Volume 67, no. 3 March 2011
U.S. District Court Judge Roger Vinson handed down a declaratory judgment that the entire Patient Protection and Affordable Care Act (PPACA) is void because it is unconstitutional.
The Judge held that the Commerce Clause does not give Congress the authority to impose an individual mandate, and that this is not severable from the rest of the law. He noted that the Obama Administration argued at least 14 times in its motion that the mandate is essential to the workings of the entire law.
David Rivkin, an attorney for the plaintiffs, stated that the 26 states challenging the law must cease their implementation efforts (Wall St J 2/1/11). Florida governor Rick Scott announced that his state would not waste time and money on ObamaCare, and his insurance commissioner returned a $1 million federal grant to start work on a Health Benefits Exchange.
The White House “went into a full convulsive rage” at Judge Vinson, according to Jonathan Turley of George Washington Univ. (Galen Inst., Health Policy Matters 2/3/11). The Administration called the decision “a plain case of judicial overreaching,” and announced its intention to carry out the law without interruption.
Some have asked why the Administration is not in contempt of court. Notably, the Judge did not enjoin enforcement, stating that his “declaratory judgment is the functional equivalent of an injunction”—because of the long-standing presumption “that officials of the Executive Branch will adhere to the law as declared by the court.” Appeals are pending; it is expected that the U.S. Supreme Court will make the final determination. The slow process in the lower courts may delay a decision until Obama can appoint another progressive Justice.
According to Article III, section 2, of the U.S. Constitution, the U.S. Supreme Court has original jurisdiction in any case to which a state is a party. Virginia attorney general Ken Cuccinelli is asking for an expedited review of Virginia’s case.
“The People Have Spoken”
With this statement, Obama was referring to Egypt, where street protestors overthrew the government. In Washington, it means the 2008 election of a Democrat regime, determined to impose its agenda despite the 2010 election. The people’s House voted 245 to 189 to repeal ObamaCare; only 219 voted to pass it last March. The Senate voted 51 to 47 against repeal; only 40 votes would have been needed to stop passage.
Some call these votes “symbolic.” But Organizing for America, which uses the Obama “O” as its logo, is “running a full-fledged [fund-raising] campaign” to “counteract and stop the repeal effort,” and protect the 21st century reform that has been “100 years in the making.”
Piecemeal repeal has begun, with the help of 34 Senate Democrats, starting with the odious requirement for businesses and charities to file millions of IRS 1099 forms. While nobody will admit to authorship of this provision, which mysteriously appeared in the bill, Reid, Pelosi, and other Democrats defended it, until taking credit for exterminating it (Wall St J 2/4/11).
The American College of Physicians (ACP) quotes Paul Simon’s refrain “slip slidin’ away” to describe what “politics” could do to PPACA. It frets that much of the public believes PPACA will not make care more affordable. “The most urgent priority for physicians is to tell lawmakers” that reform is a “medical and moral imperative” (Ann Intern Med 1/18/11).
The board of the Florida Medical Association, however, at its Feb 6 meeting, passed a resolution calling for repeal of PPACA, writes David McKalip, M.D.
ACP notes that the biggest challenge to PPACA could come in the states, where Republicans gained control of most governorships and legislatures. As Art Fougner, M.D., of New York points out, a majority of state governments are challenging the constitutionality of a recent federal law for the first time in 200 years.
Will States Assert Their Sovereignty?
The American Legislative Exchange Council (ALEC) has produced The State Legislators Guide to Repealing ObamaCare. Legislators can “decline to build the ObamaCare edifice.” One suggestion is to introduce bills to study or call for a Medicaid opt out in 2014, “as a way to shift debate to the unintended consequences of ObamaCare’s Medicaid mandates.”
Judge Vinson rejected the argument that states are “coerced” to participate in Medicaid. Though it is a “hard political choice,” because states would lose federal matching funds, they have the option to withdraw, and “several states (including certain of the plaintiffs in this case) are…considering doing exactly that.”
