AAPS News June 2012 – Selling the Affordable Care Act


Volume 68, no. 6 June 2012

Although Obama devoted fewer than 50 words to the ACA in his State of the Union message, the Dept. of Health and Human Services (HHS) has signed a $20 million contract with a public relations firm, Porter Novelli, to highlight the “preventive” benefits in ACA. The competitive bidding process awarded the contract to a firm whose managing director, Catherine “Kiki” McLean, frequently appeared as an “on-air surrogate for the Obama for America campaign.”

Americans were not all enthusiastic about Medicare either. After the government had spent more than $4 million (1966) dollars promoting it, more than 20% of seniors had still not enrolled in Medicare Part B, wrote AAPS Director Curtis Caine, M.D., in a letter to Mississippi physicians. That’s when the government pressured insurers to cancel all policies held by Americans of Medicare age. So much for a “public option on a level playing field.”

On Obama’s campaign website “delivering affordable health care” is one of six items on a scrolling banner about “Obama’s Record in Brief.” Testimonials are sought: “Whether you finally have access to insurance coverage, are paying a better rate, or were able to get that checkup you’ve been putting off, we want to hear what the Affordable Care Act means to you. It’s stories like yours that show how far we’ve come, and why it’s so important to protect this progress…. You can also upload a video telling your health care story here.”

Moving Backwards: Repeating Past Mistakes
The modern welfare state is based on principles expounded by Bismarck and the German Historical School, writes Richard Ebeling (Freedom Daily, January 1999, http://tinyurl.com/bl7ddf6). It rejects radical Marxian socialism and preserves existing social structures while placing them under government control. The promise is a higher “freedom”—security and protection from the vicissitudes of life. Individuals are assumed to be incapable of bearing responsibility for their own circumstances. There are no theoretical limits on government power: “The jurisdiction of government is a matter not of principle but of expediency.”

“There is almost no dissent to the assumption of state supremacy, of subordination of the individual, of the necessity for personal and class sacrifice to the Fatherland…. The individual exists for the state, not the state for the individual….”

The state should distribute to the community the burdens of sickness, old age, accident, or disability. No private profits should be permitted from providing insurance, Bismarck said.

The results: In 1885, just after Bismarck’s insurance was implemented, the average number of sick days taken per year was 14; by 1930, it was 30. Physicians were paid purely on the basis of quantity. It was a system of mass treatment, with little personal contact between patient and physician. When taken over by the Nazi regime, the social insurance system was used “as a means of popular demagoguery; as a bastion of bureaucratic power; as an instrument of regimentation, and as a reservoir from which to draw jobs for political favorites and loanable funds for rearmament (ibid.)” [like the Medicare Trust Fund?].

The Way Out
It is not necessary to “move forward”—over the cliff. Ebeling hopes that we will contrast the philosophy of individual liberty and voluntarism at America’s beginning with the current corrupting and abusive collectivism—and repeal the welfare state.

“What’s in It” and What It’s Doing

The impact of the ACA (ObamaCare) is being felt:

  • The 2.3% tax on medical equipment, effective in 2013, is expected to cut research and development spending by $2 billion, causing the annual loss of about $100 billion to the economy and about 1 million life years (Pacific Research Institute, May 2012, http://tinyurl.com/d2gfrrz).
  • Fortune 100 companies could save $422 billion, from 2014–2023, by dropping employee health insurance and paying the $2,000/employee fine (House Ways & Means Committee 5/1/12, http://tinyurl.com/7gz4pb5).
  • The employer mandate threatens 3.2 million jobs in the franchise industry alone (ibid.).
  • Death is preferable to readmission. The ACA imposes much stiffer penalties on hospitals for higher 30-day readmission rates than for 30-day mortality (Stanley Feld, http://tinyurl.com/d4ztvnx).
  • Cuts in Medicare Advantage are postponed until after the election by $8 billion taken from funding for “demonstration projects” (NY Post 4/23/12).
  • The small business tax credit benefits only 178,000, not 4 million, according to the Government Accountability Office.
  • Rulemakers ignore rules. In 2008, the average regulation received 56 days of OMB review. The average ACA rule gets only 5 days. The regulatory impact analysis (RIA) is seriously incomplete (Linda Gorman, http://tinyurl.com/c4vggqd).


