AAPS News December 2017 – Death and Taxes


Volume 73, no. 12 

Having failed to repeal the Affordable Care Act (ACA or “ObamaCare”), the Republican regime is moving along to the next item on its promised agenda, tax reform. A repeal of the ACA individual mandate might be slipped into the package. But so far, none of the other ACA tax increases are affected by either the House or the Senate bill.

There is plenty of class-warfare rhetoric from both sides, concerning the effects (or lack of same) on the “rich” or the “middle class,” but no historical context or economic perspective.

In 1913, the Underwood Simmons Act contained the first modern U.S. income tax—16 pages long. The bottom rate was 1%, and persons earning less than $3,000 ($75,000 today) were exempt. The top rate of 7% only applied at incomes greater than $500,000 (worth $12.5 million now). Major changes were relatively simple: today, heavily vested interests make any serious modification virtually impossible, though the structure of the economy is drastically different (https://tinyurl.com/ybehx5bd).

The tax bill offers an opportunity for game-changing reform of medical financing: doing away with the income and payroll tax exclusion for employer-owned health insurance. About half of Americans are insured through their jobs. It’s “the biggest single carve-out in the U.S. tax code,” notes the Washington Post, but Republicans aren’t going there. Instead, they are targeting the deduction for self-paid medical expenses that exceed 10% of adjusted gross income. This would “save” only $8 billion/yr (cf. more than $250 billion forgone due to employee health benefits); and 70% of Americans who claim it make less than $75,000/yr (https://tinyurl.com/yaqh4wht). Instead of giving this huge advantage to third-party payment, the tax code should treat all forms of payment in the same way, states AAPS (https://tinyurl.com/yceh7jjf).

Politicians will not explain how tax subsidies have contributed enormously to cost increases in medical care, as well as housing and higher education. As actuary Jeremy Gold pointed out, 95% of a legally mandated cost advantage will end up as waste (https://tinyurl.com/hre452z).

The tax bills do not touch the fiscal Doomsday Machine of entitlements, ACA being the most dangerous. Under ACA, Medicaid costs are slated to double to about $8 trillion over the next decade (Stockman 7/17/17). The retirement of baby boomers is rapidly propelling the nation toward fiscal catastrophe. Federal spending approaches 30% of GDP, with revenue stuck at 18%.

“There is no right way to fix the progressive tax,” writes Daniel Horowitz. Committee chairmen state their proposals will be at least as progressive as the current code. And the massive growth of refundable tax credits has made the code more progressive today than it was decades ago (https://tinyurl.com/yc76luz9).

Progressive taxation is a key principle espoused in the Communist Manifesto. The tax code is an engine for the redistribution of wealth—and not necessarily from the rich to the poor, but rather to crony socialists and the politically favored. Redistribution is also a deliberate feature of ObamaCare, with in-kind benefits flowing to the medical cartel lobby. Moreover, ACA is full of hidden taxes or tax equivalents such as community rating, which has caused a three to nine-fold greater impact on premiums than the increased cost of care (https://tinyurl.com/y9gt3rmt).

ACA subsidies and the tax code’s subsidies both keep people from advancing because of the massive effective marginal tax rate, possibly >100%, if an income threshold is crossed.


Behind the Curtain in the Tax Bills

  • All individual tax provisions expire in 2025 to propagate the myth that they do not add to the long-term deficit (David Stockman’s Contra Corner 11/20/17).
  • The big cuts, including the alternative minimum tax, the estate tax, and the business pass-thru, amount to 147% of the net cut. This means a $700 billion increase for others (Stockman 11/3/17).
  • The middle class can’t benefit much from an income-tax cut. The proper tax to cut is the payroll tax. The median income family ($59,000) has $9,500 extracted in employee and employer share, eight times the $1,182 cut touted by Speaker Ryan (ibid.)


The Ultimate Entitlement Cost-Saving Mechanism

Entitlements have been the main cause of the nation’s rising indebtedness since the 1970s. But the phenomenon of relentless expansion of an initially narrow program began much earlier. By the 1890s, Civil War pensions accounted for 40% of federal spending, having expanded from 8,000 recipients in 1873 to 1 million recipients. Those just outside the eligibility criteria clamor to be included; are they not equally worthy?

