Sunday, May 31, 2009

5-28-09- LIABILITY & HEALTH NEWS ALERT - Ask your legislators to support Mcare Phase-Out plan...

by Donna Baver Rovito, Editor, "Liability and Health News Update"Author, "Pennsylvania's Disappearing Doctors"

This LIABILITY AND HEALTH NEWS UPDATE "newsletter" is a free service which I provide, as a volunteer, to help supply medical liability reform and other health care news, as well as political insight, to physicians, patients, liability reform and quality health care advocates.

I am not employed by any physician advocacy or liability reform organization, political party or candidate, although I volunteer for several.Opinions and clarifications are my own, and do not reflect the official position of any physician or patient advocacy organization or tort reform group unless stated as such. Opinions are placed in double parentheses ((xxxxxx)), italicized and appear in blue. This Update is emailed to approximately 8,000 health professionals, physician and patient advocates, and others interested in ensuring access to quality medical care through medical liability reform.


If you would like to be added to or removed from the Liability and Health News Update Information Network, or if you have information about yourself or a colleague relocating, retiring early, giving up medicine, private practice or curtailing services due to the medical liability crisis please email


2...from the PA Medical Society Website
Ask Your Legislators to Support Our Mcare Phase-Out Plan
State budget could burden you with more debt
3...from the PA Medical Society Website
Mcare Phase-Out FAQ
4...From the PA Medical Society Website
Mcare Phase-Out Talking Points
5.....from the Keystone Chapter of the American College of Surgeons
In the Scope Newsletter
Ask your Legislators to Support the PA Medical Society’s Mcare Phase Out Plan!
6...Harrisburg Patriot News
Has malpractice crisis been cured?
7....Harrisburg Patriot News
Malpractice: State still has issues to address
8....Harrisburg Patriot-News
Malpractice lawsuit costs still a huge issue for Pennsylvania
9...Harrisburg Patriot-News
Get the facts straight on medical malpractice
10...American Enterprise Institute
11....Medical Progress Today Newsletter
The truth about health care 'truths'
12...Modern Physician
Future holds threat of surgeon shortage, physicians say
13...New York Times
Antitrust Laws a Hurdle to Health Care Overhaul
14...McKinsey and Company
Can the United States provide health care for all?
National Center for Policy Analysis
10 Surprising Facts about American Health Care


Once again, PA physicians are fighting to maintain financial solvency, and your assistance is urgently needed.

All the information you need is in the following items. In short, the state of Pennsylvania could take action in the next several weeks which would severely compromise the ability of physicians to practice here, and which would be a strong DIS-incentive to young doctors to consider practicing here.

I've said for years that there isn't a single good financial reason for any doctor to practice medicine here in Pennsylvania, due to high medical liability premiums (which are STILL among the highest in the nation) and low reimbursements (which are STILL among the lowest in the nation.

If the state takes action to eliminate the Mcare fund without taking significant action to take its unfunded liability off the backs of already overburdened PA physicians, it could be the final straw for physician recruitment in our state.

Please read the following information, become conversant with the details of this important issue, and contact YOUR state legislators about it. The PA Medical Society has made it ridiculously easy to do - just follow the links to get all the contact information you need.

While using the medical society's CAPWIZ function to send an online letter will help a lot, it would be even MORE valuable if you picked up the phone and called your state representative and state senator in person. Or stopped by his or her office tomorrow. Or sent a personal letter on your own stationery. YOU know what we need to do - so, please, just do it.

Also included in this Update is a fascinating series of pieces from the Harrisburg Patriot about whether or not PA's medical liability crisis is "over." (We know the truth.) The final piece in the series, penned by a former president of the PA Trial Lawyers Assn (who, incidentally, doesn't identify himself as such) is so factually misleading that it sent me running for a roll of duct tape. Someone, PLEASE respond to it with some REAL facts and figures, OK? And send me a copy?

Finally, there are several pieces about health care reform and the condition of health care in America today - which just ISN'T as bad as some people would have us believe.

Please make the calls, write the letters, and make the contacts with your state legislators today, before measures which could be extremely deleterious to PA health care make it into the state budget bill....

And thank you to everyone who supported our good friend Atty. Candy Barr Heimbach in her primary bid to become a Northampton County Judge - sadly, Candy won't be on the ballot in the fall for the general election, but she can be very proud of the way she conducted herself and her campaign, and she's very appreciative of the support she received from her friends in the medical community.

Thanks, also, to everyone who supported Joan Orie Melvin in the PA Supreme Court race - we'll all need to get on board for her in the fall - stay tuned!


2...from the PA Medical Society Website
Ask Your Legislators to Support Our Mcare Phase-Out Plan
State budget could burden you with more debt

Think your practice’s budget is tight this year? Just wait until next year.
As early as Jan. 1, 2010, the state will begin overcharging you for the Mcare portion of your medical liability coverage.
Contact the governor and your legislators. Use
Capwiz to compose a quick and easy email.
Picture being billed for a mortgage on a house you don’t own—and will never live in—on top of your existing debts.
If you still have medical school loans, it’s especially troubling.
It could happen Jan. 1 under existing law, as well as under the administration’s current proposal for phase-out of the Mcare Fund.
You have the opportunity in the next few weeks, while your legislators are in your home district, to ask them and the governor to address this in 2009.
Failure to enact legislation now will have a devastating effect on physician recruitment and retention.
How can you help?
Contact the governor and your legislators while they’re in their home districts from May 14 through 29. Use
Capwiz, our legislative contact tool.
Ask them to:
Phase out the Mcare Fund over a five-year period, using the plan advocated by the Medical Society and The Hospital & Healthsystem Association of Pennsylvania (HAP).
Be fair. Minimize the cost impact on physicians and other participating health care providers by ensuring that enough funds are provided during phase out.
Address this issue during 2009. Don’t miss the opportunity to pay this debt without burdening physicians or anyone else.
Remember to thank your senators for passing a budget bill that doesn’t redirect funds from the Health Care Provider Retention Account (HCPRA) for general fund purposes.
See below for talking points and other materials to pass along to your legislators and colleagues.
Last Updated: 5/20/2009

3...from the PA Medical Society Website
Mcare Phase-Out FAQ

What’s happening?
Act 13 of 2002 set in motion a process for phasing out Mcare liability coverage and transitioning to $1 million in private market coverage. Your legislators will be considering the Republican and Democrat proposals for Mcare phase-out when they return to Harrisburg in late May. The House Democrats and Senate Republicans each have their own budget plans.
Senate Bill 850 passed May 6 in the Senate; it retains the money currently in HCPRA for Mcare phase-out.
House Bill 1416 is still in committee.

How would the existing law—with no Mcare phase-out—affect you as a physician? Beginning in 2013, you will be stuck with the equivalent of a mortgage for a house you never owned and will never live in. In 2013, when the fund is scheduled to be phased out of existence, physicians and hospitals will be left to pay off the fund’s $1.8 billion unfunded liability—the “tail” of future claims.

How would the governor’s plan affect you? As early as Jan. 1, 2010, the state may begin overcharging you for your Mcare coverage. The governor’s plan would overcharge providers from 2010 to 2012 while the fund is being phased out.

What’s wrong with the governor’s proposal? The administration proposes to retire the Mcare obligation using existing balances in the Mcare Fund and the HCPRA, the state account that collects revenue that was dedicated to pay the cost of the prior abatement program, along with revenues from automobile moving violation surcharges.

