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  • Memo to My Fellow Physicians: We Have Reached the Moment of Truth

    Daniel “Stormy” Johnson, Jr., MD, FACR is a Visiting Fellow in Health Policy at The Heritage Foundation and is a former President of the American Medical Association.

    The recent hard to understand actions of the American Medical Association notwithstanding, physicians in the United States need to understand that we have arrived at the moment of truth.

    When I graduated from medical school in the summer of 1963, the political class was already locked in a struggle over whether to have the federal government control all health care financing and delivery in the United States. That struggle had been going on at least since the tenure of Franklin Roosevelt.

    When neither Roosevelt nor President Harry Truman was able to accomplish a takeover of the health care system, the advocates of central control of our health system switched to a strategy of incrementalism. The game plan was to pick off one group at a time. The first group was the elderly.

    When Lyndon Johnson became President in 1965, in his State of the Union address that year he advocated cradle-to-grave medical care provided for all Americans by the federal government. But the fallback position was the first step in incrementalism: the elderly. For good measure, the financially disadvantaged were included in a different program. Those two segments were Medicare and Medicaid.

    Later, different programs were concocted for dependent women and children. More recently, coverage of insurance for children was vastly expanded and in some states includes coverage of their parents. In some jurisdictions, this expansion has reached three or four times the poverty level, bringing much of the population into the eligibility net.

    Now, with elderly, poor, women, and children covered, all that is left is a segment of the population outside of those groups that is reasonably self-sufficient and most of which has private insurance. Those folks will be forced into government coverage because of a “public option” plan that all intellectually honest observers, including both proponents and opponents of single payer, realize is a Trojan horse for a Canadian-style single-payer system. Once private insurance is crowded out by the unfair competitive tactics of the federal government intruding into an already flawed marketplace, it will be a simple matter to consolidate all of these different groups into one single entity.

    What does this mean to physicians and their patients? “Clinical effectiveness research,” when operated by government instead of the medical profession, will become “cost effectiveness” restrictions on what care is available and to whom—determined by the federal government. It will only be a matter of a short time before Americans will enjoy the pleasures of “quality adjusted life years” wherein people my age will be denied services from which they might benefit because of their age and/or some other infirmity.

    We don’t have to make this stuff up: It is already the law of the land in some other developed countries, such as the United Kingdom, and has been long advocated here in the U.S. by voices from the left, including major media outlets. The federal government will exert total control over payment for all medical services.

    It doesn’t take a rocket scientist to imagine what will happen when the payment-control mechanisms used by Medicare are extended to the entire private sector. The occasional inability of Medicare patients to find physicians who are willing to provide for their needed care at a loss will become the standard experience when the cost shortfall can no longer be shifted to the private sector.

    Practicing physicians in the U.S. have become accustomed to the continued availability of ever better diagnostic and treatment innovations created by our academic and research colleagues. In my own specialty field of diagnostic imaging, the pace and breadth of scientific innovation to help us help clinicians be more effective in the management of sick and injured individuals or in the early detection of life-threatening illness, such as breast cancer, has been amazing. Yet I remember only too well the mid 1970s when the federal government and all but two states (Nebraska and Louisiana) did everything in their power to deny the American people access to the technology of computed tomography because of cost. As sure as the night follows the day, we will see that same kind of limitation imposed, but on a much larger scale. But in contrast to the ’70s, total federal control will prevent physicians and patients from overcoming the stricture as we were able to do back then.

    When one takes into account that the far left controls the presidency and both houses of Congress, the situation seems hopeless. What are we to do?

    The answer is that there is much that we can do, but it has to be done right now.

    First we have to understand and be able to explain to others why a significant number of physicians would actually prefer a single-payer system. With that understanding, possible scenarios for significant change become more obvious.

    Next, we have to understand why we have a cost problem. With the understanding of that very important feature comes the responsibility to propose alternatives that will work better than our current system.

    Then, armed with better understanding, we need to move forward in three coordinated efforts to stop the threatened radical change and impose a better solution that will truly work.

    It is easy to understand why many physicians prefer a single-payer system or a public insurance plan. Most of us, especially practicing physicians, are absolutely disgusted with the abuse of physicians and their patients by insurance companies. Consider the amount of time wasted by staff in physicians’ offices navigating through telephonic Hell to get permission for a particular evaluation or treatment for no other purpose than harassment in hopes that the physician’s office will give up. That is reason enough for many physicians to want to abandon the whole idea of private insurance. All of us in the private sector understand this all too well.

