Code Blue --- Health Care In Crisis by Edward R. Annis, MD

Reviewed by Jerome C. Arnett, Jr., MD, FCCP
Article Type: 
Book Review
Spring 1996
Volume Number: 
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Americans enjoy the best medical care in the history of the world, but our system is being destroyed by government regulation, by the socialist principles embodied in the Medicare and Medicaid systems, and by the liberal social policies our society has followed over the last half century: that is the theme of Code Blue: Health Care In Crisis, by Dr. Edward R. Annis, past president of both the American Medical Association (AMA) and the World Medical Association, and one of America's most distinguished physicians. He tells us what the "liberal press" has consistently hidden: that the problem is government, not health care, that all of the problems in health care have a "made in Washington" label, and that the current health care "crisis" is simply a crisis in government mismanagement. Unfortunately, most Americans, including many of our leaders in organized medicine, are not aware of this.

The first of the book's two parts, "The Golden Age of Medicine," is both an autobiography and a description of the "good-old-days." In part 2, "Uncovering the Hidden Truth," Dr. Annis discusses the mistaken ideas and social policies that he feels have led to our current predicament. The last chapter, "What's the Solution?" gives his prescription for removing government interference and allowing the system to recover.

As Annis describes it, the spread of socialist ideas in this country began over 50 years ago, when a sister organization to the English Fabian society was formed in New York. It quickly evolved into a socialist group known as the Americans for Democratic Action. Because socialism was unpopular even then, the Americans for Democratic Action adopted the Fabian tactics of "permeation" in order to transplant socialist ideas into both major political parties and of "gradualism," designed to socialize American medicine by stages. He feels this strategy eventually resulted in the passage of the first stage, the Medicare program, in 1965.

Dr. Annis relates the dramatic story of how he was thrust into the presidency of the AMA in the early 1960s, prior to the passage of Medicare. He was an effective and articulate voice for organized medicine, having personally debated, among others, Hubert Humphrey and Walter Reuther. In his famous Madison Square Garden television appearance in 1962, he directly challenged the President of the United States on national television. Projecting into the future, he correctly predicted that the Medicare scheme would "put the government smack into your hospitals, defining services, setting standards, establishing committees, calling for reports, deciding who gets in and who gets out, what they get and what they don't, even getting into the teaching of medicine and all the time imposing a federally administered financial budget on our houses of mercy and healing."

As he correctly predicted, our system currently "is 'under siege' by a bungling bureaucracy beyond our control. [It] is subjected to the perverse incentives of arbitrary price-fixing, utilization review, concurrent review, retrospective review, and retroactive denial of payment - making health care the most heavily regulated industry in the history of our nation.... Imagine the bureaucratic enormity of annually monitoring 22 million admissions and discharges at 7000 hospitals with 467 diagnosis-related groups plus 350 million charges from half a million doctors with 7000 different encoded procedures." He notes that last year hospitals lost $9 billion on Medicare patients and that since 1970 the cost of Medicare has doubled every five years. "By now the truth of this axiom should be obvious: 'Government has no solutions, government is the problem.' "

Dr. Annis' leadership of the AMA in the early 1960s, with his championing of the principles of individual rights and free markets, is in sharp contrast to the philosophy of the current AMA leadership, who refuse to confront the current administration but instead seem satisfied to ask for a "seat at the table."

Annis believes that failed liberal social policies are compounding the current health care crisis. Over the past 25 years, we have spent over a trillion dollars on the "war on poverty," yet our illegitimate birth rate has increased by 85%. Unfortunately our minorities have been hardest hit by this disintegration of the family, the very groups the "Great Society" policies promised to benefit. His point is well made: "No amount of free food, no amount of free medical care, no amount of income redistribution will induce people to act responsibly." He also believes that understanding and correcting these problems have been made more difficult, thanks to our news media campaign of "myth-information," which advances the "socialist notion of 'entitlement,' the notion that health care is a 'right,' just like life, liberty, and the pursuit of happiness, which are 'free' and guaranteed under the Constitution."

In evaluating President Clinton's proposed "managed competition," the author observes: ...the Clinton plan promises the impossible. Government cannot preserve high quality health care, prompt service, and freedom of choice without allowing patients to pay their own bills and without allowing health care providers the freedom to meet demand; Government cannot reduce the regulatory burden or control fraud under a third-party payer system; government cannot apply price controls without creating shortages and rationing care; and government cannot strengthen the economy by limiting total health care spending any more than it can boost the economy by limiting what we spend on shoes. If government could solve problems through central planning and budgeting, the Soviet Union would be the sole surviving superpower and the United States would have collapsed; West Germany would have been taken in by East Germany; and North Korea would be the envy of South Korea.

Dr. Annis believes that our health care system can be reformed by surprisingly few changes. As he points out, "Finagle all they will, bureaucrats and entrepreneurs will never overcome the problem of excessive costs without correcting the basic flaw: the system of third-party payers, whether government or corporate." With minimal changes in our tax laws, Medisave Accounts would empower the patient by breaking the tie between job and health insurance and even would allow the gradual phasing out of Medicare. Annis also would eliminate all state-mandated insurance "benefits" and reform our tort laws.

Code Blue is written from a conservative point of view. It certainly is not a balanced presentation of all the options currently available to us for health care reform. Nonetheless, it provides valuable material for the health care professional, medical executive, government policymaker, and every American who would better understand our current health care debate.

Reviewed by Jerome C. Arnett, Jr., MD, FCCP
Elkins, West Virginia.

Originally published in the Medical Sentinel 1996;1(1):39-40 and with permission from the Journal of the American Medical Association, July 6, 1994 - Vol 272, No. 1, pp.74-75, Copyright © 1994, American Medical Association.

(Code Blue --- Health Care in Crisis by Edward R. Annis, MD. 278 pp., Hardcover, Index, $21.95, ISBN: 0-89526-515-X, Washington, DC, Regnery Gateway, 1993.)

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