update on more Obamacare and central planning bad news

 There is an increasing stream of news almost hourly on the detrimental effects of Obamacare and to adequately review and highlight even the more flagrant examples would overwhelm my limited staff (me).
However from time to time I'll offer a few . Here are some for today.

1.The absurd nonsense of the Obama Administration health czars' (the designation czar is alarmingly correct) "compromise" on the contraceptive mandate.See here for  Cato's commentary on that in an article that explains Obamacare's shell game regarding the mandate.

A related story is that offered by David Catron at The American Spectator, see here. Catron tells a story about a lobbyist for  big Pharma who is now the appointee for a major position at HSS,the Barr Laboratories who make the morning after pill and pricing rules dictated by HHS.Crony Contraceptives is the appropriate title of the commentary.Is this another Cui Bono instance?


 2.The revelation of the egregious conditions at the Stafford Hospital in the UK ( see here for many details ) which can serve as a multiple poster child for the horrors of central planning gone bad,how really bad P4P can turn out and to illustrate once again the primacy of the economic principle that incentives matter. However,it may be that with the NHS 's program for reform,everything will work out especially since apparently Dr. Don Berwick may be chosen to lead the reformation of the system whose praises so loudly he sung some time ago.


3.This article from Cato by Michael Cannon explains that Obamacare from its beginning treated legal immigrants and citizens who were in a certain income bracket differently.The immigrants were granted a subsidy for health insurance under an insurance exchange while the citizen would get his health care from Medicaid.The health care obtained under Medicaid is widely regarded as inferior.How is that for social justice?

Social Justice quote for the day-by Thomas Sowell

Thomas Sowell makes the distinction between what he says is the traditional conception of justice and social justice.See here for the essay from which the following quote was taken.

   " Traditional concepts of justice or fairness, at least within the American tradition, boil down to applying the same rules and standards to everyone.  This is what is meant by a "level playing field"-- at least within that tradition, though the very same words mean something radically different within a framework that calls itself "social justice."  Words like "fairness," "advantage" and "disadvantage" likewise have radically different meanings within the very different frameworks of traditional justice and "social justice."
    John Rawls perhaps best summarized the differences when he distinguished "fair" equality of opportunity from merely "formal" equality of opportunity. Traditional justice, fairness, or equality of opportunity are merely formal in Professor Rawls' view and in the view of his many followers and comrades.  For those with this view, "genuine equality of opportunity" cannot be achieved by the application of the same rules and standards to all, but requires specific interventions to equalize either prospects or results.  As Rawls puts it, "undeserved inequalities call for redress." "

Libertarians and conservatives on one hand and egalitarians on the other all claim to be supporters of equal opportunity but they mean different things by the same words.The first group is talking about what Rawls calls formal opportunity and the second what he calls genuine opportunity.Egalitarians urge  corrective actions to transform a situation which has what  they consider ethically inadequate formal opportunity to their real deal of genuine opportunity.Libertarians not conversant with the egalitarian nomenclature consider the egalitarian's support of corrective actions to be a concern for and emphasis on outcomes while the egalitarians think of the outcome as an improved and the appropriate opportunity.Debates in which the two parties have different meanings for the same words usually do not get resolved.

The Charter (The Physician's Charter)( see here for article ) authored by a surprisingly small group (but apparently well funded, see here) internists in 2002 claims that to be  properly professional in the new millennium a physician must strive for social justice raising that goal to the same level as the  key traditional medical ethical precepts of patient autonomy and beneficence for the patient . This notion of justice is not the traditional concept of justice to which many in this country,including no doubt many physicians accept. Audacity is too weak a word to describe their assertions. Unbelievable is too weak a word to describe the apparent success their effort has had as least as judged by the nominal acceptance of that view by a large number of American medical professional organizations.

Who were the physicians  who lead the social justice movement in the medical profession? This is a topic for a later commentary.

Foundation gave $ 2.5 million to ABIMF to promote Choosing Wisely

The Robert Wood Johnson Foundation in 2012 gave the American Board of Internal Medicine Foundation (ABIMF) $ 2.5 million to further the promotion of "professionalism" which as explicated in the  Physician 's Charter ( see here)  includes social justice and the wise stewardship of limited medical resources. In this instance the grant was to promote the stewardship theme.  RWJ's website announcement is found  here.

Specifically the grant was to promote ABIM's Choosing Wisely Campaign.In the words of the RWJ Foundation web site:

 "To (1) leverage and expand the reach of the 2012 Choosing Wisely campaign of the ABIM Foundation to raise awareness about avoiding unnecessary care; (2) spur physicians, patients and other health care stakeholders to think and talk about medical tests and procedures that may be unnecessary; and (3) prepare providers, patients and other stakeholders to decrease unnecessary health care utilization."

It is no surprise that RWJ Foundation would have warm feelings for the Charter as the link between the two foundations go back at least to 2002 which was the date of the Charter's publication '


One of the authors of the Physician's Charter was Dr. Risa Lavizza-Mourey who  since 2002 has been the President and CEO of  RWJ .  See here for a listing of the Charter's authors.

The apparent successful campaign to promote social justice and the stewardship notion has amazed me but it seems less amazing considering the value of  having friends with very  deep pockets. ( RWJ foundation has about 7.5 billion in assets). The person who invited Dr. Lavizza-Mourey to be a co-author in the Charter project (if that is what really happened,I have no insider information) really knows how to get things done. A  Google search was not successful when I attempted to learn how much money over the past 10 years RWJF has given to ABIMF to promote the Charter. If anyone can help with that, please let me know.

You have to wonder how that  $2.5 million  will be spent and if this ABIMF initiative will be as successful as the promotion of the Charter seems to have been. There are still many physicians who  believe that the promotion of social justice as an basic ethical imperative of physicians is harmful at best and destructive at worse to the physician patient relationship and usurps the fiduciary duty of the physician to the patient.
With the money behind the promotion of the  social justice-stewardship of society's resources program,we have to be a bit discouraged.

Avoiding unnecessary tests and treatments for patients does not necessitate  evoking concepts of social justice and  mythical caretakers of society's resources- the traditional medical ethical concepts of beneficence and non-malfeasance  take care of that. Of course,choose wisely in patient management advice but do so because it is right for the individual patient not on the basis of some fairy tale of collective resources being preserved.


addendum.2/11/2013.I apologize to the CEO of RWJ Foundation for misspelling her name on the initial publication of this post.It is now corrected.

Will Obamacare encourage more business to "go protean" ?

What does "go protean" mean? See here for this WSJ article on the phenomenon. Basically a business would outsource many of its functions to other corporate entities, not to individual contractors, which is often what out sourcing means.

Quoting WSJ:

 " Like a protozoan single-cell organism, the protean corporation has the ability to "shape shift," rapidly adapting to internal and external forces in the market and the company. At the heart of a true protean corporation is a tiny number of core employees surrounded by a large cloud of resources, generally contracted or outsourced talent that does most of the work."

To get under the fifty employee ACA head count threshold, a business might ofter that some of its employees form a corporation and then contract with that business to do whatever functions at that business. Now you have one corporation doing business with another and there is no longer the employer-employee relationship which is one that is controlled and regulated in many ways by local and federal governmental entities (e.g.OSHA,Fair Employment laws of various kinds,Etc)


H/T to Michael Cannon at Cato who closed his commentary on this issue with this:See here for his entire comments.

"Keeping the core company below 50 full-time employees will allow such companies to avoid the employer mandate. But it will also drive up Obamacare’s cost, because most of the workers in the new corporate entity will be eligible for government subsidies through the  health insurance “exchanges.” This will drive up the cost of Obamacare wherever those subsidies exist."

The list of unintended consequences of Obamacare continues to grow.The protean corporation scheme may or may not catch on,and the IRS or some other governmental entity may or may not have some regulatory counter move and since folks respond to incentives we can expect to see more ways for businesses to avoid or minimize the effects of Obamacare and counter moves by the government.The IRS has already issued proposed rules to restrict some of the self  protective actions of businesses in regard to how full time employees are counted and how to calculate full time equivalents.

Social Justice quote for the day from Anthony De Jasay

The Hungarian economist Anthony De Jasay in his commentary posted in the Library of Economics and Liberty takes on the issue of social justice and wonders if the adjective really fits the noun and if what sense it is justice.See here for his entire comments.

