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Volume 60, No. 10 October 2004
MORE RADICAL THAN HILLARYCARE?
“If you thought `Hillarycare’ was radical, wait for this,”
writes John Goodman, president of the National Center for Policy
Analysis (NCPA). “John Kerry wants your money and your
life” (Wall St J 8/26/04). Having learned from the
Clinton debacle, Kerry would implement the plan incrementally and
rely more on economic than political pressure.
Under Kerrycare, the federal government would become the
nation’s major reinsurer by paying 75% of catastrophic medical
expenses above $50,000 if employers offer insurance to all
employees and pay at least half the premium costs.
This proposal would transform most private medical
“insurance” into a Medigap equivalent and could ultimately spell
the demise of true medical insurance.
Recall that Medicare destroyed the insurance market for
Medicare-eligible patients, despite 1803 of the law, which
states that “nothing in this title shall be construed to
preclude…any individual from purchasing or otherwise securing,
protection against the cost of any health care services.” It’s
Medicare Part B or nothing for physicians’ fees, and one can
avoid Medicare Part A only by forgoing all Social Security
benefits.
Kerrycare would provide “trickle-down” subsidies (90% of the
funds go to employers, states, and insurers); “phantom savings”
(the perennial promise to eliminate waste and inefficiency); and
a tax increase on the “rich,” estimated to bring in enough
revenue to cover about one-third of the calculated cost of $1
trillion over 10 years.
More than half the money in Kerry’s plan would be spent
expanding Medicaid and SCHIP, causing at least three people
(Kerry’s estimate) to lose private insurance for every 10 who
sign up. Others say the private-sector crowd-out will be closer
to one-to-one (NCPA Policy Report No. 269, www.ncpa.org).
Universal coverage of children might come about by making
it mandatory for school attendance, as John Edwards proposed on
the campaign trail. As the children become adults, Joseph Lee
Pugh points out, it’s expected that they will continue to want
the kind of care they have been receiving.
“Unlike some incremental reforms, which are mere stopgap
measures that fall apart after a few years, a truly universal
program would like Medicare command political support forever,”
writes Jonathan Cohn.
The structure of the Kerry subsidies, which phase out as
income increases, penalizes work. “Overall tax rates for low-
income families would soar to levels normally thought to apply
only to the very wealthy” (NCPA, op. cit.)
Cost containment might result from the Edwards method of
limiting supply. “During his 20 years of suing doctors and
hospitals, he pioneered the art of blaming psychiatrists for
patients who commit suicide and blaming doctors for delivering
babies with cerebral palsy,” writes Charles Hunt (Wash
Times 8/16/04). Quoting Charlotte neurosurgeon Craig
VanDerVeer, M.D., Hunt credits Edwards with crushing obstetrics
and neurosurgery in North Carolina, with the result that
thousands lost their medical care.
Under the Kerry plan, the federal government would “assume
the risk” of catastrophic costs, “thereby reducing the incentive
for socially wasteful spending,” writes Paul Krugman (NY
Times 8/26/04). Because entitlements are not enforceable
contracts, however, it is patients who assume the risk that
treating their expensive illness will be deemed socially
wasteful. Some might thus refer to the Kerry plan as being
“faith-based.”
“Only an idiot” would fail to support her husband’s health
care plan, stated Teresa Heinz Kerry (www.nbc10.com).
The Bush plan also has the potential to bring about radical
change of the status quo but in the direction of freedom if its
concepts of ownership and individual responsibility take hold.
Bush tax credits are targeted to individuals, providing
incentives to curb personally wasteful spending by allowing the
economizers to benefit themselves. Bush has been touting Health
Savings Accounts on the stump for six months; HSAs went
unmentioned at the Democratic convention. Also, Bush has at least
recognized the need to deal with the impending crash of the
welfare state (H. Jenkins, Wall St J 9/1/04).
“No serious person doubts that our overreliance on third-
party payments is the problem that will be solved or will lead
to a government-run single-payer system that controls costs by
denying care” (ibid.).
HSAs are now unavailable to many Americans because purchase
of a high-deductible insurance plan is impossible in some states.
Bush would permit “health insurance without borders.” Reps. John
Shadegg (R-AZ) and Dennis Hastert (R-IL) have introduced the
CHOICE Act, which would allow any willing consumer to buy a plan
from any willing insurer, by phone or internet, nationwide. State
mandates now add 15 to 30% to the cost of medical insurance, and
price up to 25% of the uninsured out of the market.
