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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 46, No. 6 June 1990


The United States will have some sort of national health plan by the mid-1990s, according to most participants at the 1990 National Health Forum held in Washington, March 13-15. But it probably won't be ``socialized medicine.''

Princeton economist Uwe Reinhardt explained that while the term ``socialized medicine'' applies to the VA system in the US, Canada and West Germany have ``socialized insurance.'' Such nations have traded freedom from government interference (as prevails in a price-competitive market system) for egalitarian distribution. Cost control occurs on the supply side only, instead of partly on the demand side.

In Canada and Europe, money flows from third-party payers to ``providers'' through a small number of ``money pipes''-one pipe in the monopsonistic Canadian system. In the US, there is an alternate pathway, directly from patients to ``providers.'' About 28% of the health care dollar (50% of the ambulatory health care dollar) flows in this manner.

``Americans need a dose of pluralism with everything,'' Reinhardt said. ``They pay a 25% pluralism surcharge.''

Besides (allegedly) increasing costs, the alternate pathway is hard to control. In addition, some believe it hinders universal access. Americans are not willing to pay very much in taxes for health care for the poor. ``If all are in the same pot, the cap might be removed,'' stated Ron Anderson, MD, Administrator of Parkland Memorial Hospital in Dallas. It was only passage of the anti-dumping law that persuaded the Texas legislature to raise the cap on Medicaid expenditures, he said.

In Reinhardt's view, the US is ``stumbling, keister back- ward, toward the type of statutory, national health insurance system operated in West Germany''-an employer-based system derived from Bismarck's Krankenkassen. The present East German system is probably about the same, he noted.

Although giving a fairly clear exposition of the definition- nominally private ownership of health care resources under government control-Reinhardt stopped short of using the word: fascism.

Although the well-intentioned Americans advocating such a system might be horrified by the use of the term, John T. Flynn stated in 1944 that ``the test of fascism is not one's rage against the Italian and German war lords. The test is-how many of the essential principles of fascism do you accept?'' He predicted that ``fascism will come at the hands of perfectly authentic Americans...who wish to commit this country to the rule of the bureaucratic state'' (Chron Culture, May 1990).

One essential principle (that allowed German physicians to cooperate in genocide) was the idea that ``physicians were no longer caretakers of an individual patient, but rather promoters of the health of the German people'' (Sprung, CL: Changing attitudes and practices in forgoing life-sustaining treatments. JAMA 263:2211-2215, 1990).

The related concept that medicine is a ``social good'' appears to be axiomatic to most members of the National Health Council, including Reinhardt, as well as to many medical leaders. For example, MSM Watts, MD, editor of the Western Journal of Medicine, proposes a new role for medicine as ``physician to society'' (West J Med 152:414, 1990).

How shall this role be fulfilled? The American College of Physicians has issued a position paper calling for a ``substantial restructuring of the entire US health care system'' so that physicians could meet their obligation to provide for universal access (Ann Intern Med 112:636-661, 1990). The paper deplores ``patchwork reform,'' echoing the terminology of an earlier article (Waitzkin, H: A Marxist view of medical care. Ann Intern Med 89:264-78, 1978), which advocated revolutionary change-including the destruction of private medicine.

The methods being used to extend government control over medicine have been compared with the techniques of German National Socialists by Joseph Scherzer, MD, of Scottsdale, AZ. ``In the beginning of the Holocaust, individual rights were slowly abridged-minor ones at first. The populace used denial to ... minimize the importance of successive incursions upon their liberty and freedom.'' Scherzer noted that resistance was effectively nullified by imposing regimentation slowly, step by nefarious step.

Other physicians charge that fascist methods are already being used in the guise of investigating Medicaid fraud. Nathaniel S. Lehrman, MD, a psychiatrist in solo practice in New York City, states that 22 armed officers barged into his office, guns drawn, and held him captive for 8 hours while indiscriminately ransacking his patient records and personal effects. After some 500,000 pages of records had been confiscated, Dr. Lehrman was charged with contempt of court for withholding records and was faced with a demand to prove himself innocent. (The judge did not find him guilty of contempt because of insufficient evidence, under standards applied to criminal cases.)