Under current proposals, the plan proposed by the Pennsylvania Medical Society and Hospital and Health System of Pennsylvania (HAP) requires $465 million from HCPRA, whereas the administration’s plan requires $280 million from HCPRA.
The administration’s plan phases out the Mcare Fund in two steps over four years.
The Medical Society-HAP plan phases out the Mcare Fund in fives steps in five years.
The administration’s plan “over assesses” providers during phase-out.
The Medical Society-HAP plan adjusts Mcare Fund assessments during the phase-out period to reflect lower coverage limits of the Mcare Fund, so physicians pay less on premiums than they would under the administration’s plan.
The problem with the administration’s phase-out plan is that it is not fully funded to pay off the entire unfunded liability. This means that, during 2010-2012, it would partially impose the cost of the unfunded liability on physicians during these transitional years.
The administration’s plan would charge physicians about double what it costs to provide them with $250,000 of coverage in 2010-2012. In 2010, the primary layer of liability insurance will jump to $750,000, with Mcare coverage reduced to $250,000. Rather than charge physicians for $250,000 of coverage, however, the state would charge physicians for $500,000 of coverage.
What is the Society’s alternative proposal? The Society’s alternative proposal would use additional funding to ease the transition, attempting to keep physician total costs at a level not higher than the cost of obtaining $1 million/$3 million of coverage in the private market during the transitional phase-out period. The Society is currently working in conjunction with HAP, medical specialty organizations, academic medicine, and other groups to gain support for the Society’s proposal among key stakeholders and legislators.

What’s going to happen in the next few months? One of several scenarios could happen:
If no legislation is passed for a Mcare phase-out plan along with the state budget, then under existing law the Mcare plan would be retired without state funding to ease the burden of the unfunded liability on physicians.
If the governor’s current proposal becomes law, then the plan will include a two-step phase-out and allocation of existing funds and revenues to pay off the unfunded liability once Mcare limits reach $0 as outlined in the governor’s budget proposal.
If the plan proposed by the Pennsylvania Medical Society and Hospital and Healthsystem Association of Pennsylvania (HAP) becomes law, the Society’s proposal would ease the transition by attempting to keep physician total costs at a level not higher than the cost of obtaining $1 million/$3 million of coverage in the private market during the transitional phase-out period.
The House Democrats and Senate Republicans each have their own versions of the budget plan. Senate Bill 850 passed May 6 in the Senate by 30-20. House Bill 1416 is still in committee (as of May 13). The House plan is likely to reflect the governor’s proposal, which reserves only a portion of the HCPRA funds for Mcare phase-out. The Senate plan is likely to retain the money currently in the HCPRA for the Mcare Phase-out. House Bill 1 could be introduced by Majority Leader Todd Eachus in May. It will include his proposal for Mcare phase-out. It may closely reflect the administration’s two-step phase-out plan.

What’s the unfunded liability? Mcare will continue to make claims payments for many years, even if the fund is no longer providing your medical liability coverage. Since Mcare is a pay-as-you-go system, it will require a continuing stream of revenue when physicians are no longer assessed for current Mcare coverage. This is the “unfunded liability.” No provision was made in the act for the state to help pay for the retirement of the Mcare Fund’s unfunded liability, or “claims tail” that will exist once the fund is gone. Under current law, physicians and hospitals would be obligated to pay off the unfunded liability under current law. The fund’s actuaries estimate the unfunded liability to be $1.8 billion. According to Act 13 of 2002, every two years the Insurance Commissioner is to examine the insurance market to determine if there is enough capacity among private insurance companies to sell $750,000 in liability coverage, rather than the existing $500,000. When the capacity is found, physicians will be required to buy $750,000 in private market coverage and Mcare coverage will be reduced to $250,000. Three years after that, the commissioner will again study the market to determine if the transition should be made to $1 million in private market coverage. If the capacity is there, Mcare coverage would be eliminated.
Last Updated: 5/20/2009

4...From the PA Medical Society Website

You can use
Capwiz, our legislative contact tool, to draft an email to lawmakers or find their contact information.

Mcare Phase-Out Talking PointsStart conversations about Mcare with your legislators and the governor.
If you are a medical student or resident,
click here for talking points that pertain to you. If you are employed by a hospital or group, click here for points that pertain to you.
Last Updated: 5/20/2009

Related Content
Mcare Phase-Out FAQLearn more about Mcare and the plans to phase it out.
Your Doctors Need Your Help (PDF)This flyer explains how patients can help their doctors by urging their elected officials to support Mcare phase-out. Requires Adobe Acrobat.
Mcare Phase-Out Talking PointsStart conversations about Mcare with your legislators and the governor.
Mcare Phase-Out PowerPoint
((This outstanding tool is for members of the PA Medical Society only. It's yet another example of the outstanding work the PA Medical Society does every day in support of PA physicians and patients, and one more reason that every physician in PA should be a member.))This PowerPoint explains why Mcare phase-out is needed and the different plans to phase out Mcare coverage.
Primary Care Sample Letter to Legislators (PDF)Primacy care physicians can use this sample letter to contact their legislators about Mcare phase-out.
Specialty Sample Letter to Legislators (PDF)Specialty physicians can use this sample letter to contact their legislators about Mcare phase-out.

5.....from the Keystone Chapter of the American College of Surgeons
In the Scope Newsletter
Ask your Legislators to Support the PA Medical Society’s Mcare Phase Out Plan!

The Keystone Chapter, American College of Surgeons is supporting the efforts of the Pennsylvania Medical Society to enact legislation that would phase out Mcare without further burdening physicians.
As early as January 1, 2010, the state will begin overcharging you for the Mcare portion of your medical liability coverage.
This issue must be addressed by lawmakers during the budget discussions that will take place in the coming weeks.
How can you help?

Contact the governor and your legislators while they’re in their home districts now through May 29. Use
Capwiz, the Pennsylvania Medical Society’s legislative contact tool.

Ask them to:

Phase out the Mcare Fund over a five-year period, using the plan advocated by the Medical Society and The Hospital & Healthsystem Association of Pennsylvania (HAP).
Be fair. Minimize the cost impact on physicians and other participating health care providers by ensuring that enough funds are provided during phase out.
Address this issue during 2009. Don’t miss the opportunity to pay this debt without burdening physicians or anyone else.

Go to to find a sample letter, talking points, and other materials to pass along to your legislator.

Remember to thank your senators for passing a budget bill that doesn’t redirect funds from the Health Care Provider Retention Account (HCPRA) for general fund purposes.

6...Harrisburg Patriot News
Has malpractice crisis been cured?
Monday, April 27, 2009

Medical malpractice law suits keep getting rarer in Pennsylvania.
But that doesn't mean the closely related debate over who are the true victims of the medical malpractice system -- patients or doctors -- has faded away.
Last year, 1,602 medical malpractice lawsuits were filed in Pennsylvania. That's down from 1,641 in 2007.
But to some, the most significant number is the 41 percent drop from 2000-02, when the state averaged 2,732 malpractice lawsuits a year.
The years 2000-2002 are noteworthy because they are the final years before the state passed reforms to eliminate frivolous medical lawsuits.
((Also noteworthy is the fact that hundreds of additional suits were filed in 2002, JUST before the new laws went into effect, which throws off the "average" of those years considerably and makes the decreased in suits filed seem more dramatic than it really is.))
In addition, the number of lawsuits occurring then caused doctors to declare a crisis, saying high medical malpractice insurance premiums were forcing them to leave Pennsylvania.
The result was the reforms. They included requiring people filing malpractice suits to get a certificate of merit from an independent medical expert, and eliminated "venue shopping," in which lawyers would try to move cases to Philadelphia, where juries were known for favoring patients and awarding huge payments.
Citing the declining lawsuits, Gov. Ed Rendell has declared the crisis over.
But the Pennsylvania Medical Society, the statewide lobbying group for doctors, contends significant problems remain.
Spokesman Chuck Moran interpreted the drop in lawsuits as evidence that many frivolous lawsuits are being weeded out.
Still, he noted, most of the cases that make it to court are settled in favor of doctors, suggesting it shows there are many lawsuits that don't involve an actual error.
Moran said doctors' medical practice insurance premiums have leveled off in recent years, but are higher than in some parts of the country.
((MUCH higher than most parts....))
Cliff Rieders, a medical malpractice lawyer, has a far different take on the lawsuit numbers.
He contends the decline shows the legal system has erected barriers that are preventing victims from filing lawsuits.
Rieders is a board member of the Pennsylvania Patient Safety Authority, another product of the 2002 malpractice reforms.
The authority collects confidential reports on medical mistakes from hospital, then studies them with the goal of making the health care system safer.
Rieders said the number of incidents reported to the safety authority involving serious harm or death far exceeds the number of lawsuits filed in the state, proving that many victims don't file lawsuits....
((What Rieders doesn't mention is that doctors must also register every lawsuit filed against them with the state medical board, and the vast majority of suits filed show NO negligence on the part of the physician or hospital....))