Still more radical ideas have been floated. The National
Coalition on Health Care cochaired by George H. W. Bush, Jimmy
Carter, and Gerald Ford would impose price controls on
physicians, hospitals, and insurance premiums, and, somehow,
bring about universal coverage (Wall St J 7/21/04).
From the opposite perspective, Holman Jenkins writes: “We
just push checks around to conceal from people the true cost of
their healthcare….Employers should be relieved of the primitive
practice of bartering health care for labor. In turn, we could
end the crazy spur to channel every routine medical expenditure
through the insurance system….The only reform that stands a
chance is one that dismantles the nutty system of tax subsidies
that fuels health care inflation by…channel[ing] every ache,
pain, and prescription through a third party payment bureaucracy”
(Wall St J 3/17/04).
Entitlement Algebra
In a recent talk to seniors, Senator Kerry promised them
free medicines and options for obtaining the free medicine that
President Bush didn’t give them, reports Craig Cantoni of
Scottsdale, AZ. Kerry apparently sees only the left side of the
equation e = t, in which e stands for
entitlement and t for taxes, Cantoni says. A more
complete equation is:
e + l + p + d + u +
r + n = ta + tc,
where l represents legions of government bureaucrats;
p, private-sector money for compliance with diktats;
d, dues for lobbying groups like the AARP; u,
unclean campaign contributions; r, rent-seekers in
private industry who earn handsome incomes interpreting
regulations; n, the damage to the moral fiber of the
nation that allows neighbors to steal from neighbors;
ta, taxes on adults; and tc, taxes on children.
Rearranging for ease of remembering, Cantoni finds that:
p+l+u+n+d+e
+r = ta + tc.
As AAPS Director Robert Gervais, M.D., of Mesa, AZ,
explains, free-market medical insurance products are constrained
by premiums that people are willing and able to pay. Entitlements
are funded by taxes, and people seemingly prefer sending taxes to
the government to paying premiums because they know that
government has the magical power to disburse $6,000 or $50,000
worth of goods for $3,000 worth of taxes. This is done by
printing money or transferring costs to future generations (i.e.
stealing from the grandkids). Of course the day of reckoning must
come, but most socialists are willing to gamble that they won’t
be around to experience the debacle.
State Insurance Mandates Growing
In 1965, only seven benefits were mandated by states; today,
the Council for Affordable Health Insurance has identified 1,800
mandates for coverage of services, persons, or providers. In
January 2004 alone, 295 new mandates were introduced. Mental
health parity, now required in 42 states, is one of the most
expensive mandates. The total number ranges from 13 in Idaho to
60 in Minnesota.
Other regulations that drive up the cost of insurance
include guaranteed issue and community rating. See www.cahi.org for detailed
lists.
Medical Bankruptcies May Be Overstated
The popular press frequently cites a Harvard study in
stating that “nearly half of all bankruptcies were the result of
medical debt or a medical condition” (Milwaukee Journal
Sentinel 11/1/03). Many debtors have health insurance but
are considered underinsured. However, it is impossible to tell
from the study how many were driven to bankruptcy by medical
bills. In 1999, one in four debtors, about 330,000 families,
cited an illness or injury as a reason for filing for bankruptcy;
loss of income might have been the primary factor. One in three
debtors said they had incurred more than $1,000 in medical bills
not covered by insurance over two years. Combining these
overlapping groups, the authors estimated that “the total number
of bankrupt families with identifiable medical problems exceeded
half a million in 1999 alone.” Nearly half of debtors aged 65 or
over listed a medical reason, compared with only 7.5% of debtors
under 25 (Consumer Choice Matters 8/18/04, www.galen.org). (The April
2000 working paper is available at
Pay for Performance in Britain
inspected,” and state that the target system results in treating
cases that can be processed quickly rather than those that are
medically more urgent (N Engl J Med 2004;350:937-942).
Universal Mental Health Screening
In what some fear could become a “No Child Left Unmedicated”
program, President Bush has proposed screening the entire
American population, including preschool children, for mental
illness (Health Freedom Watch July/Aug 2004).
The project started in Texas as an alliance of individuals
from the pharmaceutical industry, the University of Texas, and
mental health and prison systems, with funding from the Robert
Wood Johnson Foundation and several drug companies.
