U.S. health care debate — Part 3: We need more free market incentives by Miguel A. Faria, MD

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Saturday, July 15, 2017

In Part 2, we debunked propaganda, erroneous claims, and phony statistics cited by obfuscating, socialized medicine proponents to tar the U.S. health care system. In Part 3, we continue to debunk misinformation and describe how government interference in the medical marketplace has contributed to, and in certain instances even created, the problems we are experiencing today. Yet, Democrats and proponents of socialized medicine insist more Hospitalgovernment is needed, and that ultimately the single payer system is the solution. Factoids, misinformation, phony claims and misleading statistics are all used in that effort.

When it comes to health statistics, one must ascertain that the data cited have not been tortured until they confess. The U.S. public health establishment has become a willing vehicle because it has become so politicized that figures and statistics must be checked and double-checked, especially when it concerns social and economic issues impacting on health care policy. And make no mistake about it, more than ideology plays a role; the allocation of public funds for programs or research, so intertwined with financial self-interest, is also a major consideration for these “public servant” health officials.

Returning to their criticism of the U.S. health care system, an article by an American economics professor characteristically remonstrated, “administrative complexity and waste are no accident but rather are baked into our private health insurance system and made worse by continuing attempts to use competitive market processes to achieve social ends other than maximizing profit.”

But U.S. private health insurance “are baked” in complexity and bureaucracy, not because market forces are at work but precisely the opposite: Health care is probably the most extensively government-regulated industry in the U.S. The solution offered by this professor is, predictably, the adoption of the government as the single payer! Why would the government do a better job with the health care industry than it has done with every other business, industry, or profession, other than defense, in which it has inserted itself with disastrous consequences? We are left to wonder.

Another article by CBS News states: “Medical care prices increased 4 percent in 2016 according to the Bureau of Labor Statistics, and premiums under Obamacare's second-lowest costing "silver" plans rose 7.5 percent in 2015. Plus, the U.S. spends far more per capita on health care — $9,892 in 2016 — than any other nation.” All this is true, and the article correctly cites some of the reasons why medical care is expensive. Unfortunately, the first factor listed, “high administrative costs” fails to identify the real culprit; instead, like the previous writer, the CBS article blames high administrative costs on the “U.S. having so many payers — from a slew of private health insurance companies to government programs — that physicians have to negotiate with in the regular course of business.”

High administrative costs are the result of government imposed regulations, such as waiting on the phone for authorization for medical testing and procedures, approval for hospitalizations, hospital days, etc., and for this rigmarole an excessive number of billing clerks and bureaucracy is needed.  These regulations begin with Medicare and Medicaid to reduce costs, paradoxically, and soon enough find themselves in the business of “private insurance.” Thus, bureaucracy and complexity in the third party payer system is directly or indirectly government related. A “slew of private health insurance companies” is good for the public; it does not increase complexity per se as claimed, because free market competition and variety of choice in insurance plans, if unfettered by government, would increase freedom of choice and reduce costs, as they do in every other industry.

Other pernicious causes of high cost of medical care are the practice of defensive medicine and the high price of technology. The first has been an insoluble problem because the U.S. has more preying lawyers than any other “industrialized nation,” and in litigious America, fishing expeditions and ambulance chasing have sadly become repulsively too common. Trial lawyer advertising in the quest of fomenting an adversarial society, instead of a harmonious one, is another fact of life. Defensive medicine to protect from medical lawsuits, consequently, will persist, until vigorous tort reform is implemented. High technology will result in high costs because we are at the cutting edge of advances, and research and development is expensive.

The article, as mentioned, identifies the problems, but then as if on cue — like some of the other phony claims and leftist rhetoric that we have encountered — calls for socialized medicine. The sophistry used in this fallacious claim is that universal coverage will bring about a reduction in health care costs, asserting, “When countries cover everybody, they then turn to saving money.”Still waiting? Waiting times in Canada

The article, though, leaves out the real and only possible explanation for how nations with socialized medicine save money. They do so by rationing of medical care, as I stated previously: By queues and waiting lists, restrictions to see specialists, limiting access to life-saving medical treatments, cutting back approved services, and even outright denial of services to the most vulnerable in society, those deemed to have incurable illnesses too expensive for the government to allocate resources, and the elderly, after they reach a certain age.

