DrRich has long argued that a non-negotiable necessity of Obamacare will be to gain complete control over the behavior of American physicians. Most of the important medical decisions which doctors make – the ones that cost the government the most money – will be forcibly centralized. That is, panels of experts will determine which services are to be delivered to which patients under which circumstances, and doctors who fail to follow the experts’ dictates, in all their particulars, will be prosecuted as criminals.

This is more than just a matter of cost management. Placing control of most important decisions into the hands of sanctioned experts is a central tenet of the Progressive program. Centralizing decisionmaking – rather than leaving it in the hands of individuals, who will always operate for their own selfish benefit rather than for the benefit of the collective – is the principle mechanism by which the Progresive program (i.e., achieving the perfect society) is to be realized.

In recent years, growing numbers of doctors who recognize that their independence is quickly being taken away, and that the principle ethical precept of their profession (i.e., to always act for the benefit of their individual patient) is quickly being converted into a mortal sin, and that their own professional organizations are acquiescing with these changes, are realizing that the only way left open for them to retain some of their professional autonomy and professional integrity is to opt out of the system altogether, and begin contracting directly with their patients for medical services.

While the trend for doctors to opt out has not yet become widespread enough to have reached the consciousness of the broad public, it has certainly grabbed the attention of our Progressive leaders. For autonomous physicians pose the greatest possible threat to Obamacare, or to any Progressive healthcare system. And Progressives simply cannot abide these physicians who establish direct-pay practices.

So it has never been a question to DrRich whether our Progressive leaders will act to stop direct-pay medical practices. The only question has been how they will do it.

Over the past couple of months, DrRich has developed a theory about this. He hopes his theory is wrong, but he fears it is not.

DrRich believes that the medical profession is about to become nationalized, and doctors will become government employees, just like the airport security screeners. Furthermore, the mechanism by which they will become nationalized is the very same mechanism by which the airport security screeners were nationalized into the TSA, an event which occurred, DrRich reminds his readers, with barely a peep of protest from American conservatives, or anybody else. That is, it occurred precipitously, out of dire necessity, due to a grave national crisis that seemed to leave us little other choice.

DrRich believes the outline of the crisis that will justify the nationalization of the medical profession is becoming discernible. He believes the crisis will be precipitated by a provision of Obamacare that, for most observers, has just come to light.

On August 10 Medicare announced that, by March 23, 2013, most American physicians – at least 750,000 of them – will have to recertify their Medicare credentials. Now, for most Americans this prospect does not sound too odious. But be assured that it is.

The Medicare certification process is always a bureaucratic nightmare, and the nightmare will be greatly magnified when three-quarters of a million doctors are recertifying nearly at the same time.

All doctors have gone through Medicare certification at least once, and many have done it more than once. Because several common activities – such as changing your address – trigger the need to recertify with Medicare, doctors go through this process on an average of every decade or so. And most dread the experience.

Certifying requires filling out a 60-page form, a form which is absolutely masterful in combining obtuseness, opacity and redundancy, and then submitting it, along with all sorts of additional documentation, to one of several Medicare administrative contractors. These contractors are famous for their incompetence, their indifference, and their glacial bureaucratic pace. DrRich has experienced the ordeal himself, and knows countless doctors who have as well. The experience is nearly universally painful and expensive.

It is very common – possibly the rule – for submitted applications to be “lost,” at least once. (Officially, of course, the doctor never sent them in.) This event is so routine that doctors know to check with the contractor to confirm that their paperwork has been received. But the contractors have caught on to this gambit, and now refuse to reply to such queries for some specified period, usually for 30 days (at which time, it often turns out, the paperwork has disappeared into the ether). When the doctor finally gets to the point where the contractors will admit to having the documentation, there is another prolonged period of enforced silence, while the contractors painstakingly comb through the documents for misplaced commas, “X’s” typed over the line, or any other trivial excuse for discarding the application and notifying the physician (often, 2 or 3 months after originally submitting it), that they must begin the whole process again, and submit new forms. It is common for the entire process of recertification to take 3, 6 or even 12 months.

