News Capsules (Fall 2001)

Compiled by Medical Sentinel Editors
Article Type: 
News Capsules
Fall 2001
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Lawsuit Filed Against HHS and Medical Privacy Rule

"Opposition to the new medical privacy rule and support for privacy rights took a giant leap forward on July 16, says one health care policy organization. A group of physicians and medical societies from South Carolina and Louisiana have filed a lawsuit against Secretary Tommy Thompson, and the U.S. Department of Health and Human Services (HHS), charging that the medical privacy rule, and a portion of the 1996 Health Insurance Portability and Accountability Act that required writing the rule, violate the U.S. Constitution and are impermissibly vague on federal preemption of state law. Civil Docket No. 3:01-CB-2965 was filed in the United States District Court for the District of South Carolina Columbia Division.

" 'This lawsuit is the first promising step taken to undo the constitutional damage wrought by the medical privacy rule,' says Twila Brase, R.N., President of Citizens' Council on Health Care.

"CCHC has expressed its constitutional concerns about the medical privacy rule which was put in effect by the Bush Administration on April 14, 2001 with full implementation required by April 14, 2003 for most health care providers.

" 'The so-called medical privacy rule violates individual Fourth Amendment rights against search and seizure because it allows government regulators to get their hands on everyone's medical record without patient consent or a search warrant,' says Brase. In direct opposition to constitutional protections, HHS officials gave themselves unlimited authority to access all medical records on any day at any hour. Neither a citizen complaint nor a search warrant is required."

The big canons were brought in on August 2 when AAPS announced that it was also suing HHS, challenging the regulations themselves. In announcing the lawsuit, AAPS released a survey showing physicians are almost unanimously (96%) opposed to the rules because the rules themselves intrude on the privacy of patients and violate medical record confidentiality.

"Even more alarming than forcing doctors to reveal patient records to the government,' according to AAPS Public Affairs Counsel Kathryn Serkes, 'is that patients may be refused medical treatment if they won't consent to disclosure."

(Citizen's Council on Health Care, July 16, 2001, and Wes Vernon, "Doctors Sue to Stop Anti-privacy Rules,", August 2, 2001.)

Proposed International Treaty Threatens Internet

"A new proposal coming out of an international conference threatens the freedom you enjoy through 'the people's medium,' the Internet.

"James Love, writing in News Viewz, reports that the just-concluded conference at The Hague in the Netherlands would impose 'a bold set of rules that will profoundly change the Internet' and 'extend the reach of every country's intellectual property laws,' including those that are not related to the Internet.

"Last December, reported on efforts within the U.S. government to make Web sites responsible for everything said by the other sites to which they provide links...if a non-profit Web site provides links to a partisan political site, the non-profit would lose its tax-exempt status because that would count as a campaign contribution. This is widely feared to be a leftist reaction to the Internet's ability to get around the mainstream media and expose the public to the other side of issues...

"As Love puts it, the new international treaty, if it takes effect, 'will strangle the Internet with a suffocating blanket of overlapping jurisdictional claims, expose every web page publisher to liabilities for libel, defamation and every other speech offense from virtually any country.'

"Membership in The Hague Conference now includes China and Egypt. One can hardly imagine an American Web site relishing being held to the "speech standards" prevailing in places where repressive civil actions that crush dissent are commonplace. But the European delegates would not even consider adding favorable speech languageWhat caused all this activity to muzzle the Internet? Get this:

" 'European negotiators were also unhappy with the generally free and unruly nature of the Internet, and saw the convention as a mechanism to reign in hate speech.'

"To some, that raises a red flag and sounds eerily similar to frequent leftist rhetoric in the United States. Who defines 'hate speech?' Is it defined by the prevailing ultra-left tone on many of America's campuses where professors lose their positions and students are suspended or refused graduation for speaking against politically correct orthodoxy?