Only as if in passing, the article makes the subtle but astounding admission that some officials recognize the real problem of high medical care costs and are trying to break through the bureaucratic haze to provide real free market solutions: “A few providers in the U.S. and abroad are experimenting with a more direct approach to patients paying for primary care, in which patients pay a monthly fee to the office as they would pay a premium, then pay directly for visits and procedures.” But there the suggestion stops and no effort is made to pursue the thought to its logical conclusion and allow the invisible hand of the free market to function unhindered. 

Government is the problem! Reforms are needed but in a completely different direction. We have been traveling in the wrong direction for the last several decades — that is, more and more government intervention, which has worsened the situation that liberals created in the first place and now decry. We need instead more free market incentives and deregulation, and the removal of the monopolistic protection that the government has extended to the big insurance carriers. With these reforms, the health insurance industry would be subject to more competition and less government protection, improving access and facilitating coverage by making insurance more affordable.

Lack of competition is the major reason, for example, that Health Savings Accounts (HSAs) have not been expanded in many states, remain a very limited option, and truly affordable catastrophic health insurance has not been made available.  So, admittedly, there are problems in the health care system, which need addressing. Both medical care delivery and prescription drugs are also too expensive. If costs and bureaucratic red tape could be reduced, the number of the uninsured would further decrease without the need for government compulsion and penalties. Likewise, pharmaceutical competition would bring down the price of prescription drugs. So it’s worth repeating, the underlying cause of dissatisfaction is not that we need more government involvement, but that we need more competition and more free market incentives.

Since third party payers — whether private insurance or government programs — foot most medical bills, doctors and patients do not even discuss fees for elective medical and surgical procedures. The perception (and reality) is that someone else pays the bill, so that both patient and doctor are reluctant to discuss fees, even though 96% of medical encounters are routine, not requiring emergency care.

Just recently in fact, my wife and I had the opportunity to see just how much the invisible hand of the free market has been shackled in the delivery of private, fee-for-service medical care. Asking my wife’s surgeon for his fee for an elective procedure that she was contemplating, he dismissed the question, saying he “didn’t know” and “we needed to ask someone in the business office!” Later, he admitted to us that some dentists and cosmetic plastic surgeons had a competitive and better system because patients pay for their own health care in those settings. 

The point in this story is that to bring prices down in our medical care system, as in every other consumer transaction, fees and prices must be discussed to encourage competition. 

Here is another story: Another friend, who as an uninsured but prudent consumer of health care (“fee for service” medicine), routinely shops around for the best doctors at the best prices. She needed bunion removal surgery and had it done, after she found the right doctor at the best price. He turned out to be one of the best specialists in town, yet she managed to get a 50% hospital reduction and a 40% doctor’s fee reduction for her surgery and follow-up, post-op care. My wife and I have also experienced major reductions in fees by both doctors and hospitals in other specialties for both diagnostic and therapeutic procedures. In fact, we found other physicians, who were equally price-conscious and happy to help patients obtain competitively priced and equally effective medications, even from other countries for both family and friends. The free market incentive of competition, though, has to be there, promoted by both patients and health care providers, for reducing costs. 

It seems insurance companies are disliked by everyone, but unnoticed has gone the fact that hospital costs and doctors fees have increased astronomically. Insurance companies pay this enormous bills and pass the cost to the consumers, accounting for the excessive U.S. health care costs decried by everyone and that compare unfavorably with other countries. This is definitely a problem needing serious addressing, and I venture to say that if politicians do not begin to deregulate the medical industry, and hospitals and health care providers do not help the situation on their own by instituting competition and free market incentives — we could very well end up with the government-run, single payer system. Such socialized national health care system would implement severe rationing, “as in other industrialized countries,” which is the main way they lower costs.

