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Volume 61, No. 7 July 2005


In the Netherlands, the ethical debate about withholding treatment is being turned upside down. Instead of asking whether it is acceptable to stop treatment, the Royal Dutch Medical Association and the Health Council ask whether it is justified to continue. "Artificial nutrition and hydration" constitute "medically futile treatment," these authorities conclude, in conditions such as the persistent vegetative state.

In 1990, Ineke Stinissen, who had been in a PVS since 1974 as a result of a medical error during an emergency Caesarian section, was dehydrated to death. A prolife Christian group filed a legal action arguing that no one could judge the quality of life of an incompetent patient, and questioning the peculiar determination of the nursing home that treatment had suddenly become futile, after 15 years. The court rejected the group's argument for lack of standing.

"The questions echo today, in the wake of the recent case of Terri Schiavo," writes Inez de Beaufort of Erasmus University in Rotterdam (N Engl J Med 2005;352:2373-2375).

The Netherlands leads the way in the routine killing of the ailing aged and disabled newborns, even without consent of loved ones or parents, but Britain is not far behind. Faced with the costs of caring for an aging population, the Labour government championed the Mental Incapacity Bill: food and water are now considered to be medication (PRI Weekly Briefing 5/27/05) and not just for patients in a PVS.

In what Wesley Smith calls "the most important bioethics litigation in the world today," 45-year-old Leslie Burke is suing for the right to receive food and water via a feeding tube if his neurologic disease renders him unable to swallow. He won in the trial court, but the government appealed. The head of bioethics at the Dept of Health explained the position of the National Institute for Health and Clinical Excellence (NICE):

An assessment is made of the cost of treatment per additional year of life which it brings, and per quality adjusted life year (QALY).... [This] is then used as the basis for a recommendation as to whether or not...the treatment should be provided in the NHS... The Secretary of State believes that...clinicians should be able to follow NICE guidelines without being obliged to accede to patients' demands.... If that principle were undermined, there would be considerable risk of inefficient use of NHS resources.

A prominent British physician told Smith: "Burke is only thinking of himself rather than looking at the bigger picture."

As some U.S. Supreme Court justices increasingly cite foreign law in making their decisions, Smith warns: "How Leslie Burke fares may determine whether futile care theory is allowed to metamorphose from ad hoc health care rationing into an explicit and expanding duty to die (Smith WJ, The English Patient, Weekly Standard 5/30/05).

Practice has been forging ahead of the law, both in the United States and abroad. Many physicians were astounded at the attention given to the Schiavo case because they know that thousands of patients are hastened to their death every year, without the litigation, writes Ron Panzer of the Hospice Patients Alliance. They "are offended should anyone raise even the slightest objection to their now mainstream practices."

After establishing the right of "health care providers" to discontinue tube feedings in the case of Estelle Browning, Michael Schiavo's attorney George Felos declared: "Like the winter's frozen river giving way to spring, I felt the last ice jam, the final obstruction, being swept away." The legislature revised the living-will statutes in accordance with the Florida Supreme Court decision. Felos rejoiced that his work proved the bane of his newly developed right-to-die legal specialty, but he occasionally still gets a case, like Schiavo's, that "stretches the envelope" (Felos G, Litigation as Spiritual Practice).

The envelope may next be expanded from the PVS to the "minimally conscious state" and, disability rights advocates fear, to certain severely impaired patients reclassified as being in the MCS (Bernat JL, Neurology 2002;58:337-338).

Independent physicians who practice outside the established "guidelines" threaten such progress, especially by raising questions about the definition of "irreversible" or "reasonable chance of recovery." After Pakistan-born rehabilitation specialist Jamil Ahmed spent 2 years trying out cocktails of drugs that were "not specifically indicated," Buffalo firefighter Donald Herbert emerged from a 10-year state of unresponsiveness (Buffalo News 5/24/05). Patients apparently as severely impaired as Terri Schiavo have occasionally had a remarkable recovery with hyperbaric oxygenation, or have at least improved sufficiently to permit feeding without a tube (Neubauer RA et al., J Am Phys Surg 2005;10:58-59).