"Justice is a property of acts. Just acts conform to certain rules, unjust ones violate them. A state of affairs is just if it is the outcome of just acts. If we want to claim that a state of affairs, say, a particular distribution of material advantages, is an injustice, it is incumbent upon us to show that it results from unjust acts. Otherwise, talk of injustice is just talk. This is where the problem of the identification of social justice as supposedly a branch of the general body of justice must be faced.
Stripped of rhetoric, an act of social justice (a) deliberately increases the relative share (though it may unwittingly decrease the absolute share) of the worse-off in total income, and (b) in achieving (a) it redresses part or all of an injustice. (Note that “income” is used in a broad sense to include stocks and flows of all material goods or claims on same that are transferable). This implies that some people being worse off than others is an injustice and that it must be redressed. However, redress can only be effected at the expense of the better- off; but it is not evident that they have committed the injustice in the first place. Consequently, nor is it clear why the better-off should be under an obligation to redress it, even though if they do not, no one else is left to do it."

So, if the better off did nothing wrong, where is the justice in forcing them to pay; would it not actually   be an injustice to force them to redress something for which they were not responsible? John Rawls's contractarian  theory seeks to support a negative answer to that question arguing that they, quoting Jasay," have agreed in a hypothetical but prima facie sane contract to bear the burden in their own interest". In this formulation redistribution would be the remedy for an unjust situation  and there need not have been any unjust acts committed. Comments regarding this hypothetical,fictitious social contract are deferred to a later posting.

Jasay's comments resonate with FA Hayek's characterization of the modifier "social" as a weasel word which like a weasel sucking a egg allegedly without collapsing it  can suck the meaning out of the word it modifies.   Question for the day: Has the Physician Charter (Medical Professionalism in the New Millenium) sold the medical profession a bill of goods for the next thousand years based on a weasel word?

Obama admistration defines "affordable" in a way denying subsidies to some lower income families

What does the affordable in the Affordable Care Act mean? It means exactly what the IRS says it means and now the IRS has had its say in that regard. See here for the NYT news report on this IRS ruling.

Quoting the NYT article:

"In deciding whether an employer’s health plan is affordable, the Internal Revenue Service said it would look at the cost of coverage only for an individual employee, not for a family. Family coverage might be prohibitively expensive, but federal subsidies would not be available to help buy insurance for children in the family."

Affordable means affordable coverage for the individual employee not for his or her family. If the employee share of the employer subsidized coverage exceeds 9.5% of the family's annual income then the family would be eligible for a federal subsidy.But,the percentage applies only to the cost of coverage for the employee and not for the entire family and the cost of family coverage is significantly higher than for single coverage. So if the company insurance does not include the family many employees will be faced with costly insurance with no government subsidy.

This interesting brand  of social justice administered by the IRS was countered by the Secretary of HHS exempting folks screwed over by this ruling from any penalty (or tax as Justice Roberts might say) resulting from this IRS ruling.

Many, if not most large, companies which already provide health insurance do so for the entire family not just the employee so no one has a good estimate regarding how many would be affected.The Times article claimed millions.

Speaking of affordable,the IRS has released educational material explaining how the penalty (they apparently have not read Justice Robert's decision that made the penalty a tax) for failure to buy health insurance.First, they say that in 2016 the cheapest insurance allowable (bronze plan)  will cost $ 20,000 for a family of five.See here for news article.

Next they reveal in typical IRS language how the "penalty will be computed.

 "(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 - $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12))."

If you had wondered about the role of the IRS in health insurance ,that quote should give a flavor.What did you expect?

"Costs to the health care system" What does that even mean?

Almost everyone, not just health care policy wonks, talks about costs to the health care system.It seems that we are speaking about everything related to health care,the doctors,the labs,the hospitals, the physical therapy,the medications used.etc,etc.

When I recently got a MR of my pelvis to evaluate severe groin pain, I saw an orthopedist,who billed me and then I received a bill from the Imaging center and one from the radiologist. For illustration let us say that a total of 2500 dollars exchanged hands. If we consider the three entities who billed me they all received payments. The part of the health care system they represented incurred no net costs,just the opposite. As in typical transactions one man's cost is another person's pay check.

 Since all these elements of the system received money who can we say bore the cost? So should we consider the payers as part of the health care system? That appears  to be a strange way of looking at transactions.If the payers are included in what we mean by the system then does not everything nets out.Payments made by me and what ever insurance I have (private or from CMS) went to another part of the system ( that is if we include the payer as part of the system).

So what do we mean when we say costs to the health care system? I suggest what is really meant is that someone is paying for the service and when we say reduce costs to the system we really mean that we are reducing the amount that someone paid for health care goods or services.Further the reason there is so much talk about that is because much ( if not most) of health care is paid for in part or completely  by someone's else money and that most of the talk generated about reducing cost to the system is by those other people.

When more is spent on housing or purchasing automobiles why do we not hear cries of alarm about excessive costs to the house building system or the automobile manufacturing system. In fact ,there is more than a little panic expressed when home sales or automobile sales fall and then there is  talk about inadequate aggregate demand  and perhaps the need for a goverment stimulus. When I buy a new car, is that a cost to the automobile industry or a small step towards boosting the GDP. If and when the mystical cost curve of health care is finally bent downwards, will we be hearing talk about the need for goverment action to bolster a falling health care system?

Goverment imposed HIT a bust for health care but good business for the cronies

 Background: Part of the 2009 stimulus bill was a program (called HITECH) that  provided 27 billion $ to subsidize the purchase of electronic health records systems by medical practices but with certain conditions of use.

If anyone believes that the salvation of health care in the country ( or Great Britain for that matter) is in the electronic health records they should spend two minutes and read this information packed,insightful commentary.

First of all, the Rand corporation is backtracking on the glowing projections it has made regarding cost saving by the establishment of electronic health records.Rather than the 77 Billion $ in savings they projected they now admit it cost money-not saved money.The Rand study was widely quoted as demonstrating what great things EHRs would bring.

Ask almost any practicing physician who is taking time away from patient care to unravel and master the so-called "meaningful use" requirements how well the program is working.

The highly touted HIT program for the British NIH was a fiasco and the government has admitted as much and is stopping the program.Both the VA and the Defense Departments Electronic Health Records have been the target of well deserved criticism.

The following quote from John Goodman's health Policy Blog which is linked above talks about the bottom line and how the Mafia Rule serves us well again.

 "RAND’s 2005 report was paid for by a group of companies, including General Electric and Cerner Corporation, that have profited by developing and selling electronic records systems to hospitals and physician practices. Cerner’s revenue has nearly tripled since the report was released, to a projected $3 billion in 2013, from $1 billion in 2005."


So part of the stimulus bill was to take tax payer money, strong arm and sweet talk physicians into  purchasing computer systems which turned out to decrease their efficiency in clinical care but may increase hospitals proficiency in billing ,saved CMS no money but increased the revenue of certain well connected purveyors of electronic records systems.In short, by today's legislative standards a very successful program.

H/T to Paul Heish and his blog FIRM see here.

Cerner corporation has profited greatly from HITECH. See here for a blog entry from the InformaticMD at Health Care Renewal which discusses Cerner's activities in Great Britain and the NHS monumental failure in electronic health records.

Who wrote Obamacare and where is she now?

Who wrote Obamacare? Of course, no one person authored the entire lengthy statute but if one person could be singled out as playing a role greater than any other person that would have to be Liz Fowler.

At least that is what Senator Max Baucus,from whose committee the bill arose, said in the following quote:

 “I wish to single out one person, and that one person is sitting next to me. Her name is Liz Fowler. Liz Fowler is my chief health counsel. Liz Fowler has put my health care team together. Liz Fowler worked for me many years ago, left for the private sector, and then came back when she realized she could be there at the creation of health care reform because she wanted that to be, in a certain sense, her profession lifetime goal. She put together the White Paper last November–2008–the 87-page document which became the basis, the foundation, the blueprint from which almost all health care measures in all bills on both sides of the aisle came,”

Elizabeth Fowler worked with Mr. Baucus previously and then became a VP with Well Point and then back to Baucus to play the major role in writing Obamacare and now has left government "service" to have a VP job at Johnson and Johnson. That's right ,a former VP of the largest health care insurer,helped write the bill that made almost everyone buy health insurance and if they could not afford it a government subsidy would help them buy insurance. Read more details of how Washington manufactures social justice here.