And the best part is, during the time the documentation is being reviewed, the physician cannot bill Medicare for any services. So during the recertification process the physician must either stop seeing Medicare patients, or continue seeing them without hope of payment. It is standard to lose at least a month – and very often more – of Medicare income during the recertification procedure.

These cost savings, of course, are why Medicare demands recertification every time you change your address, or add a partner, or sneeze. And this is why a slow, bureaucratic, demeaning recertification process is not only perfectly OK with the “system,” but is lovingly nurtured.

That, DrRich reminds you, is what happens during the typical recertification. The en masse recertification mandated by Obamacare, when 750,000 physicians will be going through this process at the same time, promises to become much, much worse. Doctors certainly believe it will be much worse.

“Tough luck for you doctors,” many loyal readers are now saying, “but what’s that got to do with the TSA-ification of American physicians?”

There are many thousands of PCPs today who are strongly considering opting out of Medicare, or who would like to opt out but they are afraid to take the chance. That is, they’re on the fence.  There are many thousands more who are hoping to retire within several years, and are hanging on almost on a year-by-year basis, waiting either to meet their target retirement funding, or until things get so bad that they just can’t do it any more.

DrRich thinks that a great many of these on-the-fence physicians will be tipped by the prospect of having to recertify for Medicare, especially under circumstances in which the process of recertification promises to be much worse than even the usual stomach-turning process.  If a doctor is thinking about getting out anyway, and now faces the prospect of losing (most likely) several months or possibly a year of Medicare income, then he or she is much more likely to just do it.

If this doesn’t do the trick, then add to it the fact that Medicare reimbursements to all providers are likely to be reduced by something like 25%, when the pre-deadlocked Congressional Super Committee* fails to agree on the necessary budget cuts later this year.  And last Thursday night, when the President announced that the Super Committee will have to find $2 trillion instead of only $1.5 trillion in budget cuts by Thanksgiving (in order to pay for his Jobs! Jobs! Jobs! bill), the likelihood that doctors will take a 25% cut in pay increased even more.

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*The Super Committee is pre-deadlocked because: a) the Republicans audaciously appointed at least one Tea Party supporter to the committee; b) the Democrat leadership (specifically, the Vice President) has identified the Tea Party as terrorists, a designation they have never been willing to assign to any other group, for instance, to Islamic extremists; and c) it is well known that one does not negotiate with terrorists.

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DrRich thinks the Progressives, whether by design or by blind luck, are now precipitating a crisis in healthcare. They are giving American doctors a huge incentive – probably two huge incentives – to opt out of Medicare all at once (instead of opting out gradually, as they are doing today).

If this occurs, the shortage of doctors who accept Medicare will become a hyper-acute problem. Panic will take hold.  The media will decry the crisis, running heart-rending stories about old people dying in their homes because they cannot get an appointment with a doctor, and blaming it all on the abiding greed of physicians (who, after all, probably still owe the government for their education, and hold their professional licences at the pleasure of the state). Medicare beneficiaries will flood their congresspersons’ offices with emails, letters, and their very bodies, demanding immediate action.

The autonomy of physicians may be OK in theory. Classic medical ethics might be a nice idea – a nice-to-have – if you can afford it. The doctors who “opted out” might actually be standing on principle, instead of on greed. But little matter. However you cut it we’ve got a real crisis here. The public’s right to healthcare is being violated. People are dying. The very security of the country is in jeopardy.

Not even conservatives will be able to withstand the tide of public opinion. Something will have to be done to compel doctors to provide that which they owe the public. In the war on illness, doctors need to be good soldiers. So like real soldiers, if they fail to volunteer for duty in sufficient numbers they will need to be drafted – and like soldiers they will need to work for, and receive their orders from, the government.

The politicians will be sorry about this. Nobody wanted it this way, they will say.  A little less greed, a little more compassion, and we could have avoided this. The doctors brought it on themselves, and have nobody to blame but themselves. The welfare of the public must take precedence.