Bush notes that many children are expelled from school
because of “severely disruptive behavior,” and he wants them to
have state-of-the-art treatments. Whistleblower Allen Jones said
that the recommendations of the New Freedom Commission, which was
established by Executive Order in April 2002, would result in a
comprehensive national policy to “treat mental illness with
expensive, patented medications of questionable benefit and
deadly side effects, and to force private insurers to pick up
more of the tab” (BMJ 2004;328;1458). The full Jones
report is linked to the News of the Day of Sept. 11,
2004.
Congressman Ron Paul, M.D., (R-TX) attempted,
unsuccessfully, to defund the program. Concerns include
nonexistent parental rights to opt out of screening; the
possibility of coerced drugging under pain of child abuse
charges; lifelong stigmatization by a subjective diagnosis;
diagnosis for political reasons, with defenders of the U.S.
Constitution labeled as violent or mentally unstable; merging of
the screening with the academic standards of No Child Left Behind
program; increased use of drugs such as Prozac and Ritalin, whose
long-term safety and effectiveness remain unproved; and lack of
fully informed consent despite the possibility of severe adverse
effects.
AAPS Calendar
Oct. 13-16. 61st annual meeting, Portland, Oregon.
Sept. 21-24, 2005. 62nd annual meeting, Arlington, VA.
AAPS Sues to Void Language Rule
In cooperation with several physicians and ProEnglish, AAPS
filed suit against the U.S. Department of Health and Human
Services in the U.S. District Court for the Southern District of
California, challenging policy that implements Clinton Executive
Order 13166 (Colwell v. HHS). This policy may require
physicians or medical facilities that accept federal funds to
provide professional interpreters, free of charge, to patients
with limited English proficiency (LEP).
At a San Diego press conference on Aug. 30, ProEnglish
chairman Robert Park argued that the HHS policy guidelines
constitute “official multilingualism disguised as civil rights
enforcement.” The use of English is not a form of prohibited
discrimination on the basis of national origin, he said.
AAPS Executive Director Jane M. Orient, M.D., stated that
the policy interfered with the patient-physician relationship,
and that this unfunded mandate would decrease the availability of
medical services.
The complaint argues that the requirement to assure the
competency of translation exposes physicians to additional
liability under malpractice claims.
Plaintiffs contend that the Policy Guidance was issued in
violation of the notice and comment provisions of the
Administrative Procedures Act, abridges freedom of speech, and is
unconstitutionally vague. The frequent use of undefined terms
such as “meaningful access,” “reasonable steps,” and “timely
manner” makes it impossible for practitioners to know whether
“they have met some entirely subjective standards of compliance
in an area such as language that is in constant flux.”
The Prayer for Relief asks for a declaration that Title VI
of the Civil Rights Act of 1964 does not make language a proxy
for national origin. It also asks that HHS be enjoined from
enforcing the LEP rule.
The case was filed by the Pacific Legal Foundation.
AAPS Files Amicus in CON Case
Kentucky law has a broad exception for physicians’ offices
in its certificate-of-need requirement. Nevertheless, Kentucky
hospitals have instigated administrative proceedings against John
W. Gilbert, M.D., and Physician Services, PSC, declaring that a
CON is required for the stand-up MRI services now provided in
four of Dr. Gilbert’s offices.
MRI services are performed only after a consultation is
requested and a patient-physician relationship established. Scans
are interpreted by Dr. Gilbert, a board-certified neurosurgeon
trained in neuroimaging, or by a board-certified neuroradiologist
employed by Physician Services.
In its amicus
brief, AAPS states that the proceeding is an anticompetitive
tactic calculated to impair the ability of Physician Services to
compete against the Affected Parties.
“The majority of Physician Services’ office locations are in
medically underserved areas where many patients would otherwise
be without access to such services….”
The scans offered by Dr. Gilbert promote the public policy
of broad access to medical services, and interference with this
free-market activity by the Cabinet for Health and Family
Services would be arbitrary, capricious, and unconstitutional.
Under the logic used by the Affected Parties, the University of
Kentucky, the University of Louisville, and the Trover Clinic are
also in violation of the law. A holding against Dr. Gilbert could
thus have a wide and devastating effect on access to care.
Shammed Doctors Awarded Millions
A Dallas federal court awarded cardiologist Lawrence
Poliner, M.D., $366 million in damages against three physicians
and Presbyterial Hospital, which had suspended his privileges to
perform catheterizations and echocardiograms. Competitors had
accused him of poor patient care, although independent reviewers
had defended him. Dr. Poliner’s practice was severely damaged by
loss of referrals and by another hospital’s refusal to grant
privileges. The hospital plans to appeal.