Let me give you now a very critical example. A family friend, who is fully insured, underwent arthroscopic shoulder surgery for a torn rotator cuff ligament. Her surgery lasted 2 hours and she spent another 2 hours at the free-standing orthopedic facility where the surgery was performed. Everything went well and she was pleased with her surgeon. Fees were not discussed. Now hold on to your seat! Her surgeon’s fee was $5,500; the physician assistant, $4,000; the anesthesia was $3,900; the surgical/recovery facility fee was $38,000; the physical therapy and miscellaneous accounted for the rest. Her total bill was $56,000, and there was no hospital stay. Incredible!

How about yet another telling example? The chain free-standing eyeglass facilities have also been getting into the act. I went for a pair of glasses with a supposed promotion I had received in the mail; nevertheless, the price was $500 for a pair of glasses, which I turned down. The optician said, “You have insurance, don’t’ you? I said, “No.” He shrugged and walked away. The optician at my ophthalmologist’s office filled the prescription for $150! 

So there you have a more complete picture of what is wrong with the American health care system. It isn’t quality, for we have the best. It is cost, too expensive because of the distortion of the free market largely created by government interference. The solution is to promote free market incentives and encourage competition.

And yet the progressive theoreticians want to overhaul the entire system and throw the baby out with the bath water. In the face of this avalanche of misinformation and misguided solutions — let’s keep and improve the best medical care in the world with the free market solutions I’ve outlined elsewhere.

Let’s conclude by remarking on two other comments published in the Telegraph. One of them, who must have been confused, identified the problem with the U.S. health care system as not having enough free market incentives (which is true) as well as being a “medical monopoly” (which is not true) — and then proposed the contradictory and completely wrong remedy: the government as the single payer.

Lastly, there appeared an unsigned editorial on July 29 on The Telegraph (Macon), a McClatchy newspaper. It started correctly stating there had been a lot of debate and then went on to ask, “The essential question is who is going to pay for health care?” A good discussion with factual information followed, but alas, in the end it too sank into partisan emotionalism and class warfare rhetoric: “That brings up other important questions…. What kind of country do we want to be? Do we want to be the kind of country that has a two-tiered health-care system — one for the haves and one for the have-nots that rations care depending on one’s ability to pay?”

We can ask and answer the editorial writer’s repeated question, which he never deigns to answer: “Who pays the bill?” Of course, it would be the overburdened taxpayers, the 53% of citizens who carry most of the federal tax burden.

In response to the rest of his assertion about the two-tiered health-care system, let’s also remind the editorial writer that completely egalitarian systems and free lunches have never existed. In Cuba, there are still two tiers in medical care; one acceptable for the Cuban nomemklatura and the foreign tourists, and another direful one for the people. In Britain, there is the National Health Service (NHS) for the people, and a higher tier and private one for those who can afford it. In Canada, there is the National Health Insurance (NHI) for the proud Canadians, and the American medical care for those who care come across the border. And in China, the “communist” giant, where everyone is supposedly equal, there is a first class and free health care system for the cadres and the princelings, and another direful system that still requires payment for the common people.

And yes, in the freedom of the U.S. health care system, it is better that ability to pay, freedom of choice, and affordability play some role in medical care, as they do with everything else in life— such as food, clothing, housing, funeral arrangements, etc., than having the government, as the single payer, ministering, rationing by death, and deciding who lives and who dies. Just ask the parents of Charlie Gard! 

Written by Dr. Miguel Faria

Miguel A. Faria, M.D. is a retired clinical professor of neurosurgery and long time medical editor. He is the author of Vandals at the Gates of Medicine (1995); Medical Warrior: Fighting Corporate Socialized Medicine (1997); and Cuba in Revolution — Escape From a Lost Paradise (2002). His website is http://www.haciendapub.com.

This article may be cited as: Faria MA. U.S. health care debate — Part 3: We need more free market incentives. HaciendaPublishing.com, July 14, 2017. Available from: http://www.haciendapublishing.com/articles/us-health-care-debate-%E2%80%94-part-3-we-need-more-free-market-incentives-miguel-faria-md

Different edited versions of this article with different illustrations have appeared in GOPUSA and AIM. The version in AIM was re-titled, "Tortured Data making health Care Reform Much Harder and appeard July 24, 2017. The longer version that appears here has been updated and is the same longer version as in The Telegraph (Macon) published August 2, 2017.