According to numerous articles in Psychiatric Times, Mediplan fraud investigators frequently trample on due process rights. Intimidated by threats of criminal prosecution, a number of physicians have pleaded guilty to a misdemeanor and lost their licenses to practice medicine as a result. (Problems such as these will be discussed at the annual meeting by Carol Brown, MD, of Hawaii, who is suing the government after being found innocent of Medicaid fraud in a jury trial. Her attorney Steven Geshell will also speak.)

Will medicine be under fascist control in the 1990s?

The New, Improved Horse-and-Buggy Doctor

Imagine a general medical practice with an overhead of just $10,000 per year, a minimum gross personal income of $42,000 with 12 weeks vacation, and a base office charge of $10 per patient. Impossible, you say?

I am just in the process of following the Lord into an old- fashioned way, back to basics. But I think it is the way of the future. When I first began the changes in my practice, patients asked what on earth I was doing. Now I tell them, ``I'm going FORWARD to the horse-and-buggy doctor days.''

People in the US need a ``missionary'' approach to medical care-not free care, but affordable care....

[The first step is to trim overhead.] My old style of practice required an overhead of about $14,000 per month. I had a business consultant, a new computer system to handle all the PPO and HMO paperwork, a secretary, and one nurse. At this time my overhead is about $1,200 per month.

Two years ago, I dropped my malpractice insurance. I had toyed with the thought for 15 years, but had always succumbed to the norm, disgusted with my gutlessness. Finally, it became a necessity since I could not afford the premium. I said I wasn't going to pay protection money to the Mafia any longer and went bare.

Dropping my malpractice insurance meant that I had to drop out of all the HMO and PPO programs. I hated them anyway, and it was a relief, at least at first. Then I discovered that 70% of my gross business income was from these programs. (About 80% of insured patients in the Phoenix area are in these programs.)

After saying good-bye to my nurse and secretary, I began giving the patients their charts. They are told to bring them in when they come to see me. Oh, what a ruckus this has raised in the medical community! But I love it, and the patients love it. Patients almost never forget their chart. They enjoy reading it, they remember much better what I said was wrong, what I intended to do, what lab tests were for and the results, what I found on the exam, etc. If they need to see a specialist, I probably will write a summary note for his benefit. If he needs a copy of any of the chart, his secretary can make one.

Do you have any idea how much your office spends for a copy machine and supplies, or how much time your office personnel spend copying charts? I would estimate that about half of all visits charged to some insurance company elicit a letter asking for a copy of the chart. At least half of those copies will be ``lost'' and a second copy demanded. Now the patients can make the copies if they are needed. It is their insurance anyway, isn't it? Eventually, this could save money for everyone, since the insurance company wouldn't need to pay $35 for the ``attending physician's statement,'' which is almost always just a copy of the chart.

If I get a telephone call, I can have the patient read to me the information on the chart. I don't have to pull the chart and put it away. If I am not in the office, the information is still available to me. If I need to see the patient, the patient can bring the chart to wherever I am....

I had no idea that the changes in my practice would cause problems with the Board of Medical Examiners (BOMEX). But within two months, I received a letter from them stating they thought I was in violation of the Medical Practice Act of Arizona. Reading the letter was fascinating. They knew as much about what I was doing as I did! Evidently some woman had called anonymously and complained....

One problem was with the records. The Medical Practice Act states that the Board or its designee can enter your practice without notice and demand to see any and all records pertaining to your practice. It is unprofessional conduct if you do not make those records available ``in a timely fashion.'' I think I can comply relatively easily. I have a sheet where all patients sign in by date and time. The Board could request records from that list....It seems that I should have at least as much time to provide records as they allow for mailing requested records when a patient switches doctors. In my experience, that takes at least one or two months, and frequently two requests....