The “Cornhusker Kickback” did not solve the problem of the cost shift to the states, even temporarily, as it will not cover the influx of enrollees previously eligible but not signed up. TennCare, for example, will require an additional $3 billion per year from the state until 2014 because of ObamaCare. The “old-eligibles” are certain to enroll, to comply with the individual mandate. New York would have the highest 10-year additional costs: $65.5 billion (J Gokhale, Cato Institute).
One proposed interstate compact, which would require congressional approval but no presidential signature, would give states the authority to supersede federal health regulations, and still receive a share of federal health expenditures based on 2010 outlays ( http://www.healthcarecompact.org ).
Letter from the President
Those who clamor for government medicine often cite the need to increase access and decrease cost. I am witnessing first hand how government medicine does just the opposite. At my small rural hospital we have successfully performed Doppler ultrasound testing for DVT (deep venous thrombosis) for at least 20 years, or since the procedure was devised. Now, we are prohibited from doing this very simple test to check for blood clots in the legs because our radiology technician must obtain some new Medicare-required certification. Until now, we have had no problems doing the test, and each test is reviewed by a board-certified radiologist. He is certainly capable of determining the adequacy and quality of the study—what can technician certification possibly add to this? But years of successful testing does not exempt us from this onerous requirement. Now, for the last 6 months, hospitalized patients suspected of a blood clot in the leg must be bundled into an ambulance, driven 30 miles, tested, and driven back. This adds at least $800 to the cost of a relatively cheap procedure, subjects a potentially ill patient to the needless stress of transport, and results in delay of care—a delay that might prove fatal if the patient develops a thromboembolism while being driven from hither to yon. Forgetting the patient as a whole, and just considering the clotted extremity, this government “service” is even more risky for an outpatient who must be driven with the leg hanging dependent from a car seat only to wait in a distant radiology department where I cannot personally intervene to ensure prompt attention. It recently took nearly 8 hours for my outpatient to complete the circuit and for me to get a result. With government medicine you don’t pay less, you pay more—in dollars, in time, and quite possibly with your life.
Lee Hieb, M.D., Logan, IA
Health Benefit Exchanges a Loser for States
The Health Benefits Exchanges, which states are supposed to establish by 2014, or else default to the federal government, are “herding pens for insurers,” writes Peter Suderman (Reason, October 2010), where they will be corralled into doing government’s bidding. Setting one up is a “one-way, lose-lose bet,” writes John Graham of Pacific Research Institute. If ObamaCare persists, it will become a bloated bureaucracy. If it is defeated, the effort will be wasted. He notes that the Massachusetts Connector spent $26 million on vendors and contractors in 2009, and $3.6 million on employee compensation: 3.5% of the amount businesses and enrollees paid in, on top of other administrative overhead. A state may hope to blunt the worst effects of ObamaCare, and Secretary Sebelius may approve such Exchanges in the short-term, then sweep away “consumer friendly” accommodations in 2014.
PPACA allocates funds to establish Exchanges, but once up and running, they must be self-sustaining, warn Greg DeBor et al. of CSC’s Healthcare Group. Getting funding from purchasers or suppliers will be “difficult” to “almost impossible.” Required functions are demanding and complex, and “none of the required processes exists in the current environment.”
Despite the repeal effort, and states’ fears of fiscal disaster, thousands of investors are betting on implementation as written. Aetna, for example, is “salivating over all the new business coming to it in the Exchanges,” writes Greg Scandlen.
Paying the Bill
Democrats made the remarkable argument that repealing ObamaCare would increase the deficit by $230 billion over 10 years, though the law would increase spending by $540 billion. That’s because of a $770 billion tax increase. Both numbers are estimates based on absurd assumptions. John Goodman calculates that for every $2 of promised benefits, only $1 is paid for with spending reductions or tax increases. If Medicare cuts prove to be politically impossible, the ratio of benefits to “pay fors” is 4 to 1.
How can this be done? “You set up institutional structures you hope will result in the shifting of costs from a group you want to reward to one you hope will pay” (http://healthblog.ncpa.org 2/14/11). In other words, redistribution of wealth.
