Podcast:

The Occupy Movement, The Tea Party, and Healthcare [ 11:24 ] Play Now | Play in Popup | Download (72)

Some of DrRich’s conservative friends become quite exercised when they hear news commentators in the major media favorably contrasting the Occupy Wall Street movement with the Tea Party.

The Tea Party, the news readers intone, is a phony “movement” dreamed up by the Koch brothers to embarrass our first black president and to consolidate their own wealth, for which they recruited hordes of superstitious, back-woods, gun-toting, ignorant, NASCAR-loving, Bible-thumping, bigoted Ma and Pa Kettles to gather on the Mall, along with their Fox News cheerleaders and their country music stars, in a futile attempt to intimidate the enlightened leaders of the Democratic party into abandoning their program of good works. The Occupy Movement, in contrast, is a spontaneous uprising of innocent and right-thinking citizens against the tyranny of the Republican-controlled Wall Street fat-cat oligarchy, and their noble efforts have been explicitly blessed by such luminaries as Obama, Biden, and Pelosi.

Conservative Americans have a different perspective: The Tea Party was a completely spontaneous expression of public disapproval of a federal government run amok, and its gatherings are notable for its respectful, clean, polite, hard-working, law-abiding participants. The Occupy Movement, in contrast, is a contrived, Soros-funded attempt to undermine the American system, and, as one might expect from such a travesty, the Occupadoes are filthy, lawless, selfish, lazy and unappreciative of the blessings of America, which they themselves (judging from their smartphones and college degrees) have demonstrably received.

What conservatives and progressives seem to agree upon, in the matter of the Tea Party vs. the Occupy Movement, is that one is disruptive and disreputable, while the other is enlightened and constructive. They simply differ on is which is which.

For the benefit of his readers, DrRich would like to point out that, despite the foregoing, the Tea Party and Occupy Wall Street actually have a fundamental similarity between them. They are both middle class movements which are motivated by a conviction that the American system is moving in the wrong direction, that a major feature of that “wrong direction” is that an elite few have gained power that has enabled them to block the upward mobility that is supposed to be a part of the American compact, and that a fundamental change is in order. The solutions they advocate are very different from one another, of course, but their problem statements are very similar. And, most significantly, they both arise from the middle class.

At least since around 1500 AD (since the time when we can say that a middle class was present in most Western societies) the true revolutions – rapid, fundamental changes in the political system (not merely in who is leading the political system, but in the system itself) – have come to pass only when the middle class has finally become sufficiently aroused to demand (or at least tolerate) radical change. The American revolution, the French revolution, the Cromwell revolution (and the subsequent restoration), the Iranian revolution, the Nazi takeover of Germany, the fall of the USSR, various Mexican and South American revolutions, and virtually every revolutionary political upheaval one can think of in the last 500 years occurred only when the middle class had finally had it.

Political leaders instinctively understand that they can treat the poor and downtrodden as badly as they want to, and they will never rise up. (This is where John Brown got it wrong.) And so, from the political standpoint, while it might be worthwhile stirring up the emotions of the poor (at least in a democracy), in general the actual needs of the poor can be safely ignored.

But the needs of the middle class must be seen to, at all costs.

This is why Democrats (and their supporters in the media) were so unreasonably critical of the Tea party movement when it first presented itself, painting it as violent, unAmerican and racist, despite the fact that no objective evidence supported any of these charges. They were frightened nearly unto death by the implications of such a widespread middle-class expression of dissatisfaction with the direction the country is going – a direction that had been manifest for decades, but which was greatly accelerated during the first years of the Obama Presidency.

And it explains why Republicans were so quick to identify with the Tea Party (even though the mainstream Republican party is actually quite suspicious of it).

And so, when the Occupy movement finally appeared – a different middle-class movement sporting a redistributive agenda that is in line with major elements of the Democratic party – our Democrat leaders could not contain their delight. This, despite the rather odious and “non-traditional” behavior of the Occupadoes, including their public defecation, urination, fornication, rapine, drug use, property destruction, &c, that, in more normal times, would have politicians of both parties lining up to vilify them. Democrats reassure themselves that, while the Occupadoes might be dirtbags, if we play our cards right they can become OUR dirtbags.

Smart politicians in both political parties recognize the potential for real revolution in both of these movements – to reiterate, that both arise out of the middle class, and both are demanding fundamental change – and they understand the need to co-opt the one, and suppress the other.

And so the battle lines are drawn. The Tea Party agenda, which is often unfairly summarized in diminished form as “smaller government and lower taxes,” actually is fighting to restore the Great American Experiment, as articulated in the Declaration of Independence and the Constitution, whereby the autonomy of the individual is paramount. Under the GAE, the chief job of the government is to protect the citizenry from foreign aggressors, to grease the skids of a free economy, and to allow free Americans to strive as they will, and in doing so, the government may utilize only its very few, explicitly enumerated powers, and otherwise must stay out of the way.

In contrast, the agenda of the Occupy Movement is a levelling one. The fruits of America should be distributed equitably, so that there are no longer haves and have nots. Obviously, the only entity that can accomplish this feat is a strong, all-powerful Central Authority, which can confiscate the property of the “greedy” and award it to the “deserving.” Fundamentally this means that all property, in fact, is the government’s. To the Occupy supporters, while few of them will come out and say so, the Constitution is not a sacred document, but rather is an unfortunate and obsolete impediment to progress, a document that must be undermined and replaced.

To brush off either of these movements would be a mistake. Each of them is firmly grounded in the middle class; each of them discern a fundamental problem with the American system that can no longer be ignored; and each of them have already taken to the streets demanding that solutions cannot wait, and that action must be taken now.

But the two solutions being demanded by these two movements are not merely different; they are polar opposites, and are deeply irreconcilable.

Our political leaders have likewise taken sides, and the sides being irreconcilable, we can expect no cooperation or compromise between their two camps, at least not until we have another election in which the great, seething, conflicted middle class has an opportunity to say which of the two movements they have now spawned actually holds the key to their hearts.

This is a blog about the American healthcare system, and DrRich has not been bashful about expressing his belief that Obamacare – whatever good elements it may contain – is fundamentally a vehicle for undermining the autonomy of individual Americans, and handing to the government the authority to determine who in this country will get what, when and how. Until the last few months DrRich viewed the fight over Obamacare as the proxy fight for the real, underlying, fundamental question – the question of what kind of country we will be from now on.

But between the Tea Party and the Occupy Movement, DrRich has come to believe we no longer need a proxy. It looks more and more like we will have this fight out in the open, and instead of settling it with the kind of sneaky legislative legerdemain that brought us Obamacare, perhaps it will be decided by an actual election.

But whether it is decided by an election, a coup, or an exhausted capitulation, the fate of American healthcare – and everything else American – will ride on which of these two movements eventually predominates within the middle class.

Podcast:

Regarding Taxpayer Support of the Evil Drug Companies [ 14:14 ] Play Now | Play in Popup | Download (86)

A key goal of the Central Authority, as it contemplates how best to run our healthcare system, is to do whatever it can to stifle medical progress. Medical progress usually means introducing new drugs or new medical devices, which are often very expensive in themselves, and worse, which often threaten to improve the survival of some category of patients with chronic disease. So typically, medical progress greatly multiplies the costs of healthcare, and all the Central Authority gets in return is more chronically ill people to contend with. For this reason, suppressing medical progress is a critical aspect of covert healthcare rationing.

It goes without saying that a major tactic in achieving this goal is to demonize the drug companies. If the pharmaceutical industry can be made out to be sufficiently evil, corrupt, greedy, and callous to the needs of the people, then it will become the duty of our leaders to constrain them, and in so doing, to limit their ability to develop and introduce new products. This is easily done by adding daunting new regulations, or by piling on oppressive new taxes, or by legislating “windfall profits” penalties, or by using the threat of the regulatory speed trap to threaten them with massive fines or imprisonment. It is indeed fortunate for the Central Authority that the drug companies are, in fact, not the most fastidious members of the corporate community, and that their actions and methods often suggest many fruitful avenues for demonization.