Not only did she help write the law the Obama administration selected her to play a major role in the implementation of the law. See here for details and this quote from that link.

" Clearly, this is a telling indictment of the health care law itself, strongly suggesting that it was constructed by the Obama administration -- as some progressives argued -- as a massive taxpayer-financed giveaway to private insurers like WellPoint. And let's be honest: In investment terms, Fowler has been a jackpot for the health industry. The industry maximized her public policy experience for their own uses when they plucked her out of the Senate. Then, having lined her pockets, they deposited her first into a key Senate committee to write the new health care law that they will operate under, and now into the administration that will implement said law."


So, Obamacare as a giant pork barrel piece of legislation or as leaders at ACP and AMA told us as a giant step forward to provide quality healthcare to "almost all" and further social justice.Cui bono.


Addendum; Added 10/2/14 James Yandle and his grandson (Adam Smith, yes, that is really his name) have devoted a chapter to what they consider the most  significant Bootlegger/Baptist story of our time, Obamacare in their book "Bootleggers and Baptists,-How economic forces and moral persuasion interact to shape regulatory politics"..

45 years after receiving Med school diploma, I realize I am an unethical physician

I had thought for the past forty plus years that by acting as the fiduciary to my patients and by striving to help them,not harm them and respect their autonomy as individuals I would be an ethical physician. However, in recent years I have learned that by my failure to accept the egalitarian  philosophy and to strive for social justice and to act as a steward to society's medical resources, I have fallen far short of the medical ethical ideal and to act as is now thought appropriate for a medical professional.

I suppose I owe gratitude to the internists from both Europe and the United states whose combined efforts lead to the publication of the New Professionalism as explicated in  A Physician's Charter which made clear to me my ethical lapses. The Charter did not merely reaffirm the appropriate behavior between a physician and a patient but it announced how a physician should behave "towards society". 2012 saw the tenth year anniversary of its publication and I commented here regarding that achievement.

I cannot be an ethical physician because I find the concept of social justice to be vague and imprecise and open ended , a term that can be used to rhetorically justify any and all programs to redistribute and which lacks well defined (I argue undefinable) rules to determine exactly what is just.I cannot enlist to work for a concept that has no unambiguous definition and lacks anything resembling operational rules as to how to decide what is just in that formulation.

I cannot be ethical because I find the justice of redistribution to be antithesis of the justice of freedom and as best I decipher the meaning for many of  social justice it is that is  the justice of redistribution.

I cannot be ethical because I believe the concept of physicians as stewards of society's resources is sophistry and is bogus on multiple levels and is a dangerous notion. First of all, society does not have resources. there is no one named society . Society does not choose and society does not own. Individuals choose and individuals own.If one accepts the idea that individually owned assets are part of a societal pool, the next step is to correct whatever distributional inequality some observer feels is ripe to redistribute to mitigate some alleged or real inequality. As long as individuals are free to act in their own self interests within the limits of a democratic country there will be an endless array of inequalities that beg for correction in the eyes of the egalitarian.

I cannot be an ethical doctor because I consider the notion of steward of medical resources of a collective owned ( in some open ended, undefined sense) as a means or a mechanism to control medical care. The concept is both bogus and potentially dangerous.I do not believe that the intent of many of the stewardship advocates is that physicians will  each individually act to conserve resources according to their own assessment of how best to conserve or preserve simply by not ordering  "low value" tests and procedures. Rather we are talking about elite supervisory stewards who through some mechanisms such as cost benefits analysis will provide guidelines through the adherence to which the individual physicians stewards can accomplish collectively the preservation of society's resources and move towards greater social justice ends not achievable through what they believe the archaic and socially destructive selfish machinations of the physician- patient dyad.Doctor,we realize you are too busy and your capabilities too limited to do much personally to conserve the collectively owned resources and further justice but if you just follow the utilitarian based,cost effectiveness guidelines that will suffice.

I cannot be a ethical physician because of my objections to the egalitarian philosophy are so wide and so deep and that I believe the notion of redistribution is simply put a very bad idea. Why so?
Wealth is not created by redistribution and the enterprise of redistribution knows no ends. there will always be inequality of one sort or another along some scale of comparison.  The hubris of those who see an inequality along some axis presume that they know somehow to realign things to make things better (or more equal) as measured by some collective aggregate is more than I can tolerate. My priors are so strongly pro freedom that  a philosophy based on limited of freedom  is not acceptable to me.

I cannot be a modern, ethical physician because of my views about the very core of egalitarianism which included the notion that inequality needs to be corrected by government action.This assumes that the government can act as a disinterested agency capable of rationally correcting market failures and acting in the public interest and carrying out the public will.  All of that is an absurdly romantic notion of how the world works. It is a view that folks such as Jefferson and Madison understood well to be absurd but too many people have either forgotten or never understood and has been replaced by the 10th grade civics class notion of how government works. If you believe that government entities are collections of individuals acting in ways to achieve outcomes consistent with their own interests and often those of special interests you will not buy into the bogus notion that justice will served by governments acting to rectify inequalities .

If you buy into the basic outlook and beliefs of classical liberalism ( i.e.libertarianism) you cannot be an ethical physician if that definition of ethical includes the mandatory acceptance and practice of egalitarianism.


Though I cannot  be a ethical physician according to the ethical principles devised by the authors of the new professionalism and the medical ethics of the American College of Physicians at least I can hope that when father time and apoptosis  take their toll on me to the point when I need medical care  there will be physicians who have the ethical stuff to act as stewards and be sure that my personal interests will not over ride those of society.

Obamacare 's IRS rules make offspring under 26 but not spouses covered

 If you thought the unfolding consequences (unintended?) could get no more  ridiculous and socially unjust , stay tuned as the rules making ACA operational are continuing to be written and the trip down the rabbit hole  gets stranger and stranger.

See here for the latest absurdity of Obamacare. The IRS has proposed (but told business they could rely on what they said at least for the time being) that employees are covered in regard to the mandate for affordable health care and their less than 26 year old children but not their spouses.

Quoting from the NYT article linked above:


"The law says an employer with 50 or more full-time employees may be subject to a tax penalty if it fails to offer coverage to “its full-time employees (and their dependents).”

Employers asked for guidance, and the Obama administration provided it, saying that a dependent is an employee’s child under the age of 26."

At a BMI of 22.6, I need to gain some weight

I need to gain some weight because of a recent meta-analysis (see here) that informs us that folks who are "over weight" (BMI of 25 t0 30) have a lower all cause mortality than folks who are what we used to call ideal or normal weight ( BMI of 20-24.9). It gets even better, Folks who have been derided and labelled as sloths by their health care providers because of their BMI in the range of 30 - 35  have a Hazard ratio of 0.95 ( CI .88-1.01) .At 5 feet 11, I look forward to gain up to 210 from my scrawny 163. One of my new year resolutions is to act immediately on the basis of the very latest meta-analysis since:1) meta-analyses occupy the tip top of the evidence based medicine hierarchy and 2) another meta-analysis may soon appear contradicting the other one and you loose your opportunity to improve your health.

 Since we humans are pattern seeking , story telling animals the authors try and tell a tale of how the results may be explained . One suggestion- overweight people may go to doctors sooner.This is likely as chubby people love to see their doc to be told they need to loose weight.

It was not long ago that another meta-analysis found that being even a "slight amount" of overweight increased one's risk of dying.See here.

So even a little overweight is bad or a little or even a little more overweight is good. Which is it?

The following quote by an economist, FA Hayek, was, I believe, aimed at central planners of the economy but I suggest that maybe we all would be better off if the public health planners might listen as well as they go about telling everyone how to eat and what they should weigh and what size sodas they should be allowed to purchase.


"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

And to begin the new year with one more of favorite quotes. It is supposedly by an attorney cross examining an expert witness. 'Doctor, were you wrong then or are you wrong now?

More and more physicians work for corporations-what could possibly go wrong?

Dr Roy Poses tells us that plenty can go wrong and has already and will only get worse. See here for his latest commentary  of things going wrong when physicians' salaries are dependent on hospitals and other corporations for their livelihood who in turn exists to maximize profits and "quality care" is just a marketing phrase.


