand that hospital care leaves a lot to be desired. At the worst hospitals, most attendants are rude, and non responsive. At the best hospitals just some of them are. The quality of hospital care must be improved.

In all fairness, however, many people take advantage of the fee emergency room treatment at hospitals. This must be controlled. We cannot expect hospitals to charge fair prices for their services to some individuals, and at the same time require them to dispense free services to others. More careful thought and planning must be given to the hospital system, and as usual, the devil will be in the details. Speaking of details, there are many that we have not covered. We will continue this discussion in future issues. Meanwhile your input is encouraged.

LHS

We continue the discussion from the front pages of American Panthers’ Newsletters, issues No. 6 and No. 7, and from issue No. 8 page two. It may be best to reread those articles in order to be able to follow this discussion. Still to be discussed is the use of Government Medical Card Insurance (GMCI) for drugs, ongoing therapy, lab tests and non-traditional medical treatments.

The healthcare problem becomes very complicated if we try to create a comprehensive solution. A realistic healthcare plan cannot be boiled down to simple catch phrases nor can it be only a partial solution. The issues of hospital costs, drug prices, efficiency, lawsuits, insurance, research, dishonesty, etc. must all be a part of the solution, or the plan will simply not work.

As far as I know, nobody has tried to solve all of the problems in one comprehensive plan. There are many reasons for this. One is that it would be complicated and voluminous. Few people would have the patience to read it. Another is that any group involved with healthcare has its own axe to grind and may not care about the needs of other groups. A third reason is that any comprehensive healthcare plan will require some sacrifices by all parties involved. A fourth reason is that any single writer does not have enough expertise to discuss all of the issues.

That fourth reason is especially true for someone like myself. I am hoping that if I can supply some innovative ideas, and the outline of a plan, and get feedback from our members, then over time, an effective solution could evolve. Since American Panthers would like to address the major problems of our society, and since healthcare is clearly one of them, I feel obligated to take a shot at it. And so I take a deep breath and continue.

Let’s talk about non-traditional treatments. By this I mean any treatment, or category of treatments, that is not approved, or only partially approved by the American Medical Association. Examples are Chiropractic Medicine, Acupuncture, Hypnotism, Holistic Medicine, Herbal Medicine and Reiki. It’s a huge field. If you Google “Holistic Medicine” you get 2,290,000 responses.

In my opinion, most of these alternative treatments do not work, and exist for the purpose of scamming the desperate and distressed out of their money. However, and it is a huge “However”, we do not know this for sure. We do not know if there are real remedies hidden among piles of empty promises. There is absolutely no excuse for our lack of knowledge. One duty of the Federal Government, in conjunction with this new insurance plan would be to set up research projects to examine all of these approaches, and determine if any of them have merit. Until a treatment is proven useful, it should not be covered by insurance. On the other hand, we would not want genuinely useful treatments to be unavailable. I’m sure that everybody knows someone who would swear that acupuncture or chiropractic medicine, or some other non- traditional treatment, really works very well, and that the American Medical Association, or politicians, have a strong self-interest in keeping these procedures from the public. I’m very skeptical but I try to be open-minded.

I’m not open-minded about any type of claimed supernatural healing powers. These claims should be investigated by the police, and the perpetrators should be prosecuted. Legitimate medical research should not have to address this issue. I also feel that this is one of the areas in which current law-enforcement efforts are wholly inadequate.

I went to a chiropractor about 15 years ago for what I think was a pinched nerve in my neck. Insurance covered half of the cost of the first three visits. I had to pay $35 for each of those visits. When my insurance coverage was over, the Chiropractor offered me a special “uninsured” rate of $35. Here is an example of how insurance can do no good for the patient. It also shows that insurance coverage can allow doctors to charge higher prices, and can be easily taken advantage of. By the way, I feel that my pinched nerve healed naturally over time, but the Chiropractor claimed he cured me.