Barack Obama officially launched his re-election campaign, not exactly on May Day, with the slogan “FORWARD”—which has the Obama logo in the “O.” Between May 23 and May 24, the prominently displayed slogan/logo disappeared from the first page of the campaign webpage; the video to which it linked is available at http://tinyurl.com/csc2tzh. The video begins with a look backward at the economic crash of 2008.

It is apparently somewhat embarrassing that so many people noticed the history of the slogan as a socialist rallying cry. It provoked an editing war on Wikipedia, and the original page “Forward (generic name of socialist publications)” was deleted, but preserved here: http://tinyurl.com/7otc734.

Vorwärts! was a German emigré publication in Paris in 1840, to which Karl Marx and Friedrich Engels contributed. It was also the name of a marching song used by the Hitler Jugend (Amer Spectator 5/3/12, http://tinyurl.com/6wls2qj).

Mao Zedong’s Great Leap Forward (http://tinyurl.com/bumrm8u) promised economic security and the “iron rice bowl.” Private farming was prohibited, and collectivization was enforced through social pressure. The result: 18 million to 45 million deaths, and negative growth in the economy.

Obama’s hero Franklin Roosevelt used the poster and slogan “Forward with Roosevelt” in 1936. Arguments for New Deal policies came from the Iron Chancellor Otto von Bismarck—as did the ideas for the Nazi social security system.

“I studied Bismarck’s socialist legislation in its intention, struggle and success,” wrote Hitler in Mein Kampf (http://tinyurl.com/73kczqx).

Medicare Bankruptcy Pending, Trustees Say

The 2012 Medicare Trustees Report states that Medicare is solvent until 2024, but without ACA’s tax increases and spending cuts, the date is 2016. The 2024 date uses accounting gimmicks that add as much as $500 billion to the deficit. “You can’t say that you are saving on Medicare and then [spend] the money twice,” states Chris Jacobs of the Republican Study Committee (Avik Roy, Forbes 4/23/12, http://tinyurl.com/cdd4lz9).

Medicare chief actuary Richard Foster notes that Part B expenditures are very likely to exceed projections because of congressional action to prevent the 31% in physician pay scheduled to occur in January 2013.

The projected $4 trillion “revenue enhancements” include a “high-income” tax not indexed for inflation, which is expected to apply to 80% of workers by the end of the projection period.

Savings are assumed to come from “efficiencies gained by what is learned in demonstration projects,” such as pay for performance, bundling, and Accountable Care Organizations. The Congressional Budget Office, however, has concluded that these projects are producing no serious savings, and are unlikely to do so in the future, writes John Goodman (Wash Times 4/24/12, http://tinyurl.com/7zfxk3n). With electronic systems, doctors actually order more tests, not fewer.

♦ ♦ ♦

“The reality is Europe is finished…. As Jagadeesh Gokhale of the Cato Institute put it, ‘The average EU country would have to have more than four times…its current annual…GDP in the bank today, earning interest at the government’s borrowing rate, in order to fund current policies indefinitely.’”
Graham Sumner, James Cook Market Update, March 2012

No Time to Think

How were Germans—the wealthiest and most educated and culturally advanced people in Europe—drawn gradually and willingly into the great evils of the Third Reich?

Ten years after the end of World War II, philologist Milton Mayer explored this question in his book They Thought They Were Free: The Germans, 1933-1945.

People gradually became habituated to being governed by surprise; to receiving decisions deliberated in secret; to believing matters were too complicated for them to understand. People were plunged into new activities: meetings, conferences, ceremonies, papers to be filled out, reports, questionnaires.