One such avenue that is particularly fruitful, since it recruits the public squarely into the camp of the prosecutorial horde, is to show how the corrupt pharmaceutical industry feeds at the trough of the American taxpayer.

A few years ago, to specifically document this sort of reprehensible behavior, the New York Times pointed us to the case of Dr. Laszlo Bito and the anti-glaucoma drug Xalatan.

In the early 1980s Dr. Bito, a researcher at Columbia University, made a key discovery about a new class of substances that could potentially treat glaucoma. His research was funded with American tax dollars through the National Institutes of Health.

Subsequently, the pharmaceutical giant Pharmacia purchased the rights to Bito’s discovery for a mere $150,000. Based on Bito’s tax-supported work, eventually Pharmacia released the anti-glaucoma eyedrop preparation Xalatan. Xalatan rapidly became a worldwide best-seller, yielding as much as $500 million in sales per year. For their part in this unalloyed success story, Columbia University has netted over $20 million in licensing fees and royalties, and Bito himself became a millionaire.

Meanwhile American glaucoma sufferers are forced to spend upwards of $50 every six weeks for a tiny vial of the drug, which costs the company only a small fraction of that amount to produce, and whose discovery the glaucoma sufferers paid for with their own tax dollars. And, as if to guild this already brazen injustice, Pharmacia makes Xalatan available in Canada, France, and most other countries around the world (where taxpayers decidedly did not support the discovery of the drug), for less than half what American patients pay for it.

It seems, the Times points out, that the American taxpayers are the only parties in this little scheme who reap no financial return on their investment. All they got were some expensive eyedrops.

And so, drug-company demonizers would have us conclude, this is a particularly egregious example of how the evil pharmaceutical industry is ripping us off. Not only are the drug companies mercilessly profiteering from sick Americans (which indeed is their openly-admitted business model), but they are also picking the pocket of every American by using our tax dollars to invent new drugs, then selling those drugs back to us at exorbitant prices. This, one could reasonably argue, is at least as sociopathic as anything the tobacco companies ever did. (The tobacco companies, in contrast, at least had the good graces to eventually stop claiming that their products were beneficial to one’s health.)

And (we in the great unwashed are all supposed to agree), if this reprehensible behavior doesn’t give our government the right to control the prices charged by drug companies, one would be hard pressed to say what does.

DrRich certainly doesn’t want to absolve the pharmaceutical industry of all responsibility for drug prices that seem obviously too high, or for the striking disparities we see in the prices they charge for their drugs between the U.S. and other countries. He has read the complex justifications, published by apologists for the pharmaceutical industry, as to why drugs in Canada cost so much less than in the U.S., and why a tablet whose actual manufacturing cost is five cents is sold to our elderly sick for five dollars. DrRich thinks that, despite all the pretty explanations the pharmaceutical industry gives for these “seeming disparities,” drug companies simply do what every other industry does – they charge the highest price the market will bear, for each market in which they participate. If they didn’t do this, they would be abrogating their fiduciary responsibilities to their shareholders.

There is much not to like about high drug prices, or the fact that people in other countries reap the benefits of American research for far lower prices than Americans do. And it is reasonable for us to seek to address these pricing issues. But as we address certain inequities in drug pricing, we should be careful that in doing so we don’t throw the baby out with the bath water. So if we’re going to alter the arrangement we have with the pharmaceutical industry, let’s be clear on how that arrangement works, and why we set it up in the first place to operate as it now does.

Consider once again the glaucoma drug Xalatan, and consider how Dr. Bito’s discovery was actually used by Pharmacia.

Bito did not discover a finished product. Instead he discovered a new concept for reducing intraocular pressure (that is, for treating glaucoma), and demonstrated that it could be effective – but the specific compound he discovered was not marketable. In fact, it was so highly irritating when applied to the eye that it was simply not suitable for human use. (DrRich does not understand why the drug companies are the evil players in this story, when Columbia University so obviously allowed research to proceed in their facilities in which irritating substances were intentionally placed into the eyes of bunnies or other cute animals.) Indeed, Bito’s new compound was so impressively unusable that, before Pharmacia bought the rights, his discovery had been offered to and rejected by a host of other drug companies as being completely infeasible.

So when Pharmacia finally agreed to pay for the rights to Bito’s patent, they took on an expensive risk that, some estimated, had less than a 5% chance of achieving success. Pharmacia assumed the difficult task of developing a brand new synthetic molecule that would have all the benefits described by Bito, but at the same time would not have the prohibitive side effects. There was no assurance at all that such a molecule could ever be developed, and the cost of searching for one would dwarf the cost of purchasing Dr. Bito’s compound in the first place.

If such a thing turned out to be feasible, then the company then would have to conduct painstaking and extraordinarily expensive human research trials, and if successful, would then have to shepherd their new compound through a time-consuming and costly regulatory gauntlet – which explains why the vast majority of promising new drugs fail to ever gain FDA approval. That their efforts were ultimately successful does not diminish the fact that, when Pharmacia agreed to invest the time, money and opportunity cost to develop Dr. Bito’s discovery, the company was committing itself to an expensive and extremely risky proposition, with no assurance of making a profit or even recouping their losses. It was, in fact, a very long shot.

The folks occupying Wall Street ought to remind themselves that the cool products they are using each day (such as the iPhones they use to organize their flash demonstrations) all came about because the profit motive – and only the profit motive – encouraged some entrepreneur to risk his/her time, treasure, and sacred honor on some new idea. And for each risk-taker who becomes a millionare or billionare, thousands of others achieve only modest success – or fail altogether. (That’s why it’s called “risk.”) But the lure of big profits drives the whole system, and accounts for American progress.

Bito’s (tax supported) idea was a promising one, but the challenge of developing that idea into a product that was useful to patients and that could be brought to market was very expensive and highly risky. Pharmacia took on that risk (all of which was borne by its shareholders, and not by taxpayers) only after difficult, internal corporate soul-searching. If not for the prospect of making enormous profits if this risk worked out, the company (like several other drug companies did in this particular instance) certainly would have walked away.

Before 1980, it is likely none of this would have happened. The Bayh-Dole Act of 1980 was passed expressly to encourage the further development of federally financed, university-based basic research. Until then, a large proportion of basic university research was never “translated” into useful medical products. Such translation of basic research was recognized by Congress to benefit society not only by advancing the practice of medicine, but also by stimulating the overall economy. So industry was actively encouraged to take on the risk of developing promising ideas that came out of federally-funded research. And the profit that greeted successful enterprises was designed to be the one thing that would lure industry into taking that risk.

So when the Times “discovers” a company “profiteering” from work done with tax dollars, it should not be a revelation, nor should it be an unmistakable sign that the company is inherently evil or dishonest. Nor does the company’s activity in this regard give us a justification to arbitrarily restrict its profits. Rather, that’s simply the deal we taxpayers (through our elected officials) have made with the drug industry. We made this deal because we felt it would benefit American society, the American economy, American patients, and quite probably, us as individuals. Of course, if we want to change that deal now, it is within our rights to do so.

Without Bayh-Dole, perhaps patients with glaucoma would still be getting surgical therapy and wearing those coke-bottle eyeglass lenses instead of just using eyedrops. And if we wish to allow the Central Authority to put the brakes on such medical advances (ostensibly to prevent unseemly profiteering, but actually to stifle medical progress), we certainly can. It’s how covert rationing works.

But we shouldn’t vilify the drug companies for taking us up on the deal we offered them, back when we were thinking more clearly.

Podcast:

What's Really Causing The Drug Shortages [ 15:02 ] Play Now | Play in Popup | Download (97)

Last week, President Obama took unilateral Presidential action to fix the drug shortages that have been plaguing American hospitals since 2005.

He has been taking unilateral Presidential action quite a lot lately, in his effort to publicly emphasize the recent unwillingness of Congress to do his bidding, and to illustrate to us in the great unwashed how much better things would be if only the President could just go ahead and do all the stuff that needs to be done, without having to take the legislature into account.

For problems like this (i.e., drug shortages, lack of jobs, loss of “spirit,” &c.) are the price we pay when we insist on holding our leaders to the constraints imposed by some old, dusty, outdated document, written by someone else’s ancestors. (For how many of us, really, descend from either the Roundheads or the Cavaliers who wrote the thing?)

