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This is the second in a series of articles on End-of-Life Care and Covert Rationing.  The first article can be found here.

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In the summer of 2008, the Oregon Health Plan (the Medicaid plan in Oregon) injudiciously sent a letter to lung-cancer patient Barbara Wagner denying coverage for the expensive chemotherapy her doctor had recommended, and offering instead to cover palliative care “including doctor-assisted suicide.”

Despite the fact that there were plenty of distractions at the time (including a presidential election and the world’s economy on the brink of Armageddon), that letter unleashed a firestorm of public outrage. (If you have forgotten the outrage, simply Google the search terms “Barbara Wagner” and “suicide.”) Indeed, the outrage was sufficient to penetrate even the dulled sensibilities of the Oregon Health Plan’s executives. One Jim Sellers, a spokesman for the Oregon Health Plan, admitted to ABC News that “the letter to Wagner was a public relations blunder and something the state is ‘working on.’”

It is clear that the Oregon Health Plan executives were at least a little blindsided by the general reaction to their ham-handed denial letter. Denial letters, after all, are a routine activity, and they always list (as an aid to the patient) services which the third party payer judges to be reasonable alternatives to the denied care. While in this case the denied service which Ms. Wagner sought offered some reasonable hope for prolonged survival, and the service being held out by the Oregon Health Plan as an alternative (to say the least) did not, that’s really not so much different from the content of more “routine” denial letters. The difference is one of degree, and not of substance. So, Oregon Health Plan executives must surely have wondered, “What’s the big deal?”

One must try to be understanding of such insensitivity. It is a fundamental task of health plans – whether run by Medicare, Medicaid, or private insurance companies – to deliver unpleasant news to people whose lives are at stake, and it is normal (even necessary) for those who are charged with this task either to grow thick skin or to develop the traditional indifference of bureaucrats. It is perfectly predictable that such thick skin or indifference might dull one’s ability to discern subtle differences in degree among various denials of services, subtle differences that might call for more artful phraseologies than those employed in this instance by the Oregon Health Plan. The failure to recognize the need for a more artful denial letter, Mr. Sellers appeared to say, was the only problem in the case of Ms. Wagner. The solution, he therefore suggested, is certainly not a substantive change in any policy, but better public relations.

Those who ran the Oregon Health Plan must have been particularly disheartened to learn that even vocal proponents of physician-assisted suicide immediately began criticizing their ill-considered denial letter. To so blatantly juxtapose the reality of healthcare rationing with the “option” of assisted suicide seriously undermines the chief argument advanced publicly by the end-of-life movement, namely, that assisted suicide is merely an individual autonomy play, and is not in any way a cost-saving tool.*

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*Preserving the ethical precept of individual autonomy is the basis upon which modern utilitarian ethicists always build their defense of doctors ending the lives of their patients, whether it be by physician-assisted suicide, passive euthanasia, active euthanasia, and even involuntary active euthanasia. DrRich will elaborate on this ethical defense in a future posting.
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In other words, whether or not you embrace physician-assisted suicide, everyone seems to agree that offering it up as a covered medical service at the same time you are denying potentially life-prolonging therapy is both insensitive and unseemly.

And so – as a public service to those in the government and the private sector alike who are running healthcare organizations and thus who are (as a matter of course) severely challenged in trying to understand simple human emotions, to patients like Ms. Wagner who may suffer true physical harm by exposure to such institutional callousness, and to the rest of us who simply would appreciate not being confronted so blatantly by the dark abyss that underlies our healthcare system – DrRich offers the Central Authority and private insurers some friendly advice on the right way to sell physician-assisted suicide.

1) Don’t Seem So Anxious.

Sure it’s easy to get excited about physician-assisted suicide. All you need to do is look at your own data. Whether you are trying to make ends meet over at CMS, or running a private health plan, it’s likely that a huge proportion of your spending goes to patients who are in the last year of life. Enticing these end-of-lifers to choose assisted suicide (which you can accomplish in a sufficiently tasteful way for about $100) is such an attractive proposition that it’s indeed become very hard to make yourself appear reasonably circumspect about it. At the very least, if you run an organization like the Oregon Health Plan, where assisted suicide is “available” at no additional cost to patients who choose it, it’s difficult not to push the idea when the opportunity arises. Otherwise how can you be sure the patients will know all their options for end-of-life care?

But doing even that much is a mistake. If you don’t believe that, simply look at the small firestorm the Oregon Health Plan created with their straightforward and helpful “reminder” letter to Ms. Wagner. As a result of the Oregon Health Plan’s inept attempt at informing patients of their options, neighboring states that appeared ready to pass their own assisted-suicide laws immediately had second thoughts about it. It should now be clear even to health plan bureaucrats that seeming overly interested in assisted suicide, or even mentioning the option to patients (at least while simultaneously denying potentially lifesaving therapy) is a very counterproductive idea.

A much more subtle approach is required.

2) Publicly Disavow Any Interest In Assisted Suicide.

Think about Tom Sawyer whitewashing the picket fence. Ole Tom didn’t get all his friends to paint that fence for him by asking for their help, or by overtly trying to sell or cajole them on the idea. Instead, he got them to do the job by pretending he wasn’t the least bit interested in having them do it, by ignoring them altogether, and making himself seem completely absorbed in the delightful task. By the time Tom was done, his friends were begging for a turn, and even giving him wondrous gifts (such as dead cats on a string) to bribe him for a chance to participate.

What you need to do is pretend that encouraging assisted suicide – even if it’s a covered service that patients ought to be made aware of – is the farthest thing from your mind. Instead, you are completely invested in and insistent upon providing full-service end-of-life care, with all the bells and whistles and no holds barred; and – while patients of course have the option to exercise their individual autonomy as they see fit – you take great pride in squeezing every last instant of life out of those elderly, used-up, chronically ill bodies that present themselves in your ICU, no matter what the cost to the patient and family in terms of pain, suffering, humiliation and anguish. It is your mission to stave off death to the bitter end, come what may, and you’re proud of it.

3) Have Somebody Else Push It.

In the meantime, clear the path for agencies and interest groups which are dedicated to the end-of-life movement. There are plenty of them out there. Have them do the selling for you.

Make sure they have access to your patients and patients’ families, especially in the ICU setting. Allow them space for educational displays; provide them some private space where they can talk to interested patients and families; see that hospital social workers are aware of and will enable their activities. In the meantime, make it clear that you do not endorse or encourage their efforts, and indeed wish they would go away, but you are providing such groups with access in your dedicated interest of full transparency, and your commitment to patient choice. If patients choose to avail themselves of such information, you will do nothing to stop them.

4) Make the Advantages To Assisted Suicide Seem Real.

There’s no need for you to talk up the advantages of assisted suicide – let the end-of-life proselytizers do the talking for you. All you have to do is to make their arguments seem accurate. The great part is, that’s just a matter of maintaining business as usual.

The end-of-life zealots will tell patients that assisted suicide is a way of asserting some measure of control over the dying process, of holding on to some level of personal dignity at the very end. So simply make sure your end-of-life care continues robbing patients of any semblance of dignity and control.

They’ll tell patients that assisted suicide will end pain and discomfort and suffering when all hope of recovery is gone. So simply continue with inadequate pain control** and half-hearted comfort measures, and keep the ICU as hectic, loud, scary and impersonal as possible.

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**Maintaining inadequate pain control will continue as a matter of course as long as the Central Authority continues sending the DOJ after the occasional pain-management doctor. Whether the target physician is actually engaging in analgesic excesses is unimportant to the goal of making any American doctor afraid of aggressively controlling their patients’ pain, for fear of becoming a target themselves.
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The end-of-life proponents will tell the patients themselves that assisted suicide will finally bring comfort to their long-suffering family and friends, whose lives have been “so disrupted by your prolonged illness.” And make sure all those family and friends continue suffering long, by keeping those ICU waiting rooms hot, cramped, noisy, uncomfortable and smelly.

You get the idea. Simply make sure the arguments of the end-of-life proponents have teeth. You’re good at that.

5) Tell Patients to Consult With Their Doctors First.

That’s right. Refer patients to their doctors, their supposed personal advocates, the selfsame individuals you yourself have long since fatally compromised (by grabbing control of their individual professional viability). Assuming you have placed sufficient cost-cutting pressures on doctors, then their willingness to encourage (or at least not discourage) assisted suicide will be substantial. So when patients do consult with their doctors, the doctors will not undermine your subtle efforts, but will become your partners in convincing those approaching end-of-life to just be reasonable.

6) Make Physician-Assisted Suicide Legal, But Not Reimbursable.

You’re going for the Botox model here. You do not want physician-assisted suicide to be merely another hush-hush medical procedure, conducted quietly and almost secretly in a typical doctor’s office, so that people can pretend it doesn’t exist. Rather, you want to establish it as something that’s front and center, something people will want and ask for and go out of their way to seek. You want to encourage doctors to establish inventive business models for assisted suicide,  just as the dermatologists have done with their Botox clinics.