    The other reason that many physicians support a single-payer system or a public plan is that most of us are troubled by the number of people who at any one time do not have health insurance. The actual number is repeatedly vastly overstated by those who advocate a single-payer system, but the fact is that too many people do not have health insurance. But there are other solutions besides single payer that will solve the problem in positive ways without the baggage that comes with a single-payer system.

    With respect to cost, there is good news. Of the three big issues of health system reform—cost, access, and quality—the debate has finally come around to acknowledging that our major current dilemma is cost. Even in a “perfect” system, cost would be an issue. In our current system, much of the access problem we have stems from cost. With respect to quality, it costs less to do something right the first time.

    So if we are finally going to focus on cost, we need to ask why we have a cost problem. Of the myriad explanations, I would argue that the most important one is also the most amenable to correction. The person consuming the services is insulated from the cost of those services in most cases because someone else is paying for them. The only exception in our system is those rare individuals who are truly self-sufficient. Uninsured folks with no resources are eligible for Medicaid, and someone else is paying the bills. The person who shows up at the emergency department or in the doctor’s office for charity care doesn’t care about the cost because someone else is paying. The person in an HMO or with full insurance has only a small co-payment, intended as a barrier to seeking care, but is otherwise insulated from the true cost. Only those who are self-sufficient or who attempt to be self-sufficient truly feel the cost exposure.

    Therefore, if everyone had some type of insurance and if the options included mechanisms like health savings accounts that would reward individuals for using the system in a cost-effective way, we would obtain true cost-effectiveness and radically reduce, if not eliminate, the problems that come from having large numbers of individuals who lack insurance.

    This solution could be accomplished very quickly using mechanisms that are already well tested and in place:

    1) Rather than limiting choice, as will be done with a single-payer system, we should expand the choices of both financing and delivery mechanisms available to every U.S. citizen.

    2) We should give individuals the opportunity and the responsibility to choose and own their own health insurance plan, with the periodic right to change if they are dissatisfied with their previous choice.

    3) Whoever is offering a subsidy toward the purchase of insurance, such as the employer in the private sector or the government in the public sector, should put up the same subsidy no matter what choice the person makes.

    All federal employees get their insurance through a mechanism that encompasses the above three items (except that they do not own their own insurance, and portability is limited to job changes within federal agencies). It is called the Federal Employees Health Benefits Program (FEHBP), and because of competition it has outperformed the private sector for years. Consumer choice and competition are the two key principles that govern the FEHBP.

    Here’s a challenge to Congress. If they want to have a government-run insurance plan, let them try it out first on themselves and all federal employees. Members of Congress and their staffs should be the first enrolled. At the same time, move the rest of us into a new system driven by consumer choice and market competition among a variety of private plans, including health savings accounts.

    Posted in Obamacare [slideshow_deploy]

    21 Responses to Memo to My Fellow Physicians: We Have Reached the Moment of Truth

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    3. MaryAnn, USA says:

      I would add that doctors must be protected from frivolous lawsuits. The cost of malpractice insurance is, for many doctors, becoming prohibitive. The scheduling of unnecessary tests to protect themselves from lawsuits raises the cost of care immeasurably. The vast majority of doctors are not the bad guys in this scenario, as our president would have the public believe; neither are the insurance companies. If the government would get out of the health insurance/care business and do simple oversight without the countless and costly regulations it imposes, Americans would be far better off.

    4. Lloyd Scallan - New says:

      "Pick off one group at a time". "The first group was the elderly" are spot on! The elderly IS STILL targeted to be "pick offed". Obama has planed a "fair town hall meeting" at the HQ of AARP. What a complete joke. I'm certain the AARP members will all be completely unbiased with their question? RIGHT. The management of the AARP is one of the most leftest, Obama supporters in this country. My wife and I were once members until we realized just how far left and anti-conservative they are. Obama, and his ilk, will stop at nothing and will distroy anyone (even the elderly) to complete his plans to end America as we know it.

    5. C. Adli,NV says:

      AS a retired physician I have a few suggestions to make:The problem is a multi headed monster.Number one:Revamp the judicial process(there is not enough room to explain it).This reduces defensive medicine and expenses.Lean on insurance companies not to get back their financial losses from the doctors,hospitals,drug companies.Educate people not to ask the doctors for unnecessary procedures.Limit in most cases prolonged physical therapy.Then insure the remaning uninsured and those unable to buy insurance.