Anyway, that’s DrRich’s theory. With luck, he is wrong. (Perhaps, for instance, many fewer physicians than DrRich thinks are on the fence about opting out.) But if he’s wrong, he’s more likely wrong about what, specifically, will precipitate the crisis that will finally justify taking away what remains of doctors’ autonomy, than he is about the general outline of what the end-game for American doctors will look like.

Progressivism often “progresses” toward its goal not gradually, but in major, discrete leaps – and it usually does so as the result of some “crisis” that causes the people to go along with changes they would never otherwise agree to. Which is why, if you’re a Progressive, a good crisis never goes to waste.

And the requisite “good crisis,” more often than one might think, turns out to be something you can goose along, just when you need it.

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.

Part 1 of Limiting Individual Prerogatives

Part 2 of Limiting Individual Prerogatives

Part 3 of Limiting Individual Prerogatives
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DrRich could go on and on about how our government is intent on restricting the right of individuals to spend their own money on their own healthcare, but (for now, at least) this will be the final post in this series. DrRich has made his point.

Even some of his critics, who have accused DrRich in the past of being overly paranoid on this topic, seem to have gotten it. Some who previously were quite vocal have remained suspiciously silent. Others have fallen back to quasi ad hominem accusations (suggesting, for instance, that DrRich must be a follower of Mr. Beck, with all the horrific connotations that condition entails). And then there is the esteemed Praveen (author of the excellent True Cost Blog), who conceded as follows: “Massachusetts’ attempt to ban direct pay is both unfortunate and unconstitutional. Perhaps you’re right, and the bureaucrats are sneakier than I think.”

So maybe DrRich should just declare victory and move on.

But it is important to make one final point, namely: the notion that our government is intent on limiting our individual healthcare prerogatives is far more than just one of DrRich’s theoretical constructs. Indeed, our government has been acting on this intent for over 15 years. The main case in point, of course, is Medicare.

It has always been recognized that every American citizen “is the proper guardian of his own health,” (Supreme Court Justice Joseph Story, 1873), and accordingly, has a natural right to employ his own individual resources to that end. Roe v. Wade, for instance, was a particularly explicit recognition that a woman has a fundamental right to purchase medical services which she determines to be necessary for her own well-being.

Indeed, when Medicare became law in 1965, Congress also explicitly recognized this right, stipulating that nothing in the new law “shall be construed to preclude [an individual] from purchasing or otherwise securing protection against the cost of any health services.” (DrRich reminds his readers once again that a bold, restrictive statement like this, appearing in legislation, generally heralds an outcome opposite to the statement itself.)

DrRich has already pointed out that under Hillarycare, private medical practice would have been nearly criminalized out of existence. So one ought to expect that the Clinton administration would view an individual right to purchase healthcare as a threat. And indeed, it did. But, as it happens, the erosion of the rights of Medicare “beneficiaries” began even before the Clinton administration. (And even again, DrRich must remind his readers that any universal healthcare plan, even under a Republican administration, will always tend to limit individual liberties.)

In 1991, Medicare administrators published a “carrier bulletin” warning physicians that direct-pay contracts between patients and doctors were strictly prohibited, unless the contract was initiated solely by the patient, and even then, payment rates must be set by Medicare, and further, if the patient later became dissatisfied with that (patient-initiated) contract, Medicare would severely (and retroactively) sanction the physician.

When physicians sued Medicare to prevent this odious new policy from being implemented (Stewart et al. v. Sullivan), the government took the position that it had, in fact, not made any new policy after all, arguing that stuff that shows up in its “carrier bulletin” doesn’t really count. But once this argument was successful in having the lawsuit thrown out in a summary judgment in 1992, Medicare then cynically turned around and immediately made that selfsame new policy “official,” by publishing it in their 1993 Medicare Carrier’s Manual.

But the Feds were still not satisfied. The new, restrictive policy technically still allowed private-pay contracts, as long as the patient initiated them. So the Clinton administration engineered an amendment to the Balanced Budget Act of 1997 – Section 4507 – which prohibited any self-pay contracts whatsoever between Medicare patients and their doctors for medical services which are covered under Medicare. Under Section 4507, which is still the law today, if a doctor provides even one self-pay medical service to a single Medicare patient, that doctor is punished by complete banishment from the Medicare program for at least two years.