There are other ways one might run an enterprise, you know, that Adams or Jefferson probably never thought of.

In any case it is somewhat surprising that this time the President failed to take full advantage of the occasion. Namely, he did not blame George Bush for the drug shortages. He missed a real opportunity there, because had he done so he would have been more correct than usual.

Shortages of certain critical drugs have become a serious problem over the past six years or so. Generally speaking the drug shortages have involved sterile, injectable generic drugs. Sterile injectables are relatively expensive to make, and because the requirement for sterility dictates they must have a finite (and relatively short) shelf life, they are relatively expensive to manage logistically after they are made.

The shortages are in some of the more important and critical drugs used in medicine, including “crash cart” cardiovascular drugs, antibiotics, and important chemotherapy agents used for cancer. In recent years increasing numbers of patients with life-threatening illnesses have not been able to receive the drugs they need to optimize their odds of survival, and they have had to receive some substitute therapy, that is, instead of getting the drug they ought to have, they get a drug that is available. When your life is in the balance this is not a pleasant thing.

The FDA keeps an on-line list of current drug shortages, which can be found here. The list is impressively long.

Many experts (the usual suspects) have looked into the problem of drug shortages, and have come up with many explanations for it. Typically, after analysis, the reason for the shortages is said to be “multifactorial,” and includes: insufficient production space, disruptions in the supply of raw materials, several drug makers opting out of the generic drug business, and a spate of manufacturing quality issues that have resulted in prolonged production interruptions. The term “drug company greed” often hovers just beneath the surface of such explanations, and sometimes actually breaches.

Here is the formal position the FDA has taken to explain the growing drug shortages. Readers will note that it invokes all of the above multifactorials.  (And since none of these manifold causes are under the direct control of the FDA, the agency concludes, clearly it is not to blame.)

This sort of scattershot explanation for the drug shortages seems unsatisfying. It seems unfocused and random. We are to believe that a series of disparate, unfortunate events suddenly began happening to the drug industry six years ago (since prior to that there was no particular problem with these drugs), with no underlying explanation, and that all these unwanted happenstances, quite miraculously, mainly affected only one kind of product – sterile, injectable generic medications. Go Figure.

Must be one of those Black Swan deals.

Undeterred by the lack of a unifying theory to explain the problem, the President has now taken action.

He decreed the following steps.  He told the FDA to ask drug companies for earlier notice when there will be a new shortage. He asked the FDA, after the agency has ordered a halt in production of a drug due to quality issues, to speed up its reviews when the drug company says it is ready to get back on line.  And he asked the DOJ to crack down on “grey markets” that have now appeared to provide these critical drugs to hospitals for exorbitant prices.

See what kind of quick action we would get if we would just suspend the Constitution?

The problem is that the things the President is doing won’t help much, and the things that would help a lot the President is not doing.

It should not be this difficult to figure out why we are having drug shortages. Yes, DrRich agrees that the proximate reasons are multifactorial. But the proximate reasons for product shortages are always multifactorial, because when the root cause of a shortage is itself beyond their control, the product-makers will always try multiple, marginally effective and often counterproductive ways to mitigate the root cause, thus creating a multitude of potential proximate causes for problems. And if an analyst does not look beyond those proximate causes he might not see the root. This often happens when seeing the root would be inconvenient or embarrassing.

The root cause of any persistent product shortage is almost always the same. For one reason or another, the cost of providing the product has outstripped the price the product-maker can get for selling the finished product.

In a free market, when the cost of production goes up the price of the finished product rises accordingly. As long as the customers can pay the higher price there will be no shortage of the product. If the price rises so high that customers won’t pay it, the demand for the product drops – and production is adjusted to reduce the supply in accordance with that reduced demand. But even in this case, there is no product shortage, because even if more product were available nobody would buy it.

Sometimes a sudden increase in demand for a product will create a product shortage. But the higher prices enabled by this new demand will entice the product-makers (greedy bastards!) to increase their manufacturing capacities, and will attract new product-makers to go into business, and eventually the shortage will be resolved. In free markets, shortages are usually temporary and self-adjusting.

In general, truly persistent shortages will only occur when the product-makers cannot increase the price they get for their finished product sufficiently to keep up with a rising cost of production. In this case profit margins shrink or even become negative, and the incentive to expand production, or even to stay in that business, disappears. This is a true shortage – the demand is still there, and customers are willing and able to pay the price being asked, but the product-makers are no longer able to supply the product at that price. Unless the mismatch between the cost of production and the price of the finished product is repaired, the product shortage becomes persistent or even permanent.

Such a persistent cost/price mismatch does not occur in a free market. It occurs when some Central Authority acts to control prices (often, to be sure, while simultaneously acting to increase the cost of production). A Central Authority can cap effective price a product-maker can get for his/her product by implementing overt or hidden price controls; by increasing marginal tax rates high enough to push the product-maker’s risk/reward calculation to favor inaction; and by instituting windfall profit taxes that do the same thing. DrRich is certain that Progressives have thought up a number of other ways to bolix-up the supply/demand relationship as well.

We do not need to know anything in particular about manufacturing generic, sterile injectable drugs to know that it is very likely that the persistent shortages we are seeing in these products are probably due to a persistent, externally-imposed mismatch between the cost of production, and the prices the companies can get for selling these drugs. And whatever caused that mismatch must have occurred before 2005.

And lo and behold! We find that a recent Medicare law (Section 303(c) of the Medicare Modernization Act of 2003) strictly limits the price Medicare will pay for “injectable” generic drugs. Prices for these drugs can still rise, but only by 6% or less, and only once every six months.  Congress (in its great wisdom and expertise in matters economic) made the judgment that this kind of price rise would be sufficient to balance market forces. But Congress was wrong.

This law took effect January 1, 2005.

The margins companies get for generic drugs are already low. And the cost of making (and managing the distribution of) sterile, injectable drugs is inherently higher than for most generic drugs. So the profit margins for these drugs, already low, was severely challenged by these new price controls.

The industry reacted quite rationally and predictably to this new law.  The big companies, which could maximize their profits by devoting their manufacturing space to other products, got out. And new, generic drug companies got in. These generic drug companies do not have to bear the cost of research and development, so their overall cost of production is substantially lower than for the big companies – their business models indicated they could pull a reasonable profit even with the price controls, if all went well. But to do so, they had to employ cheaper manufacturing processes, with less quality control and less production redundancy. So, quite predictably, there were quality issues, and when these issues occurred there was no redundant production capacity available to pick up the slack. And stringent new FDA standards meant that each time such an issue occurred, their production would be off-line for months, or even a year or longer.

But for DrRich to belabor the story from this point would only be to elaborate on the multitude of proximate causes for the drug shortages, all of which are merely artifacts of the ways the industry chose to respond to the root cause – i.e., to government-imposed price controls.

The President’s executive order ostensibly aimed at fixing the drug shortages will of course be ineffectual. While it implies new regulatory zeal which will further increase the cost of production and worsen the cost/price mismatch, it does not acknowledge let alone address the root cause.

In this light, the President’s attitude toward the grey market that has sprung up in response to the drug shortages is particularly instructive.  A grey market, as DrRich understands it, is like a black market but less illegal.  And we know a lot about black markets.

A black market acts outside the legal economy to provide customers with products they cannot get within the legal economy. The price a black market dealer gets for the product simply reflects current market forces, given the product shortages which exist within the legal economy, the risk the black marketeer takes in providing the product extra-legally, the additional “security” they require, &c.  So the customer pays through the nose, but at least he can get the product he wants or needs.

The very presence of grey/black markets generally indicates that the shortages which are present within the legal economy are not inherent but artificial – that is, the products are demonstrably available, for the right price. That product’s abundance would increase and the price would adjust to some more reasonable value if only the customer were permitted to pay what the market will bear. (The true free-market price for any black market product will always be far higher than the legal economy allows, but far lower than the black market demands.)

Fulminating about the greed of the grey marketeers does not hide this truth.