    6. lome says:

      Doctors can still save the day if they will only admit by their practice that they respect the "culture of life".

      Not only will they get the honor of their profession back, but maybe the Government may hesitate to challenge that.

      You know, hospitals are forcing doctors, nurses, health providers to kill?


      "Your once loyal to the oath of a doctor, your once loyal doctors are now butchers! For money they kill the young, the aged!" – Our Lady, February 10, 1978

      “Hell awaits those who don't repent of this foulest of deeds.”… Our lady….

    7. Jerry from Chicago says:

      I couldn't agree more with Dr. Johnson's article above.

      Dr. Johnson speaks of a strategy of "incrementalism" adopted by the advocates of government run, national health care. This strategy has not only targeted special interest groups, such as women, children, but also the poor and the elderly for governmental sponsored/mandated coverage (Medicaid and Medicare), all of which to be funded by taxes.

      The incrementalism doesn't stop there. Every year, for at least the past forty-five years, the federal and state government have passed laws and regulations consistently mandating the broadening of benefits and eligibility for benefits under Medical insurance policies (TEFRA, DEFRA, ADEA, ADA, COBRA, HIPAA, Mothers & Newborns Act, Mental Health Parity Act, FLMA, CHPRA, mandated coverage of infertility treatments, sexual reassignment surgery, coverage of life-style drugs (Viagra, etc.). All of these mandates increase the claims that have to be paid under Medical insurance policies and many of them also require substantial amounts of administrative paperwork for doctor's offices, hospitals, clinics and insurance companies and third party claim payers of self-insured Medical plans.

      How do you eat an elephant? One bite at a time.

      It is ironic that doctors have this love/hate relationship with insurance companies. If it weren't for the insurance companies, the doctors and hospitals would havwe a difficult time getting paid. When employers and their employees complain about the high cost of medical insurance they, with the concurrence of their health care providers, put the blame on the insurance companies. When the public complained that health insurance companies were doing nothing to control escalating costs and were merely passing along all these costs to the patients, these companies began instituting cost containment measures such as mandated second surgical opinions, mandatory outpatient surgical procedures, hospital admission pre-review and length of stay review. The insurance companies hired doctors to serve on their medical review boards to determine medical necessity of recommended procedures. All of a sudden, doctors and patients began to react negatively to these cost containment procedures. Cost containment procedures were a good idea – so long as it was for 'the other guy', not me!

      When insurance companies came up with the idea of HMOs, the government thought this was a great idea and mandated that all employers with more than 50 employees had to offer HMO coverage to their employees, as a dual choice, if another Medical insurance plan was being offered. The HMOs took off successfully because they had no deductibles, co-insurance percentages, provided physical exams for adults and children and basically paid 100% of all charges and HMOs were cheaper than regular health plans. There was one catch, you had to use one of the doctors and hospitals in the HMO network and that doctor was the one who determined if you needed a specialist, or hospitalization. IF YOU DIDN'T USE AN HMO DOCTOR OR HOSPITAL, YOU DIDN'T HAVE ANY COVERAGE. After people got used to HMOs and the idea that you had to use only certain doctors and hospitals, the complaints began to grow, "Who do these insurance companies think they are, telling me what doctor and hospital to use?" Predictably, the politicians who once mandated that employers must offer HMOs, now pandered to the public's disenchantment with HMOs restricting a patient's free choice of doctor or hospital. Go figure.

      A couple of reasonable ways to reduce health care costs and slow their rate of increase would be to:

      1. Initiate tort reform. Put caps on punitive damage awards for medical malpractice suits. IN lieu of that, redirect punitive damage awards from the plaintifs and their attorneys to funding Medicare.

      2. Eliminate the perpetual expansion of health benefits and eligibility for same by federal and state governments. Regulation is an appropriate role of government. Regulatory agencies should rightfully require health coverage live up to its commitments in the policies it sells and should make sure that insurance companies are sufficiently funded to meet their obligations. WHAT THE GOVERNMENT SHOULD NOT BE DOING IS TELLING INSURANCE COMPANIES OR SELF-INSURED EMPLOYERS THAT COVERAGE, AND/OR ELIGIBILITY FOR COVERAGE, HAS TO BE INCREASED.

    8. JoAnne, Arizona says:

      "Rather than limiting choice, as will be done with a single-payer system, we should expand the choices of both financing and delivery mechanisms available to every U.S. citizen.