Therefore the GMCI program would begin with no alternative treatments covered, and a crash research program to determine if any should be. If we need an extra $5 billion to do this research, we can simply cancel the next aircraft carrier, or leave Iraq a little earlier than planned.

If a few techniques used by a particular practitioner of non-traditional medicine do prove useful, that does not mean that those practitioners should be allowed to participate in GMCI. It would probably be more practical for already approved specialists to add those techniques to their repertoire. Legitimizing only a few techniques for Chiropractors, Hypnotists, Acupuncturists, etc. would make it difficult to detect improper claims. Whatever the actual treatment was, these practitioners and their patients will be sorely tempted to report that a covered technique was actually used.

The GMCI system requires that the doctor be not paid until the patient’s medical card information is entered into the computer. The doctor’s terminal must pick up the patient information directly from the card, the procedures being billed must be entered at the doctor’s office, and the doctor’s computer should automatically enter the doctor’s identity information. The procedure can usually be entered by the push of a single button, just as they enter the price of a Whopper and fries at a Burger King. In most cases the button will simply enter “Level 1 Visit” or “Level 2 Visit”. When this is done, the patient is automatically debited his 20%, the insurance automatically pays the balance, and the patient, procedure, and doctor information are automatically transmitted to the program for examination.

As mentioned in a previous article, this information will be closely monitored, and severe penalties must be applied to cheaters. I cannot repeat this often enough: If the system can be easily scammed, it will simply not work.

The comprehensive examination of non-traditional, or alternative, medicine must be discussed in more detail. Even some traditional and accepted medical practices can be re-examined. I once was referred to a nutritionist because I suggested to a doctor that I may have a gluten intolerance, and three consultations were covered by my insurance. The nutritionist was unable to confirm or correct my doctor’s diagnosis (which turned out to be wrong). She also suggested that the consultations should be reported as nutrition instruction for a diabetic (I am one), because the insurance is more likely to pay. I agreed. It turned out, however, that she did not know much about gluten intolerance, and all of her charts and lists were for diabetics. So, 90% if what she told me was for diabetics, and 99% of that was information that I already had. I’m ashamed to say that I participated in this fraud because: “what the heck, it didn’t cost me anything, and who knows, it might have done some good”. If I had been personally responsible for even a part of her fee, I would have opted-out after the first consultation.

The study of non-traditional health care also relates to medical research in general. Medical research is conducted in many places throughout the world. I always wondered (not really!) why all of the “useful” medications belong to big drug companies and are protected by patents. Government sponsored medical research can yield results that belong to the people, and not the drug companies. United Nations sponsored medical research can yield results that belong to the entire world.

Medicare, America’s largest health insurance program, was set up 40 years ago. The program costs the American Taxpayers $300 billion a year and the total is increasing rapidly. More important, the program is easily, and constantly, scammed, as is Medicaid. Several studies have shown that between 33% and 40% of all Medicare expenditures are wasted on unnecessary or inappropriate care. The money spent on enforcing quality standards for this program is less than two dollars per $1000, or 0.2%. Ten times that amount would still be too little. Even this tiny amount spent on enforcement is spent poorly. Many enforcement activities are outsourced to private groups that have overlooked or missed cases in which patients have died due to incompetence. Some facilities have gone for years without an inspection. Huge quantities of data are stored in incompatible 20-year-old computers and never examined. There are huge, and unexplained differences in what Medicare pays for patients in different states, or even in different cities in the same state.

The largest health program in America is Medicaid. In 2005 it will cost the State and Federal Governments between $325 and $350 billion. In 2002 Medicare covered expenses for 40 million Americans, while Medicaid covered expenses for 51 million.