No wonder the President’s new decree attempts to convert the grey market for sterile injectables into a true black market, and in this way aims to snuff out this extremely embarrassing, all-too revealing, spectacle.

Podcast:

Is Healthcare a Right? [ 14:54 ] Play Now | Play in Popup | Download (821)

If we are ever to gain control of our healthcare spending, which is a necessity if we are going to avoid an economic catastrophe during the next couple of decades, we have to come to some agreement, as a society, on a few essential questions.  Chief among these questions is whether healthcare is something we must consider to be a right for all Americans.

The question of whether healthcare is a right has become a very contentious one. One side passionately declares that of course it is a right, as healthcare is so critically important that how could it be otherwise? And the other side, with equal conviction, asserts that nothing can be a right that creates an involuntary burden on another.

That is, advocates on either side of the argument maintain their respective positions as being axiomatic, as primary and irreducible truths – which does not allow much room for discussion or debate. So instead of dispassionate discussion, we get vituperation. For, when one’s opponent denies an axiomatic truth, he declares himself to be beneath contempt, and unworthy of any degree of respect.

Regular readers will know that DrRich is a peacemaker.  Accordingly, he will attempt an apology for each of these mutually exclusive, fundamentally principled positions. He will follow this by a description of the pragmatic (as opposed to principled) position on the matter taken by our current leaders. Then finally, humble as ever, he will offer the “real” answer to the question of whether healthcare is a right.

The Conservative Position

Conservatives (and in most matters, DrRich is among this lot) think of “rights” in terms of “natural rights,” that is, in terms of rights which accrue to every person by virtue of the fact that they are members of the human race. Natural rights are generally considered to descend from the Creator (as the Declaration of Independence explicitly says), or at the very least from the inherent nature of the universe, and thus are not subject to addition or subtraction by any human authority – such as by governments.

Because natural rights are granted equally to every human, it follows that there is no such thing as a right that imposes obligations or limitations on the natural rights of others.

A right to healthcare would most certainly require an abridgement of the rights of others, and so there can be no right to healthcare.

The Progressive Position

Most Progressives do not explicitly deny the existence of natural rights, because doing so would cause them embarrassment when they assert their own inherent and unalterable “truths” (such as the superiority of “diversity” over all other human virtues). However, at their core Progressives do not (and cannot) actually subscribe to natural rights, since the Progressive program virtually requires a Central Authority to assign and distribute and enforce various differential “rights” to various groups, in order to achieve social justice.  And achieving social justice is the central requirement for Progressives to reach their ultimate goal of a perfect society.

To Progressives, creating healthcare equality among all Americans is critical to social justice. And so, it becomes axiomatic for them that healthcare must be a right.

It becomes immediately evident that any such “rights” granted under the Progressive program will necessarily create involuntary obligations upon at least some individuals. So it is likewise immediately evident that any “right” for Progressives will fundamentally violate the essence of a “right” for Conservatives.

This impasse, which occurs at the very first step of the discussion, is what prevents Conservatives and Progressives from engaging in any fruitful discussion of whether healthcare ought to be a right.

The Practical Position (The BOSS Rule)

Our current leaders have taken a more practical position on the question of a right to healthcare. They rely on the fact that “rights” are often bequeathed not because of some overarching principle (as with Conservative or Progressive thought), but rather, because of issues of practicality – or more straightforwardly, because the sovereign authority has the desire and the power to do so. They point out that throughout human history innumerable “rights” have been promulgated by the expediency of raw power.

We need only consider, during the course of human events, such widely acknowledged rights as the exceptional rights of the aristocracy (especially the divine rights of kings), the unique rights of the clergy, or the special rights of the Politburo (or the Congress).  The fact is that all of these rights clearly imposed more-or-less oppressive obligations on, and limited the individual rights of, the people. But that is not the least matter of concern. Rights become rights because the exigent authority has the desire to create them, and the capacity to exert violence wherever necessary to enforce them.

In this light, one might say that healthcare is a right in America simply because of the BOSS rule (Because Obama Says So). If Obama says healthcare is a right (and he has said so, many times), and has the raw power to back it up, then, by God, healthcare is a right.

The Correct Position

It is easy to see why the “healthcare is a right” debate has become so contentious – people mean entirely different things when they use the word “right.” A right to a Conservative is a natural phenomenon, awarded equally to all people and fundamentally unalterable by human hands. A right to a Progressive is an essential social construct, enumerated by enlightened leaders, which is necessary to further the principle of social justice. And to some non-ideologues a right is whatever the sovereign authority says it is.

To DrRich, none of these constructs are useful to solving our current problem of healthcare spending.

The Conservative position – that because healthcare cannot possibly be a natural right, therefore there is no right to healthcare – not only seems callous to a large segment of Americans, but (as DrRich will shortly demonstrate) is wrong. The Progressive and Practical positions – that healthcare is a right either because it is necessary to further the supreme cause of social justice, or simply because the Central Authority decrees it to be so – leave us in an untenable position when it comes to reducing healthcare spending.

That untenable position occurs because, when a “right to healthcare” is bestowed by the government, under either the Progressive program or the BOSS rule, that right is open-ended. It immediately takes on the characteristics of an entitlement, a grant bestowed on individuals by society because of the group to which they have been assigned (such as: citizens, residents, people over 65 years of age, a particular racial or ethnic group, etc.) That entitlement is to “healthcare” – that is, for whatever we can get the authorities (by whatever political maneuvering we choose to engage) to agree that “healthcare” includes, whether it is well-baby checks, artificial hearts, chemotherapy, extravagant end-of-life care, hair transplants, or cosmetic surgery. A right like this – an entitlement – is rarely taken away, or even limited, once granted. Entitlements are soon seen by their recipients (and by the vested interests that quickly spring up to defend those entitlements, such as the bureaucracy that regulates them, the companies that supply the products for them, and the healthcare professionals that administer them) as something that is owed forever, as a natural, God-given right, which can always be expanded, but never ever restricted.

DrRich, therefore, finds all these positions on a right to healthcare to be unhelpful. For this reason DrRich proposes a new position on a right to healthcare, a position which he humbly calls the Correct Position.

To wit: all Americans have an implied contractual right to healthcare. We have this right because we have long since entered into a contract under which, in exchange for implied considerations, we’re all paying for it.

Under the present healthcare system, a system we have devised over the past six decades through our duly elected representatives, every person living in the United States is sharing in the cost of healthcare for every person who receives healthcare. Since every American, in one or more ways, is paying for the healthcare of every American who receives it, every American has a just claim – a contractual right – to their fair share of that healthcare.

Let us list some of the ways in which Americans all share in the cost of all healthcare:

1) Anyone receiving a paycheck is subject to payroll deductions to pay for Medicare for the elderly and Medicaid for the poor.
2) Anyone paying income tax is paying higher tax rates to offset tax-deductible health insurance premiums purchased by businesses for their employees. (That is, employer-provided health insurance is subsidized by the taxpayer.)
3) Anyone buying products in the U.S. is paying higher prices to cover the healthcare costs of American businesses.
4) Anyone living in America is sharing in the massive societal burden we are creating by allowing healthcare spending to be passed off to future generations, by way of the national debt.

These costs, and more, are borne by everybody living in the U.S. And since all Americans are paying the cost of all healthcare – even the cost of so-called “private” health insurance – we all have a right, in the form a consideration under a contract, to claim some of that healthcare for ourselves. To deny this fact would void the contract.

It is important to note that this argument for a right to healthcare is fundamentally different from the arguments typically given. This contractual right is not “granted” to an individual by a beneficent society because of some inherent characteristic of the recipient, but rather, it exists solely because the individual is party to a social contract, created by the peoples’ representatives, under which healthcare is a consideration given in return for certain obligations the individual makes to society. Those obligations would include paying for the publicly-funded healthcare through taxes, and subjecting oneself to whatever limits to publicly-funded healthcare such a system requires in order to maintain societal integrity.