Accomplishing this, of course, will require assisted suicide to be made legal everywhere (and not just in Oregon and a few other progressive states), but at the same time will require you to NOT make it a reimbursable medical service. For once it’s made reimbursable it will become subject to typical Medicare price controls, which thus will keep prices high and limit innovation. And in this once instance, you will not want to limit innovation.

Just think of the possibilities: One envisions physician-assisted suicide becoming established as a “life cycle event” like a wedding or Bar Mitzvah, where the right atmosphere, the right spirituality, and the right tone come together to create an unforgettable, uplifting experience for everyone. Some assisted suicides will take place in a doctor’s office, of course, but why not in a place of worship, a favorite city, a resort, a mountain top, a rocky coast – a casino? Why not allow the prospective decedent to actually hear the eulogies and experience the tearful tributes before actually engaging (ritually) in the Act? Why not partner with the new deathcare industry you will be unleashing (talk about job creation!) to wrap this final “healthcare service” into a comprehensive package along with funeral services, grave sites and headstones, elaborate obituaries, and full coverage on Facebook, Twitter, and UTube?  Why not engage American media to celebrate the event with a new mode of reality programming (one that is sure to garner a massive share of viewers)? Why not, at last, GUARANTEE every American their 15 minutes of fame (even if it’s their last 15 minutes)? Why not convert what is today an antiseptic, impersonal and frightening process into one that makes everybody say, “Yes! That’s the only way to go!”

The beauty is that this sort of model will convert what is today, at best, merely the option for assisted suicide into something that’s expected – a true destination event, a natural part of life. Indeed, not opting for assisted suicide, at a certain point in one’s life, will come to be seen as unusual, unreasonable, greedy and selfish. And when granny begins to spend more time in a doctor’s office or (worse) in a hospital, where frequent visitation is expected and other family inconveniences are generated, some loving grandchild will pat her precious wrinkled hand, and say, “Granny, you know, it’s getting to be about that time. Wouldn’t a last weekend in Vegas be just the thing?”

So, if you play your cards right – passively encouraging the end-of-life movement in its effort to spread the word, while making the alternative (i.e., not committing suicide) as nasty and foul an option as possible, and also while coercing doctors and encouraging families to view assisted suicide as the most advantageous modus exodus one could ever imagine – well, the “right” to assisted suicide will shortly become the expectation and even the duty for assisted suicide.

If you who run government or private health plans will just follow DrRich’s simple program, you will have accomplished all this without seeming crass and self-serving, as you most certainly do each time you send somebody a letter like the one you sent the unfortunate Ms. Wagner.

The implantable cardioverter defibrillator (ICD), an incredible feat of visionary medical science blended with cutting edge engineering, a device responsible for saving thousands of lives a year, has gone from being a prototypical American success story to a symbol of healthcare excess. Today the ICD is widely castigated by the press, the public, the insurers, the government, and even most doctors as the poster child for expensive and wasteful medical technology. Consequently, the ICD and the doctors who implant them have become fair game for whatever the Central Authority wishes to throw at them. DrRich has explored this fascinating phenomenon in this series of articles;

How ICD Implantation Guidelines Are Being Abused

The DOJ Investigation of ICD Implanters, and What It Means

How the ICD Became an Abomination

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When DrRich decided to become an electrophysiologist over 30 years ago, it was because he wanted to help figure out how to prevent sudden death.  Sudden death from cardiac arrhythmias is estimated to kill over 300,000 Americans each year, and at the time, some of the more recent victims of sudden death had been DrRich’s friends or loved ones. Because cardiac arrhythmias – even the lethal ones – can virtually always be stopped if appropriate interventions are available, these deaths can be prevented, at least in theory. DrRich wanted to help turn the theory into reality.

In 1982, by virtue of being in the right place at the right time rather than by virtue of his own qualities or qualifications, DrRich’s electrophysiology shop at the University of Pittsburgh became the third institution in the world (after Johns Hopkins and Stanford) to gain access to the highly experimental implantable defibrillator. The gradual development of the implantable cardioverter defibrillator (ICD) from a primitive and often dangerous device that was suitable only for the very highest-risk patients, to the finely-tuned life-saving instrument it is today, is an amazing story in itself. Perhaps some day DrRich (who was in the thick of it for two and a half decades) will try to tell it.

But the bottom line is that today we know how to prevent sudden death. And if the evolution of ICDs were permitted to follow the path which is followed by most modern technologies, these devices could, relatively quickly, become small enough, simple enough, safe enough, effective enough, and cheap enough for the kind of widespread usage which would be necessary to actually produce a large reduction in those 300,000 deaths per year. The ICD companies all know how this could be accomplished, and for that matter, so does DrRich.

But alas, this is not going to happen. ICDs will remain extraordinarily complex and expensive devices, which can only be wrestled to ground by highly-trained electrophysiologists (EPs), and which therefore will only be available to a very tiny proportion of the people who could benefit from them. And rather than being celebrated as the typical American success story of harnessing vision, persistence, and innovation to solve a very difficult problem, ICDs instead are widely castigated (by the press, the public, the insurers, the government, and even most doctors) as a symbol of excess, as the poster child for expensive and wasteful medical technology. (And so, when the DOJ goes after ICD companies and the doctors who implant them, the press and the people cheer them on.)

While most EPs and all of the ICD companies refuse to see it, ICDs – a remarkable technology which prevents an all-too-common tragedy – have become an abomination in the eyes of our society.

There are many reasons for this. DrRich will list just three of them, in ascending order of importance.

The third most important reason ICDs are an abomination is: The Toxic Symbiosis Between ICD Companies and Electrophysiologists.

EPs were important during the initial years the ICD was being developed, since expertise regarding complex cardiac arrhythmias had to be translated into engineering language, and then packed into the ICDs, in order for these devices to work the right way. But at some point in the 1990s, ICD companies should have realized that EPs had made their contribution, and were now leading them out on a limb.

Once the fundamental problems in building ICDs were solved, the companies should have been working to make their devices simpler to use, more reliable, and cheaper, so that they could be used by more doctors in more patients. Instead, following MBA Dictum Number One, they “listened to their customers,” the EPs. And the EPs (for whom, like most medical specialists, turf protection is very high up on their priority list), unfailingly counseled the ICD companies to make these devices more and more complex, so that only EPs can understand how to use them. And so, this is what the ICD companies did.

As a result, today’s typical ICD has extra leads (wires) which add appreciably to the difficulty and the risk of implanting these devices, without adding much practical value for most patients; and they have incorporated literally tens of thousands of programming options, ostensibly so that device function can be carefully “tailored” for the individual patient, but which are seldom actually used profitably, and whose chief effect is scaring off non-EPs.

By “listening to their customers,” ICD companies have been led away from simplicity and into unnecessary complexity, and today’s typical ICD is burdened with layers of grotesque tailfins, running lights, oversized tires, and massive engines. In building their vehicles, the ICD companies should have solicited the needs of the typical commuter; instead, they consulted only with monster truck enthusiasts, and so they are producing vehicles that are not suitable for highway use.

The second most important reason ICDs are an abomination is: Government Price Controls (As Usual) Are Keeping Prices High.

The price of ICDs, fundamentally, is determined by Medicare. Way back when ICDs were first approved for use, Medicare determined that a fair price was somewhere in the range of $15,000 – $25,000. This high price was justifiable back in the 1980s, since it cost nearly that much at the time to make one of these things. But the way government price controls seem to operate, ICDs will probably remain in this price range forever.

Now, to be sure, the government does not directly determine what companies get paid for ICDs. Rather, they indirectly determine the price by deciding what hospitals and physicians will be reimbursed for implanting ICDs – and the ICD companies subsequently are paid by the hospital. Those Medicare reimbursement rates apparently vary substantially from region to region and hospital to hospital (who knows how the government determines these things?), and the various rates are not publicly available to DrRich’s knowledge. But ICD manufacturers, at worst, can impute the reimbursement rates by figuring out the top price which specific hospitals are willing to pay them for ICDs (hence the range in prices).

Having determined the top price they can possibly get paid for ICDs, the only logical strategy for manufacturers is to figure out how they can always get paid that top price for every device they sell. They do this by making ICDs specifically aimed at keeping the decision makers happy. And the decision makers, as we have seen, are the EPs.

EPs, having (so far) successfully protected their turf, most often decide which patients get ICDs, and they decide which company’s ICDs to implant. So, to be competitive among their customers, ICD companies must cater to the wants and needs of EPs, and so must produce a steady stream of new, improved ICDs whose novel features are requested by these very high-end, high-maintenance physicians (who again, are dedicated to turf protection through complexity).

Since their product therefore grows more complex with each succeeding generation, in response to the “needs” of their customers, ICD companies have been able to successfully argue to Medicare that ICD reimbursement should be maintained at high levels (and in some cases they have been successful in getting reimbursements to increase even further).

All the ICD manufacturer needs (and wants) to know is: what new geegaws do I need to add to my next generation of ICDs in order to make them even more stupefyingly complex, so as to maintain the loyalty of my EP customers, and to justify high reimbursement rates?

And this is why, despite the fact that ICD technology has been fully mature (says DrRich) for at least a decade now, which in a functional market would cause the price to plummet, the cost of ICDs remains so high. Whatever has developed in the complex interplay between ICD manufacturers, EPs, hospitals and the government, it’s not a functional market.