Another problem was the clause stating that records must be ``maintained by the physician.'' It does not say ``kept on his premises.'' My feeling is that I do maintain my patients' records by writing in them and supplying the notepaper-just as your car is maintained by your mechanic, although it is not kept on his premises.

Another concern of the Board was that I allow patients to write their blood pressures or blood sugars in the chart, and the Board was afraid they might not write legibly. (Did you know that in Arizona a doctor can have his license suspended or revoked for writing illegibly?)

I had to attend an interview by the Board. They spent about 45 minutes asking me questions. The Chairman made a statement that he felt I was in violation of the Act and that the Board should find me guilty and make me stop doing what I was doing. A motion to that effect was made, but died for lack of a second. Another doctor made a motion to drop all charges. It was immediately seconded. The doctor who had made the first motion interrupted and said that would set a dangerous legal precedent, and the Board hadn't set legal precedent in eight or nine years. A ruckus ensued. Then the vote was taken: seven to drop charges, three against, one abstain, and two absent....

What could be the end of all this? If enough doctors would leave the system and become radical, how much could we trim from costs? Would ordinary working people then be able to afford insurance (I call it unsurance) again?

I feel like a country doctor, in the middle of the city. I think I will be making an amount of money that God wants to provide for me and my family. For two years, a song has been reverberating in my mind, ``Wherefore do you spend your money for that which is not food, and labor for that which satisfieth not?'' (Isaiah 55:2)....

Where have you been brainwashed by the world into a false system of medical care? How would God change your ``business'' into a ministry again? Get ready to have your synapses rerouted. Break up those concrete runways that have surrounded your thought patterns, and get ready for some real excitement!
Paul Glanville, MD
Chandler, AZ


In Memoriam

Dr. E. Peter Garber of Galveston, TX, died April 18, 1990.

Dr. Marvin A. Childers of San Antonio, TX, died Feb. 15.

Dr. Cecil Pitard, whose fight for freedom was described in AAPS News, March 1987, died in April of 1990.

The Physician-Patient Privilege

One of the most commonly asked questions at AAPS seminars concerns the physician-patient privilege.

Existing law in most states recognizes a physician-patient testimonial privilege (R.M. Gellman, ``Prescribing privacy: the uncertain role of the physician in the protection of patient privacy,'' 62 N.C.L Rev. 255 (1984), citing J. Wigmore, Evidence 2380-91) (McNaughton, rev. ed., 1961). When it applies, this privilege generally provides that the physician cannot testify about confidential communications with his patient, made in the course of treatment, unless the patient waives the privilege. The physician-patient privilege was not recognized at common law and is thus purely a creature of statute. The elements of a privileged communication are as follows:

  1. The communications must be to a licensed or certified professional, as described by the statute, or to an assistant of the professional. Thus, communications to someone not licensed or qualified as a professional (within the meaning of the privilege) is not privileged.
  2. A professional relationship must exist between the patient or client and the professional. An informal conversation not within the professional relationship is not protected.
  3. The communication must be confidential. This usually means that the communication may not be released to third parties. (Nurses, assistants, and other hospital personnel who see medical records as part of their duties are not considered third parties.) In addition, the communication must be made with the expectation of confidentiality.
The physician-patient privilege is extremely limited and may have more exceptions than actual applications. Because the privilege belongs to the patient and cannot be invoked by the physician, the physician is not forced to decide when he may testify or what he may testify about. The reasons why the privilege is of such limited utility derive from the nature and scope of the privilege.