It is critical to understand that this kind of contractual right to healthcare enables us, legally end ethically, to set necessary limits on what we mean by healthcare. The “right” to healthcare is a contractual right, and not a natural right or an ethical requirement.  So, under that contract,  as in any contract between consenting parties, we have a duty to specify the limits of our mutual obligations, that is, to specify what we mean by “healthcare.” Furthermore, we have a duty to specify what we mean by “healthcare” in such a way that fulfilling the contract does not bring about national bankruptcy or otherwise cause societal destruction.

There would no longer be an obligation to provide individuals with every manner of available healthcare under all circumstances, but only to provide individuals with that level of healthcare which is provided as a public benefit to all other individuals, under the terms of the social contract. (An entitlement to healthcare, in contrast, traditionally is an open-ended promise in which “healthcare” comprises anything and everything one might think has any possibility of restoring every bit of health.)

To summarize, as DrRich sees it we have already created a contractual obligation to provide publicly-funded healthcare to all individuals, by virtue of the fact that we have burdened every individual in America with the cost of healthcare for anyone who is now receiving it. In contrast to the Conservative position, DrRich’s formulation recognizes a right that truly exists, by virtue of a contract that is unarguably in force, and that has been enacted over a long period of time through the offices of the people’s elected representatives. And unlike the Progressive position, DrRich’s formulation does not entrap us into an open-ended obligation to pay for all “healthcare,” however our collective sentiments may entice us to define that term.

We might as well own up to our responsibilities by openly recognizing : a) the universally-shared payments we all make to the cost of American healthcare: b) the right of all Americans to the considerations that arise from this universally-shared burden; and c) that it is right and proper for us to establish clear limits to the obligations borne by all the parties, as we must do with any legitimate contract.

The open recognition of this contractual right to healthcare will finally give us the framework we need for a public discussion on setting necessary limits on publicly-subsidized healthcare spending.

And this, DrRich most humbly submits, is the correct answer to whether healthcare is a right.

Podcast:

Why This Isn't Armageddon [ 7:31 ] Play Now | Play in Popup | Download (760)

We are, the pundits tell us, staring down the barrel of an economic catastrophe. By this time next week, we may all be huddled in our darkened hovels, breaking up furniture for our meager fires, roasting the family dog for our sustenance, and dreading the likely invasion by the great Canadian menace.*

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*By cutting government spending and not raising taxes, the Canadians have not only turned a deep recession into an economic boom, but have set an embarrassing example which our leaders in Washington and our press have taken great pains not to notice. The Canadians indeed are a menace.
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But fear not. DrRich is here to assure his readers that, despite what you’ve been told, this isn’t Armageddon. He offers three proofs for this assurance.

First, the debt limit is a meaningless fiction.

The term debt “limit” implies that there is some limit to the amount of borrowing which we can do; that we may borrow money up to a certain and well-defined point, and no further. But history tells us this is absurd.

Each and every time we decide we’d like to spend more money than the debt limit says we can spend, we simply increase the debt limit. We have blithely blown past dozens of supposed debt limits in recent years, with nary a glance behind us.

DrRich is not sure why we have a debt limit at all. At some point, he supposes, somebody determined that publishing a debt limit would convince people (which people? the voters? the credit-rating agencies? the Chinese?) that we actually have some sort of built-in controls to our fiscal profligacy. But surely, after decades of treating our debt limits with less regard than one would treat speed bumps during a police chase, nobody can actually believe that we would honor those limits, ever, under any circumstances. It is obvious that the only thing debt limits can accomplish is to create transient, artificial fiscal crises, like the one we are all enjoying now.

The only logical solution to our current crisis is to simply eliminate debt limits once and for all. We would not be giving up anything substantial, since no debt limit has ever been honored nor ever will be. Debt limits clearly do no good; they only cause trouble.

So DrRich offers this solution, this change we can all believe in: Eliminate the debt limit altogether.

No problem which has such a simple and happy solution can be Armageddon.

The second reason this is not Armageddon is: One cannot schedule Armageddon.

The current debt ceiling, the one we’re going to exceed on Tuesday, is $14.3 trillion. The President wants it increased by another $2 trillion or so, enough to delay the next debt ceiling crisis until after his re-election. This, of course, is understandable. The Republicans, it appears, would like to increase the debt limit by a lesser amount, so that the next crisis will occur at a time more to their convenience. This is also politically logical.

The point here is that, by simple manipulation of the value of the meaningless fiction known as the debt limit, we have full control over scheduling the next debt crisis which will threaten our markets, economy, &c.

A feature of Armageddon upon which everyone can agree is that it cannot be scheduled. Therefore, this is not Armageddon.

The third reason this is not Armageddon is: The amounts of money we’re talking about are too trivial.

Everyone is arguing over the questions of whether we ought to leave the debt limit at $14 trllion, or increase it by another $2 trllion or so, and whether we ought to cut spending and/or raise taxes by a mere $100 billion a year or so. And the results of these arguments, we are told, will determine whether or not, in a few days, the skies will split asunder and the seas will boil away, and Old Farts like DrRich, suddenly bereft of our God-given entitlements, will immediately be reduced to dining on cockroach-kabobs toasted over a smouldering dung fire.

But worrying so much about increasing our debt by another $2 trillion (an amount so massive, so huge, as to be unimaginable to mere mortals) is akin to worrying about having another smoke as one lies dying of lung cancer – it sure won’t help, but either way, the outcome is the same.

Our debt limit, as huge and unmanageable as it is, is not only a fictional construct, but it serves as a soothing distraction from our real fiscal problem – the one that really does promise Armageddon.

Our unfunded liabilities, over the next few decades, for the things our society has promised and is obligated by law to shell out for us Old Farts – things like Social Security and Medicare – is at least $62 trillion, and some have projected double that amount. Now, there’s a real problem.

We can’t talk about that, though. If a politician proposes the first, meager step towards finding a solution to that, they will show up in a TV ad pushing sweet old ladies off a cliff.

In any case, we are not facing Armageddon next week.

That’s for later.

Podcast:

Stock Up On Fancy Feast While You Can [ 7:31 ] Play Now | Play in Popup | Download (1063)

While all the Republicans and Democrats in Washington are spending all these fine summer weekends fighting over the debt ceiling, and so far have absolutely nothing to show for it, the smart people at the New York Times have gone ahead and solved the whole debt problem for us.

Blaring at us from the front page of today’s Sunday Review, in huge, bright red print, we see the following chain of logic: A 20% tax on soft drinks will produce a 20% reduction in consumption, which will prevent 1.5 million people from becoming obese, which will prevent 400,000 cases of diabetes – yielding $30 billion in health savings.

This revelation leaves DrRich slapping his forehead and wondering, “Why didn’t I think of that?” Simply use the tax code and the regulatory muscle of the Central Authority to change human behavior in the proper manner, and everything will fall into place.

It takes a special kind of person to believe that human behavior is so predictable, and so controllable, that one can actually titrate in such a manner the amount of obesity that exists in a society, and therefore, titrate the cost of healthcare. It takes a special kind of person to believe that, simply by tweaking a specific tax here, or adding a specific regulation there, one’s actions will yield precisely the response predicted by the “experts,” and that this response will translate precisely down a complex chain of assumptions (based on selective analysis, conjecture and wishful thinking) to yield cost savings anything similar to those predicted, and that the cascade of results (not being subject to any vagaries of human nature) will not have all manner of unintended consequences. That special kind of person is called a Progressive.

Let’s say that some really smart operative in the Obama administration, reading today’s Times, takes it into his head to solve the obesity crisis, the healthcare crisis, and the debt crisis all in one brilliant stroke, and accordingly, gets the President to appoint the entire New York Times Editorial Staff as the country’s new Czar of Food. These fine folks, sensing a once in a lifetime opportunity and not wanting to squander it on such small potatoes as a softdrink tax, decide to go all out. They institute large, prohibitive taxes on ALL the foods consumed by our society that contribute to our obesity. As a result, the only foodstuffs that remain untaxed are fresh fruits, vegetables, and fish. (And, considering the possibility that one or more of the NYT editorial staffers may very well be vegans, DrRich is not sure about the fish.)