In fact, there are no market forces at all in play here. Furthermore, there is no evil-doing. The “players” in this scenario – CMS personnel, ICD manufacturers, and EPs – are all simply behaving logically, and are all responding as anyone would to the incentives that have been established within a system which employs government price controlls to keep costs down.

As a result, ICDs remain extraordinarly and unnecessarily expensive.

And the number one reason ICDs are an abomination is: Sudden Death Is Good Public Policy.

A well-known and often-repeated assertion is that 75% (or some similar high proportion) of all healthcare expenditures are consumed during the last six months (or some similar brief interval) of life. Whenever this assertion is made, the clear implication is that some means ought to be found to stop wasting all those healthcare resources, once that six-month clock is found to have started. The debates as to how to go about doing this (since the initiation of the six-month clock can really only be determined retrospectively) often become very nasty, very quickly.

In this light, consider sudden death. Sudden death has the virtue of being completely unexpected – and therefore very cheap. Victims of sudden death will not have spent the last six months of their lives selfishly consuming all our healthcare resources. Likely, they will have spent that time earning money, consuming goods, and paying taxes. These patriots are doing what every healthcare policy expert agrees we should all do – to go directly from being productive citizens to six feet under. For sudden death is free, and if everyone did this we wouldn’t have a healthcare crisis at all.

Furthermore, consider the kind of patient who receives ICDs. Some of these, of course (probably less than 10%) are young individuals with some sort of genetic propensity for sudden, lethal arrhythmias. But by far, most people who get ICDs are older folks, generally in their 60s, who have underlying cardiac disease. These are people who, if their sudden deaths are prevented, will go on consuming large amounts of Medicare dollars for the maintenance of their sundry significant medical conditions, who will go on collecting monthly Social Security payments, and who, when the end finally does come (possibly a decade or more into their ICD-extended life) will do so in the classic American manner – in an ICU, supported by incredibly expensive machines, drugs, and medical professionals. And thus, thanks to their ICDs, 75% of their lifetime healthcare expenditures will also be gobbled up during their last days.

Consider also that there is no constituency for “sudden death.” There is a constituency for breast cancer; a constituency for HIV-AIDS, a constituency for muscular dystrophy; a constituency for autism; and even a constituency for flatulence. But there is no constituency for sudden death. People who die suddenly (all 300,000 of them per year) generally have no idea that they are likely to become victims of arrhythmic death, and don’t care one way or the other if the means are available to prevent this unfortunate event. Until, perhaps, the last five seconds of their life, they are entirely unaware that sudden death is even a remote possibility.

So the path is open to demonize ICDs and those who build or implant them, and to hound them into curtailing – if not stopping entirely – their counterproductive activities.

While ICDs are indeed too expensive and too complex, the chief reason they are an abomination is that they prevent the very kind of death that every health policy expert understands is the ideal. And they convert that ideal death into a years-long orgy of entitlement-consumption, capped off by a typically American, very non-ideal, very expensive kind of death. Small wonder that ICDs are being specifically targeted by the Feds.

Because of what they do, and not because of their cost, the use of ICDs must be curtailed. ICDs would be targeted even if they were as simple, cheap and reliable as DrRich thinks they could and should be.

ICDs would be targeted even if they were FREE.

Heck, the very concept of an ICD is an abomination.

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Two weeks ago DrRich wrote about the abuse of implantable defibrillator guidelines, as illustrated by a recent JAMA article claiming that over 22% of ICD (implantable cardioverter defibrillator) implantations are “non-evidence based.” The abuse of the guidelines, DrRich showed, was perpetrated less by ICD implanters, and more by the authors of that article. That fact being interesting but irrelevant, DrRich went on to speculate that perhaps the Feds would rouse themselves to take this issue to the next level.

It certainly did not take long. Indeed, just a days after DrRich’s post (which ought to completely absolve him of having any direct impact on the Feds’ action), it was revealed that the Department of Justice had already launched an investigation of ICD implants, as related to “proper guidelines for clinical decision making.”

This revelation was made on the website of the Heart Rhythm Society, the professional organization of electrophysiologists (EPs). HRS went on to say that it (HRS itself) had “agreed” to assist the DOJ in an advisory role in its investigation. Furthermore: “Because this is an ongoing investigation, HRS Staff or Leadership is not available for further comment. HRS will communicate additional information to its membership when permitted to do so by the DOJ.” (Emphasis DrRich’s.)

So here’s what we know:

1) The DOJ is actively investigating ICD implantations.
2) Their investigation has to do with the “proper use of guidelines” in selecting patients for ICDs.
3) HRS, the professional organization to which EPs pay huge dues each year in order that it might represent their interests, most especially their interests in Washington, has been preemptively co-opted by the Feds, and indeed has been gagged, so that any further communication to its own membership regarding the investigation is forbidden until further notice.

What will HRS tell the DOJ? It hardly matters, since the important thing has already been accomplished, i.e., effectively silencing the sole organization which represents the interests of EPs in Washington. But, while the HRS statement indicates that the organization is “assisting” the DOJ with “information that does not include either identifiable patient or facility level data,” and while DrRich has no doubt that this is the sincere intent of HRS, DrRich also believes it to be a sure thing that, at the end of the day, HRS (if it wishes immunity from any liability it might find itself subject to, regarding the advice, statements, educational materials, &c., it might have produced over the years, relating to clinical guidelines, or to any other matter of interest that might surface during the DOJ’s open-ended investigation), will tell the DOJ Anything It Wants To Know.

DrRich’s fellow bloggers who are also electrophysiolgists, Wes Fisher and John Mandrola, quickly noted the HRS statement on their respective blogs, and each expressed a certain amount of concern as to the implications of the DOJ’s investigation. But Larry Husten, who writes the excellent Cardiobrief blog, offers a calming voice: “I doubt that the DOJ is gearing up to tackle the vast majority of “reasonable” off-guideline implants. I think they will be going for the real outliers, and when and if they reveal the details of their case there will be little sympathy for their targets.”

Some of DrRich’s readers, who not inappropriately consider him to be a bit paranoid about the Central Authority, may find it surprising that, fundamentally, he agrees with Larry on this matter. He does not think the DOJ will round up large numbers (or even moderate numbers) of EPs who have been practicing basically sound electrophysiology, and who likely have reasonable explanations for any off-guideline ICD implantations they may have committed. DrRich agrees that the DOJ instead will go after a few outliers, figures who – very specifically – will garner little sympathy amongst the public, and indeed, who can be held out, with good effect, for public castigation. Preferably, these figures will be individuals about whom the marketing departments of one ICD manufacturer or another will have generated a few embarrassingly glowing e-mails, celebrating the sheer number of sales these doctors have produced, and discussing strategies – offering speaking engagements in exotic locations, putting on pig roasts, &c. – to keep the ball rolling.

In other words, it is likely at the end of the day the DOJ will produce a few doctors who are truly abusing the system, and harming patients to boot, and who will actually deserve what they will get.

There is no guarantee about this, of course. DrRich has written about how he himself, in his pristine innocence, was once the target of a federal investigation of ICD implants. And while he had on his side the virtues of good medical practice, truth, justice, the American Way, ethics, and even the law, and while he eventually was extricated from his situation with an entirely clean record, it was a close thing, and his escape was based more on luck than on being right. More recently, when DrRich had the “opportunity” to testify under oath in a DOJ investigation on another matter (which he is not yet at liberty to discuss, but regarding which, happily, he was only a witness this time, and not a target), DrRich was required by the DOJ to answer several questions about this very blog and its content, which (as far as DrRich could tell) had nothing whatsoever to do with the matter at hand. By this means DrRich was led to know that the Feds are either among his very great fans (Hi, Fellas!) – or something else.

DrRich’s paranoia, you see, is hard-won, not to mention evidence-based.

So it is indeed possible for innocents to get drawn into such matters – collateral damage is always unavoidable when one is at war – but odds are it won’t be You, or You, or You, so like Larry says, not to worry. They are looking for true evil-doers.

DrRich also agrees with Larry that this DOJ investigation is not a direct response to the JAMA article. The JAMA article appeared a mere week or two before HRS made its announcement – and its announcement obviously was so carefully lawyered-up that it must have taken weeks if not months to negotiate just that one detail with the DOJ. This has all been in the works for a while.  But DrRich does not believe for a moment that the DOJ was unaware that the JAMA article was coming out, or that its content, and the subsequent media attention it would create regarding the widespread ICD abuses being perpetrated by EPs, would dovetail nicely with the subsequent revelation by HRS of the DOJ investigation.

ICDs, and their implanters, have long been a target of the payers – both government payers and insurers – and this new enterprise is merely the latest battle in a long war.