A U.S. District Court in Northern California awarded $4.3
million to Dr. John Ulrich, Jr., who was featured in a
Pittsburgh Post-Gazette series on sham peer review as a
reprisal against outspoken physicians. Two weeks after protesting
a decision to cut staff positions, Dr. Ulrich was subjected to a
wide-ranging hospital investigation. The hospital refused to
remove a data bank report after the state medical board cleared
him. He has not been able to work in his field for six years (S.
Twedt, Pittsburgh Post-Gazette 6/24/04).
Doctors Sue Blue Cross/Blue Shield of Michigan
BC/BS of Michigan is attempting to force physicians to
accept reduced fees that automakers negotiated with United Auto
Workers, through the ploy of calling an office visit a “covered
benefit” with a “100% copayment.”
The Michigan State Medical Society and the Michigan
Osteopathic Association are asking a judge to decide whether
something with a 100% “copayment” is covered.
Tip of the Month: Beware of fake patients. Possible
signs: showing up with a partner, asking for Vicodin or
OxyContin, or acting in ways that contradict their words. For
example, a patient may move as if in severe pain, but deny
pain for the benefit of the tape that will be produced in
evidence. Private insurers, such as BC/BS of Michigan, have sent
wired investigators to entrap physicians. Even if acquitted in a
jury trial, the doctor may confront the same “evidence” in a
medical board proceeding. Compact radio-frequency detectors are
available for screening patients. Be aware that even long-
standing “patients” may be wearing a wire.
AAPS Asks Court to Unseal Proceedings
In the case of William W. Backus Hospital v. Safaa
Hakim, M.D., AAPS filed a motion urging that proceedings be
unsealed and that the public be allowed access to the courtroom.
In this case, the hospital had allegedly used a peer-review
proceeding to retaliate against a whistleblower. AAPS notes that
“the confidentiality of peer review is invoked to conceal
injustices against physicians and patients alike.” AAPS members
have a direct interest in being informed about cases such as
this.
“Just as a government official has no legitimate interest in
concealing wrongdoing from the public, a community hospital lacks
a legitimate interest in wholesale denial of access by the public
it purports to serve.” There is a constitutional presumption in
favor of open court proceedings, and closure of judicial records
is appropriate only where a compelling government interest
exists, only where it is likely to be effective in preserving
against the perceived harm, and only after considering less
restrictive alternatives.
The court read the AAPS papers but denied the motion for
leave to file an amicus brief.
Correspondence
“Quality” = Documentation. While visiting in a major
Buffalo hospital, I passed the office of the Quality Documen-
tation Coordinator. The flow chart on the door said: “Better
documentation leads to longer LOS [length of stay] and improved
MCMIs [medical case mix indices] which leads to better patient
outcomes.” The truth, of course, is that the choice of ICD-9
codes affects the hospital’s bottom line, and hospitals now hire
people to encourage, pester, and nag physicians to fabricate,
embellish, or otherwise alter diagnoses to maximize hospital
revenue. An important aspect of the job is to sell the delusional
concept that gamed documentation has something to do with better
patient outcomes.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY
Socialized Medicine Is Here and Now. Third parties and
government are controlling medicine, illegally practicing without
a license, and not accepting responsibility for any untoward
consequences. Compromise with socialists is a lost cause. It
means they have won, so they continue what they were doing
anyway, using the courts to play their game.
Milt Kamsler, M.D., St. Augustine, FL
Pre-paid “Insurance” Does Not Work. There is no long-
term security with today’s prepayment schemes, which cannot work
no matter how you manipulate the pool. Real health insurance
could work, in theory, but we have never had any. As some in the
insurance industry said in the early 20th century, there is no
way to insure for medical care. The lure of third-party payment
is too irresistible for some citizens, and public welfare is a
cancer that will kill any form of government.
The key is to have more direct linkage of patients and
caregivers at the time of service, through cash. Government
should encourage behaviors of responsibility and self reliance as
a hedge against societal decay and government bankruptcy.
Joseph Lee Pugh, Diamondhead, MS
Two Forms of Payment. It’s not a question of FFS (fee
for service) vs. HMOs, but third-party payment vs. direct
payment.