According to the Times’ variety of calculus, this action will have remarkably positive consequences.  The consumption of unhealthy, obesity-producing foods will drop by some very large amount – probably 90% if the taxes are high enough – and American obesity will nearly disappear. Diabetes will go the way of tuberculosis and leprosy, all the other medical disorders made worse by obesity will greatly diminish, and we will save trillions of dollars in healthcare expenditures.

What would actually happen, of course, is quite different.

If all sugary foods and fatty foods and processed foods were heavily taxed, the demand on the untaxed foods (the fruits, vegetables and fish) would skyrocket, and prices would go through the roof. Only the very wealthy could get all the healthy food they wanted. The merely wealthy would get some of the healthy food, and would supplement their diets with the unhealthy stuff, grudgingly paying the excessive taxes to do so. DrRich does not know what the poor would do for food, but he bets they would be pissed.

A lot of other unpleasant things would happen as well. The companies that process foods and soft drinks – and most American restaurants – would suffer badly, and would probably go out of business. Robust black markets would establish themselves, trafficking in inexpensive, calorie-dense (and possibly even tasty) foodstuffs, which would now be produced in Mexico, Canada and China instead of in the US. Junk food cartels would murder each other along our borders. Americans would find themselves envying, rather than pitying, that occasional old fart who is discovered dining on a can of Fancy Feast Cat Food.

And furthermore, Americans will learn something about one’s ideal body weight that we don’t hear too much about today, because it does not fit into the “overweight is bad” narrative. Namely, while severe obesity is very bad for your health, being a little overweight is probably not so bad. Statistically speaking, it is more threatening to one’s longevity to be too thin than to be a little overweight.

DrRich does not have the solution to the obesity problem we have in America. If there is a solution, DrRich thinks it is likely to be some combination of science (since there is a large genetic component to true obesity), encouraging a sense of personal responsibility for living one’s own life, and yes, even public policy. But he finds the kind of linear thinking displayed in today’s Times – relying on assumption piled upon assumption, ignoring the obvious human and economic reactions that will knock those assumptions off their straight-line path – to be silly. And if they actually encourage public policy experts to behave in such a manner, they can be dangerous.

Podcast:

How The Implantable Defibrillator Became An Abomination [ 15:34 ] Play Now | Play in Popup | Download (447)

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.

Podcast:

Fugitive Busted By His Pacemaker (And His Doctor) [ 9:25 ] Play Now | Play in Popup | Download (399)

In Durango, Florida the week before Christmas, the FBI arrested fugitives Roger Gamlin, 62, and his wife Peggy, 54, at Mercy Regional Medical Center after a doctor determined their real identities through Roger’s pacemaker.

Wanted by the feds for 2 1/2 years on suspicion of embezzling millions of dollars from their south Florida title company, Roger and Peggy had been living quiet and unassuming lives as Ron and Nancy Jenner in Durango.

Then Peggy brought Roger to Mercy Medical Center after he developed a nose bleed that would not stop. The hospital (in accordance with the sage advice of its attorneys) is not saying exactly what happened next. But we know that Roger’s true identity was determined through his pacemaker, and the FBI quickly showed up to arrest him and his wife. Roger and Peggy waived their rights to an identification and detention hearing, were placed into custody, and will be transported to south Florida to face embezzlement charges.

The reason this story made the newswires, of course, is because the fugitives were identified through a pacemaker. Pacemakers can be electronically scanned to reveal information about the patient’s cardiac condition. Every implanted pacemaker also stores information that identifies the patient. That’s apparently what did Roger and Peggy in.

The “angle” that has made this a news story is the pacemaker angle. And yes, it’s true that when you receive a pacemaker or an implantable defibrillator, it’s like receiving a subcutaneous electronic identity chip, like the one you have in your dog. Anyone with the right scanner can find out who you are. So if you plan to become a fugitive from the law, it is best not to have one of these. (Alternately, get your pacemaker AFTER you change your identity, so that it matches with your alias.)

But really, you don’t need to have an implanted medical device in order for a hospital to learn your true identity. A medical facility could find out who you are any time they wanted, by surreptitiously obtaining DNA samples, for instance, or – for extremely rapid identification – dusting your drinking cup for fingerprints and doing a computer match. DrRich doubts whether such things are occurring today. His point is that it could happen whenever somebody wanted it to happen, whether you have a pacemaker or not.

To DrRich, the interesting part of the storyline only peripherally involves the pacemaker. The real story is this:

• A patient goes to a hospital for medical help.
• A medical procedure is done which generates certain data for the medical record.
• The data in the medical record is immediately cross-referenced with data from a federal database that lists persons of interest.
• The FBI shows up at the bedside in less time than it takes to raise a nurse with a bedpan.

Now, that’s actually a pretty interesting story.

(And people wonder why the Central Authority is so hot to have electronic medical records.)

But even that is not the most interesting angle. What DrRich wants to know – the angle he would explore if he were writing this up for the Sunday Times – is: What was the doctor thinking?

You’re an ER doc. A guy comes in with a bad nosebleed. You stabilize the bleeding, but the guy looks pretty pasty and you’re worried about his heart, so you interrogate his pacemaker. (Here’s the first red flag. For an ER doc, interrogating a pacemaker – not a routine procedure in most emergency rooms, and one which yields only sparse information about the status of a patient’s heart – is generally pretty far down the list of things to do. Could it be that Roger is acting suspiciously, and you want to find out whether he is who he says he is? If so, you are no longer acting as a doctor, but as an agent of the government.) In any case, whether intentionally or not, you learn that the patient has checked in under an alias.

So now what do you do?

There are some things you need to consider as you decide what to do. First, you have established a doctor-patient relationship with Roger, which binds you to confidentiality – unless you believe Roger is an imminent threat to himself or others. But simply using an alias does not constitute an imminent threat to anyone. Besides, using an alias is not necessarily illegal. Samuel Clements used one, and so do most people who work in Hollywood. And how many times has Barack Obama changed the name he answers to?

Second, you yourself might get into trouble if you look into the matter. For instance, if Roger were an illegal alien and you took it upon yourself to escalate the matter of false identity, you could get into serious trouble. After all, the U.S. Attorney General has determined that an Arizona law is unconstitutional which would permit police officers to investigate the actual identities of suspected illegals who are detained for other offenses. And you are not even a police officer, and Roger is not being detained for an offense, but has come in to seek medical assistance. Furthermore you are well aware that if a suspected illegal alien shows up in your ER, you are supposed to treat him/her without asking any questions about identity or legal status.

But you determine that Roger does not look Hispanic (or Arabic) – a determination that by any reasonable definition would constitute racial profiling – and so is not likely to be a member of a protected group.

DrRich thinks you are thinking like this: “This man is obviously using an alias – so what is my obligation here? In the old days my obligation would be to honor the confidentiality of my patient, who, for possibly very legitimate reasons, has altered his identity. But it’s not the old days. Now, I’m obligated to do what’s best for the collective, and only secondarily what’s best for this patient. I suspect the collective would like to know about this guy, to check him out. It’s a little risky – what if he turns out to be an illegal from, say, Argentina? A lot of people from Argentina look European. But that risk seems small, and if he is some kind of fugitive from the law I would be doing a great service to my overlords.”

So you rat him out.

We indeed have come a long way. Not only have our doctors apparently lost their scruples, but we also appear to have already arrived at a place where medical records can relatively seamlessly interface with other federal databases. Once medical records become fully electronic, patients needing medical aid will have a lot to consider. Are you an embezzler on the lam? Are you behind in paying your income taxes? Are you a parking ticket scofflaw? Do you have erectile dysfunction, or venereal disease? (These latter conditions cannot get you arrested – as of yet – but we know that all databases controlled by the government, no matter how “confidential,” also interface seamlessly with WikiLeaks, and so the publication of lists of patients with embarrassing medical conditions always remains a possibility.)

Once again, DrRich marvels at the fact that, soon, the only safe way to get your healthcare will be through the black market.

Podcast:

And Here's Something Else For You PCPs To Do [ 12:01 ] Play Now | Play in Popup | Download (357)

Thanks to Ms. Wood of the Occam Practice Management Blog for calling DrRich’s attention to an interesting article appearing recently in the Wall Street Journal Health Blog. This article describes the efforts of a non-profit organization called the Investor Protection Trust to (it appears) medicalize the problem of financial scams involving the elderly.