      2) We should give individuals the opportunity and the responsibility to choose and own their own health insurance plan, with the periodic right to change if they are dissatisfied with their previous choice."

      Consumer choice and competition are the two key principles that govern innovation, quality control, and accountability. It is the American way, and has been instrumental in the growth and accomplishments of the greatest civilization in mankind's history.

      We require people who mortgage property to insure it, and we require people using the public roadway who could endanger the property or lives of others to carry automobile insurance. We could stimulate the economy, reduce healthcare inflation, make money earn money by being available to lenders,and cover virtually everyone with affordable health insurance, by providing TAX INCENTIVES to buy insurance and to have Medical Savings Accounts. For the truly poor, or unemployed, their premiums could be subsidized, instead of putting them on Medicaid, so that healthcare providers would not consider them "charity cases" when they choose a doctor or hospital.

      Let's go back to treating American citizens as adults, who live in a land that guarantees their liberty, and get off this road to an invisible bureaucratic unaccountable ruthless State Master. Otherwise, burn the Constitution, because Government-run healthcare, already given billions to "jump start" it in the "stimulus package" which requires ALL healthcare providers to send the government our electronic medical records by 2014 (remember when an insurance company needed your permission to get private information about your personal data?) is the most egregious violation of a citizen's right to privacy ever contemplated, much less enacted, in the U.S.A., and enables bureaucrats who dole out money to approve/disapprove treatment, employment, education, etc. based on information taken from you when you are vulnerable by someone who you entrust with your life. Healthcare professionals, via the Stimulus, have been turned into unwitting, unwilling, henchmen of a State Master.

    9. Lynn B. DeSpain says:

      When the government funs the Health Care system, the average life expectancy for the average American will fall to the age of sixty Five. Therefore, Social Security will be saved, and used for other things, such as spending it on Illegal Alien support.


    10. Virginia Kurtz, PT, says:

      Thanks to you for your great ideas and the Heritage Foundation for the opportunity to read the memo. I support your reasoning and am active in forwarding my own thoughts to politicians. Personally, I am close to retirement age and am very concerned over medical,dental,etc. coverage although I have been fortunate enough to have never been admitted to a hospital yet, I am concerned (now that I am in my 60's) that I will be subjected to the govenment interfereing in my health matters as well as my practice.

    11. V.R., Pomona says:

      Freedom made our country great. How could anyone propose a plan in which a few people would decide the fate of who lives or dies or receives medical treatment (excepting Congress and the President, of course)?!!!!!! Unbelieveable!

    12. RC, WA says:

      What will never be addressed with more competition is the ability of insurance companies to deny payment for services, despite the doctor's best medical intention. The one who get saddled with the bill is the patient who is powerless and stuck between the hospital and the insurance company with no one to advocate on their behalf. Insurance as it is, is not a guarantee for getting for covering appropriate care. Our system of healthcare for profit creates a conflict of interest from the outset, by creating wealth from misfortune and misinformation. Government insurance creates competition that operates with the appropriate incentive, to cultivate health and save money over the long term. It is the difference between operating efficiently within a budget and operating to create the largest profit margins. Currently there is no reason for private insurance to cover wellness visits and preventative care (screening is not prevention) because by the time the patient is suffering from the long term complications of preventable chronic disease the patient is over 65 and within the medicare system. The government is covering the most expensive care as it is, so why shouldn't it manage their patients for the duration of the delivery of healthcare during the time when simple lifestyle interventions can generate long term health and accountability.

    13. Susan, Scottsdale AZ says:

      I turn 60 this year. Although I'm 5 years away from 65, I rue the day I have to be Medicare enrolled. Why, if our Medicare system is in such financial stress, would the Feds mandate Medicare for all Americans over 65? Just let us shop the market for a private plan that meets our needs, with a tax credit/HSA account?

      I completely agree with Dr. Johnson's reasoned and thoughtful solution to our current healthcare crisis.

    14. libertybel, Rye, NY says:

      The good doctor correctly identifies cost as the problem, but then completely misses its true cause.

      A physician, by virtue of the smarts, training and responsibility required in his profession, should be compensated well above the average tradesman. Now consider that every time a union secures, through the coercion of a strike, an unearned increase in compensation, the proportion between its pay and that of the physician can be maintained only by a commensurate percentage increase in fees.