7....Harrisburg Patriot News
Malpractice: State still has issues to address
by The Patriot-News Editorial Board
Friday May 08, 2009, 10:30 AM

In the not-to-distant past, Pennsylvania was afflicted with what might be termed a "malpractice malady."
The state was perceived to be one of the worst places to practice medicine in the country. ((Still is....there's not a single good FINANCIAL reason to practice medicine here....)) Stories abounded of doctors fleeing the state (or just never coming here at all) because of high insurance costs and continued lawsuits with large payouts.
Pennsylvania resisted the path that most states took to curtail malpractice lawsuits: placing a cap on the damage payouts.
((Actually, there was a majority in both houses of the General Assembly to take the first step along just that path - but trial-lawyer connected judiciary committee chairs in both houses used procedural ploys to make sure that even the first step toward amending our state constitution and giving voters the right to make that choice didn't happen.))
Instead, Pennsylvania took two bold moves: We forced all malpractice suits to obtain a "certificate of merit" from an independent medical expert, and we built up the "Mcare" fund to help doctors defray the costs of their insurance.
Since the reforms were made in 2002, the number of malpractice suits has dropped by more than 40 percent, mainly because of the certificate of merit requirement. The governor recently declared "the end of the crisis."
((If malpractice PREMIUMS had dropped 40%, we might be nearing the end of the crisis...but they haven't.))
The picture is a bit more nuanced, as with anything political. Even though the number of suits has dropped, Pennsylvania courts are still awarding large payouts. Last year, there were 20 awards with payouts more than $1 million and five with payouts above $10 million. ((And those numbers don't include settlements, only verdicts. And almost a third of cases are settled...I'd like to know the TOTAL payouts, including settlements, from each year since 2001 - does anybody have those?))

There are still those who would like to see a dollar cap on award amounts in the state. There is some merit to this idea, but the more just path might be to place a limit on the percentage of the award money that goes to lawyers versus victims. ((And given the percentage of lawyers in the General Assembly, that's as likely as....well, passing caps on awards...))
The entire purpose of malpractice suits is to right a grievous wrong to individuals or their families, but more often than not in the large payout cases, the lawyers end up pocketing close to half the payout. If Pennsylvania really wanted to be a leader in this area, we would move to redress that imbalance.
The other part of the malpractice equation is whether taxpayer funds should still be going to help doctors with their insurance costs.
At the moment, doctors and hospitals carry private insurance up to a certain amount and then they have coverage from the Mcare fund.
The money for the Mcare fund came partially from contributions from the doctors and health care providers over the years and partially from cigarette tax revenues and other state money.
The idea was that the state would kick in some revenue from its pockets to help offset these high insurance premiums doctors were facing, especially in critical positions such as OBGYN.
The issue at the moment is that the state has stopped contributing money to Mcare from the cigarette tax and other revenue sources.
The Governor's Office argues that because medical malpractice suits are dropping, the liabilities that Mcare is trying to protect against have dropped and so the fund has plenty of money to meet all liabilities.
The governor wants to take the funds that were going to subsidize doctors' Mcare premiums and use them to pay for the expansion of AdultBasic, the state insurance program for uninsured adults.
Aiding the uninsured is a worthy goal, and there likely is enough money from the cigarette tax to put some towards AdultBasic, but we must ensure that the state has enough doctors.
According to the Pennsylvania Medical Society's most recent report, the state has continued its decline in the number of physicians practicing here.
Any actions the state takes to move money that would have been used to go toward defraying doctor insurance costs must be weighed against the need to keep (and recruit) doctors in the state, especially in critical specialties.
((Bravo to the Harrisburg Patriot editorial board for getting it and expressing it so well!))

8....Harrisburg Patriot-News
Malpractice lawsuit costs still a huge issue for Pennsylvania
by Gerald O'Malley
Saturday May 02, 2009, 6:07 PM

Nearly 40 Pennsylvania hospitals, maternity units and other major medical facilities throughout Pennsylvania have closed in just more than a decade, most under Gov. Ed Rendell's watch.
Skyrocketing insurance premiums sparked by rampant medical malpractice lawsuit abuse has been the driving force behind the majority of these closures. Yet, Governor Rendell recently declared that Pennsylvania's malpractice lawsuit abuse crisis is over. Nothing could be further from the truth.
Rendell's announcement comes on the heels of the Pennsylvania Supreme Court's annual Malpractice Filings Report, but the court's numbers tell only a part of the story.
The Court reports only the number of cases filed -- not the number of litigants within those cases.

Most cases of alleged medical malpractice include multiple defendants as personal injury lawyers typically sue everyone whose name appears anywhere on the patients' chart.
Another key point Mr. Rendell neglects to include in his analysis is that the Supreme Court's annual report does not describe out-of-court settlements, which constitute a large percentage of the annual malpractice payouts and are a major factor behind this state's astronomical medical liability insurance rates and overall health care costs. The Court reports a statewide decrease of 41 percent in malpractice filings in 2008 -- but that is comparing the 2008 case filings against a "baseline" of cases filed in 2000-02. The meaningful statistics show 2008's numbers are only a 3 percent decrease from cases filed in 2007. The 3 percent number becomes irrelevant when the multiple litigants within each case are factored in.
Since May 2002, when Act 13 was passed requiring physicians to self report when sued for malpractice, more than half of the state's 25,000 doctors have been sued. The Pennsylvania Medical Board, an agency of state government, found that only a fraction of all malpractice cases merit any action which is an indication that rampant medical liability lawsuit abuse exists in Pennsylvania.
The trial lawyers, their powerful and influential lobby in Harrisburg, and supportive politicians have created and sustained a remarkably hostile environment for all Pennsylvania health care providers. Rather than support substantial reforms that would restore access to care for Pennsylvania's most vulnerable patients, Governor Rendell has once again jumped to the defense of personal injury lawyers who pump tremendous amounts of money into his campaigns.
The governor's misrepresentation of statistics demonstrates a callous disregard for the babies, mothers, seniors and other citizens that have lost access to health care services.
The predatory practice of filing frivolous lawsuits involving multiple health care providers continues in the state, and the crisis is far from over. Governors in other states have managed to deny aggressive trial attorneys and develop innovative and cooperative solutions to the same health care delivery problems that plague Pennsylvania.
It is time for Mr. Rendell to defend those who lost access to health care. The personal injury lawyers can fend for themselves.

GERALD F. O'MALLEY, D.O. is a Philadelphia-based emergency physician and a board member of Doctor's Advocate, a national agency headquartered in Montgomery County that fights frivolous medical malpractice lawsuits.