Besides costs shifted to states, the bill raises the cost of labor by up to $6/hr, Goodman writes (1/18/11).
The State of the Federal Treasury
The U.S. is running vast annual budget deficits that may be as high as $5 trillion (by generally accepted accounting principles, GAAP), not $1.3 trillion. The official gross U.S. national debt is $13.6 trillion; adding unfunded liabilities of Social Security, Medicare, Fannie Mae, and Freddie Mac gives a total of from $59 trillion (official) to $200 trillion (James Cook Market Update, Jan 2011).
In 2010, total real U.S. tax receipts were $1.44 trillion. This covers only 66% of mandatory spending (interest, Social Security, Medicare, Medicaid), and 0% of “discretionary” spending (e.g. defense). “In order for the U.S. government to have any chance of paying off any of its debt, it would have to completely disappear” (EverBank Review & Focus 2/1/11).
The State of the Dollar and the U.S. Economy
The true unemployment rate is said to be 22.4%, rather than the claimed 9.4%. According to Shadow Government Statistics, the Bureau of Labor Statistics overstated growth in payroll jobs by 3 million in 2010. Fed Chairman Ben Bernanke told Senators that official U.S. inflation, used to calculate cost-of-living increases (COLAs) for Social Security, is less than 1%, rather than 8-10% or more. Over the past decade, homeowner’s insurance rose 108%; real estate taxes, 77%; heating oil, 150%; electricity, 52%; regular gasoline, 118%; Medicare Part B premiums, 143%; eggs, 93%; ground beef, 49%; bread, 50%. From mid-2007 to end-2009, the private sector plunged $1.3 trillion, while government surged $1 trillion (McAlvaney Intelligence Advisor, February 2011).
AAPS Calendar
Feb 25, 2011, dinner meeting, Las Vegas, NV.
May 20-21, workshop, board meeting, Omaha, NE.
Sep 28-Oct 1, 2011. 68th annual meeting, Atlanta, GA.
Judge Vinson v. the Ruling Class
In 1824, in the first case in which the U.S. Supreme Court was called on to consider the Commerce Clause (Gibbons v. Ogden), Chief Justice Marshall wrote, and Judge Vinson quotes:
This power, like all others vested in Congress, is complete in itself, may be exercised in its utmost extent, and acknowledges no limitations, other than are prescribed in the constitution…. [T]he sovereignty of Congress, though limited to specific objects, is plenary as to those objects…. The wisdom and the discretion of Congress, their identity with the people, and the influence which their constituents possess at elections, are…the sole restraints on which they have relied, to secure them from its abuse.
Judge Vinson details many examples of Congress’s continued attempts to expand this power, and the Court’s acquiescence, but notes that this power is “not without effective bounds.” The question regarding the individual health insurance mandate is whether Congress can regulate “inactivity,” and whether refusal to buy government-prescribed insurance constitutes inactivity.
He argues that the alleged uniqueness of the health insurance market does not justify extending Commerce Clause power: Every market problem is at some level unique.
With the individual mandate, Congress was “essentially admitting that the Act will have serious negative consequences,” Vinson writes, e.g. “encouraging people to forego health insurance until medical services are needed, increasing premiums and costs for everybody, and thereby bankrupting the health insurance industry.” Applying the Necessary and Proper Clause to justify the mandate would have the perverse effect that the more disruptive a statute is, the more “necessary” a statutory fix would be.
Judge Vinson’s 74-page, closely reasoned opinion is reduced to a “sound bite” by Timothy Stoltzfus Jost, J.D.: “If Congress can make you buy health insurance, it can make you buy broccoli” (NEJM, first online). Not to worry: “But no state will ever require its citizens to buy broccoli, and neither would Congress.”
Since refusing to buy health insurance is not a “fundamental right,” Stoltzfus argues, all Congress needs to do is “act rationally.” And the Judge should defer to its reasoning. The most important unique reason to mandate insurance is that there is no product other than health care that “private vendors must provide regardless of whether customers can pay for it.”