The person who made the largest reduction in entitlements in history was Franklin Roosevelt. In 1933, veterans’ pensions were 25% of spending. Within one year, he had reduced the rolls by 400,000 (Tunku Varadarajan, WSJ 9/9/17).

To suggest taking away an entitlement is now thought to spell certain political death. Politicians pledge to protect the program. We can’t have funding cuts, or cause people to lose “coverage.”

But we can have incentives for “efficiency” and “quality,” which can, for example, reduce hospital readmissions for heart failure within 30 days of discharge. Though disputed, this might lead to 10,000 premature deaths in a year (https://tinyurl.com/ybatuj7t). Indisputably, having sick people transition with dignity to the morgue saves resources (https://tinyurl.com/yajuqdkh).


Financial Tremors

  • The Bank of NovaScotia (ScotiaBank), Canada’s third largest bank, has put its precious metals operation up for sale. ScotiaMocatta is one of the world’s eight owners of concentrated silver shorts. JPMorgan is the only one that won’t be wiped out if prices soar because it has been massively buying silver for more than 6 years and has accumulated 115 million ounces, as much as the Hunt Brothers owned (James Cook Market Update, late Oct 2017).
  • The U.S. dollar dropped 10% in the last 12 months. Since 1971, the dollar has lost 84% of its purchasing power, although the Fed claims inflation has been “under control” the whole time (ibid.).
  • The 2017 U.S. fiscal gap will be $6 trillion, nine times higher than the $666 billion official deficit, says Prof. Laurence Kotlikoff of Boson Univ. With total government debts and unfunded liabilities at $200 trillion, the U.S. is “in worse shape than Russia, China, or any developed nation” (James Cook Market Update, early Nov 2017).
  • By suppressing interest rates to unprecedented lows, central banks have created enormous incentives to speculate in high yielding risk-assets, creating bubbles that will pop. “Private investors have no way to earn a safe return” (https://tinyurl.com/ycn2wzyf).
  • The U.S. now has only 20 million jobs in the high-pay full-time goods-producing industries (manufacturing, construction, mining, and energy): 2 million fewer than in November 2007. Job gains are in the HES Complex (health, education, and social services), which are almost entirely funded from government taxing and borrowing (David Stockman’s Contra Corner 8/4/17).
  • Within 8 weeks of suspending the debt ceiling, the national debt spiked by $640 billion. Such spikes occur because of gimmicks like divesting trust funds as the ceiling approaches (Stockman 11/6/17).


Government-Caused Physician Shortage

It’s estimated that the U.S. will need at least 52,000 new primary care physicians by 2025. The shortage of  surgeons may be the most acute. At present there are 5.8 per 100,000 population vs. the 7 needed; the ratio has decreased 26% in the past 25 years. The number of general surgeons finishing residency, about 1,050 per year, has been stagnant for 20 years. The Balanced Budget Act of 1997 limits the number of residency positions. Thousands of U.S. medical graduates are thus unable to practice (https://tinyurl.com/y8cqgwre).

Nearly one in five physicians is planning to reduce clinical work hours in the next year (https://tinyurl.com/yc7fd59a). Then there’s the “battered physician syndrome” (https://tinyurl.com/y7ylna54), too often leading to suicide, and uncounted casualties from Maintenance of Certification, sham peer review, licensure board actions, and even prosecution. The effect of highly touted “diversity” in medical school acceptances—at least half of graduates are women—is unknown: the likely number of lifetime hours to be spent in hard clinical work is not a consideration. “Work/life balance” is a higher priority.


“It will be said, ‘Communism abolishes eternal truths, it abolishes all religion, and all morality, instead of constituting them on a new basis; it therefore acts in contradiction to all…historical experience.’ What does this accusation reduce itself to? The history of all past society has consisted in the development of class antagonisms that assumed different forms at different epochs.”

Karl Marx, https://tinyurl.com/ybtk9hvz


What If a Debt Ceiling Is Enforced?