Greg Scandlen, Hagerstown, MD
Access and First-Dollar Coverage. We were a typical
low-income family, with no insurance but plenty of access to
primary care. The pediatrician would always see us, and I’d pay
him when I could scrape up the money. A flat tire was a bigger
problem; we had no credit and nobody would give us a tire without
payment. When my employer got HMO coverage, I paid my asthmatic
daughter’s allergist out of pocket. The in-network doctors
couldn’t do same-day appointments, and didn’t produce a reliable
outcome. I was poorer because my employer spent my money unwisely
on HMO premiums. My access would have been better with less
coverage and more dollars in my pocket.
Donna Kinney, Texas Medical Association
Access Is Available. A woman wrote that when a new
consumer-directed plan allowed her to choose her own doctors, she
got a second opinion that caused a dramatic turnaround in her
son’s health. I can’t imagine someone being unwilling to pay $60
for a second opinion, irrespective of the insurer’s diktats, when
her son is deteriorating. There is a deeper problem in America
than absence of a consumer market. Under paternalism and
socialism, people behave like trained seals.
Craig Cantoni, Scottsdale, AZ
Cost of Third-Party Payment. Billing overhead probably
doubles the cost of providing service. The best way to determine
the cost is to look at a practice like mine in which I can charge
about half the going price and make as much net income. I don’t
play games to get paid; I tell the patient the price up front
(simple throat infection, $35; pneumonia or kidney stones, $50).
Here in northeast Tennessee we have to keep everything simple.
Otherwise I would get confused and think I was treating the third
party, not the patient.
Robert Berry, M.D., Greeneville, TN
How Can Low-Income People Afford a $5,000 Deductible?
By getting patients to stop paying higher insurance premiums. Why
not pay $100 for $100 worth of services instead of $200 in
premiums, $100 of which is for paper shuffling?
Robert P. Gervais, M.D., Mesa, AZ
On Outrageous Hospital Bills. A response to the stories
of people hit with huge hospital bills: Do you vote for
politicians who promise to take care of you by forcing others to
pay the bills; forcing insurers to offer the same premiums to
all; and enacting guaranteed issue, mandated benefits,
certificates of need, minimum benefit payout ratios, etc.? If
yes, you just voted yourself a $20,000 hospital bill.
Sean Parnell, Heartland Institute
A Modest Proposal. Last fall, I received a hospital
bill showing a charge of $8,000, and a letter from Medicare
indicating a payment of $1,600. I called Medicare and was told
the hospital had agreed to accept 20% of the billed charge…. I
suggest that senators and other federal employees participate in
this practice of accepting only 20% of their salaries or wages,
in the interest of balancing the federal budget….
Don Huntoon, Medicare beneficiary
Legislative Alert
The Presidential Health
Debate
President George W. Bush and Senator John Kerry are starting
out in a very close race. And while international terrorism, war,
foreign policy, and the state of the economy are likely to
dominate the next two months, health care will still remain a
first-tier issue.
Both candidates have outlined complicated “incremental”
plans composed of a series of discrete policy initiatives. Both
would result in additional federal spending. The Bush tax-credit
program calls for an estimated $90 billion in forgone revenues
over ten years, while the cost of the Kerry plan over 10 years
ranges from $653 billion to almost $1 trillion.
To date, the Bush expedited waiver system has enabled states
to expand coverage to 2.6 million persons through Medicaid and
the State Children Health Insurance Program (S-CHIP). HHS has
also boosted support for community health centers, thereby
serving 3 million additional persons.
The enactment of Health Savings Accounts (HSAs) is Bush’s
signature triumph. It has the potential to transform the health
insurance market. Already, according to ehealthinsurance, the
nation’s largest internet health insurance broker, 33% of those
persons who purchased HSA policies were previously uninsured.
HSAs drive the Left crazy.
The Congress also enacted Bush’s health insurance tax
credits for certain displaced workers under the Trade Adjustment
Act, which created an infrastructure for a larger tax-credit
system if Congress were to enact it.
The House of Representatives has already enacted Bush’s
proposals for medical liability reform, the creation of
association health plans, and a liberalization of flexible
spending accounts (FSAs), ending the current “use it or lose it”
rule that returns unused funds to the employer. The Senate,
however, has not acted on any of these Bush initiatives.