A medical system truly dedicated to allocating services on the basis of "need, not ability to pay" might be expected to give priority to the most vulnerable patients of all. But the real ethic for collectivized systems is utilitarianism: the greatest good for the greatest number, as determined by a central authority. Worthiness, or ability to serve a state purpose say as a constituent for a desired program is the criterion.

If revenues plateau or decrease, while promised federal spending balloons to reach or exceed 50% of GDP, as projected by Congressional Budget Office Director Douglas Holtz-Eakin in May 19 testimony, should anyone be allowed to expend scarce resources public or private for "futile" care?

"The fact that a relatively small number of patients account for a large share of medical expenditures suggests another possible cost-reduction strategy," writes the CBO.

But futilitarian bioethicists already go far beyond the CBO's suggestion of better preventive care.

How Much Awareness?

"PVS is not death hidden by machinery," writes Paul McHugh, Professor of Psychiatry at Johns Hopkins University. "It is life under altered neurological circumstances."

In the late 1950s, Dr. McHugh was a neurology resident caring for a patient who was, after a botched brain operation, in a state similar to that of Terri Schiavo. The nurses who fed him with cup and spoon, and some relatives who visited, believed he had some awareness. Their testimony was not taken seriously, although the physicians treated him with the respect owed to America's foremost clinical scientist.

One day, after a bold intern challenged him to demonstrate evidence of awareness, Dr. McHugh shook the patient by the shoulder and asked in a sharp voice: "Dr. A., what's the serum calcium in pseudopseudohypoparathyroidism?"

"It's just about normal," he replied, correctly. He had, after all, discovered and named the condition.

"Subsequently, in all the months we cared for him, he never uttered another word. But what a difference that moment had made to all of us. We matured that day not only in matters of the mind but in matters of the heart. Somehow, deep inside that body and damaged brain, he was there and our job was to help him. If we had ever had misgivings before, we would never again doubt the value of caring for people like him" (McHugh P, Annihilating Terri Schiavo, Commentary, June 2005).


Clinical Pathway to Death in New York

New York state senator William Stachowski has mailed his constituents a sample living will, referring to the "confusion often caused by end-of-life decisions," as in the "tragic death" of Terri Schiavo. As Dr. Lawrence Huntoon notes, like all other living wills that hospitals offer patients, the form alludes only to things that a patient does not want except for medications to relieve pain, "including pain that might occur by withholding or withdrawing treatment." The form specifically includes the minimally conscious state.

Dr. Huntoon fears that patients will not understand the form but regard it as just one more admission form to sign.

"Death with dignity/ Is code you should know/ For all of those things/ It's your duty to forgo.
"So, don't linger too long/ Resources are limited/ Just sign all the forms/ So your organs can be distributed.
"And thanks in advance/ For signing the directive/ You've done the right thing/ For the good of the collective."

Lawrence R. Huntoon, M.D., Ph.D.


Hospice Allegedly Disregards HIPAA

The first complaint under the HIPAA Privacy Rule was filed by Ron Panzer, President of the Hospice Patients Alliance, against Suncoast Solutions, the for-profit subsidiary of the nonprofit Hospice of the Florida Suncoast, where Terri Schiavo died. The help screens of its software use real patient information. The Office of Civil Rights has done nothing to stop ongoing violations, Panzer said.

The real purpose of HIPAA, Panzer states, is to allow government and corporate "researchers" to access the data of anyone in the system, so as to better "manage" the U.S. population. The Health Department views the population as a "herd," and uses that term, Panzer warns.


Small Offices Not Required to File Electronically

Many members have received notices from their Medicare carrier implying that they are now required by law to file electronically and thus become a HIPAA-covered entity. This is not true. The statutory exceptions still apply, as for offices with fewer than 10 full-time employee equivalents, but you will need to provide written documentation to the carrier.


Federal Payment for Illegal Aliens

The Medicare Modernization Act provides for $250 million per year to fund emergency medical services provided to illegal aliens during fiscal years 2005-2008, apportioned to states on the basis of the undocumented alien apprehensions in that state. Implementation has been delayed because of questions about how to ascertain eligibility without subjecting patients to risk of deportation. Providers must apply for enrollment. There is a finite amount of money, and the precise amount of payment is undetermined. Some hospitals fear that compliance might cost them more than they could receive. See www.cms.hhs.gov/providers/section1011/.