An elderly Medicaid patient that I know recently underwent a serious operation. After being release from the hospital, it was decided that he needed twice-weekly visits from a nurse, a physical therapist, and a housekeeper. He didn’t need the housekeeper because he was living with his children after the surgery. She had nothing to clean, so she helped him take a shower when she came for her visits. He didn’t need help taking a shower, but if a good time was had by all, who am I to complain? The physical therapist walked with him, and showed him how to blow into a tube. She also showed him some very simple exercises that he could easily have learned from a videotape. The patient could walk by himself, and really did not need the physical therapist. The nurse came to monitor the patient and the progress of the physical therapist and the housekeeper. The visits lasted over a period of six weeks before the nurse decided that they were no longer necessary. If the patient had to pay even a small part of the costs for these services, he would have deemed them unnecessary (perhaps with the exception of the shower).

As described in Newsletter #7, Medicaid, and Medicare can be efficiently combined into the GMCI program. The same system that monitors efficiency and honesty in one program can monitor all of the programs. The Medicaid expense sharing between the State and the Federal governments can be handled by adjustments among themselves.

The Healthcare article in Newsletter issue 8 suggested that a GMCI representative must be available 24/7 at each hospital to monitor minimal standards, and address patient issues directly with the patient and/or their families. This representative must be paid by the GMCI program and act as an advocate for both the program and the patient. He or she must have the authority to investigate deaths, uncleanly areas, the spread of infection in-house, patient complaints, unusual charges, admittance and release decisions and so on. This may sound like a big expense for the government to take on, but it really is not so. A few billion dollars goes a long way, and at the same time it is not a big part of the money spent on healthcare in this country.

There are, as near as I can estimate, 7,600 private (profit and non-profit) hospitals, and public general hospitals in this country. There are 168 hours in the week, which requires 4.2 GMCI employees per hospital to get 24/7 coverage. That equals 31,920 employees nationwide. If we assume a generous $100,000 per year cost per employee, that comes to $3.192 billion dollars a year. Add 25% for overhead, investigators and backup personnel (those who sort out the reports that come in from the hospitals) and you get a total cost of about four billion dollars, an easily affordable expense.

LHS

We continue the discussion from the pages of American Panthers’ Newsletters, issues No. 6, 7, 8 and 9. With the help of your input our plan will be improved and expanded and serve as a basis for an ongoing national discussion.

The term “Moral Hazard” is used by economists to describe the fact that insurance changes the behavior of the person being insured. This can be a big problem when it comes to health insurance. People definitely do use more unnecessary health services when covered by insurance. On the other hand, many necessary services, or important preventative services, are omitted by people who are poor and uninsured. It is for this reason that the proposed Government Medical Card Insurance Plan provides that the patient always pays a percent of the cost, even if it is minimal. In Issue #7 it was proposed that even people on Medicaid pay 2% of their medical costs. This percent will force doctors and patients to discuss the cost of any procedure in advance, and decide if it is necessary.

Since Medicaid patients will pay nothing for the insurance itself, and only 2% if actual costs for services, it is important that these people be investigated thoroughly to be sure that they actually qualify for Medicaid. I believe that we must accept the fact that these investigations must be intrusive.

This brings us to the difficult question of what society should do about citizens that can’t afford any medical costs, not even the 2%? Do we simply let them die? There is a solution to this conundrum. Almost every other developed country in the world insures all of its citizens. It cannot be easy, but a backup system can and must be put into place so that people simply do not die if they cannot afford the 2%.

Under the current system, Americans pay, per capita, 2½ times the healthcare costs of the industrialized world. For this extra money Americans apparently get nothing useful. Americans’ life expectancy is lower than the average for Western countries. We tend to have fewer doctors per capita and we visit them less often. We check into hospitals less frequently, and we complain more about the quality of healthcare services. We have fewer CT scanners and fewer MRI machines and a higher birth mortality rate than many of these countries. And finally, our per capita medical paperwork costs are three times that of most industrialized countries.

There are currently 45 million American citizens without healthcare coverage. Making healthcare insurance more affordable will cut down on this number dramatically, but in order to cut it to zero additional hard work and careful thought will be necessary.