The major policy change in the Kerry health plan is to have
the federal government serve as the payer of last resort for 75%
of all catastrophic costs in excess of $50,000 annually. In
effect, this would negate the very purpose and function of
private health insurance as it shifted the bulk of all high costs
onto taxpayers. There is no evidence that private insurance,
which is designed to spread risk among large numbers of
individuals, is incapable of providing catastrophic coverage. The
problem with private insurance is that is does not cover enough
people, not that it is unable to pay the major costs of those
whom it does cover.
Kerry’s proposal would have several related consequences.
First, it would distort the incentives of virtually all sectors
of the medical economy, affecting patients, doctors, employers,
and insurers, inevitably raising costs. Second, it will fuel new
political pressures, from large corporations to union
representatives, for the government to pay 100% of costs. That,
of course, would drive costs higher still.
The basic dividing line between the candidates is
philosophical. Bush would generally expand private sector
options, while Kerry would generally expand government programs,
including Medicaid and S-CHIP. Kerry would also provide tax
credits for uninsured individuals to buy into the Federal
Employees Health Benefits Program (FEHBP).
Getting It Wrong on the Uninsured
The Census Bureau just reported that almost 45 million
Americans don’t have health insurance, an increase of 1.4 million
over last year. The political spin has been predictable. Progress
for America, a left-wing think tank, says that 45 million
translates into 150 uninsured Americans for every physician;
nearly 7,500 uninsured for every hospital; and more than 84,000
uninsured citizens for each Member of Congress. The enormity of
the numbers, so the reasoning goes, calls for an enormous
government response.
Many Americans do indeed suffer high anxiety over health
insurance. Those who have it are afraid of losing it. Those
without it worry about paying their medical bills. The problem is
rooted in the structure of the employment-based health insurance
market, which is almost exclusively favored by the tax code. More
than three-quarters of the uninsured work for firms where the
employer doesn’t offer them coverage.
The Census Bureau numbers are a “snapshot,” but they are
inadequate for an understanding of the problem. A look at the
government Survey of Income and Program Participation (SIPP)
provides a much better focused picture than the standard Census
numbers. But the SIPP numbers are almost never cited by
politicians or the media. According to the SIPP data, the typical
family without insurance coverage suffers a spell of un-insurance
for only about 5.6 months on average. Moreover, according to
SIPP data, very few 3.3% of Americans lack insurance for four
years or more. So, there is no evidence of any significant
number of permanently uninsured people: we have a dynamic
population, where people are in or out of coverage, largely based
on their employment. What is wrong, once again, is tying the ease
of a person’s access to health insurance by law and
regulation to a person’s employment. If Congress doesn’t change
these dynamics, we can expect to be having the same conversations
next year.
Getting It Wrong on Stem Cell Research
Ron Reagan, Jr., brought the Democratic Convention to a
wild ovation with his appeal for federal support for embryonic
stem cell research, arguing that medical progress, and cures for
Alzheimer’s and other terrible diseases, should not be impeded by
those who put “narrow ideology” ahead of “science.” Ron Reagan’s
cavalier dismissal of the serious ethical and philosophical
misgivings over embryonic stem cell research was just the sort of
anti-intellectual rant of which the Left used to accuse the old
Right. Big issues, particularly those dealing with the meaning
and destiny of human life itself, should be dealt with seriously,
and not dismissively. A pragmatic rejection of the traditional
respect for human life may be crucial to the mental and moral
self-esteem of the abortion lobby, but it doesn’t constitute a
serious philosophical argument. But then high-mindedness is not
to be expected at political conventions. In any case, what
Ron Reagan did not tell the Democratic Convention in prime time
is that only adult stem cells (derived from bone marrow) and
neonatal stem cells (derived from placental cord blood) have been
used to save or improve the lives of patients. Embryonic stem
cells have never yet been used in this fashion, and there are
enormous clinical obstacles to doing so that have little to do
with “narrow ideology.”
Limited work has been done with adult stem cells. There is
an adult bone marrow registry of 5 million potential donors, but
the General Accountability Office (GAO) reported in October 2002
that fewer than 25% of the patients in need of a bone marrow
transplant were able to get a suitable match.
In the case of neonatal cells, the situation is much more
promising. But Ron Reagan did not even touch upon that subject.
Thus far, there have been thousands of cord blood cell
transplants, and the source, of course, is easily replenished
with the birth of every baby. More than 18 peer-reviewed journal
articles have focused on neonatal or cord blood stem cell
research and its applications, and the cord blood stem cells hold
enormous potential for various conditions, including diabetes,
spinal cord damage, Parkinson’s disease, leukemia, and sickle
cell anemia. Reagan also failed to mention the bipartisan Senate
bill, cosponsored by Senators Orrin Hatch (R-UT), Dianne
Feinstein (D-CA), Arlen Specter (R-PA), Christopher Dodd (D-CT),
and Sam Brownback (R-KS), that would establish a National Cord
Blood Stem Cell Bank Network with, of course, federal funding.