Embryonic Stem-Cell Controversy

Given a choice between funding both adult and embryonic stem-cell research or only work that did not involve destroying an embryo, Americans favored the latter by 61% to 23%.

The Southern Baptist Convention, the second largest U.S. denomination, stated that research on embryos relies on a "crass utilitarian ethic which would sacrifice the lives of the few for the benefits of the many." The Vatican and most evangelicals oppose embryonic stem-cell research, but most sects of Judaism and Islam don't consider the early embryo to be fully human. Most Talmudic scholars hold that "ensoulment" occurs 40 days or more into pregnancy. Embryonic research in Iran has the blessing of its supreme leader, Ayatollah Ali Khamenei. Hinduism holds that life begins at conception, but destruction of an embryo could be justified if done for the "greater good." Some Buddhists support the research, but most Buddhist scholars hold that killing an embryo at any stage violates the central tenet that living things should not be harmed.

"Everyone agrees that fundamental ethical questions underlying stem-cell research, many of which transcend religion, need to be addressed," writes Tony Reichhardt.

And stem cells are just the beginning. "The stuff that's coming down the pipe will make this look like child's play," said Kevin FitzGerald, S.J., Ph.D. (Nature 2004;432:666- 669).


AAPS Calendar

Sept 21-24, 2005. 62nd annual meeting, Arlington, VA.
Oct 22, 2005. SEPP meeting in Pittsburgh, www.sepp.net.
Sept 13-16, 2006. 63rd annual meeting, Phoenix, AZ.

Doctor Versus Prosecutor

In late 1998, Utah state officials demanded that board- certified neurologist Taj Becker, M.D., of St. George, pay $107,000 in returns, fines, and investigative costs, within two weeks, or face criminal prosecution, incarceration, loss of her medical license, and bad publicity. Prosecutor J. Denis Kroll testified that he informed Dr. Becker of the "parade of horrors" (Becker v. Kroll, 340 F. Supp. 2d 1230, 1234 (D. Utah 2004).

There was no basis for this demand or for the criminal prosecution that ensued when Dr. Becker refused to capitulate, and instead complained about the abusive tactics of the Medicaid Fraud Control Unit (MFCU) through testimony before legislative committees and letters to officials and the news media. The charges were eventually dropped, and Dr. Becker sued on the basis of malicious prosecution and retaliation for exercising her freedom of speech. While acknowledging that there was evidence for malicious prosecution, the lower court held that years of harassment and threats did not violate Dr. Becker's civil rights because she was never actually incarcerated. Dr. Becker appealed to the Tenth Circuit Court of Appeals.

The "shake-down" of Dr. Becker was part of a general strategy by the MFCU, which "repeatedly raided rural physicians' offices in front of waiting rooms filled with patients, simply to obtain billing records easily obtainable through a subpoena. Often the investigations were groundless fishing expeditions," writes AAPS General Counsel Andrew Schlafly in an amicus brief.

Doctors said they were "treated like criminals in drug busts," according to the Deseret News.

"In effect and perhaps by design, these in terrorem Medicaid prosecutions cause physicians to abandon Medicaid patients in droves. That saves the state money," stated Mr. Schlafly. But patients' lives can be lost when physicians are abruptly removed or severely distracted.

Even without incarceration, the criminal prosecution was a seizure of Dr. Becker's person by compelling her to appear in court, obey travel limitations, and live under a stigma, argued Mr. Schlafly. Because of the immense damage inflicted by false prosecution, victims must have redress, and future wrongdoing must be deterred.

[The AAPS amicus brief, which is posted at www.aapsonline.org , was funded by the American Health Legal Foundation.]


NASPER: Prescription Drug Tracking

The National All Schedules Prescription Electronic Reporting Act is again before Congress (H.R. 1132 and S. 518). This purportedly will help physicians feel more comfortable in prescribing opioids because they will have the ability to query a database to discover whether a patient is receiving prescriptions from other sources. It would not set up a nationwide database but would provide federal funding for states that set up a statewide database that is interoperable with at least one contiguous state.

"Nationwide interoperability seems inevitable, eventually," stated AAPS Executive Director Jane Orient, M.D. "If New York is interoperable with New Jersey, and New Jersey is interoperable with Pennsylvania, then New York is interoperable with Pennsylvania also."