The logic of George Bush on this issue was laid out in the 2004 Economic Report of the President. In this report he claims that some of them are foreigners that are covered in their country of origin, some are people who, if they chose, could be covered by Medicaid, and some are uninsured as a matter of choice. The report stresses the risks of moral hazard, and even opines that many of the insured are over-insured. Two things are clear from this report. One is that President Bush has no intention of improving healthcare for Americans, and the other is that our President resides on some other planet.

One good (?) thing about writing about our healthcare system is that you can’t turn over a rock without finding something that smells really bad underneath. A close acquaintance of mine recently stabbed herself in the hand with a kitchen knife (I’ll spare you the details) and had to call 911 for an ambulance to take her to a hospital a little over a mile away. The bill for the ambulance service came to $957.88! While I’m generally in favor of letting the laws of supply and demand determine pricing, in cases where the free market system isn’t working, I favor price controls. This is an example of such a case.

There are many scoundrels in the American healthcare story. However, not all scoundrels are equal. The pharmaceutical companies are the worst. It’s not possible to tell what it actually costs them to make their drugs. The truth is well concealed in the thick number fog of their financial statements. I’ve seen claims that it costs them $0.05 to manufacture a drug that they sell for $5.00. Such claims are impossible to substantiate, but it wouldn’t surprise me if it were sometimes true. The Pfizer 2004 income statement, for example, lists “Cost of sales as $7.541 billion. Somewhere in there is the cost of manufacture of their pills. “Selling, informational, and administrative expenses” is listed as $16.903 billion. In other words, they spend at least $2.24 to advertise a pill that costs them $1.00 to make. By the same income statement, they spend at least $2.20 to advertise a pill for every dollar that they spend in research. That is only what they admit to. Their markup probably is on the order of twenty times their cost. We know that they show a profit, but in fact they tone it down to avoid the embarrassment of riches. Pfizer lists an expense called “Amortization of intangible assets” ($3.364 billion) which seems particularly suspect.

There is absolutely no reason why vital research should be carried out by private companies. Research should be government sponsored, and the rights to manufacture the results should belong to the American people. Let the pharmaceutical companies manufacture the pills, and compete with each other to sell them. The government could set up their own medical laboratories or sponsor research by private companies or sponsor research done in Universities. People who make medical breakthroughs should be very generously rewarded. The bottom line is that the patents must belong to the people.

It is legitimate to ask if a government organized “socialist” program of medical research can be more efficient than one based on the proven capitalist profit motive system. The capitalist system works extremely effectively, and we know that the communist system worked poorly enough to collapse of its own weight. In previous discussions I have pointed out that neither capitalism nor socialism is the natural system. Both are natural in their place. Breast-feeding has been, and still is, my primary example of Marx’s “From each according to their ability, to each according to their need”. We do not hire competing companies to police our cities or select among competing armies of mercenaries to protect our nation. When a capitalist solution does not work for a particular problem, we must look toward a socialist solution. Remember, it was a socialist system that put Yuri Gargarin in orbit. American Panthers is not interested in characterizing solutions, only in finding the solution that works best.

The capitalist drug creation and distribution system in the United States has broken down. Pharmaceutical companies no longer have the incentive to provide the best drugs at the best prices for the American people. They only have to provide drugs that seem to work. They then spend three times the cost of research to sell these drugs. Drug companies often buy promising research-in-progress, funded by tax dollars, then turn this research into pills for which they own the patent. They support friendly politicians and outright bribe doctors. They flood the media with propaganda, they control which clinical trials are released, and effectively control supposedly neutral medical journals through fees for sponsored drug trials and their advertising revenue. They hire professional bloggers to neutralize the complaints that are now appearing on the internet. Often doctors that prescribe these drugs are directly paid off by what is called “consultant fees”. All doctors are bribed with free medical conventions, drug samples, and freebies. A typical free week in Hawaii for a medical convention requires about an hour of attendance at a lecture. The rest of the program does not have required attendance, and so is not attended. The FDA and United States Patent law have also been perverted to act in the best interests of the drug companies.