Federal funding, imagine that! One of the advantages of such a
network is that it would rapidly advance broad access to viable
stem cell therapy today, not tomorrow.
Ron Reagan did not tell the Democratic Convention any of
this. That is an indication of the genuine threat posed to real
science by the forces of leftist “narrow ideology.” Meanwhile,
nobody will confuse Ron Reagan with Ronald W. Reagan. They were,
and are, philosophical poles apart.
Getting It Wrong on Medicare
Republican political operatives sold the line that
enactment of the Medicare drug law would be a political boon to
the fortunes of the President and the Republican majority in
Congress. Talk about getting it wrong! A recent survey by the
Kaiser Family Foundation, along with a Harvard University team,
showed that most seniors don’t like the Medicare drug provisions,
a large plurality admit that they don’t know much about it, and
10% want the new Medicare law repealed.
A close reading of the survey reveals that while close to a
majority of the Medicare population may have more or less strong
feelings against the law, a clear majority also concede that
after years of bitter debate and extensive discussions they don’t
understand the very thing that they register fairly strong
feelings about. For example, 60% said that they don’t
understand enough about the law to say how it will affect them
personally.
The Kaiser-Harvard study also found that huge majorities
want to buy “cheap” drugs from Canada, and think that Medicare
officials should “negotiate” [i.e. fix] the price of drugs, a
shorthand way of saying that the government should fix prices.
Governments have been fixing prices with the same disastrous
results for more than 4,000 years, and there is not the slightest
ground for believing that the end results shortages and
decreasing quality will be any different in the 21st century. But
politicians know that price controls are always popular at least
initially.
These recent findings are consistent with previous research
on the Medicare program as a whole. While it is enormously
popular, very few seniors understand how it operates, how it is
financed, how it will be financed in the future, or what it does
or does not cover. Thus, they are extremely susceptible to false
promises or to demagoguery.
The Kaiser Harvard report says 53% of seniors don’t think
the new drug discount cards are “worth the trouble” because they
don’t do enough to control costs and are “too confusing” to use.
Among the 60% of seniors who don’t have a card and don’t plan to
sign up for one, the main reason that the Kaiser-Harvard survey
cites is that 63% of this class of seniors already have drug
coverage or another discount card.
Critics notwithstanding, the weight of recent analyses
clearly demonstrates that seniors could expect impressive savings
from the discount cards. But left-wing critics know what right-
wing Republicans often forget: the money savings or no
savings isn’t the issue. It’s the structure, stupid.
Back to Real Medicare Reform?
The big policy problem is that Congress did not target
assistance simply to those who needed it, but rather created a
universal entitlement that would cover everybody. Roughly one-
third of seniors get their coverage through former employers. And
CBO estimates that 87% of these seniors will end up in the
government plan, and many of them will be paying higher out-of-
pocket costs for a government drug benefit that is inferior to
most of the plans offered by employers. The Congress anticipated
this and offered tax credits to employers to keep drug coverage.
But employers are still expected to drop or substantially cut
back their coverage. CBO and independent analysts predict that
one-third of seniors with employer-based coverage will lose
it. This will disrupt the lives of millions of seniors. It is
not necessary. In January 2005, this should be fixed.
Likewise, Medicare’s entitlement cost will be a killer.
Recall that the initial ten-year cost, courtesy of CBO, was $400
billion. The Administration upped the estimate to $534 billion.
CBO then said that in the second decade the cost of the drug
bill was going to be $2 trillion. The truth is that we don’t
know. We do know is that the drug benefit is not paid
for; there is no way we can finance this expansion without a
major increase in taxation. Meanwhile, the congressional
Democrats were proposing an expansion at least twice as
large as the one that passed. Congressional Republicans may
have had a fit of fiscal irresponsibility. But congressional
Democrats would plunge the country into fiscal madness.
There is a short-term solution: the 2006 drug entitlement
should at least be delayed until Congressmen can tell us how they
are going to pay for it.
Robert Moffit is Director, the Center for Health Policy
Studies at the Heritage Foundation, Washington,
D.C.