As of May, 2002, 15 states had prescription drug monitoring programs (PDMPs). General Accounting Office Report GAO-02-634 noted that program costs were a major hurdle; annual operating costs in Kentucky were $500,000. In Kentucky, physician requests increased from 28,307 in 2000, the first full year of operation, to 56,367 in 2001, a 100% increase. Law enforcement requests increased from 4,567 in 2000 to 5,797 in 2001, a 27% increase.

The time needed to investigate alleged doctor shoppers decreased from 156 days to 16 days with PDMP implementation in Kentucky. States without PDMPs must rely on tips (probable cause?) and lengthy, labor-intensive investigations.

The number of OxyContin prescriptions per 100,000 persons tends to be lower in states with PDMP, but drug diversion appears to be worse in neighboring states without a PDMP. The effect on appropriate prescribing or unwarranted physician prosecutions is not known.

The number of states with PDMPs increased only from 10 in 1992 to 15 in 2002, partly because of concerns about patient confidentiality as well as funding.

James Graves, M.D., now imprisoned in Florida because of drug diversion and abuse by a few of his patients, writes that he would have queried a PDMP if it had existed, but many of his misbehaving patients would not have been in it. He said that he took every possible precaution, to no avail. He made copies of drivers licenses and had patients sign opioid contracts. Taking Polaroid photographs of patients did enable him to catch a patient who had stolen a prescription pad; a pharmacist identified her from the photograph.


Ban on Private Care Violates Rights, Court Rules

A Quebec family physician, Jacques Chaoulli, M.D., may have singlehandedly put a stop to the policy of forcing patients into a rigid government monopoly on medical services.

Private physicians (i.e. those who accept direct payment from patients) have been "treated as a bigger threat than Al Qaeda," writes Peter Foster. "The totalitarian notion of preventing people from spending their own money as they choose, and of outlawing private provision of health services, is based on junk economics and tribal ethics. Socialized health care boosters seem to believe there is a `lump of health care,' which must be doled out by the tribal chief." Patients must not grab more than their fair share (Financial Post 6/18/04).

The system put a stop to Dr. Chaoulli's busy emergency house-call service in 1996, while desperate patients went without care. Serving as his own lawyer, and footing nearly $600,000 in legal bills from his own pocket with a little help from family and friends, Dr. Chaoulli fought all the way to the Supreme Court of Canada (Western Standard 10/11/04).

Dr. Chaoulli argued that long waiting lists contradict constitutional guarantees for "life, liberty, and the security of the person," and the ban on private health insurance or care for sick patients is "infringement of the protection against cruel and unusual treatment." The government argued that the Court should not interfere with "one of Canada's finest achievements and a powerful symbol of the national identity."

On June 9, after a delay of a year, "the equivalent of the Berlin Wall came tumbling down in Montreal," wrote Grace-Marie Turner. The Court struck down Quebec's prohibition against private insurance for services covered under medicare.

The decision applies only in Quebec, for now, but freedom could spread throughout Canada. It might even spread to the U.S. single-payer system for the elderly, which now prevents private contracting with non-opted-out physicians.


Insurers Will Resist Change. A powerful motivator for most physicians, the path of least resistance to the money has been through third-party payers. Unless and until physicians begin to realize that the end of that path is government-mandated physician slavery, the status quo will continue.

Just as a trend toward the free market is developing, we see articles that are possibly intended to try to keep physicians on the path. The cover story on the May 2005 issue of Physicians Practice features a smiling physician who says "I'm thriving under Medicare." The article itself shows how she is making ends meet by selling items not covered under Medicare from an "in practice store." The AMA featured an article, "Out of Network, Out of Luck," with the message that you had better stick with your abusive HMO because if you don't, the patients will abscond with the insurance check and never pay you. Entities that are closely aligned with government, HMOs, and insurers will probably work in collaboration with hostile patients, who feel entitled to have doctors "take their insurance," to try to enforce participation with third parties.