 Copyright ©2017 Miguel A. Faria, Jr., M.D.

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Comments on this post

Charlie Gard comment

In a private note I was sort of reprimanded for taking “an unfair shot at the end with Charlie Gard.” Let me state categorically the person writing to me is among the most reasonable, the best informed and amiable liberal [my label, not his] one could find to engage in debate anywhere. In fact this comment is included here because I consider it instructive and valuable. With that caveat, let me proceed. I was told:

[The case] wasn't about insurance or payment. It was a medical decision made by that hospital and the baby's doctors over ethics, not insurance or payment. Even now, children are treated without their parents permission all the time. The court, whether you think it right or wrong, has overruled parents on numerous occasions. Ask any Jehovah's Witness.

To which I replied I disagreed about the “unfair shot' at the end. The medical decision in the case of Charlie Gard was made by all concerned, except the parents. The decision was made then by the NHS, the British government and their courts, which could have promptly overruled "the doctors and the hospital," and let the baby come to the U.S. But no, in Britain they were all in agreement not to treat, except for the parents who wanted the baby treated.

As to the Jehovah's Witness, the situation is the complete reverse. Jehovah’s Witness parents have been always been for not to treat (usually blood transfusions), and the US courts have ruled for life, allowing the transfusions. Big difference in term of medical ethics. With Charlie Gard it was the complete opposite. With that the exchange ended.

I should add It took the British Courts 6 months with pressure mounting from President Trump as well as the Pope interceding for the parents, to finally decide against the British socialized medical establishment: the NHS and the NHS-controlled hospital and doctors, by which time it was too late. Charlie Gard died a few days later. The adage, Justice delay is justice denied also aptly applies here, as this case dramatically demonstrates.

It is more than just a matter of who decides in general. It is also about government exerting power, rationing by death as covert State policy, government intrusion into family decisions, sidelining the ethical principle of acting in the best interest of the individual patient, and ultimately individual freedom. And everything been equal, we should go with freedom, which in this case is for the family to decide.

Admittedly, parental freedom has limitations with the state of medical knowledge and the dictates of medical ethics. For example, the courts have a compelling interest in the rule of law and the ethical consideration of acting in the best interest of the patient, especially when others make decisions for the ailing patient, decisions contested by others as the wrong medically or ethically, such as not giving or withdrawing efficacious treatment because of parental incompetence, or misguided religious beliefs; or terminating life because of the convenience of the parents, as in partial birth abortions and infanticide (which I’ve written against, despite theoretical parental wishes), or the impatience of relatives and convenience of potential heirs. — MAF

From the mouths of Canadian doctors.....

Hi Miguel,

Keep up the good work exposing the lies and deceit of those wishing to push socialized medical care on to the United States! Why do you think my dad and so many of his friends came to the US to practice after they graduated medical school in Nova Scotia? The Canadian government had to approve every procedure they felt their patients needed, and in many cases procedures were rejected because they were too expensive. The life and well-being of the patient did not factor into their calculations. My Dad and his friends simply felt they could not ethically practice medicine in such an environment. Liberals have said to me that that was just an excuse they made up because they wanted to make more money in the United States practicing medicine, but they are so ignorant, simple, and crude in their thinking I don’t bother pursuing any further discussion with them when they say something as stupid as that anymore. Marxism is appealing to simple people, because the explanations it gives for human behavior ARE so simple. If you make a nuanced point, you can bet a liberal will miss it. Best Regards, Adam

Canadian health care

Dr. Faria hits a home run with his analysis of health care. Look at the waiting times for needed surgery in Canada. Of course, if waiting times are long enough, surgery will not be needed - the patient will be dead. The British courts took months to decide that Charlie Gard was beyond help - which by that time was correct.

Do you recall Otzi the Iceman? His 6000-year-old frozen body was found in an Alpine glacier. For years, scientists speculated about the cause of death. Some of their ideas were quite creative. But finally a CT scan was done, and an arrowhead was found. Perhaps Otzi trespassed on someone else's land, or looked at someone else's woman. However, Otzi's views on the subject were not available.