This detailed article from the NYT provides more chilling documentation of what can happen and,is happening, as corporate entities practice medicine and physicians become more and more under the control of the corporations' suits.


When there is a conflict between the corporation's bottom line and the individual patient's well being one could only hope that the physician's ethical compass would point in the direction of the patient benefit.However, with the new medical ethics , one could argue that the good of the collective ( the HMO or ACO or hospital  or whatever) may well trump the welfare of the individual .

 That was not the case with the "old ethic" in which the good of the collective was not mentioned and the physician was considered the fiduciary of the patient.Try and find the word fiduciary in the New Professionalism or in the latest edition of the ethics manual of the American College of Physicians.

When the physician and the corporation have the same interest  (corporate bottom line) and the former act in the interests of the latter the published desire of Berwick and Brennan to do away with the [physician - patient ] dyad as a decision making unit will be fulfilled. See here for my earlier comments on the following quote from Berwick's Book entitled New Rules.

 
"Today, this isolated relationship[ he is speaking of the physician patient relationship] is no longer tenable or possible… Traditional medical ethics, based on the doctor-patient dyad must be reformulated to fit the new mold of the delivery of health care...Regulation must evolve. Regulating for improved medical care involves designing appropriate rules with authority...Health care is being rationalized through critical pathways and guidelines. The primary function of regulation in health care, especially as it affects the quality of medical care, is to constrain decentralized individualized decision making.


In the 17 years since the publication of New Rules,considerable progress has been made in their desired reformulation of ethics and how medicine is practiced and one can surmise that the authors are appropriately gratified. Those of us who hoped that in our hour of medical need we would be attended by physicians who acted in their fiduciary duty to us and not in accordance with a reformulated ethical framework are a bit less sanguine.

More revolving door antics with Obamacare

I have commented before about the happy feet of Elizabeth Fowler and her travels in and out of government and in and out of the industries materially affected by the branch of government in which she "served".See here for earlier commentary.

Now a similar tale can be told in regard to a major player in the governmental regulation of the health  insurance industry.Steve Larsen's resume is similar to Dr. Fowler. As outlined here he worked with an insurance company and then played a key role in HHS  dealing with insurance regulation as regards ACA and now back to insurance, this with a subsidiary of a company who was the beneficiary of a large HHS contract while Larsen was employed by HHS.

Larsen left his position as head of HHS's Center for Consumer Information and Insurance Oversight shortly before SOCTUS ruled Obamacare was constitutional and is now an executive VP with the UHG subsidiary Optum. Mr. Larsen also played a role in one of favorite examples of the social justice brought about by Obamacare,the granting of exemptions to friends of the administration. See here.

Expose of how big pharma worked on the sausage of Obamacare's social justice

See here for a fascinating, detailed account of the behind the scenes activities in the creation of one part of the Affordable Care Act.

Details of the cahoot activities were gleaned from numerous E-mails studied by the House Energy and Commerce committee.

After an agreement was reached between PhRMA (the lobby group for big pharma) and the white house they donated 150 million for an ad campaign and another 70 million for two front groups to advocate for passage of the bill. Big Pharma was able to block efforts to allow re-importation of medications and to enable CMS to negotiate drug prices for medicare part D.

The WSJ on line article linked above includes this paragraph.

At least PhRMA deserves backhanded credit for the competence of its political operatives—unlike, say, the American Medical Association. A thread running through the emails is a hapless AMA lobbyist importuning Ms. DeParle and Mr. Messina for face-to-face meetings to discuss reforming the Medicare physician payment formula. The AMA supported ObamaCare in return for this "doc fix," which it never got.

 If the lobbyists for AMA were hapless, what can you say about the lobbyists for the medical device manufacturing sector? See here for an article indicating that now even liberal Democratic senators seem to belatedly realize that the tax on that sector will cause the loss of jobs .

Perhaps the Obamacare sausage maker who should be singled out for special recognition is Elizabeth Fowler who some (including Max Baucus who should know) have said is the real author of ACA. Another important aspect of the cahooting,crony capitalism,baptist and the bootlegger world of legislation is the revolving door aspect. See here for how flagrant that process can be with a detailed chronology of Dr. Fowler's resume.Here are comments in that regard by Glenn Greenwald,by whom very little gets by:


  Ms. Fowler “will receive ample rewards from that same industry as she peddles her influence in government and exploits her experience with its inner workings to work on that industry’s behalf, all of which has been made perfectly legal by the same insular, Versailles-like Washington culture that so lavishly benefits from all of this.”


h/t Dr. G.Keith Smith for reference to House Committee's report

Affordable Care Act as a monumental Baptist and Bootlegger morality tale

 "We are pattern-seeking,story-telling animals".

From chapter 1 , Macroeconomic Patterns and Stories, Edward E. Leamer


In a 1983 article in the journal Regulation, the economist Bruce Yandle introduced the concept of the Baptist and the Bootlegger (B+B). It refers to the situation in which a given legislation or regulatory action is supported by some group on high moral grounds as in denouncing the evils of alcohol.Support also comes another group who stand to get economic gain from that legislation such as bootleggers would if alcohol sales were banned. The Mafia rule of "follow the money" is useful in seeking out who might be the bootleggers in a given situation.See here for some classic examples of the B+B pattern including the acid rain story and the tale of  spotted owl.

After I became aware of the B+B pattern I seem to see it in many places, even in the Affordable Care Act.So here is the story.

I can see the medical progressives as the Baptists. Medical progressives believe (many of them sincerely) that health care or medical care is too complex,complicated and important to be left to the individual patient and his physician.Rather it should be determined by the elite who using a utilitarian ethic with the tools of cost effectiveness research will be able to find practices that will benefit society as a whole.But control is not the what the medical progressives explicitly argue for in their advocacy but rather it is the furtherance of the social justice that will be fulfilled as millions will now have access to health care and health care inequality will be greatly diminished. No, not  all physicians who  supported ACA  fall into that category.There are many sincere physicians who believe the statute is the way to obtain health care for  millions who are now under served and who are not part of the progressive medical elite but typically it is not their voice we hear from the pulpit.

I can see a coalition of bootleggers at work in the formulation of the many pages of dense, self referential legal prose that comprises ACA. The Mafia rule works well here.

Who would gain from millions of new clients with health care insurance?

Easy answers. The hospitals would gain simply as there would be many more  clients to be able to seek out and pay for their services. Similarly the big health insurance companies would welcome millions of more clients who are forced to pay for their product.Big Pharma would be in the position of more customers who could buy their products with other people's money. Information technology companies would relish the legislation to force or nudge physicians to buy and maintain computers systems.

But there is more.While the Baptists were singing hymns of praise for social justice,equality,elimination of waste, and the millions of uninsured Americans,the bootleggers and their lobbyists were busy working with the movers and deciders on the hill (eg. Max Baucus and his adviser, Elizabeth " revolving door" Fowler) to work out the important details. Big Pharma was able to get restrictions on the re importation of generic drugs,big hospital was able to be exempted from the actions of IPAB until 2020 and big health insurance was able to keep the public option from being included in the statute.

 Of course, metaphors and other figures of speech only can go so far,the reality flows over the cup.What about the medical professional organizations such as AMA, ACP, AAFP, etc.Many of these talked the talk of the preachers.Yet some had something to gain. The AMA  gathers more cash flow from its monopoly on coding than from the decreasing number of members' dues and coding will only increase as more patients are seen by physicians.Why did ACP and AAFP and others advocate for passage of Obamacare? Did they have anything to gain or were they merely dedicated preachers? Maybe the metaphor does not allow for much moral ambiguity.

The preacher who is pure in heart and sincere in belief gains only the satisfaction of doing the right thing.Preachers rarely have part time jobs as bootleggers or renounce the cloth and become a full time dealer in illegal sales of a prohibited substance. 

Folks with MD degrees who advocate for universal health care and alterations in medical ethics favorable to third party payers who either before or after that advocacy hold executive positions in major health insurance companies might gain more than self satisfaction. Maybe some people can really do well by doing good and that would be true in this instance if in fact passage of ACA is considered a good thing. Sometimes it is hard to tell the Baptists from the Bootleggers .

More social justice bubbles up from the magic Obamacare fountain

There is so much social justice being dispensed from ACA that I can't really keep up. Here is one more instance,one that is imminent, ( Jan 1, 2013) the capping of health saving accounts at $ 2,500 down from 5,000 see here for Forbes article.