Specifically, under the auspices of the IPT, government securities regulators will be teaming up with physicians organizations (in particular, the American College of Physicians and the American Academy of Family Physicians), to train PCPs to recognize signs that their elderly patients are victims of financial fraud or exploitation. If such fraud is uncovered or suspected, the physician is to notify Adult Protective Services, an organization which (helpfully) is not subject to certain annoying confidentiality regulations. IPT estimates that screening for financial abuse can be accomplished by adequately-trained PCPs in only three short minutes.

The plan is to have PCPs take special training to help them recognize the signs of financial elder abuse. This training can be accomplished in only two hours, the IPT explains, and will be conducted “under the auspices of medical ethics continuing education.”

Long-time readers will know that DrRich is the President (and sole member) of Future Old Farts of America. (He retains this position despite the fact that his eligibility for FOFA is rapidly expiring, and, some have suggested, has already expired.) As President of FOFA, DrRich naturally deplores financial fraud perpetrated upon the elderly. Indeed, this is one of the chief reasons he opposes Obamacare.

So DrRich applauds this new effort to protect the fiscal wholeness of our beloved elderly. The plan is flawless, as it has something good in it for everyone – except, perhaps, the PCPs.

The IPT itself stands to gain much from this new program, since this organization is funded through fines collected from investment-fraud cases. Having American PCPs embark on a major, sustained, grass-roots effort to troll for such investment fraud (using screening criteria developed by the IPT itself) should greatly increase this organization’s revenue.

The major physicians organizations which represent PCPs – the ACP and the AAFP – also come out ahead by supporting this effort. They reap, of course, all the public relations benefits that always go along with new programs aimed at assisting our esteemed elderly population. But perhaps more importantly, their participation in this program helps them with the small “ethics problem” they have lately created for themselves.

As regular readers will know, the ACP and AAFP are major proponents – and indeed the authors – of the New Age medical ethics that was formally adopted by the medical profession in 2002. This new ethics, as DrRich has patiently explained, obligates physicians to strive to practice medicine for the benefit of the collective. Practically speaking, the “new ethics” creates the ethical foundation by which American physicians will practice medicine according to fiats handed down by government-controlled expert panels. That is, it excuses physicians from their now-obsolete obligation to always do what’s best for the individual patient, in favor of doing what’s best for society as a whole, as determined at a distance by the Central Authority.

All well and good. As DrRich has amply demonstrated, the ACP (at least) is quite satisfied with its new medical ethics, and sees no reason to reconsider. But still, this creates a problem for the ACP when it comes to “medical ethics continuing education.” Thoughtful physicians, when faced with indoctrination programs aimed at getting them to absorb the new medical ethics, often raise uncomfortable questions, questions which (as, again, DrRich has shown) even the chairperson of the ACPs’s ethics committee cannot effectively answer. Clearly then, having formally tossed real medical ethics aside has undoubtedly made these ethics sessions somewhat awkward for the instructors.

What better solution to this embarrassing problem than distraction? Simply turn these annoying continuing education sessions into something other than a discussion of medical ethics.  Turn it into, say, a two-hour session on recognizing financial fraud among the elderly. You’ve got to have something to talk about, after all – and defrauding the elderly is unethical, is it not?  It is not hard to understand why physicians organizations are so supportive of the IPT’s new effort.

But, of course, the very first among the beneficiaries of the medicalization of elder fraud is the government.

Most directly, anything that helps to keep the estates of the (pleasantly) befuddled elderly intact, until they pass on to their more permanent rewards, will increase revenues to the state and federal governments through inheritance taxes.*

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*DrRich leaves it to the reader to decide whether the benefits to the overall economy are greater if the accumulated wealth of the elderly is passed on to the government, or to perpetrators of fraud. Which entity – government or crooks – is more likely to make use of that money in a truly stimulatory fashion? It boils down to the old argument between Keynes and Hayak, of course. In the interest of both brevity and civility, DrRich declines to take up this argument at the present moment. Still and all, it is indeed a point for consideration.
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But the government – and any healthcare payer – benefits immediately from this new program, even before the elderly person dies.

A major strategy in cutting the cost of healthcare – THE major strategy – must always be directed toward controlling the behavior of PCPs. This strategy, for instance, fully explains the massive tangle of uninterpretable rules and regulations which the PCP must painstakingly navigate today, the violation of any one of which is now a federal crime punishable by massive fines and imprisonment. Another tactic for controlling the PCP’s behavior is to severely constrain their face-time with patients, and to tightly regulate what must occur during these now-brief doctor-patient encounters.

Accordingly, during the 7.5 minutes allotted for each patient visit, the PCP must complete a 10-to-15-point checklist of required activities that fall under the rubric of “Pay for Performance.” Such checklists are designed, among other things, to keep the PCP and patient from straying off to address medical questions which do not appear on approved lists, and which might lead to unfortunate medical expenditures.

From the government’s standpoint, adding yet another obligation to the PCP’s critical checklist – an obligation which is so obviously beneficial to our elderly citizens, and which after all takes only three minutes to complete (leaving a full 4.5 minutes for actual medical issues) – is a very useful thing. And furthermore, it is the right thing. Anyone objecting to PCPs being directed to screen for financial abuse in their elderly patients immediately reveals themselves to be completely heartless and unfeeling and, likely, a Republican.

The PCPs, of course, are the only losers here. They are being asked to add yet another impossible task to their already-impossible list of jobs. Furthermore, as we have seen, once some outside body declares that it is the PCPs job to accomplish some impossible new task (such as assuring that all of their patients actually quit smoking), then our friends in the legal profession can immediately begin suing PCPs who fail to accomplish it.

So now the adult children of neglected elderly parents, finding that their inheritance has been frittered away because someone talked Pap-Pap into having a new roof installed on his house every year, will have somewhere to go to recover their damages.

If, as has been DrRich’s contention, the ultimate goal is to render primary care medicine so very odious, demeaning, exasperating and dangerous as to become a completely untenable proposition for any self-respecting American physician, so that by default the role of PCP will have to be filled with lower-level professionals who presumably will be more accepting of central directives, happier with checklists, and more comfortable with time-clocks than most doctors ever could be, then this new initiative is more than just a good idea. It is truly inspired.

Podcast:

How the Obesity Crisis Is Like the Mortgage Crisis [ 16:00 ] Play Now | Play in Popup | Download (686)

Q. What’s the difference between a public health expert and an incompetent doctor?
A. An incompetent doctor tends to kill only one person at a time.

The deep recession and jobless “recovery” which we have enjoyed in the U.S. for going on three years now was triggered by the bursting of the housing bubble. The housing bubble was created by lending practices that awarded “subprime” mortgages to people with bad credit ratings, and offered to people with good credit ratings adjustable-rate mortgages (ARMs) that enticed them to purchase more expensive homes than they could afford.

Traditionally, banks were always reluctant to award mortgages, of any flavor, to people who obviously could not afford them, since doing so would wreck their businesses. The reason the banks began making bad loans in the 1990s is that new government policies, chiefly the Community Reinvestment Act, strongly “encouraged” them to.

The banks, being businesses, reacted logically to the new regulatory climate, to threats by ACORN and other activist groups, and to the escape hatch opened for them by the government which allowed them to turn over their toxic mortgages immediately to Fanny and Freddie.  Banks quickly began turning out as many questionable mortgages as they could write, to as many uncreditworthy individuals as they could find.

Fannie and Freddie, in turn, securitized all those bad loans into complex investment instruments, which they released into the general worldwide marketplace. Investors around the world were happy to take these questionable new instruments since Fannie and Freddie, tacitly at least, were backed by the United States government.

And so, when the unqualified homeowners, who never had any prayer of making long-term payments on their mortgages to begin with, proceeded (at the very first and gentlest whiff of a recession) to default on their loans, the whole structure rapidly collapsed, nearly causing a global financial Armageddon.

Thank goodness us U.S taxpayers “volunteered” to clean up the whole mess with our taxes and those of our children and grandchildren.