If you wait long enough to do diagnostic tests and administer treatment, the question becomes irrelevant and meaningless. This is called "queueing." In the extreme, it represents the Final Solution to the health-care problem. No, we're not there yet. But the time to sound the fire alarm is when you smell smoke, not when the whole structure is in flames.
Dr. Faria replies: Dr. Stolinsky, this brings to mind my idea of socialized medicine as rationing by death but you have come up with a more vivid illustration of the problem, the ultimate, cosmic, philosophic meaning of universal coverage that everyone should ponder:

"...Socialized medicine is “good” because of “universal coverage.” Overlooked is the fact that U.S. survival figures for most cancers are the best in the world, while the figures for Britain’s National Health Service are dismal. The Brits have “universal coverage” – with six feet of dirt. Also overlooked are the prolonged delays for elective procedures, and sometimes even for necessary procedures, in Canada, in Britain, and now here. And if officials refuse cancer care, they suggest assisted suicide. But it’s “free” and “universal,” right? Well, so is death.

"Europeans have an excuse for believing in socialism and a powerful central government. They lived under kings for centuries. The French, Germans, and Russians recall that their nations were more powerful when they were ruled by kings. They yearn to be taken care of by an authority figure. But America was built by individual initiative. What’s our excuse?"--- Dr. David Stolinsky, January 15, 2015

McCain vs. The Chappaquiddick Swimmer

I was sorry to hear this morning of McCain's diagnosis on the way to work. I don't like him, but despite the positive spin several news outlets are trying to put on it, I don't need to tell the many neurosurgeons here what is going to be the outcome, when you know the median survival time is one year.

Contrast that to the patient whose was first operated on by Dr. Loyal Davis in January 1926, and whose case writeup I linked to several days ago on a followup to a series of posts about George Gershwin. In those days, the patient had perhaps several months less to live following first craniotomy then today. That is not so impressive. In over 90 years, the classic triad of surgery, radiotherapy, and chemotherapy seems to have reached its limits. I believe that was first stated by neurologist Dr. Fred Plum in 1969. He felt it was about the number of tumor cells removed during cytoreductive surgery. If one can only remove 95% of a glioblastoma, then ancillary aids to surgery will not be effective. He then calculated that the glioblastoma could be cured if 99% could be removed and then the ancillary methods of radiotherapy and chemotherapy applied. The problem is that in practice, 99% of the tumor can NEVER be removed, so that is why unless some new radically different approach is developed, very few if any will be cured.

Dr. Davis reports using Zenker's solution to treat the tumor bed. I suppose one could consider that chemotherapy in the 1920's was Zenker's solution. It is used as a fixative by biologists, as an alternative to formaldehyde. As such, it is a cell poison, and it was popular in the early 1900's with surgeons because by treating the tumor bed of an excised malignant glioma with it, they felt they could kill residual tumor cells they knew were there but could not see so they could not resect them.

What irks me is that I see all over the liberal blogs complaints that McCain is receiving treatment that none of the rest of average Americans would ever have. I am presuming that is because he is a "rich white Republican male."

That is NOT true. He will receive the same ineffectual treatment that any of the rest of us would. It is not rocket science to resect a glioblastoma, and there are no new advances in radiotherapy or chemotherapy that only he would receive.

BUT SINCE he is not a murderous Kennedy, I guess that is why that charge was not raised in 2009, and you know Ted Kennedy did not use any plan connected with Obamacare. Plus, Kennedys have more money than God, so if the rich receive the best treatment in the USA, why did he die anyway, with the usual course of the illness that would be seen in any patient with far less money than him?