The only remaining safety brake on inevitable national bankruptcy is the debt ceiling, writes David Stockman. The White House has the power to throw down that desperately needed gauntlet, refusing to sign any bill that does not repeal ObamaCare and include a sweeping set of other entitlement reforms. With $270 billion in monthly revenue, the President would have to prioritize spending: $35 billion to service the debt, $35 billion to pay the troops and maintain military readiness, $85 billion for Social Security checks, $60 billion for Medicare, $15 billion for veterans benefits, $40 billion for the courts and other core government functions. There would be short-term chaos and excruciating political pain, “but then and only then could the tyranny of entitlements be broken.” He adds: “stopping ObamaCare is the Waterloo for national solvency and the survival of a serviceable form of capitalist prosperity” (David Stockman’s Contra Corner 6/31/17).

And what if the debt ceiling is abolished?


Life and Death in Socialist Utopias

  • The National Health Service (NHS) in the UK,  having received only one-third of the funding it requested, is compiling lists of surgeries and prescription drugs it cannot afford, such as hip or knee surgery, gall bladder operations, hernia repair, many painkillers, and thyroid pills (https://tinyurl.com/y8qmoc65).
  • On the death of Charlie Gard after the NHS refused to allow him to receive privately paid experimental treatment, Robert Truog, M.D., of Harvard Medical School asks how the rights of individuals to use their own money as they desire can be “balanced against the obligation of societies and their governments to regulate health care systems in ways that ensure the delivery of beneficial and cost-effective treatments for the good of all.” The best interest of patients is part of his answer, but he calls for a commitment to “upholding the integrity of medical practice by refusing to provide treatments that fail to meet a reasonable threshold of scientific justification” (JAMA 9/19/17).


Evolving the New Man

In 1920 Lenin said that communists subordinate morality to the class struggle. The murder of 100 million is still excused or ignored by many because of the noble intention of creating a just society and redefining human nature. After all, Natural Selection (i.e. death) is the driving force of evolution.

The Communist century should have taught us, writes David Satter, that “the independent authority of universal moral principles cannot be an afterthought, since it is the conviction on which all civilization depends” (https://tinyurl.com/y7837ysh).


Is There a Right to Food?

This right might be considered a corollary of a right to health care, since provision of nutrition and hydration is now defined as life-sustaining medical treatment. Consider:

  • After a significant popular rebellion in July, the streets have become quiet in Venezuela. People who complain can’t get a government-issued food ration card. The government is withholding cash, forcing the use of debit or credit cards. This enables it to monitor all transactions and obviates the need to print planeloads of new currency in the face of triple-digit inflation (WSJ 11/19/17).
  • Deprivation of food and water ends a life as reliably as a lethal injection, and is an increasing threat to patients judged mentally incompetent. The American Nursing Association has adopted a policy supporting the right to commit VSED (voluntary stop eating and drinking) without intervention: “A patient’s decision regarding VSED is binding, even if the patient subsequently loses capacity.” Increasingly, prominent bioethicists contend that “caregivers should be forced to withhold spoon-feeding,” states Wesley Smith, if a dementia patient has an advance directive that he wanted to be denied sustenance if incompetent. “The medically vulnerable have rarely been in greater jeopardy,” he writes, noting that 72% of caregivers in Quebec favored euthanizing Alzheimer’s patients, even without a directive (https://tinyurl.com/y7ae9f4c).
  • Oregon SB 494 would allow starving mentally ill patients to death, denying them spoon-feeding even if alert. It defines food and water as a regulated, physician-controlled form of medical care. The insurance industry was the most enthusiastic supporter of this form of “regulation” (https://tinyurl.com/yddcvdps). The bill was in Judiciary committee at the time of adjournment.


Global Physicians’ Pledge Gets Makeover

The World Medical Association recently adopted a revised version of the Declaration of Geneva (https://tinyurl.com/yc823n3s), its most substantial update in 70 years, “reflecting changes in the relationship between patients and physicians,” writes Tanya Albert Henry on the AMA Wire (https://tinyurl.com/y7q6fqbc). To the clause that calls for a physician to practice with “conscience and dignity” the phrase “in accordance with good medical practice” is added. Doctors will “maintain the utmost respect for human life”—but the pledge says nothing about declining to end a human life.