Drug companies sponsor trials of their drugs to be carried out by medical journals, such as The New England Journal of Medicine, Lancet or JAMA. Over two-thirds of the medical trials published by these magazines are sponsored by the drug industry. The results are then widely respected because of the prestige of the journals. Guess what, the trials hardly ever find the drug to be dangerous or ineffective.

Aside from direct advertising of particular drugs, pharmaceutical companies spend a lot of money advertising their own altruism. They claim that their creations are a great benefit to mankind, and they claim to go out of their way to create programs that help low income people to afford them. Their claims and their lies are supported by Bush and the neocons in exchange for the drug companies’ support to help keep these corrupt politicians in power.

Doctors do not know which drugs are most effective and, because of the way current insurance is structured, neither doctors nor patients know, or care, which drugs are least expensive. (A problem that American Panthers’ GMCI insurance will quickly solve.)

The system is totally corrupt and provides overpriced and under-effective prescription drugs for the American people. It’s time for a complete overhaul.

I’ve already mentioned that all medical research should be government, or United Nations, sponsored and the resulting breakthroughs should belong to the people. Another major change for the better would be to completely ban the advertising of prescription drugs. That means all advertising, including ads that do not mention specific drugs but just tout the “altruism” of the pharmaceutical industry, or of the individual company. There should also be a total elimination of the fleets of salespeople that visit doctor’s offices. And let’s not forget the premiums. These are calendars, notepads, pens or anything that carries the name of the pharmaceutical company or a specific drug. The tons of free drug samples dished out to doctors must be outlawed and, of course, those preposterous medical conventions must go.

In-depth information about all prescription drugs should be available on a government sponsored website accessible to all. Important breakthroughs and other information can be on that website or be disseminated by the government via DVD or videotape to all physicians, or anyone who wants them. Mass Emails can be used to alert and update the medical community about important issues. Drug companies must be forbidden from contacting medical practitioners directly, and of course it must be against the law for them to contact any member of the government involved in regulating the industry except via approved, and strictly monitored, channels.

While we’re at it, lets set executive compensation caps for any company, including pharmaceuticals, that wants its shares listed on a national exchange. If compensation on the order of $5 million dollars a year is not enough for a Chief Executive Officer, then let him look elsewhere for a better paying job! Lower compensation caps should also be set for executives other than the company CEO.

All this gives tremendous power to the government agency in charge of the medical program. Checks and balances will be necessary. We rely on the press as the final protector and we must continue to do so. Unfortunately, the press has done a poor job in exposing the truth about Bush and his cronies. The survival of America as a free nation depends on the press doing better in the future.

LHS

We continue the discussion from the pages of American Panthers’ Newsletters, issues No. 6, 7, 8, 9 and 10. With the help of your input our plan will be improved and expanded and serve as a basis for an ongoing national discussion.

Last month I mentioned that in writing about Healthcare in the United States, the good news (?) is that you can’t turn over a rock without finding something that smells really bad. I meant that any place you looked you could find waste, dishonesty and/or incompetence that could be corrected to save money and improve the system. Laboratory testing is no exception.

The medical laboratory business grosses about $40 billion a year. An arrangement between doctors and laboratories, called Referral Deals, is quite common. In a Referral Deal, the doctor sends a sample to a laboratory for analysis, the laboratory bills the doctor, and the doctor then marks up his cost and bills the patient’s insurance company. These markups can be as much as ten times the doctor’s cost.

In a Referral Deal, the doctor never reveals to the insurance company that the work was done by an outside lab and, surprisingly, the insurance company usually pays the marked-up invoice without question. One problem for the insurance company in detecting the scheme is that the amount of the invoice does not differ from the cost of the test if it were billed directly by the medical laboratory. In order to get the doctor’s business the medical laboratory bills the doctor at a steep discount, but still at a profit to themselves.