Apparently, EMTALA (the Emergency Medical Treatment and Active Labor Act or “anti-dumping” act) justifies PPACA as “necessary and proper” to correct its side effects. Stoltzfus also alludes to “the problem of cost-shifting that insurance addresses.” If the main cause of cost-shifting is Medicare and Medicaid, then PPACA is the latest attempt to fix the problem started in 1965.
Alternatives to the Individual Mandate
The individual mandate is so unpopular—76% of Americans view it unfavorably—that Democrats might consider ditching it as an albatross, writes Jonathan Oberlander, Ph.D. (NEJM, first online). But what is the alternative? With single payer, there would be no adverse selection and no need for penalties, he states, but in the absence of “the political transformation necessary to displace private insurance,” it “remains infeasible.” Auto-enrollment, with an opt-out but a substantial penalty for those who decide to enroll later, is one suggestion.
But for “the reality that solidarity remains elusive in U.S. health policy,” Oberlander writes, “reformers could appeal to the mandate’s communitarian foundations.” Some public programs—Medicare and Social Security—“produce invaluable social benefits” and “succeed because everybody participates in them.”
Single payer should not be ruled out as the end-game. PPACA could be the “neutron bomb” of the insurance industry, writes Peter Schiff (LewRockwell.com 12/24/09). “It leaves some of the private apparatus standing, but it irradiates whatever remains of the industry’s market vitality.” The centerpiece is the clause prohibiting the denial of insurance for a pre-existing condition. The maximum $750 penalty is a place-holder; the only way for companies to remain solvent is if the penalty is greater than the gain of skipping coverage. The government could double cross insurers by not raising the penalty, forcing them into bankruptcy.
Congress then might have the mandate to ride to the rescue with “a single-payer socialized insurance system, using its powers to tax and spend ‘for the general welfare’.” Under “long-established Supreme Court precedent,” Congress has such authority, writes Mark A. Hall, J.D. (NEJM 1/27/11).
From an economic standpoint, argues John Graham, “penalizing the nonpurchase of health insurance is merely the flip side of subsidizing the purchase of health insurance, which the government has done for decades.” The real difference is whether the government allows people to use the tax break to buy the insurance of their own choice, or limits them to benefits chosen by their employers, or worse, the government. That is not the issue at hand in the lawsuits challenging the constitutionality of ObamaCare (PRI, Health Policy Prescriptions, February 2011).
Does the General Welfare clause give Congress unlimited power to rob selected Peter to pay collective Paul? This may be the as-yet-unnamed issue at the root of the debate.
Tip of the Month: AAPS receives many calls concerning abusive processes by licensure boards. For a compendium of tips, see http://www.arizonmedicalboardwatch.com . For example: Read everything carefully before you sign it. By your signature you are attesting, indelibly, to the truth and accuracy of everything in the document. A common regret expressed by physicians is for agreeing to settlements that severely harm their reputations; rarely does a physician express regret for continuing to defend the appropriateness of his care.
You Can Have Too Much Documentation
Although you must keep medical and other records for a certain period of time to comply with federal and state laws—or because of litigation in progress—you can run into at least as much compliance trouble by keeping records too long, writes Lou Ann Wiedermann of the American Health Information Medical Association (AHIMA). If you have kept the records longer than necessary, you still have to produce them if requested for an audit. If the records are on a laptop that is stolen, all patients need to be notified and provided with free credit monitoring. Doctors should have a document retention and destruction policy. Destroy documents that are past their retention deadline, using a secure method, and keep a record of what was destroyed, Wiedermann suggests (Medical Practice Compliance Alert 1/24/11).
Correspondence
NY State Bankrupt. Democrat Gov. Andrew Cuomo has declared that NY State is “functionally bankrupt.” The proposed $132.9 billion budget contains a 2.7% decrease, the first cut in the all-funds budget in 15 years. It would close a $10 billion deficit. There is no new borrowing, but $6 billion is needed to pay interest on previous borrowing. As to federal Stimulus funds available to Albany for the past two years, “We inhaled it, we injected it into our body, and now it is gone,” said Cuomo (Buffalo News 2/1/11).