As it happens, DrRich spoke at a certain investigators’ meeting just this past weekend, which was attended by a score or so of prominent electrophysiologists. He can report that the JAMA article (which defined off-guideline ICD usage as bad medicine and harmful to patients), followed by the intense publicity in the media this article generated (also emphasizing bad medicine and harm to patients), followed by the DOJ investigation related to the “proper use of guidelines” in ICD implantation, followed by the co-opting and the gagging of the EPs’ own professional organization, is having a delightfully chilling effect on the profession. DrRich thinks it is unlikely that very many off-guideline ICD implants will be performed for the foreseeable future, no matter how much individual patients might benefit from them, at least while this investigation continues. In fact, while the investigation is ongoing, DrRich suspects that even referrals to EPs for ICD implants will drop off. Because, until then, it will remain an open question just how rigorously one must stick to the letter of the guidelines in order for the DOJ to give one a pass, and to not be considered as guilty of crimes against humanity. The profession is duly intimidated.

Whatever the final outcome of this investigation, it has has already had its intended effect.  DrRich respectfully suggests that the DOJ might just as well take its time with it, and let the effect percolate to perfection.

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Note: Further evidence came this afternoon (January 24) that the effect the Central Authority had in mind is being realized, when Wells Fargo Securities downgraded St. Jude Medical from Outperform to Market Perform. The downgrade was based on WFS’ assessment that ICD implants will be reduced by 10% in 2011, thanks to the DOJ investigation. That reduction doesn’t quite do it, of course, but it’s a start.

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From the ominously-titled book, “New Rules,” by Donald Berwick MD and Troyen Brennan MD:

“Today, this isolated relationship [between doctor and patient] is no longer tenable or possible. . . Traditional medical ethics, based on the doctor-patient dyad, must be reformulated to fit the new mold of the delivery of health care. . . The primary function of regulation in health care…is to constrain decentralized individualized decision making.”

Unfortunately, Dr. Berwick’s straightforward formulation of the appropriate role of the individual physician in our reformed healthcare system is not isolated to thinkers of the Progressive persuasion. The notion that most clinical decisions can be usefully made by a centralized authority is attractive even to some conservatives.

For example, a few years ago the noted economist Arnold Kling strongly defended the idea. “My own view is that a remote third party probably can use statistical evidence to make good recommendations for a course of treatment.”

Now, Kling is no far-left radical, pushing for centralized control of healthcare (and everything else). Indeed, he is now with the Cato Institute, and before that he taught economics at George Mason University. So he has earned his conservative and/or libertarian chops.

And to be fair, he is not really calling here for “remote third parties” to have final authority on what’s best for individual patients. Rather, he thinks patients should make that decision for themselves, weighing the recommendations of data-driven guidelines promulgated by remote experts, against the ego-toss’d recommendations from their all-too-fallible doctors, or, as Kling sarcastically refers to them, their “heroic personal saviors.” (Such sarcasm, regular readers will know, is as abhorrent to DrRich as it probably is to you.) Kling is saying: trust patients, armed with good evidence-based recommendations handed down from experts, to make the right decisions for themselves.

In concept even DrRich supports this latter notion. Indeed, a chief theme of this blog has been that doctors have been coerced into such a compromised position by the government and the insurance carriers that wise patients will no longer simply trust their doctors’ advice explicitly. As things now stand, patients who place full reliance on their doctors, assuming that they’ll get all the information they need to make good medical decisions, are putting themselves in peril. Smart patients will seek out all the information they can about their own medical conditions, so they can confirm that their doctors are indeed presenting them with all their reasonable options, and so they can more intelligently evaluate those options. And certainly, expert-endorsed guidelines would be an important part of that research.

But Kling’s remedy – that patients rely on the treatment recommendations made by expert panels as a remedy to the conflicted advice being doled out by their own doctors – is seriously flawed.

The first flaw, of course, is the idea that remote third parties, wielding evidence-based data, can make good treatment recommendations for individual patients. Evidence-based guidelines, almost by definition, are designed to improve the average outcome across a population of individuals, and are specifically designed not to optimize outcomes for each individual within that population.

Second, Kling apparently assumes that the remote third parties who are producing evidence-based treatment recommendations will be acting in a completely objective and unbiased manner. But this can never be the case. A major theme of the Covert Rationing Blog this past year has been to demonstrate that a) clinical science is probably the least exact of the sciences; b) the design and interpretation of clinical studies is inevitably attended by significant bias; and c) therefore, no matter who is producing them – whether it is medical professionals or GOD panelists (Government Operatives Deliberating) – these guidelines will always be produced with a particular agenda in mind. To assume that such agendas will be primarily – or even remotely – related to optimizing the outcomes of individual patients will often be a serious error.

Third, the idea that patients, even very intelligent patients armed with “perfect information,” can by themselves reliably sort through the morass of conflicting evidence and conflicting opinions that invariably inform any set of clinical recommendations (whether made by vaunted teams of completely objective experts from on-high, or by one’s inherently flawed, conflicted and ego-driven personal physician) is simply false. This would be the case even if the healthcare system were perfectly aligned to help patients. Which, of course, it is not. (It is aligned to affect the covert rationing of healthcare.)

Finally, while the advice patients get from their doctors is indeed biased, more and more it is biased (thanks to heavy-handed coercion) in favor of those same central authorities that are commissioning the expert panels.

As a result, patients – especially when they are sick and least able to fend for themselves – are generally incapable of negotiating the gratuitous complexities and hidden hazards laid out before them by a hostile healthcare system, a system which silently prays they will, in frustration, just go buy themselves some alternative medicine remedy, then crawl under a bush and die while contemplating their qi. Indeed, patients are as incapable of successfully navigating such a system as are accused felons of navigating a complex and hostile legal system that’s bent on sending them away for 15-20 years.

It is for this very reason that accused felons are assigned an advocate, an individual who is ethically and legally obligated to take their part, to help them navigate all the legal hazards, to do everything possible to see they are treated fairly, and that they are given every reasonable chance to prove their innocence. Lawyers, as much as we physicians might like to castigate them, are absolutely critical to a civil society.

And this is the reason why patients (according to traditional, though now quaint, medical ethics) are also supposed to have a personal advocate, an individual who is obligated to take their part, to help them navigate all the medical hazards, to do everything possible to see that they are treated fairly and that all available medical options are made open to them, and that they are given every reasonable chance of a good clinical outcome. Patients, in other words, need doctors who are devoted to the classic precepts of their profession. Such doctors, as much as Kling and others might like to diminish their importance, are also absolutely critical to a civil society.

But, as we have seen, and as has been publicly celebrated by Dr. Berwick and others, severing the classic doctor-patient relationship has been Job One under our system of covert rationing – whether that rationing is managed by insurance companies or by the government. Doctors simply cannot be allowed any longer to place their patients first. They’ve got to place the needs of their true masters first. They’ve got to keep the government and the insurers happy or they’re out of a job. They are no longer permitted to tailor clinical choices to best fit their individual patients, but they are simply to apply treatment directives as they are handed down by (from now on, government-appointed) panels of experts.

And this brings us back to Kling. DrRich of course agrees with his notion that patients ought to be armed with the high-quality information they need to determine their own medical destiny. DrRich can even agree that relying solely on the information provided by today’s doctor is generally not advisable. But DrRich cannot agree with the reason it’s not advisable. Doctors aren’t so much inherently flawed by ego and other intrinsic character flaws (at least, no more than any other group of humans), as they are operating under duress, under imposed constraints, and under external coercions that systematically and purposefully prevent them from discharging their professional obligations.

Nor can DrRich agree with Kling’s proposed solution. No centralized set of recommendations, evidence-based or not, can fix this problem for patients – especially when the expert bodies that make those recommendations are controlled by the same entities that have, with malice aforethought, killed the medical profession for the express purpose of stripping patients of their advocates, and therefore, of their medical options.

DrRich has trouble seeing a solution to this problem that is not radical. He does not see how doctors can resume their rightful place as their patients’ advocates and remain in what has become of the traditional healthcare system. Perhaps enough doctors to make a difference will leave the traditional healthcare system, shedding themselves of the third parties who now control their behavior, and re-establishing their practices (and revitalizing their profession) with a new commitment to the doctor-patient relationship. If not, then perhaps some brand new profession will establish itself (call it “personal healthcare advocates”) to fill the great void that threatens the safety of every American patient.

So yes, let individual patients weigh all the evidence and choose the healthcare option that suits them best. But unless they have a personal advocate to help them navigate the morass of biased choices – whether that advocate is their PCP like it’s supposed to be, or some new variety of professional advocate – those options will be limited to whatever healthcare is deemed best by the central planners.

A fine economist such as Dr. Kling should realize that a remote third party can no more make good recommendations for individual patients trying to survive in the rough and tumble of the healthcare system, than can a remote third party make good recommendations for individual businesses trying to compete in the rough and tumble of the marketplace. It is one thing for Progressives to hold to such a notion. It is far more disturbing to see respected conservative thinkers doing so.

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It should by now be obvious to everyone that, in its great push to take over the American healthcare system, our government will do everything it must to eliminate private practice physicians. This is necessary because Obamacare (or any government-controlled healthcare system) simply cannot operate unless physicians cooperate completely with the Central Authority. Physician behavior absolutely must be controlled, and so doctors who insist on acting independently must either be reeducated or eliminated.

(Don’t get too exercised about DrRich’s language here – he is talking mainly about forcing recalcitrants into early retirement, or career changes. The other kind of “elimination” probably will not become necessary.)