In “condo” schemes an outside company organizes a large testing facility consisting of a multitude of smaller labs within it. Individual doctors buy and equip one of these smaller labs, and pay the outside company to maintain their facility. Since the doctors are now doing the testing on what they can claim to be their own premises, they feel justified in billing insurance companies directly for these tests, and keeping the profit.

Another scheme is for labs to charge artificially low prices to doctors in exchange for the doctors throwing lucrative Medicare testing their way, which the labs then legitimately bill directly.

Since medical labs can bill doctors at 50%-75% discounts and still make a profit, an obvious inference is that the costs of medical tests (blood and urine analysis, skin biopsies, etc.) are too high by a large factor. You may ask how this can happen in a capitalist system where costs are supposed to be determined by free competition and the laws of supply and demand? The answer is that they can’t. There is clearly a conspiracy to fix prices in this industry. The conspiracy may not be written, or discussed, but it is surely happening. As I have said before, when the laws of supply and demand are not working, a socialist solution to the problem is in order. In this case, the solution is that fixed prices be established by the government for all possible medical tests. These prices must be published on the internet and elsewhere so that no patient, or his insurer is overcharged. The GMIC plan proposed by American Panthers, which requires that patients pay a percent of the bill, will insure that they check out the price, and avoid unnecessary testing.

Doctors, some of whom may be genuinely struggling to earn money, are sorely tempted under the current system to prescribe unnecessary tests and to use the lab that gives them the lowest price, and not necessarily the most accurate results. The patients and their insurance companies are both severely disadvantaged by this process.

Marginally effective laws to combat this problem are in place in some states. It is also a federal crime for healthcare providers to pay doctors for referrals when Medicaid or Medicare is involved. These laws require that medical laboratories bill insurance companies directly.

One problem is that these laws do not address the fact that the amount of the charges are already artificially high.

The American Medical Association pays lip service to the problem by addressing it in their code of ethics, which says that a physician should not charge a markup for services done by others. The AMA does add that it is legitimate for a doctor to add a “processing charge” for such services. Federal law also prohibits doctors from referring patients for services in which they have an interest. Both are apparently of little effect.

CT (Computed Tomography) Scans, MRIs (Magnetic Resonance Imaging) and PET (Positron Emission Tomography) Scans have become a business that is now about 2.5 times the size of conventional laboratory testing. CT scans were first used on general patient populations in 1972, MRIs in 1984 while PET scans have only come into wide use recently. Scanning is one of healthcare’s fastest growing diagnostic tools, and for Medicare, it is the expense that is growing fastest.

The scam used is similar to what is done for conventional laboratory tests. The doctors are billed at a discounted rate, and they in turn bill the insurance companies at an inflated rate. For MRIs, a typical cost to the physician is $375, but it can go as low as $245, He then typically bills the insurance company $700-$750, or as much as $1350 for an MRI brain scan. Doctors claim an expense of about $100 each for paperwork and the cost of having the scan interpreted. That still leaves a big profit for doing nothing.

The law against doctors referring patients to outside services for a kickback or profit has a loophole that is frequently taken advantage of. If the doctor performs the service in his own office it is not deemed a referral, and he is allowed to bill the insurance company directly. The referral deals stipulate that a doctor is leasing the imaging facilities during the time that his patient is being imaged.

Slick healthcare lawyers can then claim that these temporarily leased facilities can be treated as a part of the doctor’s office, allowing the doctor to bill directly. These “per use non recourse lease agreements” are similar in concept to the “condo” schemes and “referral agreement” used in conventional laboratory testing.

Using MRIs as an example, a government controlled price of about $375 would ask the patient to make a 20% co-pay of $75. This would be an affordable amount, but high enough for the patient to ask about the cost and purpose of the procedure in advance.

For CT scans the story is similar. A typical charge to the doctor is about $350, while doctors bill the insurers $750 for the procedure. Triple the numbers for PET scans.