Twenty per cent of workers have HSAs.Meanwhile premiums rise on health insurance. So ACA forces folks to spend more on their health insurance and "nudging" them to spend less at their own discretion.

While this latest wrinkle is only a relatively small cog in the mammoth ACA legislation the progressive medical elite can savor it as it is one more move to limit the individual's choice in medical care which is the operational arm of their dominant theme which is "medical care is too important and complicated to be left to individual patient and his physician."

Will states opting out of insurance exchanges unravel Obamacare?

Michale Cannon of Cato seems to argue that.See here.

Michigan is the latest state to say no thanks to the insurance exchange deal.Cannon has argued that while the federal government can establish an exchange it cannot have the subsidies that were to be part of the state exchanges. The IRS has issued a ruling that claims the opposite. Cannon and his co authors argue that both the legislative history and the statutory  language make it clear that ACA did not authorize the subsidies to the federal run exchanges.

The key thing seems to be how the courts rule regarding  the federal established exchanges legal  authority to issue subsidies .Ultimately if the issue reaches SCOTUS , will Justice Roberts act in a way to redeem himself  in the eyes of his former conservative supporters or will he once again dazzle us with innovative legal reasoning? My pessimistic prediction is for more bedazzlement.

Even if the IRS ruling holds as Dr. Scott W. Atlas of Hoover Institute argues here ,Obamacare may prove to be unworkable as costs rise and access to health care actually decreases (insurance cards do not magically generate physician) and the public or interests groups and politicians clamor for a solution we may well face the single payer option. Some have argued that was the plan all along even though that assumes greater wisdom in those who planned ACA than I think they likely possess.

More aspects of Obamacare being challenged in court

Some states are still refusing to set up the insurance exchanges contained in ACA.Subsidies are an important part of the exchanges.The IRS claims that when the federal government sets up an exchange when an individual state refuses to it can offer the same subsidies.However the claim underlying another challenge to ACA is that there is no statutory authority to do so.

See here for details.

Also the Liberty University litigation has been resurrected by the the Supreme Court. See here for details.The dogs keep barking but the pessimists believe the caravan has moved on and will not be recalled.

How Medicare CMS payment schemes push physicians to be employees

 The health care economist John Goodman explains  one more  incentive for the private practice doctor to become an employee of a hospital or some other vertically integrated health care corporation  and  for the vector that is pointing in the direction of increased health care costs.

 Differential price controls benefit some and harm others. See here for how much more CMS pays for the same procedure based on where it is provided.Wonder which group has the more effective rent seeking mechanisms-hospitals or private practice physicians.

In regard to the differential payments,Cui bono.Obviously the hospitals- but why would CMS adopt that tactic? I suggest it is in the interest of all third party payers not just CMS to eliminate the private practice of medicine by thousands of small, individual physician practices.If the goal is control of how physicians practice medicine, then to nudge them to become employees of a medical collective  would appear to be a good tactic.

More on the movement away from small medical practices to hospitals can be found here in the discussion on the effect of ACA (Bronco care) on that issue.

U.S. health care needs more regulation,bureaucratic oversight and expert panels

Fortunately, that is exactly what is on the way  thanks to ACA also known as Bronco care-formerly Obamacare. Efficiency and innovation will be forced from the top down with new regulations,more price controls sprinkled with the fairy dust of accountable care organizations,medical homes and high value care all of which will also preserve the medical commons.  Wise central planners will shape a system of rational health care thankfully cleansed of the short sighted, selfish collaboration of the archaic physician patient dyad which for so long impeded the effective,cost efficient, culturally competent health care for all which social justice demands.

We can see from scrutiny of the historical record  how those techniques were successful in generating cheaper,better quality goods and services and general public admiration in the following areas : Amtrak,the US post Office, public school education, airline regulation, DMVs, and the TSA- just to name a few of the more successful instances.

Again we are fortunate that the nameless planners,bureaucrats,politicians,lobbyists for the various rent seekers and the self-less, advice-giving intellectuals  wisely ignored the frivolous advice of FA Hayek . " It is the curious task of economics to demonstrate to men how little they really know about what they imagine they can design." Obstructionist pontification like that serves only to hamper progress.

With the "wise leaders with ideas" at the helm of health care one can be confident that we can rationalize health care while avoiding some of the inconvenient truths about the central planning of  Canadian health care as described here.

Further,we should be grateful that the archaic impediment to the new health care nirvana,namely the restrictive and shortsighted notion of there being a fiduciary duty of the physician to the individual patient,has been corrected by the new medical ethics and professionalism.

With the presidential election settled Obamacare is free to pour forth its bountiful social justice

Opponents of ACA had hoped that SCOTUS would find the act unconstitutional and failing that that the 2012 election would give republicans the legislative power and occupancy of the White House to find way to defang the statute. But no,Obamacare is now unfettered to benefit the citizens of the country with unbounded instances of  social justice. Here are just a few.

Health insurance premiums are set to rise probably everywhere but so far we have published evidence regarding the degree to which they will rise in one state,Ohio,see here for details

The social justice fairy will likely bring more part time jobs at the expense of full time jobs.See here.

 When HHS determined that various methods of birth control would be covered by insurance companies at no extra cost to anyone,not only was a bold step for justice taken but by outlawing the there is no free lunch dictum the gates opened for endless more justice- effortless accomplished by a stroke of the HHS secretary's pen.See here.

With Obamacare seemingly immune from repeal or significant alteration the particularly compassionate and just aspect of ACA ,the granting of waivers from certain aspects by the secretary of HHS can continue unabated. "The secretary shall determine".

Part of Obamacare is the Medical Device Tax.See here how some medical device companies are adjusting by eliminating some jobs.At least some of those employee may have well  "Liked their doctor" but they will not be able to keep them as promised prior to the passage of the statute.Strange sometimes how that justice thing works out.

In fairness it should be noted that the social justice will cost a little bit more than the slightly less than one trillion dollar number that was contrived to facilitate passage of the bill. See here.Nevertheless a bargain at nearly twice the projected cost.

Is the term "medical commons" a useful analogy to US health care or a lame figure of speech

  In the Animal kingdom,the rule is eat or be eaten;in the human kingdom,define or be defined. Thomas Szasz

A recurrent meme in the discourse of medical policy  is the notion of the "medical commons". This term can be traced back to the phrase " the tragedy of the commons" which was a term introduced in a 1968 article by Garrett Hardin.

Tragedy of the Commons refers to the situation in which a shared resource is depleted by individuals acting in their own short term interest to the detriment of the group.Typical stylized examples are herders overgrazing their sheep on a common field not allowing grass to regrow or fishermen overfishing an area of the ocean depleting the fish population thereby damaging all in the long run.A characteristic of these commons is that the property is unowned or is considered to be common property.In other words there is lack of strong property rights.

The earliest reference I could find for the notion of medical commons (MC) was in a 1975 NEJM special article entitled Protecting the Medical Commons:Who is responsible? by Dr. Howard H. Hiatt.(NEJM 1975;293:235-241,July 31,1975).

Dr. Hiatt made the following gratuitous assertion that medical resources in the country can be viewed as analogous to the grazing area problem.I say gratuitous because Hiatt does not elaborate of how the two phenomena are alike in significant ways.

"The total resources available for medical care can be viewed as analogous to the grazing areas on Hardin's common."

 An analogy is  a type of comparison in which one likens one thing to another in circumstances in which the two things have useful similarities such that knowledge of the one thing can aid in understanding the other.  For example one could consider the human heart to be analogous to a pump.From our understanding of a pump we gain some insight into the mechanics of the heart.

The problem I have with the medical commons analogy is that health care or health care resources share no essential features with the notion of a commons.

 For example, the common field or patch of ocean is owned by no one ( or every one,which in some regards is the same thing ) whereas medical resources are owned by numerous entities in particular. Hospital X is owned by someone or some real economic entity,a corporation  or perhaps a local government or the federal government. The MRI units and the physical therapy units and the commercial labs are all owned by someone or other. Ownership involves the right to use one's property,to dispose of one's property and to exclude others from the property. In the commons all can use the property but do not enjoy the other  elements of property ownership.