9...Harrisburg Patriot-News
Get the facts straight on medical malpractice
(("Facts" have absolutely nothing to do with this piece....))
by Cliff Reiders
Wednesday May 27, 2009, 4:35 AM

((This sent me screaming for a roll of duct tape, JUST in case my head exploded when I was reading it....someone, PLEASE respond, with real facts and figures, and send me a copy, please?))
If it stops raining, you no longer need an umbrella. But The Patriot-News is telling us to do exactly this when it uses incorrect facts to give a false forecast of the medical malpractice climate.
There never was a storm. Malpractice lawsuits have declined 41 percent since 2002. However, you leave out that most of the cases (81.4 percent) that reached a verdict in 2008 were for the defense. ((Sooooo....HOW MANY cases that shouldn't have been litigated at all went to court, at an average cost of $100,000 per case? Defense costs in cases where there's no payment to the plaintiff are a LARGE part of malpractice insurers' expenses, which, of course, drives premiums UP. Mr. Rieders knows quite well that the defense attorney always gets paid....)) Overall, significant payouts in malpractice cases have dropped 56 percent since 1991. ((These are all PARTIAL numbers, leaving out significant information - like totals.....))
There are no floodwaters. Doctors are not leaving the state and never have been. ((Right. We made it all up. ASK MCARE if there are fewer doctors...ask your neighbor...)) According to the American Medical Association, the number of physicians in Pennsylvania has risen from 36,882 in 1996 to 43,257 in 2007. ((43,257??!?!?! Now THERE'S a number I've never seen before...might that include every retired physician in the state, and likely more than a couple of dead ones?)) Low Medicaid reimbursement has caused some doctors stress. Our state ranks in the bottom 10 in Medicaid reimbursement.
You do not need a rain cap. Capping damage awards or limiting attorneys' fees would only punish those hurt by medical negligence. Cases are costly to try and could almost never be paid for out of pocket. ((They're costly for physicians who are accused of wrongdoing they didn't commit, too...))

Get an accurate report. ((Uh-huh....funny how Mr. Reiders and his organization, the PA Trial Lawyers Assn, of which is was President several years ago but doesn't say that in this article or his signature at the end, tout newspapers as definitive sources when the statistics or information bolster their arguments, but now that a paper which has frankly not been overly supportive of physicians' efforts in this area finally expresses understanding of the real issue, they're suddenly WRONG....)) we want to improve health care and lower costs, we need to reduce preventable medical errors, which are the sixth-leading cause of death in America. ((Oh, gag me - THAT old nonsense again? Mr. Rieders sits on the board of the organization which has demonstrated time and time again Pennsylvania medicine's leadership role in reducing medical errors.))
The Mcare Fund should continue. There are millions of drivers and all need insurance, but only tens of thousands of doctors. ((And they're all getting older, and no smart young doctors want to take their places....)) This makes for an inherently unstable market, especially in uncertain times. The insurance market for doctors has improved significantly, but it is too soon to pull the plug on Mcare. ((It has NOT improved "significantly." Premiums might not be rising 50% a year like they were in the early part of this century, but they haven't dropped "significantly" at ALL. In fact, I know of a general surgeon who is still paying FIVE TIMES what he paid in the year 2000....))
CLIFF A. RIEDERS, Williamsport
((Funny how he hides his affiliation with the group which has the most to gain from the status quo....))

10...American Enterprise Institute

((Following are the table of contents and excerpts from this amazing 150 page plus document, which you can download free....))

Three Roadblocks on the Road to Health ReformRobert B. Helms 4
Lessons from the Clinton Plan: Incremental Market Reform,Not Sweeping Government Control Joseph R. Antos 7
Symptomatic Relief, but No Cure—The Obama Health Care ReformJoseph R. Antos 12
Beyond Those Health Care NumbersN. Gregory Mankiw 14
Making a Difference in Differences for the Health Inequalities of IndividualsThomas P. Miller 16
Living without Health Insurance: Why Every AmericanNeeds Coverage Joseph R. Antos 20
Covering the Uninsured—Springing a Leak in the“Cost Shifting Hydraulic” Thomas P. Miller 25
What DO We Know about the Uninsured?Thomas P. Miller 28
Have Health Reformers Forgotten Medicare?Joseph R. Antos 34
Hitting the Snooze Button on Our Medicare Fiscal Alarm ClocksThomas P. Miller 39
State Fiscal Relief: Protecting Health Coverage in an EconomicDownturn Robert B. Helms 42
What Medicaid Tells Us about Government Health CareScott Gottlieb, M.D. 47

How Obama Would Stifle Drug InnovationScott Gottlieb, M.D. 50
Stop the War on DrugsScott Gottlieb, M.D. 52
More Drugs for More Developing World DiseasesRoger Bate and Karen Porter 54
Congress Wants to Restrict Drug AccessScott Gottlieb, M.D. 63
Promoting and Using Comparative Research: What Are the Promisesand Pitfalls of a New Federal Effort? Scott Gottlieb, M.D. 64
When Patents Are Not Enough: Data Exclusivity for Follow-On BiologicsJohn E. Calfee 73
Facing Reality on Follow-On BiologicsJohn E. Calfee 78
Uncle Sam, M.D.Scott Gottlieb, M.D. 84
Drug Safety Proposals and the Intrusion of Federal Regulation intoPatient Freedom and Medical Practice Scott Gottlieb, M.D. 86
Restoring FDA’s Ability to Keep America’s Families SafeRoger Bate and Richard Tren 96
The Deadly World of Fake DrugsRoger Bate 103
Reform without Reason: What’s Wrong with the FDA Amendments Act of 2007John E. Calfee 110
Is the Food and Drug Administration Safe and Effective?Tomas J. Philipson and Eric Sun 119
FDA Preemption and Patient Welfare in Wyeth v. LevineJohn E. Calfee 132
The Supreme Court’s Wyeth BlunderJohn E. Calfee 140
Abuse of Medical System by Lawyers Hurts PatientsRoger Bate 143
Stem Cells and the Truth about Medical InnovationScott Gottlieb, M.D. 145


Health care reform is once again at the center of national debate, and AEI scholars continue to inform that debate through an ambitious programof publications, conferences, and consultations with political and industry leaders. This collection of essays provides an indication of the range and depth of AEI’s work in health care reform and pharmaceutical policy. AEI has analyzed issues and concerns critical to the future of America’s health system, spanning subjects as varied as Medicare and Medicaid reform, health coverage for the uninsured, the role of the FDA, the effects of price controls on pharmaceutical R&D, drug reimportation, global health and drug provision, and the role of private sector solutions to public health problems. AEI’s Health Policy Studies program is one of the most active centers at AEI, providing the intellectual and practical underpinnings for current health care debates.
A flurry of activity forty years ago laid the foundations for AEI’s health policy program as we know it today. In the early 1970s, AEI scholars did pioneering work on pharmaceutical reform. In 1974, Sam Peltzman wrote an AEI Evaluative Study titled Regulation of Pharmaceutical Innovation: The 1962 Amendments in which he argued that more aggressive regulation had doubled the costs of developing and bringing a new drug to market. The number of new drugs brought to market each year was reduced by half. In a 1975 study, William Wardell and Louis Lasagna described the extent to which the United States came to lag behind other advanced countries in drug development after the passage of the 1962 FDA amendments and the degree to which the gap narrowed following changes to the law in 1971.
The authors analyzed whether the current U.S. regulatory system met the needs for development of new drugs, an area of inquiry that continues to occupy AEI scholars today.
In 1978, Robert Helms wrote an essay about reining in the cost of health care, a subject he and other AEI scholars continue to study. An AEI conference volume from 30 years ago, National Health Insurance: What Now, What Later, What Never?, contributed to the ongoing debate on comprehensive health care reform and reminds us of the durability of Washington’s policy preoccupations. Also in 1978, in a prescient discussion, Leon Kass, M.D., examined the ethical dilemmas of in vitro fertilization.
As the health care debate heated up in the 1990s with the advance of the Clinton health reform, AEI scholars responded with a series of monographs analyzing various proposals and advancing new insights into the challenges of making health coverage available to the uninsured. An AEI study, Responsible National Health Insurance by Mark Pauly and colleagues, demonstrated that universal health insurance could be achieved but only if government regulation and tax policy were reshaped. The issues addressed in the studies published by AEI during the 1990s remain at the core of today’s efforts to reform the health system.
The essays in this collection have been published in the past several years and represent some of the best of AEI’s current work on current debates in health care and pharmaceutical reform.
The collection underscores AEI’s commitment to advancing these debates in a serious, constructive, and timely manner.