For any scans done on a hospital in-patient, the cost (as discussed in a newsletter #8) would be a part of the fixed daily hospital charge.

When doctors get kickbacks on scans, it is not surprising to discover that the number of scans prescribed go up dramatically. Thus, America’s healthcare costs go up due to unnecessary scans as well as the fact that the profit on each scan is unconscionable.

One conclusion is that the laws against these various kickback schemes are not properly written, or adequately enforced. When you are talking about businesses this big, with profits this large, there is plenty of money left over to unduly influence lawmakers and regulators.

Alas, I have come upon another scoundrel. They are collectively called Pharmacy Benefit Managers (PBMs) and include Caremark, Medco, Express Scripts, and others. These companies fill and send subscriptions to patients at the insurance company prices, or even a little less, and then bill the insurance company for the medications. They charge only about $5 (or even less) for each prescription, and nothing for shipping and handling. I use Caremark, and cannot complain about their service or costs, except that they will switch me to a generic drug without asking. They even send me three months of a prescription for the price of one month. So, where’s the catch?

PBMs have been accused of partially filling prescriptions, switching prescriptions, sending drugs that have been returned by other patients and overfilling insurers. The real problem is that they can use their bulk purchases from pharmaceutical companies to negotiate a lower price for themselves, and bill the insurance companies at a higher price. Since pharmaceutical companies grossly overcharge for their drugs, they have plenty of room to give discounts to the PBMs. The PBMs, in turn, only give token discounts to the patients and keep the very large profits for themselves. As a result, patients get very little, if any, benefit and neither the PBMs nor pharmaceutical companies have any interest in controlling the wholesale prices that the pharmaceutical companies charge.

The Government Medical Card Insurance (GMCI) program must also cover mental health, dental health and eye care.

I suspect that the cost of vision correction can be lowered substantially. As an example, lo and behold, perfectly acceptable eyeglasses can be purchased for $19.99, and sometimes on sale at half of that price. These are reading glasses only, and are sold at drug chains and other stores throughout the country. The buyer himself does the examination at the eyeglass display. I do not have enough information to determine if eyeglasses for distance vision can be purchased in this way, but the possibility should certainly be investigated.

Dental health is unique in that low cost prevention and maintenance can always avoid large bills later on. It is vital that regular examinations are done so that cavities can be detected and gum disease can be treated at early stages. Cavities, if untreated, lead to root canals, caps and false teeth. Periodontal (gum) disease strikes almost all adults eventually. If not treated, the gums become irritated and bleed easily. As time goes on the gums pull away from the teeth and form pockets. These pockets collect debris and grow as the bacteria spread below the gum line and attack the bone holding the teeth in place. The teeth become loose and eventually fall out.

Aside from being very painful, bad teeth are a social stigma associated with poverty and ignorance. They are also a serious deterrent to getting a good job.

The good(?) news is that everybody hates going to the dentist, and nobody will go just because it is made cheap by insurance. The bad news is that some people will not go even if it is free. As food for thought, consider that it might be an advantage to have free and compulsory preventive dental examinations for insurance holders.

Mental health is an extremely important part of an overall health care insurance plan. I will not go into detail at this time because I need further study and more space.

Check out http://www.kucinich.us/issues/univesalhealth.php on the Dennis Kucinich website. He makes a very good case for Universal Health Care along with some specific points that are worth considering seriously.

Kucinich finds major fault with the insurance companies and the HMOs. The costs of their lobbying, advertising, executive salaries, bonuses, paperwork and sales commissions are all added to our health care costs without producing any corresponding benefits. His Universal Health Care plan eliminates all of these costs by replacing insurance companies and HMOs with one single insurer.

While it might be a good idea to have the government pay the premium for all citizens, I believe that the Kucinich plan would become unworkable if each insured were not made a part of the oversight process by being responsible for paying a percent of the cost of the services that they use.

LHS