First, the privilege applies only when the physician is testifying in court or in related proceedings. Thus far, in most disclosure decisions, the privilege is irrelevant. Second, the privilege is much narrower than it seems. Statutory exemptions and judicial restrictions have so limited the privilege in many states that the protections are only rarely available. In many states, the privilege does not apply in criminal proceedings, will contests, malpractice cases, physician disciplinary proceedings, cases in which the patient puts his condition in issue, and several other types of cases. Third, the privilege does not exists in all states. According to the 1977 report of the Privacy Protection Study Commission, 43 states have some form of the testimonial privilege. In some of these states, however, the privilege is applicable only to psychiatrists and not to other physicians. Since the privilege is defined by state law, the privilege is not recognized in federal criminal trials or in nondiversity (federal question) cases in federal court, (Id., citing United States v. Moeger, 531 F.2d 752 (5th Cir.), cert. denied, 429 US 853 (1976) and United States v. Kansas City Lutheran Home and Hosp. Assoc., 297 F.Supp. 239 (W.D.No. 1981).

Finally, many legal commentators are hostile to the physician-patient privilege. Professor Wigmore, the noted evidence authority, questions whether physician-patient communications are really confidential; whether patients are less open in communications in the absence of the privilege; and whether the injury to the physician-patient relationship as a result of the disclosure of confidential communications is greater than the expected benefit to justice by the disclosure of the communications when relevant in court (Id., citing Wigmore, 2380a, 2285.

The bottom line is that the physician-patient privilege is of very limited utility to those confronted with disclosure question. The privilege applies only in a courtroom and only when the patient has successfully asserted the privilege. It is thus of no help to those who have to decide the propriety of a disclosure outside the courtroom.

Most disclosure issues must be decided by resort to statutory law, case law, and medical ethics. Note, however, that the existing law is far from comprehensive, often varies from state to state, and only occasionally will provide meaningful guidance.


Thumbsuckers Safe from Oregon Rationing

The term ``universal access'' generally occurs in the same context as ``rationing,'' as it did at the National Health Forum, where the Oregon experiment was presented as a model.

The Oregon Health Priorities for the 1990s project developed a Citizen's Health Care Parliament to develop a consensus about value judgments to guide planners. Colored markers were placed on a magnetic board to display the extent of agreement among various small groups concerning the priority of each box in a 4 by 4 matrix of ``health care building blocks.'' The phases of the human life cycle (from infancy to old age) were on one axis and type of health care (from preventive to critical) on another. The ``elderly'' (age 65 or older) were assigned a low priority for all types of health care except long-term care (West J Med 152:441-446, 1990).

Panels of health care providers were asked to prioritize medical procedures, using the same ``life-cycle conceptual approach.'' A computerized system was used to produce a list of 3000 procedures in order of social benefit, with tradeoffs between quantity and quality of life quantitatively balanced. The Oregon legislature will draw a line across the list; procedures below the line will not be covered by Medicaid.

Thumbsucking was near the top of the list because it is easily treated at relatively low cost and affects a large number of people. Cystic fibrosis and certain types of arthritis were in the middle of the list. Near the bottom were chronic ulcers, herpes, varicose veins, and impacted teeth.


Legal Consultants Honored

Kent Masterson Brown has been named to the Lay Advisory Board of the St. Louis Metropolitan Medical Society.

Vickie Yates Brown has been reappointed as a Council Member of the National Institute of Diabetes and Digestive and Kidney Diseases Advisory Board by Secretary Louis W. Sullivan.


From Capitol Hill

Department of Defense Awards Contract to HealthCare Compare (HCC). The firm that claims to have saved Medicare $17.6 million in Georgia last year by denying or downcoding claims (see AAPS News, Jan. 1990) has been awarded its second government contract. HCC will review claims and help to develop a preferred provider organization for patients covered under CHAMPUS.

Federal Credentialing Proposed by Stark. Rep. Pete Stark (D-CA) has introduced legislation (HR 4464) to require physicians to take federal competency tests at least every seven years in order to treat Medicare beneficiaries. Testing standards would be determined by HHS. Stark dismissed as ``specious'' the argument that such a requirement might impede Medicare beneficiaries' access to care. If physicians don't want to be recertified, Medicare won't miss them, he said. Stark may couple the bill (which he thinks will curb medical malpractice) with one introduced by Nancy Johnson (R-CT) to require binding arbitration for malpractice claims brought by Medicare patients (HR 4566).