Tip of the Month: Beware of the “trust me” model of hospital contracts, warns attorney Charles Bond (https://tinyurl.com/ya9k65ky). The hospital industry has latched on to the phrase “burnout” just as it did with “disruptive physician,” and we are now seeing “burnout” used as grounds for disciplinary action. It is a totally subjective label, against which there is no defense. The physician usually winds up in a “performance improvement plan” (PIP), and if he resigns from the medical staff while under PIP, the Data Bank considers that a reportable event (i.e. resigning while under discipline). The term “burnout” arose just as the hospital industry determined to cut physician income by 25%, by hiring physicians “on production.” Compensation is tied to work RVUs (relative value units) tracked by the hospital. Most contracts allow physicians no way to audit or challenge the record. This has led to rampant abuse; complaints may be evidence of burnout.


What a Piece of Work Is Man?

Hamlet’s question is nowhere answered in the AMA’s Code of Medical Ethics, writes Philip Hawley, Jr. “Curiously, nowhere in this document does the AMA explain its foundational moral principles.” Nor does it discuss human nature, or give any clue about the qualities that define membership in the human family. It is silent about protections owed to the smallest and weakest humans.  Using the term “potential offspring” almost certainly refers to Justice Blackmun’s opinion in Roe v. Wade, in which he refers to a human fetus as “potential life.” What makes life “actual”? The AMA doesn’t say. But it does say that medical ethics encompasses “matters of social policy” (https://tinyurl.com/y9zatww5).


IRS Used to Push ObamaCare

According to documents obtained by Judicial Watch from a Freedom of Information Act request, Obama’s IRS coordinated with the Department of Health and Human Services (HHS) and the Obama White House Behavioral Sciences Team in a $5 million effort to pressure Americans to sign up for ObamaCare. The IRS may have illegally revealed information used to select taxpayers to receive letters threatening penalties and claiming enrollment was much cheaper than it was (https://tinyurl.com/yb85whvv).


States Can’t Force Payment of ACA Subsidies

U.S. District Judge Chhabria in San Francisco refused to block President Donald Trump’s executive order to block cost-sharing subsidy payments to insurers, rejecting requests from 18 Democrat state attorneys general. The subsidies were expected to cost $7 billion this year and $10 billion in 2018. They were not appropriated by Congress. The judge said that the requested restraining order would allow insurers to double collect both the subsidies and the increased premiums calculated on the basis of  the anticipated cut (https://tinyurl.com/y9qh8hqx).

The NY Times implies that Trump’s “determination to dismantle [ObamaCare] on his own is an attack on the rule of law,” when in fact it is an effort to faithfully execute the law as written.

The lack of appropriations is not an oversight, writes Andrew C. McCarthy. Obama requested the funding annually, and Congress refused. Lawmakers like to be seen as the source of generous tax “credits,” but not as money funnels to corporate titans. The law was “intended to unravel, only gradually and with the right villains taking the blame, while the government, having actually caused the problems—emerges as the savior” (https://tinyurl.com/y78wwbba).


Rigged Arbitration

In California, about half of all patients are enrolled in Kaiser Permanente and are asked to agree to mandatory arbitration in medical malpractice cases. Kaiser is the defendant (“respondent”) in virtually all cases that go to arbitration. Decisions are virtually unappealable. Both parties must agree on the appointment of the  highly paid “neutral” arbitrator, who will be heavily penalized if he finds against Kaiser. Heavy pressure to settle large cases before trial has been noted if the judge hopes to earn a living as an arbitrator after retirement, writes Arlan Cohen, M.D., J.D.




ObamaCare’s Death Payments. In 2010, Democrats and their president, Barack Hussein Obama, implemented a policy of death   that killed thousands. ACA’s Hospital Readmission Reduction Program successfully reduced hospital readmissions by 0.9% over a one-year period. The mortality rate, however, rose by 5% during that same period—an estimated 5,400 [or more] additional deaths of Medicare patients. In a centrally planned and controlled economy, people (such as hospital administrators) find ways to game the system, as to avoid penalties for readmissions. This goes beyond Obama’s statement that Granny might be better off not getting surgery and instead taking a pain pill: Make Granny wait for care, and maybe she will die. Republicans are now complicit in these continuing deaths because of their inexcusable inaction.

Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


“Kaiserization.” Kaiser Permanente is extremely important for understanding what is happening because it is well connected to federal bureaucrats and its system is being used as a blueprint for many changes. It is also so politically connected in California that it “owns” government officials and judges. Kaiser physicians must sign a contract not to disparage Kaiser, and their retirement benefits depend on observance of this provision. One thing it does is broaden the “normal” range of lab values to favor nontreatment.

Ron Panzer, Hospice Patients Alliance


All Data at Risk. A cyber attack at Morehead Hospital in Eden, NC, potentially breached 66,000 patient records. Any facility that uses electronic health records is vulnerable to this type of breach. All it takes is a single staff member who inadvertently opens a bad e-mail message. The field of cybersecurity is thus far inadequate to prevent such attacks. In fact, in our state, most facilities are being required to turn their medical records in to the state twice daily. The North Carolina Health Information Exchange is our own special tribute to George Orwell. The Republican/Democratic duopoly claims that deep state or proxy electronic oversight and control of medical care is going to help patients, and save money.

Joseph Guarino, M.D., Reidsville, NC


Who Is the Single Payer? In my opinion, the single payer is U.S. citizens. The government is the “single distributor”; and since it actually has no vested interest in containing costs, it will simply increase taxes at the expense of the “single payer” citizens. Remember that the government can never “provide” (distribute) any service as efficiently as the private sector.

Jeffrey A. Keenan, M.D., Knoxville, TN


The Most Depressing Government Graph. In constant 2009 dollars, the amount of money the federal government spends per capita has increased inexorably from $180/citizen (3% of GDP) in 1900 to nearly $11,000 per citizen (21% of GDP). The government is 60 times more intrusive, 60 times more pervasive.

William M. Briggs, Ph.D., wmbriggs.com/post/22980


NHS at Risk.  “The healthcare system is facing failure, rooted in an epidemic of misinformed doctors and patients,” writes Dr. Asheem Malhotra in The Guardian (https://tinyurl.com/yd5u67jn). “Finance trumps patients at every level. UK healthcare needs an inquiry.” Dr. Malhotra is a consultant cardiologist and member of the Academy of Medical Royal Colleges choosing wisely steering group. During a keynote lecture, he discussed a man whose disabling muscle pain was relieved when he stopped taking a statin drug. The audience guessed that his risk of death within 2 weeks of stopping the drug was 25%; actually, it is between 0 and 1 in 10,000. Malhotra cites a study (https://tinyurl.com/yd9v4zyr) showing that 70% of trainees fail a simple test on principles of evidence-based medicine. Moreover, the literature itself is suspect. Too many people with conflicts of interest are making policy. There’s a battle of “truth versus money.”

Paul Martin Kempen, M.D., Ph.D., Weirton, WV


ACA: Rapid Demise Intended. The NY Times is accusing Trump of sabotaging ObamaCare (https://tinyurl.com/yaeezwno), but it was designed to fail. The Marxists wanted to decimate and destroy private market-based care, create the death spiral, sucker insurers into the game so they could be the Judas goats, create a  noisy dependency to scare politicians so they won’t trash the abomination, then impose Medicaid for all. Jonathan Gruber revealed their attitude: the public is gullible to utopian socialist promises. Organized medicine and hospital officials were bought off or just went with their socialist delusions.

John Dale Dunn, M.D., J.D., Brownwood, TX


Medphobia. The dysfunctional management of controlled medications reflects the abandonment of the Oath of Hippocrates as the standard of care. Wanton prescribing is one extreme; the other is abandonment of medication-dependent chronic atypical polysyndromic patients. The self-righteous grandiosity of politicians, addictionologists, and pharmacists imposing dogma has created a bipolarity of causes and effects. Some patients do have their lives back on properly managed pain medications and benzodiazepines. One such 45-yr-old patient did well for 5 years, with an occasional binge, but was dead after 4 months of pretentious abstinence.

Samuel Nigro, M.D.,  Cleveland Heights, OH