Accordingly, under Obamacare all doctors are to be driven into federally-sanctioned organizations that will operate strictly under government directives. The current parlance for such an organization is the “Accountable Care Organization.”

The ACOs will be run by administrators who (theoretically) will become expert at navigating the morass of rules and regulations now being conjured up under Obamacare.  These administrators will interpret the rules and regulations in such a way as to determine The Way It Must Be Done, and then will pass The Way It Must Be Done down to the ACOs’ clinical chiefs (doctors who perhaps used to practice medicine, and maybe still do, a little, but who are now mainly brevet administrators), and the clinical chiefs will finally pass the restrictive rules of engagement down to the doctors who will actually take care of the patients. These doctors, struggling in the trenches, will attempt assiduously to follow those rules without exception, if they would like to keep their jobs as well as avoid a federal fraud rap. The patients, of course, will get whatever they get, but always with official assurances that whatever it is they get, it will be of the highest quality.

As DrRich has pointed out, doctors have very little leverage under this kind of system. Not only do they have the full weight of the federal government pushing them toward their fate as functionaries within ACOs, but they also are being pushed to so assimilate by their own professional organizations. Indeed, thanks to the New Age medical ethics which their professional organizations have promulgated on their behalf, joining collectives such as ACOs is about to become the only ethical way of practicing medicine. (DrRich has shown that this is explicitly so, and that Dr. Berwick agrees.) Doctors who try to make a go of it on their own will not only be practicing extra-legally, but also extra-ethically.

So this is where we are headed.

But we’re not there yet. Far too many physicians are still fundamentally independent-minded; there is still a lot of work to be done to get all the doctors to assimilate into the Borg.

And a major step in this direction will be to eliminate Independent Practice Associations. While the systematic emasculation of IPAs has been going on for years, it is to accelerate rapidly under Obamacare.

IPAs are groups of doctors who own independent medical practices, and who join together to provide bulk services to health insurers at rates of payment that are negotiated collectively. IPAs have a long and respected history for over a half-century. But they have been on the Fed’s hit list since at least the Clinton administration.

The rules under which IPAs must operate in legally negotiating with insurance companies have become complex, illogical, restrictive, arbitrary and ultimately ironic. The full weight of the federal government has been brought to bear against IPAs, apparently to protect the large and powerful health insurance companies, not to mention government health insurers, against “price fixing” by independent doctors – while simultaneously imposing price fixing by those same insurers upon the IPA physicians .

So: not only is it a violation of anti-trust for two random doctors to have a cup of coffee and mention anything to each other about their respective reimbursement rates, it is also illegal for fellow members of an IPA (who are joined together in collective bargaining with insurers) to do so. Indeed, the only kind of negotiation that is apparently allowed (“apparently” because the actual rules are not explicit but implied, and change arbitrarily depending on which administrators are running the Federal Trade Commission) is called the “messenger model” of negotiation.  The messenger model is necessitated by the fact that physician members of the IPA are not allowed to communicate with each other about rates, so each IPA must hire a “negotiator” who communicates between individual physician IPA members and the insurer. Furthermore, physicians are not allowed to declare to the insurer what level of reimbursement they will accept (because that would be price fixing), but rather, they can only hear the proposed reimbursement rates from the insurer, and accept or reject them. And in recent years, rejecting the offer by insurers, especially government insurers, has sometimes been determined also to be physician price fixing. This system, for reasons unfathomable to DrRich, is NOT to be considered price fixing on the part of the insurers.

DrRich is not sure he has this entirely right, because it is far more complex than he has allowed, and indeed, the rules are manifestly changeable and unclear, even to professional IPA negotiators.

In fact, it has proven to be very easy (and progressively easier as the years have gone by) for IPAs to get into serious trouble with the FTC, and incur massive fines, for “violations” that are not only fundamentally harmless to any party, but that had been perfectly acceptable behaviors in the recent past. To get the full flavor of the runaway prosecutorial zeal with which the FTC has been acting against IPAs, DrRich strongly recommends that you read this article in the December Reason Magazine by S. M. Oliva. (Many thanks to concerned reader Robert R. for pointing DrRich to this article.)

When the FTC decides to prosecute an IPA for price fixing or other violations-du-jour of the negotiating process, the IPA’s only reasonable course of action is to cave in immediately, sign a consent decree, pay the always-huge and always-arbitrary fine, and then abjectly accept whatever reimbursement rates the insurance company is willing to pay. This resolution to federal charges is unattractive, but at least it gives the IPA some chance of continued survival.

And if you don’t like the terms of the consent decree being imposed upon you, for God’s sake keep your mouth shut about it. When the director of a Colorado IPA recently told the press that her organization had done nothing materially wrong, but had signed the consent decree because they simply could not afford to fight the FTC in court (a truism for any IPA), the FTC sanctioned her as an individual, and barred her from negotiating with insurance companies for two years (effectively ending her career, simply for exercising her right of free speech). Even one of the FTC’s own commissioners, in a dissenting opinion, agreed that this latter action had been a travesty. (It was carried out nonetheless).

And so, operating a medical practice in an IPA has been a pretty dicey thing for several years now.

But Obamacare escalates the risk to a whole new level.

While dealing with the FTC is itself a decidedly nasty proposition, it’s nothing compared to dealing with the Justice Department. And Obamacare brings the DOJ into the fight to eliminate “price fixing” by doctors. That is, a violation of arbitrary and unpredictably changeable rules during IPA negotiations is not just a civil matter anymore, but is potentially (at the discretion of the Feds) a criminal matter.

It looks more and more like the handwriting is on the wall for IPAs, or for any independent, private practice physician who wants to take care of insured patients.

So, once again, DrRich begs his physician friends to consider the alternatives. Think about getting out now, dropping out of the system altogether while you still can, and establishing a direct-pay practice before that, too, is rendered illegal. The window of opportunity is closing.

And, sadly, you may want to re-read DrRich’s helpful suggestions regarding black market healthcare, as that may become the only viable alternative to the Borg – and much sooner than DrRich had previously thought.

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One of DrRich’s most dearly held theories, which he has expounded upon at length, is that the American health insurance industry supported Obamacare from the very beginning (and continues to do so) because the President’s plan offers them a graceful exit strategy from their now-defunct business model. Without Obamacare, the health insurance industry was headed toward sure oblivion. With Obamacare, they are headed toward – something else.

The remarkable and sustained actions the insurance industry took in support of Obamacare, DrRich continues to submit, is all the evidence that one should need to conclude that a deal has been struck. But even DrRich has had to admit that it has never been entirely clear what, exactly, the deal was. What were the health insurance companies promised in exchange for their support?

One obvious benefit for the insurance industry is the one last windfall they will enjoy when the individual mandate kicks in, and a few tens of millions of mostly-healthy Americans are coerced into purchasing health insurance for the first time. This windfall should not only temporarily boost the insurers’ bottom lines and their stock prices, but will likely push out for a few years the timing of the industry’s ultimate demise. So that part of the “deal” is pretty clear.

The remaining question is what will happen when that “last windfall” runs its course. Here, DrRich has speculated on two possible outcomes. Perhaps the health insurance industry will declare, at the appropriate moment (after profits have been made, stock options exercised, golden parachutes deployed, &c.), that they just can’t make a go of it anymore. This, obviously, will leave the government (whether it is controlled at that particular moment by Democrats or Republicans) with no choice but to step in and take over, lock, stock and barrel. DrRich has called this single-payer end-game the Amtrak Model.

On the other hand, the end-game could follow the Public Utilities Model. Here, the health insurance companies will be converted, either all at once or gradually, into public utilities. Public utilities operate as private companies, but the rates they can charge, the profits they can make, and the products they can offer, are all determined by the government. Such an outcome would be only a quasi-single-payer healthcare system, and so might be easier to justify to a Tea-Partied-up American public.

Either option would provide a graceful exit strategy to our health insurance industry, and either would be far more attractive to them than the ignominious oblivion they would have faced without Obamacare.

Last week, we were informed that what Obamacare has in mind for the insurance industry is the Public Utilities Model. That evidence came in the form of the Medical Loss Ratio (MLR) rule that was formally issued by the HHS, in accordance with a provision of Obamacare.

Under Section 10101 of the Affordable Care Act (Obamacare), beginning in January, 2011, insurers are required report to HHS each year what percentage of their revenues from premiums they spend on a) clinical services for enrollees, b) “activities that improve health care quality,” and c) all other costs. Depending on the size of the group market (and a few other factors), insurers must spend either 80% or 85% of premiums revenue on actual health care. (This amount, in health insurance parlance, is called the “medical loss.”) So only 15% or 20% can be spent on administrative costs, marketing, profit, and other non-clinical expenditures.

Behind the scenes, there was a great amount of jockeying over the past six months to convince the National Association of Insurance Commissioners (NAIC, the organization designated to propose the MLR rule to HHS) as to what constituted clinical and quality-improvement activities and which did not.

The health insurance industry tends to insist that every activity it undertakes is aimed at improving healthcare quality, whereas congresspersons and policymakers and consumer advocates insist that very little of what health insurers do has anything to do with anything except profit and greed. So, for instance, insurers claimed that the “healthcare hotlines” they have set up for subscribers are a quality measure, and should be included under medical loss; whereas opponents of the insurance industry claim it is purely an administrative function.