In the commons,all are allowed to bring in the sheep to feed but every patient cannot simply go to any of the numerous health care facilities and partake of their offering for free and ad lib.

The "tragedy" in the tragedy of the commons is that overuse leads to resource depletion but does overuse (how ever defined) of health care resources deplete those resource. I argue just the opposite .

 As the demand for health care resources increases often so does the supply. As demand for hip replacements goes up more facilities have become available for orthopedic surgery, the same for cardiac caths and for MRI etc etc.Increasing demand and use of medical resources does not deplete them but can lead to their increase.No one is using up the MRI exams.

 The issue is not the depletion of resources as one might think using the flawed medical commons analogy, rather it is the expenditure for using those resources about which alarms have been sounded. Even here though, money spend on a MRI or surgery or whatever is not money hurled down a black hold- it is simply redistributed . But could not that money have been better spent by for example preschool tutoring for under privileged inner city youth? Maybe, but there will always be some other use for money that is spent on any thing. So is the resource that is being "depleted" in the medical commons   money or more accurately other people's money or the perception that it is other people's money.


If the medical common analogy is thought to be appropriate and valid why would not the following be equally so; the home construction commons,the  food supply commons, the hair care commons,the automobile manufacturing commons. Why do we not hear alarms being sounded about spoiling of the home construction industry by overbuilding or too many customers spoiling the food supply commons?After all money spent on burgers cannot be spent on housing for the poor. Hint: Much of medical care is paid for using someone else's money.


While a grassy field for the villager's sheep to graze can be defined by a specific surveyor description, the "medical commons" is a extremely large amorphous array,the elements of which defy enumeration, and is every changing, with some elements growing ,others contracting and rearrangements cropping up constantly. Various entities own various elements of this array-society owns none even though various government entities own some but the government is not society.

The skills,and knowledge of thousands of physicians are aggregated and then allocated as if somehow society own them.There is no easily defined entity called "medical resources". Rather,it is an amorphous abstraction.Further, to speak of allocation means some one or some elite group will be the "allocator in chief ".

 If there is societal allocation decisions will not be made by thousands of individual physician-patient pairs.



Dr. Hiatt is a very accomplished medical scientist with a distinguished career .His article in my opinion was an attempt to call attention to what he believed was the need for "society to find ways to govern access and control of the use of the medical commons" and the role that physicians would have in those decisions. In that regard the use of the idea of medical commons was a rhetorical device  to imply that medical resources are in some meaningful sense owned collectively and that society should decide important allocation questions. Governing access and control are the operative words.

Once one accepts the notion that the medical resources are collectively owned then it is a short step to the idea that individual physicians and patients should not be selfishly decide how things are allocated, the allocation must be done for the collective good based on sound, cost effective, utilitarian considerations.Although the discussions speak of a medical commons implying everyone in the country, operationally what we would be dealing with are smaller commons such as that found in and HMO or the current HMO oid entity the ACO which is the panacea flavor of the month.


When someone speaks of society making a decision be wary because there is no one named society and society decides nothing.The medical commons concept is more than a very flawed analogy . It is a rhetorical  tool for the listener or reader to passively accept the notion that health care should be collectivized. Advocates of that may say society decides and society demands but basically some (most ?) of the advocates of that view believe that the medical intellectual elite with the power of the government should make those decisions . They believe that medical care is too complex,too complicated and costs too much to be left in the hands of the individual physician and patient.Drs. Donald Berwick and Troynen Brennan  clearly expressed  the view that the doctor patient decision making "dyad" in their book New Rules should be eliminated.

Here are two quotes expressing the desire to do away with the traditional physician patient relationship , the first from Berwick's New Rules, the second from a 1998 Annals of Internal Medicine article by Dr. Robert Berenson and Hall :

"Traditional medical ethics, based on the doctor-patient dyad must be reformulated to fit the new mold of the delivery of health care."

and

"we propose that the devotion to the best interests of each individual be replaced with an ethic of devotion to the best interests of the group for which the physician is personally responsible."

 Of course everyone using the medical commons figure of speech is not an advocate of the new medical ethics or of collectivization of medical care, but once a phrase is used  often enough  it becomes part of the common discourse sometimes (often?) without concern about what it might really mean to some.

If we want to make progress in solving or at least mitigating some of the problems with US health care I suggest referring to a meaningless analogy is not useful except to those whose agenda involves destruction of the old time medical ethics.You might remember the one that emphasized the primary fiduciary duty of the physician to the patient.

The medical commons meme is often invoked in polemics admonishing physician to not order unnecessary testing.Such comments as "spoiling the commons" appear. I suggest that advocates of prudent medical testing need not invoke collectivist views of medical resources or reference to non existent medical commons.Physicians already have a firm ethical basis for not ordering unnecessary tests and procedures. Two well known,long standing, stalwart precepts cover that very well;beneficence and do no harm.

Ordering unnecessary tests and procedures bump up against both. The harm of doing a test that is not necessary should be evident to a physician before he finishes medical school let alone residency training. The patient is harmed by the cost of the test (even if she only pays a fraction of the cost),by the anxiety of a false positive result and the inevitable cascade of further testing and possible invasive procedures that commonly occur after a false positive result.

Simply put- a physician who orders tests that are not in the interest of the patient is harming his patient and not living up to his fiduciary duty.The problem is not harm to the medical commons,there is no such thing.

It is not an oversight that advocates of the new medical professionalism which posits a co-duty of the physician to the patient and to society conveniently leave the term fiduciary duty out of their discussions and admonitions regarding medical professionalism.The fiduciary duty of the physician to her patients has been nudged out of the definition of a ethical physician and quietly replaced by physician as steward of society's resources.

Naturalistic Decision Making,phronesis and the making of an expert

A recent blog posting by Dr Robert Centor, see here, introduced me to the term "naturalistic decision making" which seems to be one aspect of the broader area of the study of cognitive reasoning, or how we make decisions. In this regard one focus is on decisions in which there are high stakes, time pressure and complex situations as is common in emergent clinical situations.

Basically  faced with that type of situation,such as the challenging chest pain case  described in Dr. Centor's article, expert clinicians typically rapidly categorize the situation based on a pattern recognition ( as described by Kahneman as a System 1,fast and unconscious mental act) and then move on to use a deliberate,analytic System 2 approach involving,in part,  a search for missing data and for discrepancies and then a simulation of what might occur next if the first plan based on the first impression were carried out.

The Nobel prize winning work of Kahneman and others working to elucidate how people think in have apparently fleshed out possible mechanisms of  some of what Aristotle referred to as  Phronesis.

Aristotle spoke of the virtues of the  mind as including:

sophia (wisdom of first principles),
episteme (emperical knowledge,
techne (technical knowledge)
nous (intuition) and
phronesis (practical wisdom or prudence).

Evidence based medicine  with its emphatic focus on  techne and episteme may foster the illusion that good clinical practice can be encapsulated in guidelines and pathways and that quality lies in obedience to them but it is the blending of those elements of science and technique with practical wisdom that makes good practice. Treatment guidelines or algorithms come into play only after a diagnosis has been reached and in all but the most trivial cases a bit of phronesis might help.

 In Kathryn Montgomery's 2006 book, How Doctors Think, we find the following quote which sounds a lot like what we learn from the field of Naturalistic decision making:

"Clinical judgment done well is the intuitive and iterative negotiation of the patient's narrative of illness...This focus come with experience"

And for that I don't believe there is an algorithm.

More on the "seen and the unseen" related to Obamacare

Bastiat's "seen and the unseen" and Thomas Sowell's "and then what" express the same basic notion. That notion is part of  what the economist Russ Robert calls the economic way of thinking.

See here for a commentary on one of the many "and then whats" of ACA.Part time workers are excluded from the employer mandate to provide insurance or face a fine.So the definition of Part time worker become important. The latest government edict on that stipulates than the cut point is 30 hours a week whereas previously the definition was less than 35 hours per week. So there is now a substantial financial incentive for employers to limit part time workers to less than 30 hours per week. The result is more part time employees will work less;more of the marvelous social justice that ACA is bringing to the middle class and those lower than that on the income spectrum and beating them over the head with it.