There’s plenty of blame to go around for causing the mortgage crisis. We can blame all those people agreeing to mortgages they could not afford, the banks pushing mortgage deals on people who clearly did not understand what they were getting into, and Fannie and Freddie infecting the worldwide investment structure with toxic instruments. But the root cause was bad government policy.

Establishing policies that compelled banks to award mortgages to people who could not afford them (in order to advance the noble goal of creating a nation of homeowners) may seem like a compassionate thing to do. But the laws of economics are like the laws of nature. You can’t change them by government fiat. All you can do by fiat is to get people to behave in new and possibly unpredictable ways. And when those irreducible economic laws finally come around to assert themselves, you will be surprised, and likely dismayed, by the result.

As it turns out, setting health policy can have much the same kind of result. If you fail to pay sufficient attention to certain irreducible laws of nature – such as the laws of human behavior, and the laws of human physiology – you may not get the effect you are looking for (or, at least, not the effect you say you are looking for).

And this brings us to the obesity crisis.

Whether or not you agree that obesity is a “crisis” in the U.S., or even that mild to moderate obesity is the medical disaster it’s often painted to be, you’ve got to admit that Americans have gotten substantially fatter over the past few decades. And whether or not our increased corpulence is a grave threat to life and limb, it is creating an opportunity for the government to seize control over our individual freedoms – so it is, in fact, an important phenomenon.

DrRich is not the first to suggest that the public health policies of that very government substantially contributed to our obesity crisis. But as we enter a new era of Progressive healthcare, in which medicine is going to be practiced by policy fiats instead of by individual decision-making, it serves us to remind ourselves just how much the obesity crisis is tied to the great push, instigated by government policies dating back to the 1970s, for everyone to eat low-fat diets.

An association between dietary fats and coronary artery disease was first noted in the 1950s. In 1957, the American Heart Association (AHA) published its first, tentative recommendations for limiting the consumption of saturated fat. The recommendations were specifically aimed only at people who had strong genetic predisposition to heart attacks or strokes, or who already had heart disease. An accompanying editorial by Herbert Pollack, in the August, 1957 issue of Circulation, specifically warned against the widespread application of the recommendation to avoid saturated fat:

“Altering the dietary habits of a large population group is fraught with a great many dangers. Our knowledge of nutrition is not sufficient at this time to anticipate what ultimate results would happen if the public were encouraged to alter radically their basic dietary patterns.”

The AHA’s recommendations regarding saturated fat in the diet received sparse attention for 20 years. Then in 1977 (during arguably the second most Progressive administration in our history), the Senate’s Select Committee on Nutrition and Human Needs, chaired by George McGovern, nationalized the question of fat avoidance. After holding a series of hearings which tied fat consumption to heart disease, the Committee published the first “Dietary Goals in the United States,” advising all Americans to cut back on fat consumption. With this report, the US government officially supported low-fat diets for everyone.  (The public then was judged to be just as stupid as we are judged to be today, so any real effort to distinguish between unhealthy fats and healthy fats was quickly set aside. “Fat is bad” is a message you can sell even to gun-toting Bible-thumpers.)

The anti-fat boulder got a great big push down the hill in 1983, when the Framingham study published a landmark paper tagging obesity as an important risk factor for cardiac disease. Because eating a diet high in fat obviously caused obesity, it seemed self-evident that low-fat diets would prevent heart disease both directly, and indirectly (by preventing obesity).

Accordingly, in 1984 the NIH issued a Consensus Statement entitled “Lowering Blood Cholesterol to Prevent Heart Disease,” which amounted to an all-out attack on dietary fat. Many scientists pointed out that there really was a lack of convincing evidence demonstrating that low-fat diets would be healthful. But the majority, seeing an epidemic of heart disease which must surely be due to fatty diets, outnumbered the reticent ones, and the Consensus Statement was voted into publication. Then, when the AHA abandoned its earlier caution and endorsed this Consensus Statement, the scientific backing for the government’s public policy encouraging low-fat diets for everyone was fully in place.

This action finally ignited the great low-fat diet era. Spurred on by government policy, prestigious medical organizations and others began a campaign of public service announcements and media blitzes. Influential magazines (that is, magazines read by women) began a prolonged onslaught of low-fat diet tips, articles, and human interest stories emphasizing the deadly nature of dietary fat. The food industry, which was at first very skeptical (like the banks when subprime mortgages were initially foisted upon them), finally jumped in with both feet. A massive new product line of low-fat and no-fat snack foods were invented which were just packed with carbohydrates, and often with supposedly “healthy” man-made trans fats. (This major shift in food production has been referred to as the “Snackwell phenomenon.”) The AHA found a lucrative new revenue source officially certifying such low-fat, high-carb products (including Frosted Flakes and Pop-Tarts) as being “Heart Healthy.”

Americans, being filled with the milk of human nature, largely ignored the ubiquitous pleas to abandon their burgers, pizza and tacos in favor of broiled, skinless, sauceless, saltless chicken breasts and broccoli. But they did begin scarfing up the new-age low-fat snack foods in massive quantities, having been assured that, as long as the snacks contained no fat, they could eat as much as they wanted.

There are a few physiological facts about dietary carbohydrates that were largely ignored during the low-fat era. First, the body greedily converts dietary carbohydrates into massive stores of adipose tissue, so indeed you can readily become fat by eating carbs. Second, gorging on the refined carbohydrates found in these new “healthy snacks” causes huge spikes in insulin levels (insulin being a key factor in converting excess carbohydrates to fat).  When the insulin levels suddenly drop a couple of hours later, that drop produces insatiable hunger. So, two or three hours after enjoying a fat-free Pop-Tart or a Snackwell cupcake, one is ripping the cubboards open to find another carbohydrate fix. By thus inducing a continuous-snacking mode, the new high-carb snack foods increased overall caloric intake far beyond the calories listed on their labels.  Third, diets high in refined carbohydrates increase triglyceride levels, reduce HDL cholesterol (“good cholesterol) levels, and in general create lipid profiles that are quite damaging to the arteries.

So, while few people actually stuck to a strict low-fat diet, many, many people became addicted to refined carbohydrates, and as a result became fat.

It has only been in the past five or six years that the low-fat dogma has begun to moderate, largely thanks to the (now mercifully faded) low-carb craze that struck at that time.  We now hear somewhat more reasonable advice about good fats and bad fats, and good carbs and bad carbs. But much of the damage has been done, and at least partially because of the major push for low-fat diets, we Americans are fatter and less healthy than we used to be.

By the way, to this day it has never been shown that low-fat diets applied across the population would reduce the incidence of heart disease.

The low-fat diet policy amounted to a massive public health experiment, with the research subjects being us. Our government and our scientific organizations have yet to apologize for subjecting all of us to this travesty.  Indeed, like the outcome of the great experiment in subprime mortgages, the outcome of the low-fat experiment is not particularly chastening to our Central Authorities. In fact, it works to their advantage.

To see why, consider the final way in which the obesity crisis is like the mortgage crisis. To prevent another mortgage crisis, our government, in its wisdom, did not promise to avoid promulgating any more counterproductive economic policies that will force businesses and individuals to act in harmful ways. (In fact, government policy continues to coerce lending to unqualified individuals.) Rather, they passed massive new “financial reform” legislation aimed at preventing banks and other financial institutions from behaving logically in response to bad government policies. The cure for bad regulation is more bad regulation. And when the results of its own bad regulations created an opportunity to grab even more control over the marketplace, our government lept at the chance.

Similarly, having (probably inadvertently) made policies that resulted in a fatter, less healthy populace, our government is now poised to take advantage of that opportunity, to turn the purportedly grave danger posed to the nation by the obesity crisis into a mandate for assuming powerful controls over the prerogatives of individual Americans.

And now, having learned that, like bad economic policy, bad public health policy can get them to where they want to go, our Progressive leaders are turning their attention to the next great public health initiative. Far from apologizing to us for the damage they caused with their low-fat experiment, they are plotting the next great experiment in public health which they will perform upon the population.

It appears it will have to do with salt.