(DrRich does not know whether opponents remembered to advise the NAIC how certain insurers have utilized such hotlines in the past. For instance, in 2002 Kaiser Permanente paid workers at three northern California call centers bonuses for limiting the number of doctors appointments they set up, and for limiting the duration of patients’ phone calls. Kaiser admitted that workers at the hotlines received between 2 and 4% of their salaries as bonuses if certain criteria were met. In order to receive their bonuses, the hotline workers were expected to make appointments for less than 35% of the callers, to spend an average of less than 3 minutes and 45 seconds per call, and to escalate less than 50% of their calls for further evaluation.)

In any case, the NAIC finally made its recommendation on the MLR rule, and on November 22 HHS accepted the proposed rule in its entirety.

For the purposes of this post, the details of the new MLR rule are not particularly relevant. What is relevant is that such a rule was made at all.

The MLR rule sets a federally mandated, one-size-fits all limit on how much of its revenue an insurance company can use for administration and profit. That is, the MLR rule is explicitly the very kind of control that government agencies always impose on public utilities.

For public consumption, proponents of Obamacare have always claimed that insurance expenses – including profits – will be controlled through the competition that will be provided by the new “health insurance exchanges.” If market-like competition were actually simulated through these exchanges, then it is true that the MLR ratio would be driven toward the optimal value.

But the MLR rule establishes, among other things, that market forces are actually not going to be allowed to function in this arena. Rather, the optimal value for MLR will be determined by governmental regulators.

And so, dear readers, it appears that the deal, which proponents of Obamacare struck with the health insurance industry, is beginning to take definite shape. What we’ve got here, increasingly clearly, is the Public Utilities Model – a truly graceful exit strategy by anybody’s reckoning.

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Regular readers will know that DrRich is not enamored with Obamacare. Further, they will recall that DrRich’s chief objection to Obamacare is that it codifies into law the final destruction of the classic doctor-patient relationship.

Under Obamacare, the physician is not only released from her fiduciary obligation to her individual patient (i.e., the obligation to place the interests of the patient above all other considerations), but is strictly forbidden from acting in accordance with it. Indeed, elaborate mechanisms are established to assure that physicians will follow the directives which are to be handed down from omnipotent and immutable government panels, directives which will be explicitly aimed at optimizing collective rather than individual outcomes. And whereas physicians have long been discouraged from making healthcare decisions based on individual considerations and needs, Obamacare makes doing so a felony.

Combine that fact with inevitable future provisions that will prevent doctors from opting out of the system, and patients from spending their own money on their own healthcare, and you’ve got a prescription for a healthcare system (and a society) that are somewhat less friendly to individual needs, and somewhat more tyrannical, than supporters of Obamacare have promised us.

So, as a matter of principle, DrRich is sympathetic toward the newly-elected (and newly-reformed) Republicans who promise they will introduce and vote on a bill to repeal Obamacare.

But let’s be realistic. Even the most zealous Republicans understand that any repeal bill that passes in the House will stall in the Senate, and if it does not, the President will veto it. Indeed, it is this comforting assurance, DrRich thinks, that will induce many Progressively-oriented Republicans to go along with a repeal vote in the first place. By voting to repeal Obamacare, frightened and disoriented Republicans can mollify the Tea Party, without risking an actual abolition of the new reforms. Because if Obamacare were somehow repealed – well, where would the Republicans be then?

The health insurance industry, however, is taking no chances.

DrRich will remind his readers that Obamacare never would have become law in the first place if not for the solid and unrelenting support of the health insurance industry. The industry’s support for Mr. Obama’s effort was unfaltering. And during the long and perilous process that finally brought Obamacare to the President’s desk, whenever the cause faltered and appeared to be lost, representatives of the insurance industry would rise up and take whatever strong and difficult action was needed to get it back on track.

DrRich will further remind his readers that the insurance industry did not support Obamacare out of any principle, or compassion, or any sense of what was moral or right. They did it as a matter of life and death – theirs. For the health insurance industry had run out its string, shot its wad, blown up its business plan, and had nowhere else to turn. It was Obamacare – and its soothing “promise” to allow the industry to survive in diminished form, as a government-controlled utility – that offered insurers their only visible path away from oblivion.

The insurance industry is not about to go back. Furthermore, unlike Nancy Pelosi, Harry Reid and even President Obama, the insurance industry is not satisfied to let the political realities of the day block the Republicans’ efforts at repeal. For all they know, nervous Democrats in the Senate who want to be re-elected in 2012 will allow the repeal bill to go to the President’s desk. Worse, unused to seeing Presidents willing to sacrifice themselves on the alter of principle, the health insurers, in their existential panic, must wonder whether even Obama might finally change his mind and decide that he wants to be re-elected badly enough to sign a repeal bill. These possibilities seem pretty far-fetched to DrRich, of course, but to DrRich the prospect of repeal does not spell Armageddon.

During the long and painful process that saw Obamacare become law, the health insurers clearly demonstrated just how far they were willing to go to keep that process alive. DrRich is certain they will be happy to go at least that far to block repeal.

So it came as no surprise when, just last week, the insurers sent Republicans their first, gentle reminders that they will not countenance any such thing. At the Reuter’s Health Summit in New York, David Cordani, the CEO of Cigna, warned Republicans, “I don’t think it’s in our society’s best interest to expend energy in repealing the law. Our country expended over a year of sweat equity around the formation of it.” And Mark Bertolini, president of Aetna, said that any attempt to repeal Obamacare, or even an attempt to hold up funding for it, would be “problematic.” “We can’t go back,” said Bertolini,  “We need to keep moving, and we need to improve upon what we have.”

These seemingly mild-mannered statements should send a chill up the spines of Congressional Republicans. Any repeal of Obamacare necessarily and utterly relies on the acquiescence of the insurers, on their desire (or at least willingness) to continue with their current business model (possibly with some tinkering around the edges). Republicans, bless their innocent hearts, assume that’s what the insurers want.

But the truth is that the insurers know that their current business model is completely defunct, and far beyond any salvation. They see Obamacare as their only visible lifeline, and any serious threat to Obamacare as a threat to their survival.

The health insurers simply will not countenance a repeal of Obamacare. They will do whatever is necessary to demonstrate this fact to the Republicans. Their initial foray is suitably gentle. But once the repeal effort gets revved up, watch out. The insurers have already graphically demonstrated just how ungentle they can be.

If the Republicans really want to get rid of Obamacare, they’re going to have to propose an alternate solution that, among other things, provides the health insurance industry with a new and viable business model, one that seems at least as good to them as the rather paltry one Obamacare has promised. (If the Republicans want such an alternate solution, they have only to ask DrRich.)

DrRich does not think the Republicans have any idea of what may be coming their way, and from the very industry, no less, they consider to be their chief ally in the healthcare wars.

They should pay more attention.

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In prior posts DrRich introduced his readers to Ezekiel Emanuel, MD, PhD, brother of Rahm, eminent medical ethicist, and one of the White House’s chief advisers on healthcare policy. Dr. Emanuel was one of the authors of that recent paper in the Annals of Internal Medicine which admonished American physicians that resistance is futile. He has also famously called upon American physicians to abandon the obsolete medical ethics expressed in the Hippocratic Oath.

The reason the ideas (and pronouncements) of Dr. Emanuel are important is that he presumably will be a major “decider” in determining who will serve on the GOD panels, and how those panels will operate to advance his (and Mr. Obama’s) program of healthcare reform.

So, before we leave Dr. Emanuel to his important duties, let us take one more pass at the views he has expressed, regarding the direction of American healthcare, which we can expect to see manifested in government guidelines and policies in the coming years.

In particular, and especially relevant to the subject of this blog, let us view how Dr. Emanuel would direct the rationing of our healthcare.

His ideas in this regard were probably spelled out most clearly in an article Dr. Emanuel co-authored in The Lancet, in January, 2009, which proposed a system of healthcare rationing based on what he and co-authors call the “complete lives system.” Most notably, the complete lives system proposes rationing healthcare on the basis of age, in a way that frankly “discriminates against older people” (The Lancet, Vol 373, p 429).

While Emanuel has taken a lot of heat from the right wing for espousing such a thing, his argument for doing so is unique and thoughtful, and DrRich finds it worthy of more careful consideration.

First, we should note that the outrage we often hear expressed at the very idea of healthcare rationing (with each side accusing the other of wanting to ration) only applies to politicians. When healthcare ethicists get together for instance, they (like DrRich) understand that healthcare rationing is utterly unavoidable, and that in fact we’re already not avoiding it. Ethicists argue, instead, about how to do it. In this way, DrRich feels a certain sense of brotherhood with these ethicists (a group which, in nearly every other way, DrRich most often feels a sense of disgust).

So let us consider the ethical argument most often made for discriminating against the elderly in a system of healthcare rationing. Almost always, the argument is a utilitarian one. Saving the life of a 90-year-old might “buy” him only an extra two or three years of life, whereas spending the same amount of money to save a 10-year-old might buy him another 70 – 80 years of life. So society gains much more if it spends the money on the younger person, and withholds it from the older one. From a utilitarian viewpoint the argument for discriminating against the elderly is unassailable.