I go off course....I apologize...I just wanted to say that this same thought was going through me on and off today. With effective complete control of the government, why again do Republicans shoot themselves in the foot and act against the president? It wins them no friends with the left to oppose repealing Obamacare. If they still do not get it, we could easily lose all we have gained. ---ARB

PS. Yes, it is partially about Obamacare working in favor of Republican (and Democrat) politicians, but I still see it as Republicans still never developing the backbone Democrats always had.
I found a one year survival tops for glioblastoma, and I reached that with only a few patients, after much misery from the chemotherapy that adds the two or three extra months of life. I had one patient that went much longer than that with just two major surgeries (no neurological deficits) and radiotherapy. He became a friend of my entire staff, and as a local iron works executive, he personally made a very nice piece of work for a treasure of a mine, a Meso-American sculpture (another one of my interests). We still think of him warmly! I've other unforgettable patients who succumbed to this dreadful disease after courageous struggles. I cannot say the same for some of my low back pain patients with secondary gain who tried to milk the system--- MAF

Glioblastoma Treatments

I can sympathize. I have lost family members, friends, and even grad school advisors to them! That would include two neurologists!

The tumors defy comprehension in their viciousness. I recall in the 1930's it was thought that if the tumor seemed confined to one lobe of the brain, a total removal of the lobe might be curative. Many frontal lobectomies were done to test this out, but it was found the tumor invariably reoccurred. This suggested that by the time the patient reached the surgeon, the tumor had already seeded distantly.

I presented an interesting case at a lab meeting once. If you recall, my lab in grad school was interested in the neurobiology of memory. Well, there was a woman who developed a temporal glioblastoma which invaded the hippocampus. Complete temporal lobectomy was done, in the hopes of removing all the tumor. This time it seemed a relative success, but as we know, both hippocampi can communicate with each other via a thin bundle of axons connecting the two. When the woman began to show signs of memory loss, MRI diffusion tensor imaging of the white matter showed the tumor had invaded the contralateral hippocampus via just these few axons connecting the two.
I assume she eventually died, but since one temporal lobe had already been removed, they could do no surgery on the other, and she was left totally bereft of memory. She lived completely in the present.

Then there was a great aunt of mine who developed a gross exaggeration of a previous neurotic personality, along with "word salad." The psychiatrist thought it best to involuntarily place her in Gracie Square Hospital, which is a New York psychiatric hospital.

A keen young psychiatric resident noticed the "word salad" was really Wernicke's aphasia, and also that she had a slight right pronator drift. She was transferred to Lenox Hill Hosptial and then Memorial Sloan Kettering where CT showed a thalamic glioblastoma so large, it was touching the meninges of the temporal lobe. When a knife happy Pakistani told her family that he could remove all of it, they asked my dad for advice and he said don't let him touch it. They ignored him, and they let the surgeon operate. He did remove most of it, by he didn't care how many cranial nerves were cut through in the process. What that did to her emotionally was not worth the one year of extra life it gave her. Plus, he must have damaged the cortico-bulbar fibres, as it was even harder to tell her emotions, since she developed pathological laughing and crying.

On some level, these tumors must be fundamentally different from all of the rest of the intracranial neoplasms. How else can you explain so little progress we have made in curing them since Rickman Godlee removed the first malignant glioma in 1885? His patient died a month later of meningitis and the autopsy showed his brain was tumor free, but I am sure if he did not die of other causes, it would have returned. -ARB

Winning strategy in ObamaCare repeal

“This week’s news that the Senate failed to repeal Obamacare is a bitter disappointment to the 18 million people in the individual market struggling with unaffordable premiums and deductibles. It’s also bad news for another 8 million who are opting to pay hefty penalties rather than buy those unaffordable plans. And things are only getting worse. Health insurers are asking for giant rate increases this fall, as high as 50 percent in Connecticut, Maryland and Virginia. Ouch.

“If members of Congress were feeling the same pain, they’d be more focused on repealing and replacing the collapsing law. But they’ve got a sweetheart deal. Even though the Affordable Care Act requires them to purchase their coverage on Obamacare exchanges and follow the same rules as the rest of us, President Obama set up a way for them to weasel out of it. They get to choose from 57 gold plans and have John Q. Public pick up most of the tab. Meanwhile, in nearly half the counties in the nation, ordinary folks will have only one insurer available. Or none at all..."

Read the full article at GOPUSA

Betsy McCaughey is a senior fellow at the London Center for Policy Research and a former lieutenant governor of New York State. she is a frequent health care writer at GOPUSA,