      "Proportion" and "percentage" means, for example, that if the plumber earns $100,000 a year and the MD earns $200,000, when the plumber's income rises to $150,000, the MD's must go to $300,000 to maintain the difference. The increase is not the same 50K, but 100, to maintain the proportion. This is not generally understood by the public, so that when your elderly lady mentions that you raised your fee, the correct answer is, "No, Mrs.Patient, YOU raised my fee".

      The politicians, of course, don't want to bring this up because offending the unions is often political suicide, and the news media have long since avoided truth in favor of game shows. True, advances in medical technology and patient longevity have both contributed to the high cost of care, but now you know of the most important third leg of the financial triad, the one no one will mention.

    15. Al, The Villages, Fl says:

      Many good comments above, most of which I agree with. As a consumer, I do not, often, deal with the insurance company and when I do – sometimes it does seem they can be inflexable with questionable logic. However, for the doctors that might prefer to deal with gov't, how would that be any different? As they say, he who has the gold rules. Gov't or insurance company, the one who decides to pay out has to make the decision and that friction will always be there – though I would guess it could be improved. Not by a single payer Government health care program, however. I happen to be over 65, have medicare and a secondary under the FEHBP. That works out pretty well but I don't like what I hear coming from congress and hope,quite frankly, that nothing gets out so long as it is being crafted by this group of dems/Obama admin folks.

      By the way lome writes re abortion. It is interesting that, with the emphasis on cost, abortion is included when it is not a necessary procedure. But then this group in dc are all about abortion and universal health care period, they do not care about "our" health care.

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    17. Adam Arfaras, Florid says:

      The academic and professional cartels run healthcare now, the corrupt political elite want to use the voting poor to take it away from them in return for their vote.

      If you don't think what we have now isn't corrupt at its root, you haven't seen it up close, and don't understand what motivates it. Either way, the spirit of greed will win out in the end.

      I don't see any such concern or gravity given to this subject in scripture. We will all get sick and old then die. The righteous will live by faith! Let the lost be consumed by the desires of the flesh, and who they intrust to care for it!

    18. Erin Anderson, TX says:

      RC writes that healthcare for profit creates "wealth from misfortune" – this is the mindset that government hopes to exploit, portraying doctors as trafficking in human suffering, rather than helping people. Doctors are highly trained and provide a valuable service for which they deserve to be compensated, yet I know women who pay more for a manicure than a trip to their doctor. Our current insurance system shields us from the true cost of our health care.

      Health care is a commodity, and like any other commodity people need to know the true cost of what they are purchasing and make buying decisions accordingly. You may want steak but can afford ground chuck. If you can't afford even the chuck, you won't be left to starve in this country, but don't expect filet mignon.

      Medicines are not free, hospital facilities are not free, x-ray machines and MRIs are not free, and like other professionals, nurses and doctors do not work for free. And insurance was intended to cover catastrophic situations, not every office visit and antibiotic.

      Whatever else anyone may believe about health care, it must be obvious that giving the federal government any more control over would be a mistake – we can look to every country and state that has tried it for our proof. Dr. Johnson makes excellent suggestions and gives lie to the cnstant claims that our only choices are the plans coming from Congressional Democrats or "doing nothing". But incrementalism has built a large base of support for government(taxpayer)-funded health care that I suspect will have to be weaned off incrementally as well – IF we can prevent Congress from passing its currently-proposed "reform".

    19. Dianna in Columbus says:

      We are members of the 9/12 project started by Glenn Beck and will be in DC the weekend of Sept. 12 for a huge rally against this govt. takeover of every part of our lives. Go to 912dc.org to check out march info and to register to go. Hotels are offering big discounts (some half-price) to protesters. If you want to make your voice heard loud and clear sign up for the march. Congress will be back in session trying to get this monstrosity bill shoved down our throats then. Perfect time to do some marching in the streets, don't you think? Join thousands from all across this nation who are descending on Washington-its time to rock and roll!

    20. Dianna in Columbus says:

      We are members of the 9/12 project started by Glenn Beck and will be in DC the weekend of Sept. 12 for a huge rally against this govt. takeover of every part of our lives. Go to 912dc.org to check out march info and to register to go. Hotels are offering big discounts (some half-price) to protesters. If you want to make your voice heard loud and clear sign up for the march. Congress will be back in session trying to get this monstrosity bill shoved down our throats then. Perfect time to do some marching in the streets, don’t you think? Join thousands from all across this nation who are descending on Washington-its time to rock and roll!

    21. Dianna in Columbus says:

      I don't understand why my comment is "undergoing moderation".

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