Non-utilitarian ethics asserts that all individuals have equal value, so discriminating against any person should be avoided, and therefore the 10-year-old and the 90-year-old should have an equal opportunity to receive the medical service in question. (That is, either both should get it or neither should get it.)

DrRich believes that most people would sympathize with the idea that if only one life can be saved, saving a young person’s life might make more sense than saving a very old person’s life. He thinks that even most 90-year-olds he has known would agree with this proposition. The problem, DrRich believes, is with the rationale we use for making such a decision.

The utilitarian argument for discriminating against the elderly in a rationing system rests on the idea (as does all utilitarian ethical reasoning) that individuals are not of equal value, at least, not from society’s point of view. And since they are not equivalent in value, it is right and proper for some agent of society to determine the relative value of individuals, so that resources can be distributed accordingly.

Obviously, utilitarian ethics opens the door for differentiating the intrinsic values of individuals for reasons other than age. That is, if you can devalue the elderly to optimize the public good, then you can also devalue the disabled, the stupid, the lazy, the left-handed, and the obese (for instance) to optimize public good.

Emanuel’s “complete lives system,” he argues, is NOT a utilitarian one. Emanuel would favor treating the 10-year-old over the 90-year-old not to maximize public good, but to maximize the opportunity of individuals to enjoy “complete lives” over the entire age spectrum. That is, under his system all individuals are taken as having equal intrinsic value. And during the course of their lives, everyone experiences an equal spectrum of priorities – first, the priority of a 10-year-old, and later (if lucky enough to live that long) the priority of a 90-year-old. While in practical terms this still means discriminating against the elderly, it does so in a way that cannot be extended to other groups of people (i.e, the disabled and so forth), and that, in fact, yields equal age-based priorities across individuals through the course of their complete lives. In other words, when one considers the entire course of an individual’s complete life, he or she is treated the same as any other individual during the entire course of their lives.

In this way, Emanuel asserts, the complete lives system is not a utilitarian system; while it would allow us to withhold medical care from the elderly, based on their age, it would do so in a way that would not open the door for discriminating against others, for other reasons.

DrRich understands this reasoning because he proposed something entirely similar in his book, as an option for dealing with the age issue in a rationing system. In fact, since DrRich wrote his book a few years before Emanuel published his “complete lives system,” it is entirely possible that Emanuel got his idea from yours truly.

DrRich does not expect any thanks from Dr. Emanuel in this regard, however, and in fact he wishes to thank Dr. Emanuel for showing him the fatal flaw in such thinking. Indeed, thanks to Dr. Emanuel, if DrRich were to produce a new edition of his book, he would propose no such thing.

For, no sooner does Dr. Emanuel propose his complete lives system as an alternative to utilitarian ethical reasoning, than he demonstrates, in the very same article, how easily his system can be twisted to the ends of utilitarian ethics.

Specifically, Emanuel argues that a healthcare rationing system should also discriminate against the very young, and asserts that his “complete lives system” justifies such discrimination (since every individual, at one time in their lives, is very young). But in explaining why it would be desirable to withhold medical services from the very young, Emanuel reveals that his rationale, in fact, is entirely utilitarian:

“Consideration of the importance of complete lives also supports modifying the youngest-first principle by prioritizing adolescents and young adults over infants (figure). Adolescents have received substantial education and parental care, investments that will be wasted without a complete life. Infants, in contrast, have not yet received these investments.” (The Lancet, vol 373, p. 428)

So, Emanuel holds that it is OK to discriminate against infants, toddlers and young children on the grounds that society has not “invested” a lot of resources in them yet. That is, their worth to society is not all that great.

This provision is extremely disturbing, to DrRich at least. For it essentially discards the notion that all human lives are of equal intrinsic value, in favor of the idea that an individual’s real value ought to be determined by their worthiness to the collective. And so society has the right and the duty to determine which individual lives are valuable enough to save, and which are not. Note that the rationale for discriminating against the elderly in the complete lives system was framed specifically to avoid having to do this.

In DrRich’s view, this provision against the young entirely negates the purported ethical premise of “complete lives.” This provision is what finally places the state, the insurers, or the GOD panels in the position of assigning intrinsic value to individual human lives, from a distance, as a matter of policy. If this can be done based on extreme youth, then it can also be done based on any other factor which some empowered panel decides will influence the worth of individuals to society.

The above figure, from Emanuel’s article on the complete lives system, reduces the question to a stark graph, with age on the X axis and value to society on the Y axis. Your age is determined by God. Your value to society is determined by the state.

It is easy to envision other, similar graphs, with your worthiness to society plotted on the Y axis, and certain personal features other than age plotted on they X axis – your income, your IQ, your disabilities, your BMI, etc.

DrRich reminds his readers that eugenics has been, from the beginning, an intrinsic part of the Progressive program. The idea that society can (and must) be perfected hinges, to a large extent, on the idea that mankind can (and must) be perfected. And perfecting mankind will require at least some culling of the herd. Indeed, early Progressives unabashedly embraced eugenics as an essential feature of societal perfection – and said so. Theodore Roosevelt, Woodrow Wilson, Bertrand Russell, H. G. Wells, and Margaret Sanger are only the most well-known of the Progressives who openly extolled eugenics.

Openly espousing eugenics became politically inadvisable after the Nazi atrocities came to light. But, since you can never achieve a perfect society while you are “carrying” a large proportion of people who are defective in their bodies, or minds, or thoughts, finding an acceptable way to eliminate such undesirables remains intrinsic to Progressivism.

DrRich believes that gaining control of the healthcare system, and gaining control of who gets what, when and how, provides both a new venue and a new language for Progressives to bring their program to fruition.

He humbly suggests that Dr. Emanuel’s “complete lives system” is an example of this new language, and that it offers a glimpse of what a system of Progressive healthcare rationing will look like.

Why Big Health Insurance Supported Obamacare, Part III

Podcast:

As we have seen, the fact that the health insurance industry was going to support healthcare reform after the 2008 elections was a foregone conclusion.  The question was: How would the insurance industry support healthcare reform?

When the time came, the support the insurance industry gave to President Obama’s efforts to reform healthcare followed four simple rules:

1) Do not actively oppose Obamacare. In stark contrast to its behavior during the Clinton’s effort to reform healthcare in 1993-94, this time the insurance industry never engaged its vast public relations resources to stifle healthcare reform.  There was no Harry and Louise this time. (Actually, Harry and Louise – the original actors – did make a brief appearance, but now, like the insurance industry itself, they were older, wiser, and sadder, and this time they fully supported the proposed reforms.)

2) Submit quietly to demonization.  A key strategy of the Democrats in passing Obamacare was to remind Americans repeatedly that the for-profit health insurance industry is fundamentally evil.  This strategy was based on the time-honored precept that it is easier to get the unwashed masses to cooperate through hatred than through reason, and so, to gain their cooperation, one must give them something to hate. Obviously, this strategy meant that the health insurance industry had to accept its role as the bad guys in the reform debates without complaint, and without engaging in any serious self-defense.

3) Offer subdued public support to Obamacare. The AHIP (America’s Health Insurance Plans) issued public statements that cautiously supported President Obama’s healthcare reforms. But its support had to remain subdued and tepid, since Satan can’t be seen leading the hymns.

4) Whenever necessary, rise up and demonstrate to the world just how evil you really are. At the end of the day, this was the most important role the insurance industry played in advancing Obamacare. It was certainly their most active role.

It was not a difficult role to fill. Since 1994 the health insurers had engaged in the sorts of truly evil, inhumane, and reprehensible practices that are naturally engendered by covert healthcare rationing, and that harmed or killed many of their subscribers. The only difficult part was choosing which reprehensible behaviors to feature, and when to do it.

In at least two key moments during the fight over healthcare reform – June, 2009 and February, 2010 – when the proponents of reform felt their momentum lagging, the insurance industry intervened with gratuitous behaviors whose chief function was to remind Americans just how unremittingly wicked and inhumane they really are. In the second case, at least arguably, the insurance industry turned the reform effort from apparent defeat to almost certain victory. Indeed, it is not too much of an exaggeration to assert that, in the end, the health insurance industry saved Obamacare.

June, 2009: Say Hello To My Little Friend

The debate over Obamacare entered a new phase in May and June of 2009.  It was during those months that the opposition to healthcare reform found its voice, and it began to seem as if perhaps the Obama steamroller could really be slowed, if not stopped. People were even beginning to say that many Democrats in Congress, after getting an earful from their constituents when they held their summer town hall meetings, would abandon any idea of supporting President Obama’s healthcare reforms.

Supporters of Obamacare decided it was time to invoke the demons.  So in mid-June, the House Subcommittee on Oversight and Investigations called three health insurers to testify on the practice of rescission, and to face not only indignant Congresspersons, but also some of the people who had been personally harmed by their practices.