I quote from the above referenced article:

 "So there’s a balancing act: preserving jobs vs. providing insurance. The problem isn’t small. In September, 34 million workers, about a quarter of total workers, were part-time, reports the Bureau of Labor Statistics. But the bureau defines part time as less than 35 hours a week; Obamacare’s 30 hours a week was presumably adopted to expand insurance coverage. There are now 10 million workers averaging between 30 and 34 hours a week. To the bureau, they are part-time; under Obamacare, they’re full-time."

  There are advocates of ACA ,including some  in leadership role at major physician organizations, who seem unconcerned or at least silent about the unprecedented power given to federal bureaucrats (this time the IRS) to put words to paper and influence the lives of millions of people seeing only that we have moved further to universal coverage somehow believing the fairy tale than given millions more people Medicaid cards will translate into those people actually getting care.

Bastiat:

1.1

"In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them."

The corporate physician - he is not your father's doctor

Dr. Roy Poses has tirelessly written about the loss of professionalism in the medical profession.Here is the link for a recent commentary by Dr. Poses about the rise and likely consequences of the corporate physician.

There was a time when the AMA vigorously opposed the corporate practice of medicine and a number of states outlawed it.But now times have changed and few states have strong statutes limiting it.

Texas still has a residual- but significantly watered down- corporate practice of Medicine statute. See here for a history of the corporate practice of medicine idea with emphasis on the exceptions even in Texas which has one of the strongest prohibitions against the corporate practice.In Texas the most widely used exception is the situation in which a "non-profit health corporation"-so certified according to defined statutory criteria-can hire physicians.See here for a discussion of what is referred to as a 501(a) entity.The rational of the original opposition to corporate practice was simply that the business entity would control the doctor's practice and profit-not the patients best interest would be controlling.There is much to suggest that the same objection is valid today but few voices are heard in that regard.It should be noted that the "non-profit health corporations" included the "not for profit hospitals". As is obvious Non-profit as well as successful for profit hospitals annually have revenue greater than cost;otherwise they would not be able to keep expanding with more and more branch offices and purchasing physician practices let alone keep operating.

Recently,  I attended a seminar sponsored by the local medical society  labelled as eligible for CME credit under the ethics category of required annual CME credit in Texas.The topic was how to promote your medical practice and , of course, advertizing was one way recommended.

There are at least two negative consequences of physician being employed by hospitals or large medical aggregations ( that includes the latest incarnation, the highly touted ACO):

1)Increased costs to the patient

2)decreased quality of care

Poses give illustrative examples of how the same procedure can cost more when ordered by or performed by a physician working for the hospital   versus a free standing doctor not compensated by the hospital. Read Dr. Poses's posting referenced above for details about these negative consequences.

People respond to incentives.Physicians employed by health care corporation inevitably will face the situation in which the incentives generated by corporate goals and targets with which the docs will be tasked  will conflict with  the primary directive ( or what used to be the prime directive ) of a physician namely doing what is right for the individual patient.I am afraid that the physician's role as a patient advocate  in the corporate health care organization may go the way of the AMA's prohibition against physicians advertizing,a quaint historical artifact.Once the physician accepts the new ethics position that they are responsible for the health of the collective ( the ACO may be the collective ),then the greater good for the greatest number will just happen to coincide with the financial health of the organization.

Will ACA turn full time jobs into part time jobs?

See here for comments from economist Garrett Jones.

If Obamacare increases the cost of hiring full time employees versus part time workers it would seem that a as  shift to part timers would make sense for some employers.This may well apply to the hotel and restaurant sectors and at at least one large restaurant company is going that way.See here for what Red Lobster is planning. Who would have thought that people respond to incentives?

If something costs more ( like having full time employees ) people will do less of the something.Again Milton Friedman's two principles of economics are on target. To review: there is no free lunch and demand curves slope downward. Thomas Sowell said a good economist always asks "and then what" which is a similar thought to Bastiat's "seen and unseen". With Obamacare, the "and then whats" just keep on coming.

The locus of medical decisions will shift evenmore with Obamacare

Thomas Sowell said the following as a good summary of the second half of his book Knowledge and Decisions:

Even within democratic nations,the locus of decision making has drifted away from the individual,the family, and voluntary associations of various sorts and toward government.And within government, it has moved away from elected officials subject to voter feed-back, and toward more insulated governmental institutions, such as bureaucracies and the appointed judiciary.

Think about the role of IPAB, the binding pronouncements of USPSTF, and the astounding power of the Secretary of HHS under ACA.All of these and other aspects of Obamacare point to the observation that there has never been a larger shift in the locus of medical decision making in U.S. history.
 and in the absence of its repeal the likelihood of a shift back approaches zero.

If you give up Medicare Part A you loose your social security benefits-WTF

The headline is correct .See here for background on this agency ruling that makes the headline true.
See here for my earlier posting of what a federal judge considered a "mandatory entitlement".
 
The absurdity of this situation has been challenged in court and lost in the trial court and in the appeal but now efforts are underway to put the issue to the Supreme Court.

I have blogged about this before and thought the issue was settled but thanks to folks at Cato the fight goes on.

Electronic Health Records-follow the money

Promoted as a means of not only improving health care quality but saving money ( the often quoted $ 77.8  Billion that computers would save in medical care costs) the mandate and subsidy to physicians to adopt electronic health records (EHRs) did not randomly appear in the 787 pages of the 2009 stimulus bill also known as American Recovery and Reinvestment Act (ARRA)

 Application  of the  "follow the money rule" is interesting this regard.

See here for an article from the Washington Post that gives some interesting back story to the HITECH Act which had been waiting in the legislative wings for some time without much congressional support until the 2007-2008 recession and then its insertion into ARRA. Nothing like a good crisis to get stuff done. See here for another important commentary by InformaticsMD (aka Dr. Scot M. Silverstein) who writes regularly at the blog "Health Care Renewal " and writes tirelessly about the major problems with medical IT as it is being sold ( and mandated) to the medical profession.The  initial $36.5 billion for computerization of medical records is just the first of a gift that keeps  on giving to the IT industry. There will be a income stream as software will need updating as will hardware and system malfunctions will need continuing maintenance and a headache stream for the docs who bought in to this Trojan Horse.

HITECH provided subsidies and a very firm nudge to physicians to acquire computer systems  to make operational EHRs in their practices.Further a number of hoops have to be jumped through to receive further monetary rewards and as time goes on to avoid penalties.The term "meaningful use" refers to some of the hoops which in part obligate physicians to report on certain metrics that are allegedly measures of the quality of the care they provide to their patients but really are techniques to force savings.

fee for service in primary health care-what you get when you mess with prices

 In regard to consumer goods markets most economists accept the superiority of the market versus central planning.Almost all believe the invisible hand works to channel private interest into broad cooperation with gains from trade and from innovation.. (OK, Joe Stiglitz and Paul Krugman might not) and that the price mechanism can coordinate production and consumption and provide the feedback of profit and loss. In most of the consumer markets there is a fee for service or fee for a product arrangement (FFS). Paying the plumber,furnace repair man,car mechanic or barber on a per encounter fee are all routine transactions the propriety or desirability of which are seldom the subject of serious commentary. I realize that there also service contracts in some instances so that every encounter may not generate a separate charge.

  Yet the fee for service arrangement is the target for criticism in regard to health care ( mainly in regard to primary care) and often depicted as one of the reasons for escalating health care costs and decreasing quality.

Some argue that FFA cannot work in health care  because of the marked information asymmetry between physician and patient. But that cannot be a sufficient reason to wish to do away with FFS in medical care as there are many situations in a modern western economy where large information gaps exist. That became an issue probably as soon as property rights and trade allowed for the division of labor.  Getting advice regarding estate planning and tax avoidance is just one. Your furnace repairman tells you the something or other needs replacement and in doing so she knows a lot more about furnace anatomy and physiology than the home owner.

 It has been argued that since the physician is paid on a episode or encounter  based FFS that he will tend to do more than is necessary for good health outcomes because of his incentive to make more money. Certainly that is the direction that the cost vector points just as in a capitulated system the physician has an incentive to limit care to avoid financial loss. Is one method categorically better than the other?And the incentives for more financial gain argument would seem to apply  equally well to many other instances of market transactions.The incentive argument and the information asymmetry argument do not clearly distinguish medical care from other economic transactions based on FFS about which we hear no hue and cry or concerted campaigns for its abolition.