Meanwhile, both Erie County and Buffalo are under state control boards because of deficit spending: one drunken sailor supervising another. The Erie county executive is asking for legislation permitting the county to “opt out” of “Cadillac” Medicaid benefits required by the state but not the federal government. The $80 million would amount to 40% of property tax revenues, virtually all of which go straight to Albany for Medicaid.
“County governments are drowning in Medicaid costs. The least New York State can do is allow [them] to build their own life raft,” writes Chris Collins of Erie County.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
Asking the Right Question. The push for “healthcare reform” is based on “Duh…” polls that ask dumb questions like “Do you think the U.S. health care system needs reform?” Who is going to say, “No, it’s perfect”? What do you think the response would be to: “Would you be willing to pay an additional tax of $2,000 per year, on top of your health insurance premiums and medical bills, to pay an army of federal bureaucrats to create a new plan that, like Medicare, pays physicians so little that they refuse to see patients enrolled in it?”
Linda Gorman, Ph.D., Independence Institute, Golden, CO
Game-Changing Questions. Many Americans thought Barack Obama would save them. Now they think Sarah Palin or Newt Gingrich or some Tea Party politician will save them. It shows that we are still in the Dark Ages about leadership. We’re still looking for an alpha male or a Platonic philosopher-king.
Want to get people thinking differently about politics? The next time someone says a politician is a great leader, ask “Why do you need a leader?” With the astonishing advances in information technology since 1776, isn’t self leadership possible? People in government should be followers, or appointed managers.
The first step in no longer being a follower is to punish our current overlords. If tarring and feathering offends you, at least ridicule them and treat them like the scoundrels that they are.
Craig Cantoni, Scottsdale, AZ
Why Paper Charts Are Better than EHRs. Though the U.S. government and insurers are determined to make us use electronic health records, paper is better in many ways: You will never recover the costs of the EHR, or even break even. EHRs can make you less efficient, and disturb all established staff work flows. EHRs make the physician the IT help desk for the whole staff. They detract from giving the patient your full attention. They make you dependent on IT vendors, customer support, and expensive hourly consultants. They have not been shown to improve medical care. EHRs benefit government and insurers, not patients. Paper charts are well-established, reliable, and have minimal learning curves.
Craig Wax, D.O., Mullica Hill, NJ
Why Doctors Should Ditch the AMA. The AMA is well aware of physicians’ concerns, but that does not change its behavior. Its hands are in the government’s pocket, and it is compromised beyond redemption. I fear it could become like the Canadian Medical Association, which became the instrument of government power against its members when socialized medicine was instituted there 40 years ago. The CMA negotiates fees with the government, and membership became mandatory. To keep the AMA from ending up with that role—which would make further government control of us much easier, we need to make sure the government sees the AMA does not represent us. We’re getting there. Membership is down to 10% of doctors; 1% would be really great.
Thomas W. LaGrelius, M.D., Torrance, CA
Health Policy Group-Think. What really caused the disaster of ObamaCare is the intellectual bankruptcy and laziness of the “health policy community”—the supposed experts. It’s a close-knit group, and they all begin to parrot the party line, and ostracize those who disagree with the conventional thinking. Business, in contrast, generally welcomes contrarians. Investors have a lot of their own money at stake. Political decision-makers do not share that concern, and often are not even subject to the programs they inflict on the rest of us—e.g. public housing or urban renewal.
Greg Scandlen, Hagerstown, MD
Freed from CPT. Primary-care physicians spend much of their time learning the finer points of coding. We have become data collectors for government and insurers, much like pharmacists. This increases our overhead tremendously, not to mention the huge waste of bean counters working for government and insurers. Those of us who have opted out of Medicare and third parties have freed ourselves and our patients from CPT hassles.
Chris Ewin, M.D., Ft. Worth, TX