Right to Die. Rep. Sander Levin's ``Patient Self- Determination Act'' (HR 4449) would suspend the Medicare and Medicaid certificates of nursing homes and hospitals that don't inform patients of their right to execute living wills. Levin believes the burden of information should be on the provider rather than on the state. Periodic inquiries about advance directives, documented in the medical record, would be required. The companion bill (S 1766) was introduced last fall by Senator Danforth (R-MO) and referred to the Finance Committee.

Federal Employees May Get Medicare-Like Benefit Plan. In the name of cost containment, the federal employee health benefits program (FEHBP), which insures 10 million federal workers, retirees, and dependents, may be ``reformed'' into a self-insured package designed to ``work like Medicare'' under heavy government control. The number of carriers would be winnowed. Five indemnity packages would be offered, operating through contractors to process claims and administer pre- admission screening and case-management programs; 300 HMOs would be kept in operation.

Medicare Bankruptcy Looms. Because of a shrinking work force, OMB projects $250 billion in unfunded Medicare liabilities. To avert bankruptcy in Part A by 2005, Sen. Dave Durenberger (R-MN) introduced S 2249 to redistribute tax revenues from Social Security to Medicare.

Technology Assessment Funding Quintupled. Determined to find out ``what works,'' Congress increased appropriations for effectiveness research from $5.9 million in FY89 to $32 million in FY90. So far, the Institute of Medicine has set criteria for setting priorities, and has produced a list of 14 clinical condi- tions and six technologies to be reviewed first. Next step: achieving national consensus on priorities and process.

A new medical specialty is probably required, since physicians trained to do surgery ``can no more be expected to research scores of articles...than a statistician can be expected to take out an appendix.'' We have spent too much on training and equipping the troops and not enough in supporting the commanders (JAMA 263:442-443, 1990).

Civil Penalties for Incorrect Claims. Inspector General Richard Kusserow wants civil penalties against anyone who submits Medicare claims forms (the physician in all cases after Sept. 1) that fail to include information identifying the primary payer. He states that Medicare has been overpaying up to $1 billion per year in the secondary payer program. The HCFA will be able to identify the 300,000 beneficiaries who should have had Medicare as a secondary payer but didn't report that fact, thanks to a provision of the Omnibus Budget Reconciliation Act of 1989 that requires the Internal Revenue Service, the Social Security Administration, and the HCFA to share information.


New Members

AAPS welcomes Drs. John P. Anders of Toledo, OH; Sidney MacDonald Baker of Hamden, CT; Ralph M. Bard of Tullahoma, TN; Greg Cammell of Toledo; Merrill Cohen of Dover, PA; Michael A. Deluca of Kingwood, TX; Daniel Steven Elliott of Loma Linda, CA; William J. Estrada of Houston, TX; W. Irby Fox of Abilene, TX; Howard M. Guthmann II of Charlotte, NC; Gary Henderson of Tucson, AZ; Olgierd C. Garlo of Bloomville, OH; Paul L. Gorsuch of San Antonio, TX; John M. Gray of Bethlehem, PA, Gerson N. Kaplan of Columbia, MD; Warren M. Levin of New York, NY; M.H. Marx of Lansdale, PA; Wilfred M. Potter of Scottsdale, AZ; Mark Sedler of Amityville, NY; Dennis L. Thrasher of Tucson, AZ; and Antonio C. Yap of Maumee, OH.


AAPS Calendar

Sept 12, 1990. Board of Directors meeting, Scottsdale, AZ.

Sept 13-15, 1990. 47th Annual meeting, Clarion Hotel, Scotts dale, AZ. (Send in your reservation now!)

Oct 17-19, 1991. Annual meeting, Lexington, KY.