But wait, don't we see primary care docs rushing through a 12 minute patient counter to cram 5 patients into a hour?, Is not FFS in primary patient care rotten or worse and a major reason for deteriorating quality and increasing costs? Is it really FFS or is it a pretense of FFS or a poorly function remnant of a FFS system that once existed and worked pretty well.To be clear,the objection seems to be aimed at primary care FSF.

 Is there something different about FFS  in health care?Yes, FFS in health care and other consumer products or services FFS are as alike as a warm puppy and a hot dog.They sorta sound alike but there are not.

There are at least two reasons why the nominal fee for service (FFS) payment method in health care differs from FFS in most other  retail transactions regarding goods and services

  1) Much of the payment for health care services is with some one else's money2) There are price controls on the fees in the FFS in Medicare and Medicaid.

Much of health care expenditures is paid for by third party payers, either CMS which includes Medicare and Medicaid or health care insurers.In this circumstance patients are buying things with either someone's else's money or the perception that they are paying with someone else's money.

Milton Freedman explains how things are different when one is spending his own money than when he is spending with other people's money. This is such a obvious common sense observation that most of us have verified that nugget of conventional wisdom by observing multiple instances of that circumstance so that a formal econometric study would not be necessary.Just think of eating out on an expense account.See here for Freeman describing how this works.

 But such a formal study was done by MIT economist Amy Finkelstein who demonstrated that health care expenditures increased markedly after senior citizens in the US were enrolled in the Medicare program which in effect made the price the paid for their health care  much lower.When things are cheaper people buy more. Milton Freedman said that one of the two major principles of economics was that demand curves slope downward,an economist's way of saying that people tend to buy more stuff when it is cheaper..See here for my earlier comments on the Finkelstein paper.

This verification of the obvious was incredibly heralded by fellow economists as a major change in thinking about health care spending.Apparently previously no one had noticed that the elderly were spending more on health care now that they had to pay less nor that such a finding would be expected.The American Enterprise Institute economist,Joseph Antos said of the Finkelstein paper that it was path breaking.MIT's Johnathan Gruber,one of the architects of Romney care, said that the report changed the landscape of health care economics.

CMS's price controls came about as the number of medical goods and services that  increased over the last twenty or so  years ( more diagnostic tests,more medications,etc) met up with the increasing demand brought about mainly by the other people's money factor and reaching some tipping point in which the government moved into an effort to control costs.

 Economics 101 texts tell us that price ceilings create shortages,degradation of quality,wasted time and cost of waiting in lines and  mis-allocations of resources.

Advocates of a single payer and central planning in medical care sometimes conflate FFS and the market economy. One cannot deny that the current FFS situation in primary care medicine has much to be desired but it is because the market has been distorted by price controls and the fact that for a large segment of the patient population folks are paying for care with other people's money. Neither of those factors is likely to go away in this country any time soon..Actually both will likely increase.

But there can be a workaround.

Fortunately, at least for now, people can still operate to some degree outside of this system and contract with physicians for primary care with a retainer payment arrangement.Here there is no price control and the patient is not spending other people's money.

The fee for service in primary care medicine is not your father's or grandfather's fee for service.It is not the case that fee for service cannot work with medical care even now. Cases in point are cosmetic surgery and refractive eye surgery and more recently the growing market for retainer medicine.are example of FFSs in regard to medical care working out  reasonably well.

If price controls were placed on retainer medicine retainer fees we would see the same negatives that we see now with primary care with price controls. It's the price controls, stupid.

The economist Russ Roberts of the Hoover Institute said the following in his novel, The Price of Everything.A parable of  Possibility and Prosperity :

"Know that there is no free lunch. Play with prices and you will bring disorder.You will loose the benefits of the flow of knowledge and resources that  prices choreograph without a choreographer."

When you urge coercion by the government,don't be shocked if you get coerced as well

The following quote explains the title.See here for further details

All people have the moral obligation to care for those who are less fortunate. But replacing morality with legality is the first step in replacing church, religion and conscience with government, politics and majority vote. Coercing people to feed the poor simply substitutes moral poverty for material poverty.
The bishops dance with the devil when they invite government to use its coercive power on their behalf, and there’s no clearer example than the Affordable Care Act. They happily joined their moral authority to the government’s legal authority by supporting mandatory health insurance. They should not have been surprised when the government used its reinforced power to require Catholic institutions to pay for insurance plans that cover abortions and birth control.

Dancing with the devil is dangerous business.

Quality adjusted life years (QALY)-More to life than counting the dead

Counting deaths is much easier than assessing quality of life.Drs Pamela Hartzband and Jerome Groopman discuss the vagaries and uncertainly of clinical decision analysis and in quantifying the impact of disease on a person's life in the September 13,2012 issue of NEJM in a perspective piece entitled There is More to Life than Death.

The authors point out in regard to the recent USPTF pronouncement regarding PSA testing that while the data are conflicting and the study (the PLCO trial) that largely controlled the panel's decision against PSA testing has serious defects the chairperson spoke as if the call was a slam dunk or in her words "a no brainer". The authors of the NEJM article were polite in their criticism. but I cannot talk about the panel's actions and comments without using the word hubris. Reasonable, well trained statisticians have differed in their analysis of the set of data on PSA testing. Actually hubris is not strong enough a descriptor.

The Harvard husband and wife team asks " Is it possible to put numbers on the "utility"or impact of these conditions on a man's life?

 Is the concept of aggregating utility valid? I have argued before that it is not. See here.

Hartzband and Groopman discuss methods to attempt to quantify utility. One such method is call the "time trade off". Here a person is simply asked how many years of life she would be willing to give up to reverse a medical condition and return to health. On the face of it this is a absurd counter factual. One is asked to imagine having for example a cancer and what number of years of life they would give up to not have the cancer? A similar absurdity is the "standard gamble" which asks which odds you would take to risk sudden death to reverse some condition.

H and G :

"People cannot anticipate the global impact of a specific future change in their lives".

Of course they cannot.The quality adjusted life years concept is built on a dual fallacy.The fallacy of determining of some one else"s quality of life-based on a hypothetical and the absurdity of adding those determinations to conjure up; some aggregate utility. Yet organizations such as ACP seems to proceed on making cost effectiveness "determinations" that likely will be used to limit a person's access to some element of medical care.Are they aware that the father of utilitarianism expressed the folly of adding up happiness (or the modern equivalent - utility)?

At least the authors of an Annals of Internal Medicine article hyping the cost effectiveness analysis did not claim their analysis were no brainers but rather assured the reader that those type decisions were complex and needed to be made by highly trained professionals.This meant training more advanced that the 7-10 years of post college education that a physician accumulates.The tone of the article made it clear than the Annals article authors were just the folks for that type of very difficult analysis.No hubris there.This is typical of what I call the medical progressive elite whose mantra is that medical decisions are too complicated and complex to be left in the hands of a patient and her physician.

Rule of law,property rights erode and USA economic freedom index drops to 18 th in world

Not too long ago the United States was one of the most economically free countries..Not so now, as measured by the Frazier Institute in Canada. See here for economist Lynn Kiesling's. comments on the latest ranking of the various countries on the economic freedom scale.

See here for the Executive Summary of the "Economic Freedom of the World.2012 Annual Report."

Forty-two variables are used  in this ranking exercise that cover five areas:

1.Size of government
2.Legal system and property rights
3.Sound money
4.Freedom to trade internationally
5.Regulation

So why did the US drop further in the rankings?

"During the past decade, the U.S. rating fell nearly a full point on our 0-to-10 point scale, from 8.65 in 2000 to 7.70 in 2010. While it is difficult to pinpoint all the reasons for this decline, the increased use of eminent domain, the ramifications of the wars on terrorism and drugs, and the violation of the property rights of bondholders in the bailout of automobile companies have all clearly weakened private property and the rule of law tradition of the United States."

 It is getting worse.From 1980 to 2000 the US trails only Hong Kong and Singapore,by 2005 US fell to
 8th and now 18th.

Although I could find no analysis of the role of the Affordable Care Act in their publication, clearly the ACA did not enhance freedom economic or other wise. The regulations ( many of which are still being written) will limit the freedom of all elements of the health care system. The ACA which in this respect has been validated by the Supreme Count,forces individual to purchase a certain product ( health insurance). If  that is not the opposite of economic freedom, I don't know what is. If that were factored into the analysis (maybe it was),US would be even lower than 18th.