“One had no time to think. There was so much going on…. The dictatorship, and the whole process of its coming into being, was above all diverting. It provided an excuse not to think for those who did not want to think anyway.”

“Slavery by degree” and the “paralysis of uncertainty” were key features, writes Donald McAlvaney in summarizing the book (MIA, January 2012). “The one great shocking occasion, when tens or hundreds or thousands will join with you, never comes.” The gassing of the Jews does not happen right after “German Firm” stickers are placed on the windows of non-Jewish businesses. “In between come all the hundreds of little steps…, each of them preparing you not to be shocked by the next. Step C is not so much worse than Step B, and if you did not make a stand at Step B, why should you at Step C?” Soon, the external forms of life may look the same, but the spirit has changed. When you finally see it, “you are compromised beyond repair,” Mayer writes.

In the U.S. today, shall physicians spend all their energy on the SGR, CPT-5, and ICD-10?

Hyperinflation: Can It Happen Here?

A necessary adjunct to runaway inflation is that nobody sees it coming, writes James Cook (Market Update, May 2012). The citizenry has always been taken by surprise.

China has made more than 20 bilateral trading agreements that eliminate the dollar, and is making credit available to key trading partners in Chinese currency. Cook asks: “Has it occurred to our leaders that China could destroy the dollar and ruin our economy with one phone call?” If the dollar loses its status as the world’s reserve currency, massive amounts of dollars held by foreigners would come flooding back.

Austrian economist Ludwig von Mises wrote: “Inflationism cannot last. If not radically stopped in time, it must lead inexorably to a complete breakdown. It is an expedient of people who do not care a whit for the future of their…civilization.” No power or gimmick can save a nation that keeps borrowing to cover deficits.

AAPS Calendar

Oct 4-6. 69th annual meeting, San Diego, CA.


Have a question for a politician? Go to http://www.telldc.com.
Ask your own question, or vote for others’ questions. TellDC will send a video crew when a question gets enough votes.

43 Catholic Entities Sue HHS

A dozen lawsuits have been filed in federal court on behalf of 43 Catholic entities concerning the HHS mandate to cover sterilization, abortifacients, and contraceptives.

Catholic bishops have become increasingly concerned about the erosion of conscience protections. Recently, their top-rated program to aid victims of human sex trafficking was denied funding because of refusal to provide “the full range of reproductive services,” including abortion.

The dispute is not just over a church with a minority view on human sexuality, writes Harvard law professor Mary Ann Glendon. “At the deepest level, we are witnessing an attack on the institutions of civil society that are essential to limited government and are important buffers between the citizen and the all-powerful state.” She notes that if religious providers of education, medical care, and social services must either close down or become a tool of administration policy, “the government consolidates a monopoly over those essential services” (WSJ 5/21/12).

Plaintiffs include the Archdioceses of New York, Washington, D.C., and St. Louis, and many Catholic schools and charities.

The complaint in University of Notre Dame v Sebelius et al. may be found here: http://tinyurl.com/bocdlod.

In addition to concerns about the contraception mandate, the Bioethics Defense Fund complains that ACA, which is likened to a Russian nesting doll, contains a $1 billion fund for abortion, despite the claim that federal dollars won’t directly cover abortion. Insurers may include abortion coverage in plans approved under state exchanges. All enrollees in such plans must pay at least $1 per month into a specially segregated fund for abortion.

Physician Medical Identity Theft

Nearly 2 years after sending out applications for part-time work, a retired physician was ordered to return $350,000 in Medicare overpayments to a practice he had not joined. The government began garnishing his Social Security checks.

The physician’s NPI, tax-identification number, and medical licensure information may be stolen in fraud schemes. More than 3,600 cases of physician or patient medical identity theft were reported to the Federal Trade Commission in 2009.

CMS recently established a remediation process to help relieve physicians of financial obligations resulting from services falsely billed in their name. The OIG hotline for reporting potential identity theft is 1-800-HHS-TIPS.