What should real reform in health care look like?
How do current proposals measure up against reforms in an ideal world? And how feasible and effective are these proposals? In this chapter, AEI scholars provide some answers. N. Gregory Mankiw’s article, “Beyond Those Health Care Numbers,” debunks three misleading criticisms of health care in the United States, helping readers see more clearly the current state of our health care system. He tells us that life expectancy and the infant mortality rate are dictated more by the homicide and teenage pregnancy rates than by the quality of our health care system. He explains that the oft-quoted number of uninsured—47 million—includes 10 million non–American citizens; people eligible for, but not enrolled, in Medicaid; and those who can afford to but choose not to buy health insurance. He also suggests that it is natural for a wealthy society to spend a larger share of its income on health.
Robert B. Helms identifies components within private health insurance, Medicare, and Medicaid that stand as roadblocks to comprehensive health reform. He suggests that the open-ended payment policies of these three principal financers of medical care encourage wasteful spending and thus stand in the way of creating a health care system of higher quality and greater economic value. Helms argues that real reform will transform these payment policies into ones that reward quality and value. He then demonstrates the value of proposals that aim to cap the amount of health insurance that a firm can provide tax-free or to provide a fixed payment to the individual or state for assistance in purchasing health care.
In a similar vein, Joseph Antos argues that President Obama’s health care reform proposals, as stated during his campaign, fail to address the perverse incentives that drive up health care spending. In this piece, which originally appeared in the New England Journal of Medicine, he offers a critique of the concepts of a “pay-or-play” mandate and a national health insurance exchange, which he argues would indeed create choice for individuals purchasing health insurance but minimize the kind of competition among private insurers that would enable market forces to bring down costs and improve quality. In a separate article that appeared in Health Affairs, Antos explains the lessons to be learned from the failed health reform attempt during the Clinton administration, namely the perils of insisting on an individual mandate for health insurance and relying on a top-down approach to limit the growth of health spending. Here again, he argues that policy needs to address the perverse incentives inherent in the current system.
In his article “Making a Difference in Differences for the Health Inequalities of Individuals,” Thomas P. Miller suggests avenues for improving health outcomes for the most vulnerable. He highlights arguments that suggest nonmedical factors account for much more of the variance in predicting health outcomes and producing disparities among populations than differences in the use of health care itself or the financing of health insurance. Therefore, improving outreach, mentoring, and education of vulnerable populations (with the goal of intervening early to prevent health deterioration) will be more important to improving health outcomes than expanding the level and scope of health insurance coverage.

11....Medical Progress Today Newsletter
The truth about health care 'truths'
David Gratzer, The Dallas Morning News, 3-27-09

The high cost of health care "causes a bankruptcy in America every 30 seconds," we're told repeatedly by Barack Obama's administration. The president mentioned these exact words twice in recent weeks, before Congress and at the opening of his health care summit.
There's only one problem: It's completely false, drawing on four–year–old bankruptcy stats and a discredited paper co–written by an advocate of socialized medicine suggesting that half of bankruptcies are due to health expenses.
As Americans consider health care reform, it's important to get our basic facts right. So consider these bipartisan "truths":
American health care is an underperformer
Obama has said that we spend "50 percent more on health care than other industrialized nations. And yet, we don't have... better outcomes." By outcomes, the president meant measures like life expectancy. That's a theme repeated in the report accompanying the Democratic Party's convention platform. It claims: "We spend more on health care than any other country, but we're ranked 47th in life expectancy."
This much is true: Americans live fewer years than people in Canada, Britain and France. But how long a person lives isn't simply about access to health care but reflects various factors: tobacco and alcohol use, genetics, diet, crime rates. Economist Robert Ohsfeldt and John Schneider observe that deaths from accidents and homicides in America are much higher than in any other developed country. Exclude these unintentional deaths from the statistics, and Americans come out on top in life expectancy.
If we measure a health care system by how well patients are treated, American health care excels—besting the European systems in 13 of 16 cancers and boasting better survival post–transplantations.
Prevention saves money
Prevention is embraced by members of both parties. Republican Gov. Mike Huckabee explained that a focus on prevention "would save countless lives, pain and suffering by the victims of chronic conditions, and billions of dollars." Obama bemoaned the fact that "less than 4 cents of every health dollar is spent on prevention and public health" and pledged to do something about this.
Intuitively, prevention makes sense: Teach seventh- and eighth-grade students not to smoke, and the high costs of lung cancer care can be avoided. But in a review published in the New England Journal of Medicine, analyzing 599 papers, researchers found that most preventive care measures—like targeting adolescents with tobacco education—increase costs. In fact, less than one in five interventions save money; in some cases, costs can be increased and outcomes actually worsened.
Prescription drugs are a major driver of health-care costs
During the campaign, Sen. John McCain went so far as to describe them as the "bad guys." He wasn't talking about terrorists, though—he was referring to pharmaceutical companies. Obama has also bemoaned the high cost of prescription drugs, noting that they have driven up overall health spending. Both endorsed reimportation, a plan to bring in price–controlled medications from Canada and other countries.
But health care spending isn't quite so simple. Prescription drugs account for about 10 cents on every health care dollar. Pharmaceuticals have shown less growth (about 3.4 percent in 2008), by the way, than other areas, like hospitals (7.2 percent).
And reimportation is not a panacea: Even if all pharmaceutical-industry profits were eliminated, the savings would be small, equivalent to a one-time freeze in health care cost inflation of about three months.
Politicians are eager to take up health reform this year, and there are good reasons to do that: from rising costs to the uneven quality of American health care. But we need good medicine for an ailing system, not populist rhetoric.

David Gratzer is a physician and a senior fellow at the Manhattan Institute. He may be contacted through

12...Modern Physician
Future holds threat of surgeon shortage, physicians say
By Elizabeth Gardner

Posted: May 26, 2009 - 8:00 am EDT

Concern about the looming shortage of physicians mostly focuses on the fear that patients won’t be able to find a primary-care doctor. But perhaps even more dire is a looming surgeon shortage. While a certain amount of primary care can pass to nurses, nurse practitioners and physician assistants, there’s no substitute for a trained hand with a scalpel.
“We offer essential services that others can’t do,” says Thomas Russell, M.D., executive director of the American College of Surgeons, which has recently launched Operation Patient Access, an initiative to increase the number of surgeons in the pipeline. “If you don’t have surgeons properly distributed in proper specialties, you have a huge access problem, where patients can’t get the services they need or have to travel long distances.”
While precise numbers are elusive, both inner cities and rural areas are short on surgeons, Russell says, and students who take up surgery are opting for specialties like bariatric surgery or minimally invasive procedures. The number of general surgeons has remained constant while the population has grown. The ACS says three out of four hospital administrators report having trouble finding surgeons to cover emergency departments.
The main culprit is the Balanced Budget Act of 1997, which, in response to a feared surplus of physicians in general and specialists in particular, capped the number of residency slots eligible for federal funding. And because residents are now limited to working 80 hours a week, they’re not likely to accept positions with the longer hours that were routine for previous generations. As a result, more surgeons will be needed.
Operation Patient Access is pushing for more residency slots, student-loan forgiveness programs, more funding for educating surgeons, and expanding the National Health Services Corps. As for payment reform, Russell favors upping the pay of primary-care physicians—but not at the expense of surgeons. “If you rob Peter to pay Paul, you create unintended consequences in an area that’s already having problems,” he says.
Anne Williams, M.D., in Glasgow, Mont., is on the front line of the surgeon shortage. She’s the only surgeon in four counties covering about 5,000 square miles. Only 8,000 people live there, but they need their surgical care, whether it’s a hernia repair because of farm-related heavy lifting or a head trauma from a horse’s kick.
Williams is on call all day, every day, and patients often have to drive for hours to get to her. Sometimes she goes to them via outreach clinics in some of the surrounding small towns. She simplified her life last year by going on salary at 25-bed Frances Mahon Deaconess Hospital in Glasgow, which has been her home base for the past 23 years.
Williams will retire in another decade or so. Her training took place in an era when round-the-clock call wasn’t perceived as either unusual or difficult, but things are different now. “They’ll need to get two people to do what I do,” she says. “It’s not that I’m so remarkable, but trying to get someone to be the only guy on call is a thing of the past. There aren’t a lot of younger physicians who are ready for that life.”