The federal government was eventually challenged again in court over Section 4507, but that lawsuit was also thrown out in a summary judgment. The rationale the government offered to the court in justifying its restrictions on individuals’ prerogatives, however, is instructive: “…what you will have is a system whereby the rich can buy what they want and those many beneficiaries who are on fixed income will not be able to afford those services” (United Seniors Association et al. v. Shalala). So again, the interest of the collective (“social justice”) was invoked to justify a law which stifles an individual’s fundamental right to purchase medical services he or she determines to be necessary for his/her well-being.

In any case, since 1997 Medicare patients have been able to purchase Medicare-covered services for themselves ONLY if they obtain that service from a doctor who agrees to opt out of Medicare entirely. This severely limits a patient’s opportunity to self-pay for covered services. The fact that Medicare patients can still buy these medical services from direct-pay physicians, however, is one reason the government hates direct-pay practices, and wishes to stamp them out. More importantly, while some primary care physicians have indeed opted out of Medicare in order to establish direct-pay practices, this path is not a realistic option for medical specialists. So in practical terms, the only “covered services” available for self-pay by Medicare patients, on even a limited basis, are primary care services.

There are several legitimate reasons a Medicare patient might want to self-pay for a medical service that is covered by Medicare. If Medicare “covers” heart valve surgery, for instance, a patient might want to pay for a new, minimally-invasive surgical approach that is inadequately reimbursed by Medicare, rather than the big, open-heart surgery that Medicare reimburses fully. Or, one might want to self-pay for “covered” psychiatric care, or for treatment for a venereal disease, in order to keep embarrassing or harmful medical records out of government-controlled databases.

Furthermore, it is important to recognize that just because a healthcare service is “Medicare-covered” does not mean that it will be covered for a given patient. Whether a specific individual is covered is often determined by a “medical necessity” ruling, made by a bureaucrat. Section 4507 essentially precludes a patient’s ability to purchase a denied (but “covered”) medical service, no matter how badly they want it, or believe they need it.

One can argue, and with some merit, that at this juncture denials of medically necessary services by Medicare have been relatively judicious, and therefore that the “Section 4507 rule” has not had much of an actual impact. In fact, it is likely that most Medicare beneficiaries do not even know that this rule exists.

But while its impact might be relatively small so far, the Section 4507 rule has now been in place for 13 years – it is well-established. So, once Medicare begins reducing reimbursements to physicians and hospitals, to the point where they can no longer afford to offer certain services to Medicare patients (and Medicare has just recently begun doing so, specifically, for some cardiac imaging studies), those patients will be left in the cold. Services which are officially “covered” by Medicare, but which are reimbursed at such a low rate that they cannot actually be provided to them, will become unavailable even to Medicare patients who are willing and able to pay for those services.

DrRich’s main point, once again, is that our government has a deep and abiding need to limit our individual prerogatives when it comes to our healthcare, and has been acting on that need for a long time. The principle for these limitations on our individual liberties, the principle of social justice, has already been established, and has survived court challenges.

Extending these limitations on personal liberties to Obamacare, and broadening their usage, will not require any major changes in direction, or principles, or policy, but will merely require an expansion of already existent – and even “venerable” – rules, rules which have been an established part of Medicare for many years.

DrRich has expressed the idea that such restrictions by our government on such fundamental individual liberties are a very big deal indeed, and, in fact, signal an end to the Great American Experiment. His critics admonish him, however, that he makes too much of it, that, presumably, our government in its benign wisdom is just doing what’s best for us.

DrRich begs his readers to forgive him if he sees, in such a reply, even more evidence that the only nation in the history of mankind to be founded on the principles of individual freedom is well on the way to abandoning those exceptional principles, for the sake of the same, soothing-but-empty blandishments that have been offered, throughout human history, by well-meaning people who end up producing – or becoming – tyrants.