One risk factor is the NPI, which is publicly available. Given widespread reliance on this number, securing it would be difficult even if it were removed from the public domain.

Be sure to review remittance notices (JAMA 2/1/12).

EHR Legal Pitfalls

If you transmit protected health information electronically even once, you are subject to both HIPAA and HITECH, with their civil and criminal penalties. Breaches are increasing dramatically with the use of EHR, as practices focus on meeting “meaningful use” requirements. Attorney James Pyles recommends obtaining cybersecurity insurance, and reading policies carefully, as some have very broad exemptions. For example, they may pay legal expenses, but not fines. As rates will go up, he suggested getting a three-year policy (MPCA 2/20/12). Vendors cannot be expected to warn about potential problems. One, for example, failed to turn firewalls on when installing the system, and the resulting security breach cost the practice a lot of money. Some vendors have actually stated that they don’t care whether their systems are HIPAA compliant because “they are making too much money with all the doctors panicking and signing up without reading their contracts” (MCPA 2/6/12).

Massachusetts Ban on Balance Billing

As more physicians contemplate withdrawal from government insurance plans, the prospect of tying participation to licensure is raised. Massachusetts led the way in 1985. Massachusetts has a number of physicians who have opted out of Medicare (see http://tinyurl.com/773547j). However, to receive a license, a physician must sign a statement that he “will not charge to or collect from a Medicare beneficiary more than the Medicare reasonable charge for that physician’s services.” If he charged more, he would be committing fraud by lying on his license application.

The law was upheld by the First Circuit Court of Appeals in 1987 in a case brought by the Massachusetts Medical Society (MMS) (815 F.2d 790). The opinion, written by Judge Breyer, noted that MMS quoted a description of the 1965 Medicare Act made in a 1984 statement to Congress by Senator Kennedy:

The fundamental compromise that permitted the passage of Medicare in 1965…was the bargain…by which the American Medical Association permitted the Federal Government to pay a large share of the medical costs of the elderly, in return for which physicians would still be able to pursue additional private charges from their patients, free of Government restraint (130 Cong. Rec. S5498 (daily ed. May 9, 1984)).

Nevertheless, the Court concluded that there was insufficient evidence to show that Congress intended to create a right to balance bill or to prevent state regulation of physicians’ fees.

The Court was unconvinced that the balance billing ban would create an “obstacle” to care, since Massachusetts doctors, prior to the ban, chose to accept assignment on 90% of Medicare claims. Moreover, Massachusetts led the nation in number of physicians per capita.

MMS argued that a promise not to balance bill was not rationally connected to a physician’s fitness to practice medicine. The Court held that “this ‘promise’ simply amounts to a rule…. And, there is nothing irrational about a state’s saying that a doctor, entering the profession, must promise to follow the rules.”

Patient Bounty Hunters

Seniors are being recruited on the CMS website to join the Senior Medicare Patrol. The SMP is “a grassroots network of volunteers who work to educate seniors and other Medicare and Medicaid beneficiaries on how to protect, detect, and report health care fraud.”

Medicare also plans to advertise on explanation of benefits statements (EOBs) and also publicize the $1,000 bounty that patients will receive should their reports lead to the discovery of fraud (Doctors Management 3/9/12).


ObamaCare Protesters for Single Payer. Lest we forget, there are a large number of extreme left-wing liberals who are clamoring for the U.S. Supreme Court to strike down ObamaCare so they can implement single payer. The front page of the May 2012 issue of Clinical Neurology News features a photograph of a protester carrying a sign reading: “Single Payer Now. Strike Down Obama.”
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY

What about the Money? At a D.C. press conference on Obama Care’s health insurance exchanges—the state-based federal takeover centers, a federal official refused to answer a reporter’s question about whether states will have to return millions in exchange grants if ObamaCare is overturned. Instead, he simply said, “We believe the law is going to be upheld.”
Twila Brase, St. Paul, MN