Elizabeth Gardner, a former reporter at Modern Healthcare, Modern Physician’s sister publication, is a frequent contributor to the publication. Reach her at

13...New York Times
Antitrust Laws a Hurdle to Health Care Overhaul
Published: May 26, 2009

WASHINGTON — President Obama’s campaign to cut health costs by $2 trillion over the next decade, announced with fanfare two weeks ago, may have hit another snag: the nation’s antitrust laws.
Antitrust lawyers say doctors,
hospitals, insurance companies and drug makers will be running huge legal risks if they get together and agree on a strategy to hold down prices and reduce the growth of health spending.
Robert F. Leibenluft, a former official at the Federal Trade Commission, said, “Any agreement among competitors with regard to prices or price increases — even if they set a maximum — would raise legal concerns.”
Already, some leaders of the health care industry who appeared at the White House on May 11 say the president may have overstated their cost-control commitment. Three days after the gathering, hospital executives said that they had agreed to help save $2 trillion by gradually slowing the growth of health spending, but that they did not commit to cutting the growth rate by 1.5 percentage points each year for 10 years.
White House officials say even the more limited commitment is significant. Under current law, federal officials predict that health spending will grow an average of 6.2 percent a year, to $4.4 trillion in 2018.
Mr. Obama is asking the industry for detailed proposals to control costs. But so far the administration has not offered the industry any relief from antitrust laws and has, in fact, vowed to step up enforcement.
As a presidential candidate, Mr. Obama said consumers had suffered because of “lax enforcement” of antitrust laws in many
health insurance markets.
In 1993, when President
Bill Clinton made the last major effort to overhaul the health care system, the lobby for the drug industry, then known as the Pharmaceutical Manufacturers Association, devised a voluntary cost-control plan. Under it, each drug company offered to limit the annual increase in the average price of its prescription drug products to the increase in the Consumer Price Index.
The Justice Department rejected the proposal, saying it would violate antitrust laws. In blocking the proposal, the department said the
Supreme Court had made clear that agreements setting maximum prices were just as illegal as agreements that set minimum ones.
“Such maximum price-fixing agreements create the risk that the maximum prices will become minimum or uniform prices,” the department said in a business review letter signed Oct. 1, 1993, by Anne K. Bingaman, then the assistant attorney general in charge of the antitrust division.
In 1978, hospitals also asked the Justice Department for an assurance they would not be charged with antitrust violations when they undertook a “voluntary effort” to curb costs as an alternative to legislation proposed by President
Jimmy Carter. The department would not provide such an assurance.
Many savings now envisioned by the health care industry would require much closer cooperation by independent doctors and hospitals, taking them into a gray area of the law where federal agencies have not provided clear guidance.
In a recent letter to the Senate Finance Committee, the American Hospital Association said uncertainty about enforcement of the antitrust laws “makes it difficult for a hospital and doctors to collaborate to improve care” and lower costs.
Doctors often want to collaborate and share information about prices without sharing financial risk or fully merging their office practices. The
American Medical Association has asked Congress to revise antitrust laws so doctors can collectively negotiate with insurers over fees and other issues.
The Federal Trade Commission has repeatedly challenged such collective action as illegal price-fixing, even though doctors say they are at a severe disadvantage in trying to negotiate with giant insurance companies.
A new study by an economist at
Northwestern University, Leemore S. Dafny, finds that a growing number of geographic markets are dominated by a handful of insurance companies, and that the decline in competition may contribute to higher prices.
Among the groups that say they have joined together to rein in health costs, besides the hospital and medical associations, are America’s Health Insurance Plans and the Pharmaceutical Research and Manufacturers of America.
Jamie Court, the president of Consumer Watchdog, an advocacy group, said he was wary of such joint efforts.
“When companies that control the health care system get together to change it, there is a serious risk that they are doing it to stifle competition at the expense of consumers,” Mr. Court said.
The Federal Trade Commission says that while cooperation among health care providers can benefit consumers, it can also increase the bargaining power of hospitals and doctors, making it easier for them to set prices and eliminate competition.

14...McKinsey and Company
Can the United States provide health care for all?
Regina Herzlinger
18 May 2009