“Rescission” is when an insurance company voids subscriber’s health insurance (after happily accepting premiums from that subscriber, often for many years) once they get sick. Under some circumstances, rescission might be justifiable. It is legal and proper to cancel a policy if the subscriber is found to have purposely lied on the insurance application about a prior illness that is material to the current illness.

But health insurance companies for years have actively and aggressively practiced rescission on subscribers whose insurance applications contained inadvertent and non-material inaccuracies.  (Just to put it in perspective, this kind of bad behavior is to be expected under a system of covert healthcare rationing, which again, is rationing by whatever means you can get away with.)

Furthermore, the health insurance industry does not merely engage in occasional unfair rescission practices; it has industrialized the process. It employs health insurance detectives whose job is to comb the prior medical records of subscribers who are newly diagnosed with certain, expensive medical conditions, looking for even trivial discrepancies on insurance applications, which they can inflate to “fraudulent” omissions, thus voiding the policy. These health insurance detectives are paid by commission, according to how much money their efforts can save the company. Many of them find it a very lucrative career.

So, at the cost of perpetrating a bit of inhumanity, rescission can save insurance companies a lot of money.

Consider some of the individuals who testified in Congress along with the insurance companies that day

• A nurse in Texas had her insurance canceled after she was diagnosed with breast cancer because she had failed to reveal that, years before, she had consulted a dermatologist about acne.
• A man (whose surviving sister had to testify) had his insurance canceled before he could begin expensive cancer therapy, because he had not revealed (and indeed he had not known) that a prior CT scan had showed gallstones and an aneurysm – conditions unrelated to his cancer.
• A woman had her insurance canceled – and due to the rescission could not find replacement insurance – because she failed to reveal that, at one time, she had been on medication for irregular menstruation.

During the hearing, the three health insurance executives were caused to listen to these and other incredible stories describing some of the inexcusable pain, suffering and death their unfair rescission practices had caused, and then were forced to listen to withering commentary by stunned Republicans and Democrats on the Subcommittee, whose own investigation had found that the three companies on the docket had retrospectively canceled the policies of 20,000 sick subscribers over the past 5 years.

After these heart-rending testimonies and the blistering attacks from extremely angry congresspersons, the executives were challenged by Chairman Stupak (D-Michigan) to now commit to discontinuing the practice of rescission unless intentional fraud could be shown.

All three replied, in turn, “No.”

Such a reply, in such a setting, almost defies belief. The only possible explanation, in fact, is that the insurance industry was stepping up to the plate, and embracing its assigned role as the Evil One in the great healthcare debate.

Even the most stone-hearted insurance executive can see that canceling the health insurance of a newly-diagnosed cancer patient, because she’d forgotten she’d required acne medicine before the prom 20 years ago, is just a bit unfair. But how did these three executives react? They did not attempt to deny such reprehensible behavior, or to explain it, or to defend it.  They were simply defiant about it.

One is put in mind of Tony “Scarface” Montana, bereft of friends, family, allies and bodyguards (albeit because of his own actions), hopelessly surrounded by an army of heavily-armed assassins, screaming, “Say hello to my little friend!” then launching defiantly into a wild, bloody and spectacular suicide.

One cannot for a moment believe that that Richard A. Collins, chief executive of UnitedHealth’s Golden Rule Insurance Co., Don Hamm, chief executive of Assurant Health, and Brian Sassi, president of consumer business for WellPoint Inc., would have been stupid enough to publicly defy Congress over such an indefensible practice, if doing so was against their own long-term interests.  Appearances to the contrary notwithstanding, they were not auditioning for a remake of Scarface.

This is not how an industry behaves which wants to court the goodwill of Congress at a critical juncture in its life cycle. This is not the strategy of an industry that wants Congress to defy its own party’s President and defeat healthcare reform, or that is begging Congress to give them another chance to figure out how to bring healthcare costs into check. This is not the behavior of any industry that wants to elicit any sort of favorable action from Congress. Indeed, these executives would have seemed more sympathetic and deserving if they had proposed instead to place live puppies on a spit and roast them over an open fire during half-time at the Super Bowl.

There is only one explanation for their astounding public defiance on this matter. Which is, it must have suited their long-term interests.

Recall that at the time of this remarkable hearing, there was growing skepticism about President Obama’s healthcare reform efforts, not only on the part of Republicans, but also on the part of a critical minority of Democrats in Congress. And for the first time since the election, there was some question about whether his reform plan would succeed in gaining sufficient support.

What must the health insurance industry do in the face of this faltering support for its desperate end-game? It must act to bolster Obamacare.

In this light the stark, defiant, public “no” uttered by the three insurance executives makes sense. “Look at us,” they were saying, “See how evil we are! We are utterly devoid of human decency, ethical obligations, or a sense of fair play. If we behave this defiantly when we are in the position of mere supplicants to your eminences, just think how we will behave if you fail to rein us in with new reforms!  Abandon all hope, those of you who rely on us for your healthcare, and behold the congressional dogs that placed us in this position of power over your very lives!”

Given the headwinds the healthcare reform effort was to face during the next nine months, it is difficult to say with any certainty how much good the insurance industry did in June, 2009, when it took such an extraordinary step to remind Americans just how incredibly evil it is. But when the time came to help boost the President’s reform efforts, nobody can deny that the insurance industry stepped up and did its duty.

February, 2010: Raising Obamacare From The Dead

Things looked especially bleak for healthcare reform in early February of 2010.  The incredible, possibly Constitution-defying, machinations Congress employed in its desperate attempt to pass healthcare reform had disgusted a majority of Americans, and momentum was clearly shifting to the opponents of Obamacare. And when Republican Scott Brown incredibly won the Senate seat in Massachusetts, robbing the Democrats of their crucial, filibuster-blocking 60th vote, many thought healthcare reform was dead.

But then out of nowhere, in early February, Wellpoint’s California subsidiary, Anthem Blue Cross, announced it was raising its already-astronomical health insurance premiums by as much as 39%, a move that promised to greatly increase the number of Californians who are uninsured.

The demoralized Democrats in the administration greedily capitalized on this new opportunity.

Kathleen Sebelius immediately fired off a very public letter to the company, demanding that they justify this unconscionable rate increase. And Wellpoint, lustily assuming its assigned role as villain, was delighted to reply, equally publicly.

We’re in a recession, Wellpoint brazenly asserted, and in a recession, like it or not, people exercise their prerogative to drop their health insurance. The only people who don’t drop their health insurance are the sick people, or those who are likely to become sick, which means that our cost per subscriber goes way up. So naturally, we have to increase premiums. By a lot. It’s just business. That’s just the nature of our current, unreformed healthcare system. So choke on it.

Wellpoint was also kind enough to mention (for anyone dense enough to have missed the point) that the need for higher insurance premiums would be nicely mitigated if everybody was mandated by the government to purchase health insurance.

Wellpoint’s anounced premium increase immediately triggered great volumes of delighted outrage by thankful Democrats, who desperately needed a large dose of “evil insurance company” at just that time. Wellpoint’s action reignited the proponents of healthcare reform, who were inspired to remind all Americans that this is what would happen to everyone if healthcare reform failed, and the greedy insurance companies had their way.

Stunned Republicans, seeing their impending victory over Obamacare evaporating before their eyes, could only issue a few lame and uncomfortable attempts to diminish the significance of Wellpoint’s unfortunate action.  But to little avail. The momentum had shifted. At least arguably, it was Wellpoint’s decision to announce an unconscionable rate increase at this extremely critical juncture that put healthcare reform back on the road to adoption.

From a pure business standpoint, there was no good reason for Wellpoint to stir the soup at that moment. Wellpoint is the most financially sound private health insurance company. While its California subsidiary did lose money in 2009, overall the company performed quite well, and reported a very nice profit growth for the year. And with several of its competitors in trouble, Wellpoint stood to do comparatively well for the foreseeable future.

Furthermore, it has since been learned that Wellpoint’s math was bad. An independent actuary working for the California Department of Insurance reported on May 5, 2010 that the company had made “numerous errors” in calculating is rate increases, and further, that Wellpoint could cut its rate hikes substantially, and still meet its required 70% medical-loss ratio threshold.

It stands to reason that if Wellpoint really wanted healthcare reform to go away, they would have first checked their math before announcing seismic rate increases, and then, if such astounding rate increases were really needed, they would have waited a few months – while Obamacare died – before announcing their rate hike.

The last thing they would have done is to throw the reformers a critical lifeline just as they were going under for the last time.

In any case Wellpoint’s action, especially at that moment, seems entirely gratuitous. Wellpoint could only have chosen to do its demon dance, at such an inopportune moment, in order to revive Obamacare during its darkest hour.

And that’s precisely what happened.

In the final post in this series of articles, we will take a look at the implications of the insurance industry’s support of Obamacare, as we who find Obamacare less than desirable contemplate what we ought to do about it.
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Why Big Health Insurance Supported Obamacare

Part I – Another Reason He Should Have Kept the Bust

Part II – Why the Health Insurance Industry Supported Obamacare

Part IV – What It Means That the Health Insurance Industry Saved Obamacare
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Now, read the whole story.

DrRich explains it all in, Fixing American Healthcare – Wonkonians, Gekkonians and the Grand Unification Theory of Healthcare.

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