ObamaCare Billionaires. The cover article for the May 17 issue of Forbes (http://tinyurl.com/buaop4e) concerns those who will make billions from the Affordable Care Act no matter how the Supreme Court rules. Creating hassles, making simple things very complicated, can generate enormous earnings. These financial wizards have taken control of our profession and then picked the pockets of our patients, holding them hostage to the mandatory growing premiums and subjecting them to poor care.
Jaime Durand, M.D., Arlington, TX

Slavery Is Freedom. ObamaCare’s supporters are selling a version of Orwell’s slogan, claiming that greater government control over doctors will enhance their freedom. Former White House policy advisor Ezekiel Emanuel, M.D., argues that replacing fee for service with “bundled payments” gives doctor more autonomy. Stanford health economist Victor Fuchs, M.D., compares government-imposed bundling with the “emancipation of slaves.”

ObamaCare “coverage” does not equal care. It’s like a cell phone plan that promises coverage but never has a decent signal.
Paul Hsieh, M.D., Sedalia, CO from http://pjmedia.com/blog/dr-orwell-will-see-you-now/

Medicaid Expansion. With almost 60 million people enrolled, state expenditures on Medicaid have grown from 0.2% of total state tax revenue in 1966 to 21% in 2005. In 1975, 10% of the U.S. population was enrolled, but by 2008, 19% was enrolled in Medicaid. The Affordable Care Act will add at least 18 million people to Medicaid rolls, and without reform some states will see spending increase 50% in 10 years.
Linda Gorman, Ph.D., Independence Institute, Golden, CO

Innovation or Rationing? Amazing advances were presented at the meeting of the American Association of Neurologic Surgeons, but there was a disturbing current of how some neurosurgery leaders will work with the government to create the tool for rationing care, by contributing data to define the cost of a “QALY” (quality-adjusted life year). They trust that Comparative Effectiveness Research will only be used to show whether surgery is better than medical care. However, doctors will have to avoid high-cost patients to avoid a bad “efficiency profile.” It is time for ethical neurosurgeons to refuse to participate in such registries.
David McKalip, M.D., St. Petersburg, FL

For the “Greater Good”? It doesn’t matter what wonderful deed is accomplished with money taken by force from one individual and given to another. confiscation of the property in the first place is wrong.’s rights have been violated. So when you hear someone drone on with trumped-up statistics about how “we are the unhealthiest people on earth,” while “countries with single-payer systems have the best health care in the world,” or “we have the highest infant mortality in the world,” or some such, to justify some government intervention, remember that whatever they are about to propose is essentially a robbery.
G. Keith Smith, M.D., Oklahoma City, OK from http://surgerycenterofoklahoma.tumblr.com/post/22898929331/what-i-could-do-with-your-money

Black-box Denials. The Affordable Care Act will allow restrictions based on data on effectiveness, which amount to rationing, to enjoy the force of law even though they are not subject to debate, disclosure, or revisions. Treatments with a relatively low rate of success may still be the best bet for certain patients.
Robert Weinmann, M.D., San Jose, CA

Full Control. The “fully functional” electronic medial record (EMR) has been adopted by 11% of physicians and hospitals—less if you exclude the VA and Kaiser. It is designed to be punitive to physicians and patients (see http://tinyurl.com/7q5pmna). It is disruptive to work flow and does not increase quality or decrease costs. According to Jonathan Bush, the founder/CEO of AthenaHealth, a major EMR supplier, “The goal of EMRs is to wrestle control of healthcare away from the doctor-patient relationship into the hands of third parties who can then implement their policies simply by removing a button or option in the EMR.” Patients will only be able to get the care they “qualify” for according to a bureaucracy and a nonelected committee. Physicians will become the instrument of government rationing of care by the use of a fully functional EMR. It will eliminate the physician’s need to think and will destroy the patient-physician relationship.
Stanley Feld, M.D., Dallas, TX

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