Of course.
After all, providing universal coverage, at, say, an average cost of $5,000 per person, will cost at most $250 billion annually and likely less because some of the uninsured can afford to pay part of the cost of their health insurance—a quarter earn more than $40,000- and many are lower-cost young people. Two hundred and fifty billion dollars is a large sum, for sure, but not overwhelming relative to the trillions of expenditures in the stimulus bills.
And United States citizens support universal coverage. Buffeted by a recessionary economy and locked into jobs they do not want only because they offer health insurance, Americans increasingly demand affordable access to health care.So we’ve got the demand. We have an adequate supply of doctors, nurses, and facilities (though perhaps not forever if we continue on our current course). ((Actually, we DON'T have an adequate supply....which will cause numerous problems as more and more people require greater amounts of health care....can we say Baby Boomers?)) And we can afford a well-structured universal plan. To achieve such a plan, however, we need to impose the discipline of the marketplace so that patients can spend wisely, providers can price services correctly, and we can cut down on waste and inefficiency.
What are the obstacles?
US health care costs are already killing our economy. Prudent people on both the left and the right of the political spectrum worry that universal coverage that further expands these costs may be the final nail in the economy’s coffin.At 17 percent of GDP, US costs are about 70 percent higher than those of our developed global competitors. The uniquely high proportion of health care funding funneled through employers forces US companies to carry this excess poundage into the global arena, unlike employers in countries that support expenditures through a broader tax base. Many employers, especially smaller ones, do not offer health insurance at attractive rates—a third of those who work for organizations with fewer than 25 employees are uninsured, for example. As a result, the allocation of labor in the economy is distorted by productivity-killing job lock, as employees spurn jobs in these smaller companies, which create about 80 percent of new jobs.
The experience of Massachusetts provides a sobering lesson about the results of expanding universal coverage without paying attention to cost control. As more than 300,000 people gained insurance, costs also increased. Not surprisingly, the number of enrollees who needed subsidies was higher than expected. When the recession hit once wealthy Massachusetts, the increase in health-care costs helped tip the state into a billion-dollar deficit. The Commonwealth is now contemplating cost control through all-payer regulation, in which the state effectively sets the prices for health insurance. If this Massachusetts solution seems like the road to a single-payer system, under which the state government controls all health care expenses, that’s because it is.
There is no question that single-payer systems control health care costs: Canada, in which private payment is virtually illegal , and the United Kingdom, in which most of the funding comes from the government, have substantially lower costs. But do single-payer health care systems achieve cost control in a manner that would be acceptable to the American people?
Single-payer systems control health care costs primarily by rationing services to the 20 percent of the people who account for 80 percent of the costs. The political calculus is cruel but irresistible: 80 percent of the people, the healthy ones, will love their system, while some of the sick, a mere 20 percent, will not. As a result, the United Kingdom has the lowest uptake of new cancer drugs among the Big Five European economies and commensurately low cancer survival statistics. The percentage of people treated for end-stage renal disease in the UK is roughly a third of that in the United States and about 50 percent less than it is in other Organisation for Economic Co-operation and Development (OECD) countries. Lack of treatment is essentially a death sentence because most people cannot afford to pay the high costs of treating these diseases from their own pockets.
The United States may render too much medical care to the sick but the United Kingdom does too little. The Americans who caused the managed-care backlash are unlikely to tolerate this kind of rationing.
Nevertheless, in the United States, Medicare is alleged to be a good cost controller and one that avoids the rationing tactics of the single-payer economies. So how does it achieve this miracle? Give considerable credit to government accounting: Medicare is low cost because the government accountants are permitted to ignore some inconvenient truths: $34 trillion in unfunded liabilities plus $89 billion in underpayments to medical care providers, which are ultimately paid by private insurers. With correct accounting, Medicare’s cost would increase by more than a trillion dollars. Further, if Medicare were the sole US health insurer, it would either increase its payments to providers by $89 billion or the current near-shortage in doctors would reach crisis proportions as medical students and graduates, burdened by huge debts and limited financial prospects, chose other professions. ((As they're already doing.))
Although the Democrats tout various other magic bullets for health care cost control—invigorated health care IT, oodles of prevention, miraculous reversions of destructive lifestyles, and centers for measuring relative cost effectiveness, even President Obama’s budget director pooh-poohed their likely impact when he headed the Congressional Budget Office. Most Americans do not believe these miracle solutions will do the job, either. In their eyes, the key to slimming the US health care system lies in eliminating its waste and inefficiencies. After a thorough analysis, McKinsey claimed that plain old inefficiency accounted for about $500 billion of excess US costs relative to other countries, as adjusted for their wealth and other relevant characteristics.
So, can we control health-care costs by slimming down this sector, without rationing care, and thus make health care available to all?
It cannot be that difficult. After all, we have achieved this kind of cure in other sectors of the economy, even for complicated products such as cars and computers. Henry Ford, for example, singlehandedly slashed the price of a car from that of a house to something readily affordable by the middle class. Bill Gates, Gordon Moore, Michael Dell, and Steve Jobs transformed the finicky, volatile $150,000 minicomputers I reluctantly programmed (in a foreign language, Fortran) as an MIT student in the 1960s to the cheap, reliable, user-friendly devices we use today. Service industries have benefitted from productivity too. Another McKinsey study attributed a third of the 1995–1999 surge in US labor productivity and continuing growth through 2002 to retail’s managerial and organizational innovations, such as the new markets created by eBay and and the inexpensive and stylish products offered by IKEA and Target.
There were two key ingredients to these productivity surges: the consumers who bought goods and services that provided better value for the money and the brilliant entrepreneurs who supplied them. The only viable health care cost cure is to reform public policy so that we create a consumer-driven health care market that motivates and rewards productive innovations in supply.
On the demand side, most health insurance beneficiaries do not behave like real consumers: employer-insured consumers are not motivated to shop carefully because they do not recognize that their health insurance benefits are essentially taken from what would otherwise be their wages, and those insured by the government have someone else footing the bill. As a result, consumers do not exercise the normal value-for-the-money judgment that has caused goods and services in other markets to become simultaneously better and cheaper.
When people use their own money to purchase health care, they drive costs down without compromising their health. For example, Switzerland, where health insurance is totally purchased by consumers (the poor and sick are subsidized), has costs that are 40 percent lower than those in the United States, as well as excellent care and universal coverage. Similarly, high-deductible health insurance policies demonstrate that middle-class consumers who pay a meaningful fraction of their health care expenditures out of pocket reduce spending without damaging their health.
On the supply side, providers are compensated for delivering fragments of care by a Medicare payment system that compensates providers for a hospital stay, for example, rather than for all the treatment and followup needed to treat a disease or disability. This payment system is especially problematic for the treatment of chronic diseases and disabilities, which account for 80 percent of health care costs. Because the providers are not motivated to optimize the overall course of care, patients receive suboptimal care that ultimately results in higher costs. The experience of Duke University Medical Center in devising an integrated system of care for the treatment of congestive heart failure is instructive. Although its integrated system reduced costs by 40 percent in only one year, Duke as an institution lost virtually all the savings it generated because it receives substantially higher compensation for treating sick, hospitalized people than for creating improvements in health that keep people out of the hospital in the first place.
Effective cost control would motivate consumers to shop carefully for insurance policies that offer the best value for the money while giving providers incentives to supply the best value for the money. There are two reforms that can make this happen:
1) Reform the income-tax system so that employed enrollees understand that their income funds the purchase of health benefits. The most direct way would be to make the money spent on health insurance available as cash, tax free, to employees. For example, my employer, Harvard University, could offer me a tax-free raise for the $15,000 of my income that it currently spends to purchase my health insurance. Like me, many of Harvard’s employees would opt to take the money and buy their own insurance, creating a genuine consumer-driven market.
2) Insurers would then compete for customers with policies that offer better value for the money. Their most important innovation would be the creation of integrated networks of producers paid for providing the total care needed by victims of chronic diseases and disabilities. (The payment reform would be led by changes in Medicare’s payment formulas.) These networks would offer better and cheaper care because of their integration. Other policies might reward health promotion by offering up to 40 percent rebates—that would amount to $6,000 annually in Massachusetts where a family policy costs $15,000—for enrollees who demonstrated health promoting behaviors, such as smoking cessation or vigorous exercise regimens.
The combination of invigorated supply and demand is the only health care reform plan that will avert the economic disaster that otherwise awaits us and, simultaneously, make health care available to all.
Sadly, it is a solution that the Washington, DC, establishment, which doubts the wisdom of consumers and the competence of entrepreneurs, is most reluctant to effect.

Copyright © 2009 Regina E Herzlinger. All rights reserved to the author.

15....National Center for Policy Analysis
10 Surprising Facts about American Health Care
No. 649
Tuesday, March 24, 2009
by Scott Atlas