During the transition to free-market medicine, physicians can expect to be attacked. We must not tolerate blackmail by "somebody else should pay for my medical care" patients. The tactic is basically to say "if you don't take my insurance, I'll file complaints against you and threaten your hospital privileges or license." Complaints include fabricated charges of poor care or unprofessional conduct. Free-market physicians should consider precautions such as RF detectors (to identify wired patients who may be used to set them up), small concealable digital recorders, chaperones, and meticulous documentation.
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


The Popularity of Socialism. Initially, people like socialized medicine, just as there was at first little dissatisfaction with Soviet rule. The British National Health Service was great until the illogic of its construction started destroying the social capital that private medicine had built up. It takes a couple of generations to ruin working social systems based on shared conceptions of what is right. Look at public education. It took 40 years to ruin it.
Linda Gorman, Independence Institute, Engelwood, CO


It's All Theirs. Many years ago, in a discussion about high-risk pools and how much public or private money fund them, the then-insurance commissioner of Massachusetts said: "Public, private, what's the difference?" Ultimately it is all public money anyway." In a nutshell, the mind of a liberal: the government owns everything and lets you use it for a while.
Greg Scandlen, Hagerstown, MD


"Your" Medicare? There is no Medicare account with your name on it, and no guaranteed benefits. You get only what the politicians and bureaucrats agree on.
Joseph Lee Pugh, Diamondhead, MS


Why Work and Save? For doctors especially, the possibility of retaining personal wealth is so remote that it makes little sense to save. We are easy prey for personal injury lawyers, DEA agents, and federal prosecutors, never mind the IRS. Why should I work any more than necessary to meet current expenses when my savings will probably be plundered by the time I am 65? One thing they can't steal from me is my time in the present. The most reliable thing I can take with me into my 70s is my medical skills, available 25 hours per week.
Robert S. Berry, M.D., Greeneville, TN


Why Employee Benefits Are Shrinking. My column in The Wall Street Journal, Aug 18, 1997, was prophetic. It stated that the most significant cause of the decline in health and retirement coverage has been the growth in the contingent work force, which could reach 40% of the working population in 10 years. Companies use contract and part-time workers largely to avoid benefit costs and burdensome record-keeping requirements. ERISA regulations alone, in 10-point type and double-sided, are two feet thick. The annual cost to small business of administ- ering a 401(k) plan is $475 per recipient.
Craig Cantoni, Scottsdale, AZ


Limiting Supply in Ontario. Contrary to what some may believe, the Ontario government does not pay all claims. It downgrades and rejects claims and limits the number of services payable per patient, per physician, and per unit time. For example, I can only bill for three A184s (medical specific reassessment, $41.15 Canadian in 2003) per 12 months, regardless of need. After that I can only be paid for A188s (partial assessment, $25.12). An especially galling requirement is that a neurologist must stay within 15 minutes of the hospital for acute stroke care (stipend is $40 for 24 hours).
Duncan M. McIlraith, M.D., Ottawa, Canada


Double Taxation. Physicians in our area must pay taxes to support Medicaid and the universities of Kentucky and Louisville, hours away. Then we must also provide free care. The entitlement mentality is sculpted by government largess. For elective surgery, the preoperative "deposit," pegged to Medicaid rates, is the only payment we usually receive. For "emergent" procedures generally not a limb or life-threatening emergency we receive no upfront payment. Many patients get "urgent" procedures done so they can receive narcotics.
Lee Balakaw, M.D., Louisa, KY

Legislative Alert

The Stem-Cell Debate

This past month the House of Representatives voted 238 to 194 for federal funding of embryonic stem-cell research. The legislation (H.R. 810), sponsored by Rep. Mike Castle (R-DE), would reverse President Bush's policy. The President has threatened to veto the legislation, saying that the destruction of human embryos is a destruction of human life. The Castle bill fell 50 votes short of the number necessary to override a veto. This is likely to be Bush's first veto.

On a separate vote the House overwhelmingly (431 to 1) approved H.R. 2520, sponsored by Rep. Chris Smith (R-NJ), which would promote continued research and the storage of stem cells derived from placental cord blood. Such stem cells offer many of the promised advantages of embryonic stem cells without the ethical problems. Indeed, 6000 patients, with 60 different diseases, have already been treated with stem cells from cord blood.

The stem-cell legislation now goes to the Senate, where the President's policy in this matter, as well as all others, is even less well regarded. The issue is not the legality of embryonic stem-cell research, but rather the wisdom of federal funding.