Medical care in the United States is derided as miserable compared to health care systems in the rest of the developed world. Economists, government officials, insurers and academics alike are beating the drum for a far larger government rôle in health care. Much of the public assumes their arguments are sound because the calls for change are so ubiquitous and the topic so complex. However, before turning to government as the solution, some unheralded facts about America's health care system should be considered.
Fact No. 1: Americans have better survival rates than Europeans for common cancers.[1] Breast cancer mortality is 52 percent higher in Germany than in the United States, and 88 percent higher in the United Kingdom. Prostate cancer mortality is 604 percent higher in the U.K. and 457 percent higher in Norway. The mortality rate for colorectal cancer among British men and women is about 40 percent higher. ((How can ANYONE question the quality of US health care in light of this FACTUAL information, as opposed to the nonsense we hear people spouting?))
Fact No. 2: Americans have lower cancer mortality rates than Canadians.
[2] Breast cancer mortality is 9 percent higher, prostate cancer is 184 percent higher and colon cancer mortality among men is about 10 percent higher than in the United States.
Fact No. 3: Americans have better access to treatment for chronic diseases than patients in other developed countries.
[3] Some 56 percent of Americans who could benefit are taking statins, which reduce cholesterol and protect against heart disease. By comparison, of those patients who could benefit from these drugs, only 36 percent of the Dutch, 29 percent of the Swiss, 26 percent of Germans, 23 percent of Britons and 17 percent of Italians receive them.
Fact No. 4: Americans have better access to preventive cancer screening than Canadians.
[4] Take the proportion of the appropriate-age population groups who have received recommended tests for breast, cervical, prostate and colon cancer:
Nine of 10 middle-aged American women (89 percent) have had a mammogram, compared to less than three-fourths of Canadians (72 percent).
Nearly all American women (96 percent) have had a pap smear, compared to less than 90 percent of Canadians.
More than half of American men (54 percent) have had a PSA test, compared to less than 1 in 6 Canadians (16 percent). ((Guess that explains deaths from prostate cancer being 184% higher in Canada than in the US))
Nearly one-third of Americans (30 percent) have had a colonoscopy, compared with less than 1 in 20 Canadians (5 percent).
Fact No. 5: Lower income Americans are in better health than comparable Canadians. Twice as many American seniors with below-median incomes self-report "excellent" health compared to Canadian seniors (11.7 percent versus 5.8 percent). Conversely, white Canadian young adults with below-median incomes are 20 percent more likely than lower income Americans to describe their health as "fair or poor."
Fact No. 6: Americans spend less time waiting for care than patients in Canada and the U.K. Canadian and British patients wait about twice as long - sometimes more than a year - to see a specialist, to have elective surgery like hip replacements or to get radiation treatment for cancer.[6] All told, 827,429 people are waiting for some type of procedure in Canada.[7] In England, nearly 1.8 million people are waiting for a hospital admission or outpatient treatment.[8]
Fact No. 7: People in countries with more government control of health care are highly dissatisfied and believe reform is needed. More than 70 percent of German, Canadian, Australian, New Zealand and British adults say their health system needs either "fundamental change" or "complete rebuilding."[9]
Fact No. 8: Americans are more satisfied with the care they receive than Canadians. When asked about their own health care instead of the "health care system," more than half of Americans (51.3 percent) are very satisfied with their health care services, compared to only 41.5 percent of Canadians; a lower proportion of Americans are dissatisfied (6.8 percent) than Canadians (8.5 percent).
Fact No. 9: Americans have much better access to important new technologies like medical imaging than patients in Canada or the U.K. Maligned as a waste by economists and policymakers naïve to actual medical practice, an overwhelming majority of leading American physicians identified computerized tomography (CT) and magnetic resonance imaging (MRI) as the most important medical innovations for improving patient care during the previous decade.[11] [See the table.] The United States has 34 CT scanners per million Americans, compared to 12 in Canada and eight in Britain. The United States has nearly 27 MRI machines per million compared to about 6 per million in Canada and Britain.[12]
Fact No. 10: Americans are responsible for the vast majority of all health care innovations.
[13] The top five U.S. hospitals conduct more clinical trials than all the hospitals in any other single developed country.[14] Since the mid-1970s, the Nobel Prize in medicine or physiology has gone to American residents more often than recipients from all other countries combined.[15] In only five of the past 34 years did a scientist living in America not win or share in the prize. Most important recent medical innovations were developed in the United States.[16] [See the table.]
Conclusion. Despite serious challenges, such as escalating costs and the uninsured, the U.S. health care system compares favorably to those in other developed countries.

Scott W. Atlas, M.D., is a senior fellow at the Hoover Institution and a professor at the Stanford University Medical Center. A version of this article appeared previously in the February 18, 2009, Washington Times.

[1] Concord Working Group, "Cancer survival in five continents: a worldwide population-based study,.S. abe at responsible for theountries, in s chnologies, " Lancet Oncology, Vol. 9, No. 8, August 2008, pages 730 - 756; Arduino Verdecchia et al., "Recent Cancer Survival in Europe: A 2000-02 Period Analysis of EUROCARE-4 Data," Lancet Oncology, Vol. 8, No. 9, September 2007, pages 784 - 796.
[2] U.S. Cancer Statistics, National Program of Cancer Registries, U.S. Centers for Disease Control; Canadian Cancer Society/National Cancer Institute of Canada; also see June O'Neill and Dave M. O'Neill, "Health Status, Health Care and Inequality: Canada vs. the U.S.," National Bureau of Economic Research, Working Paper No. 13429, September 2007. Available at
[3] Oliver Schoffski (University of Erlangen-Nuremberg), "Diffusion of Medicines in Europe," European Federation of Pharmaceutical Industries and Associations, 2002. Available at See also Michael Tanner, "The Grass is Not Always Greener: A Look at National Health Care Systems around the World," Cato Institute, Policy Analysis No. 613, March 18, 2008. Available at
[4] June O'Neill and Dave M. O'Neill, "Health Status, Health Care and Inequality: Canada vs. the U.S."
[5] Ibid.
[6] Nadeem Esmail, Michael A. Walker with Margaret Bank, "Waiting Your Turn, (17th edition) Hospital Waiting Lists In Canada," Fraser Institute, Critical Issues Bulletin 2007, Studies in Health Care Policy, August 2008; Nadeem Esmail and Dominika Wrona "Medical Technology in Canada," Fraser Institute, August 21, 2008 ; Sharon Willcox et al., "Measuring and Reducing Waiting Times: A Cross-National Comparison Of Strategies," Health Affairs, Vol. 26, No. 4, July/August 2007, pages 1,078-87; June O'Neill and Dave M. O'Neill, "Health Status, Health Care and Inequality: Canada vs. the U.S."; M.V. Williams et al., "Radiotherapy Dose Fractionation, Access and Waiting Times in the Countries of the U.K.. in 2005," Royal College of Radiologists, Clinical Oncology, Vol. 19, No. 5, June 2007, pages 273-286.
[7] Nadeem Esmail and Michael A. Walker with Margaret Bank, "Waiting Your Turn 17th Edition: Hospital Waiting Lists In Canada 2007."
[8] "Hospital Waiting Times and List Statistics," Department of Health, England. Available at
[9] Cathy Schoen et al., "Toward Higher-Performance Health Systems: Adults' Health Care Experiences In Seven Countries, 2007," Health Affairs, Web Exclusive, Vol. 26, No. 6, October 31, 2007, pages w717-w734. Available at
[10] June O'Neill and Dave M. O'Neill, "Health Status, Health Care and Inequality: Canada vs. the U.S."
[11] Victor R. Fuchs and Harold C. Sox Jr., "Physicians' Views of the Relative Importance of 30 Medical Innovations," Health Affairs, Vol. 20, No. 5, September /October 2001, pages 30-42. Available at
[12] OECD Health Data 2008, Organization for Economic Cooperation and Development. Available at,3343,en_2649_34631_12968734_1_1_1_37407,00.html.
[13] "The U.S. Health Care System as an Engine of Innovation," Economic Report of the President (Washington, D.C.: Government Printing Office, 2004), 108th Congress, 2nd Session H. Doc. 108-145, February 2004, Chapter 10, pages 190-193, available at; Tyler Cowen, New York Times, Oct. 5, 2006; Tom Coburn, Joseph Antos and Grace-Marie Turner, "Competition: A Prescription for Health Care Transformation," Heritage Foundation, Lecture No. 1030, April 2007; Thomas Boehm, "How can we explain the American dominance in biomedical research and development?" Journal of Medical Marketing, Vol. 5, No. 2, 2005, pages 158-66, U.S. Department of Health and Human Services, July 2002. Available at .
[14] Nicholas D. Kristof, "Franklin Delano Obama," New York Times, February 28, 2009. Available at
[15] The Nobel Prize Internet Archive. Available at
[16] "The U.S. Health Care System as an Engine of Innovation," 2004 Economic Report of the President.

If you would like to be added to the Liability and Health News Update Information Network, or if you have information about yourself or a colleague relocating, retiring early, giving up medicine, private practice or curtailing services due to the medical liability crisis please email

No comments:

Post a Comment