Proponents of embryonic stem-cell research say that the federal funding is necessary to maintain America's preeminence in biomedical science. This appears to be a weak pretext for picking taxpayers' pockets. As to America's competitive edge, its future depends more on the genius and resourcefulness of our scientific enterprises, thriving in a wholesome atmosphere of low taxes and limited government, than on profligate infusions of taxpayer cash. Those who want taxpayer funds for this research can always tap into the deep pockets of California, which has allocated $3 billion to the effort.

But why the rush for federal money? Several private companies are ready to take risks on basic research with their own treasure. If the prospects for clinical success improve, such companies will no doubt flourish in the market. Charles Darwin himself, the world's mentor on survival of the fittest, would break out the champagne and cheer them on.

Some otherwise resourceful private-sector investigators have, of course, been scared off by the intense debate about ethics. The best of the White Coats have headed for the proverbial high grass. But political wrangling is the price of admission for living in a free society.

Another Round in the Health Care Reform Debate?

In its annual report, the Census Bureau reports that roughly 45 million Americans lack coverage. When new numbers come out in September, we can expect the debate about the uninsured and health care reform will start all over again.

The research on the uninsured is steadily improving. The problem is more complex than the bumper stickers make it out to be. The Census numbers themselves are raw figures, and the situation for very different classes of people without coverage is far more complex. It appears that this is a dynamic population, concentrated among workers in small firms, retail businesses, and services industries, with people in and out of coverage. While most are low-income working folks, there is a rather large number who are well into the upper middle class. In Maryland, for example, one of the wealthiest states in the Union, approximately one third of the uninsured population have a household income of $50,000 or more.

So what do we know? People are going without coverage for a variety of reasons. Their employers don't offer it, and they can't afford it on their own; they can afford it, but choose to spend the money on something else, thinking that they are young, healthy, and immortal; they can afford it, but figure that if they do get sick, the taxpayers will pick up the bill. CBO analyses show that many people are without coverage for a short period of time; roughly 45% of the uninsured are uninsured for four months or less. On one level, though, it doesn't matter exactly how many Americans are without coverage; there is a general consensus that it is better for people to have coverage than to go without it.

Where can the uninsured get the coverage? There are, according to the Wall Street Journal, about 60 million Americans who don't get health insurance either from their employer or from a government agency. Their only resort is the individual insurance market, and what you get or don't get is not merely determined by consumer choice, but by state rules as well as the fine print of the individual insurance policy. Roughly 17 million people, or roughly 10% of Americans under the age of 65, according to the Journal, get coverage through the individual market. But this market is not functioning as effectively as either its critics or its proponents believe it should.

The individual market is encumbered by state mandates; Maryland, with a highly regulatory regime, has about 58 according to one count. Additionally, individuals are often excluded because of preexisting conditions or have health-related restrictions. On one level, this makes sense: you can't insure for an event that has already happened. But it also means that many cannot get the coverage they need and will end up being dependent on the taxpayer.

This market is also unstable. People may sign up for coverage when they think they need it, and then drop coverage when they think they don't.

Proponents of the individual insurance market say that it is largely broken because of government policy and that it can be fixed by policy changes. The big one is the federal and state tax code. Lack of a tax break for the purchase of individual coverage undercuts the ability of this market to compete with tax-favored alternatives. Mandates, underwriting rules, and other regulatory policies also impose uneven requirements on group and individual policies.

Less Freedom, More Government

One thing is certain: neither the Bush Administration nor the Congressional Republican majority has yet managed to reframe the national debate on health policy in a way that the public appreciates or understands. Senator Kerry and his colleagues, in spite of losing the election, are once again starting to drive the policy agenda.

On May 23, 2005, the National Coalition on Health Care, co- chaired by former Presidents with a list of luminaries on the letterhead, recently unveiled its recommendations. The analysis was conducted by Professor Ken Thorpe of Emory University, a former advisor to both Bill Clinton and John Kerry.

The Coalition has offered a menu of policy options: an employer mandate supplemented by an individual mandate (the basic Clinton plan prescription); expansion of existing public programs (Medicaid, Medicare, SCHIP); a program modeled after the FEHBP (the Devil here is in every nook and cranny of the details; and Mephistopheles himself is hiding in the details within the details so, use a microscope on this one); and drum roll please a "universal publicly financed program" good old- fashioned "single payer" socialism.

There is not much new, different, or imaginative in the Coalition's prescriptions: another resurrection of key elements of the Clinton agenda that the Republican Congress has not yet enacted (inadvertently) and an expansion of public programs.

The Council warns that the "cost of inaction" is higher than the cost of taking the actions that they recommend. They estimate that the number of the uninsured will exceed 54 million by 2015, and that annual medical costs will be $3.8 trillion, or about 19% of the GDP. Yes, that's true. But public program growth will far eclipse the growth in private coverage as aging Baby Boomers begin to accelerate the income transfer from their kids to themselves, via payments to hospitals and nursing homes. The only way to control costs in public programs is to cut the supply of medical services to seniors leading us to the inevitable fine print.

If you imagine that the "fine print" of the recommendations would be fairly prescriptive, Clintonesque even, you imagine right. The Coalition says that national legislation should provide for coverage of all Americans within 2 or 3 years of enactment, and that it should provide for serious cost containment, specifically that benefit costs should rise at the same rate as GDP per capita, or 4% within 5 years. The cost- containment measures include reduction of administrative costs; a reduction in "variations in clinical treatment" (which could evolve into classic cookbook medicine, spiced up with a set of rigid regulatory recipes); and controls on "provider payments" to assure the "target rate of growth" (ye oulde price controls and global budgets again).

The quality and safety improvements would require the nationalization of medical practice, with "national practice guidelines," a "national information technology infrastructure," and information about the "effectiveness and cost effectiveness of care." Looks like more work for the overburdened staff at the federal bureaucracy charged with making this "work."

Can't We All Get Along?

In an unrelated development, Robert Pear of The New York Times recently reported that 24 health policy experts from both sides of the ideological spectrum, as well as representatives from business and labor, have been meeting "secretly" to figure out whether there is anything anything at all they can agree on to address the coverage problem. This will be interesting.

The focus is on incremental steps, based on continuing discussions, in a desperate search for ways to break the policy logjam. The outcome of the search for "common ground" is not at all certain, and, as in many cases in the past, these things can fall apart once the details are discussed. While no single plan has emerged from the behind the closed doors sessions they say they don't want any single plan they have been discussing various options, including:

  • Income-related tax credits for those who can't or don't get health insurance through the workplace.

  • Health care tax credits for children under the age of 21 who are not eligible for Medicaid or the State Children's Health Insurance Program.

  • Ease of administration for employers, allowing employers who don t offer health insurance today to use the withholding system in collect premiums as well as taxes, with the Treasury forwarding the money to insurance companies.

  • Ease of personal access to coverage. Federal grants to states to establish health insurance purchasing pools. If such pools create a level playing field for all sorts of plans, including HSAs, this could be a winner. If it is another way for the government to standardize and regulate supply of insurance products or medical services, it would be another version of the Clinton-style "regional alliance" a real loser.

  • Expand Medicaid coverage. The federal government would provide financial incentives for states to provide Medicaid coverage for any person whose income is below the federal poverty level ($9,600 for an individual).

The Medicare Drug Bill Again

Next year's administration of the drug benefit continues within the framework of a cumbersome Medicare regulatory regime. Congress's historic passion for regulatory expansion has accelerated in recent years, imposing enormous administrative burdens on doctors and hospitals, whose costs are absent from the Medicare budget. While some analysts view Medicare's administrative or managerial problems as a matter of inadequate resources, they are in fact a function of the Medicare defined benefit structure, which inevitably results in Congressional micro-managerial intervention.

Congressional Republicans say that they don't want a government-run drug program, and prattle on about the vigorous role of private health plans and PBMs, but that is yet another indication of myopia or strenuous efforts at self-delusion. The dynamics of the Medicare entitlement will ensure the progressive control of drugs over time, especially the pricing. The consequences can be no less baneful than the results of all other government price-fixing schemes: a reduction in the supply of advanced pharmaceutical products.

As noted last month, Rep. Jeff Flake (R-AZ) has the right answer: Stop this madness before it starts on January 1, 2006.

Robert Moffit is Director, the Center for Health Policy Studies at the Heritage Foundation, Washington, D.C.