"...Presumably, there will come a time when the president will be asked to submit this treaty to the U.S. Senate for ratification. Look for another controversy over yet another document which, according to the report cited above, would 'diminish national sovereignty.' "

(Wes Vernon,, June 27, 2001)


Patients' Bill of Rights Passes Both Houses of Congress

"Delivering a last-second victory for President Bush, the GOP-controlled House approved a revised HMO lawsuit bill.

"The mostly Democrat supporters of the so-called 'patients' bill of rights' - which even supporters admit will make health insurance less affordable --- that passed the Senate in June threatened to modify or kill the House measure.

"The 226-203 vote solidified a tense week for the president. He had extensively lobbied about a dozen House Republicans who insisted on supporting the Democrat-backed lawyer-friendly version of the bill, which included larger caps on judgments and expedited litigation processes, opposed by Bush.

"Though supporters of the legislation style it as pro-consumer, opponents say it is anything but and dub it a 'lawyers' bill of delights.' CNN reported that it would raise the cost of health insurance more than 4 percent, hurting the very people it is alleged to help.

"The original bill --- introduced by Reps. Charlie Norwood, R-GA, John Dingell, D-MI, and Greg Ganske, R-IA --- appeared to have enough votes to easily pass the House, until August 1, when Bush and Norwood reached an agreement on compromise language that bridges the differences between their positions. This agreement cost Norwood the support of his former allies, but it also solidified support for the bill among the Republican rank-and-file, which handily supplied the eventual margin of victory.

"The president...had pushed for the new language --- which limits non-economic and punitive damages and moves some kinds of lawsuits from state to federal court --- to limit lawsuits against insurers in a lobbying blitz over the previous two weeks. He had vowed to veto the original version of Dingell-Ganske unless changes similar to those in the amendment were made.

"Under the Norwood-Bush amendment, non-economic and punitive damages would be capped at $1.5 million each --- far less than the $5 million suggested by the earlier bill, but triple Bush's original position of $500,000. Though patients could sue HMOs in state court, the amendment would require the courts to follow the more stringent federal lawsuit guidelines...

"The House added language to expand the medical savings account programs, which encourage tax-free savings accounts to spend on health care. Democrats mostly opposed the measure, claiming that the accounts mostly benefit the wealthy and do little to help working families.

"Sens. Ted Kennedy, D-MA, and John Edwards, D-NC --- who had joined Arizona Republican Sen. John McCain in getting the Senate to accept a bill in June --- told reporters before the final vote that they would attempt to 'improve' the bill in a conference committee planned to reconcile the House and Senate versions. Barring this, they plan to use the committee to kill these versions of the bill and plan to amend unrelated House bills to include their version of the lawsuit bill.

" 'The more we see of this, the less we like it,' said Edwards, a wealthy trial lawyer...."

The Senate version of this bill that passed on June 29 carries an unrestricted right to sue in state court and punitive damages where the sky is the limit. It would add nine million to the ranks of the uninsured, swelling public programs such as Medicaid and state CHIP programs subsidized by the taxpayers and add $4.2 billion in litigation costs.

(United Press Interna-tional and Wires, August 3, 2001)


"For the second year in a row, protests by irate Tennessee taxpayers persuaded the state legislature not to institute a state income tax.

"Why is the legislature repeatedly seeking an income tax? The answer is: out of control spending.

° Since 1997, state spending has jumped 33 percent --- about four times the rate of inflation over the past three to four years.

° Most of the increased spending has gone for TennCare, the state's comprehensive health care program for the poor, the uninsured and the uninsurable.

° Spending for TennCare will increase 12 percent this year alone.

"The highly subsidized premiums for TennCare have attracted many people who aren't eligible. Estimates put the number of people in the program illegally at one in five, or more than 260,000 Tennesseans."

(Investor's Business Daily, July 17, 2001.)


Doctors as Agents of the State

"Many doctors apparently are uncomfortable about having to educate their patients about drug prescriptions. Hence the American Medical Association's contemplation this week of an outrageous resolution to seek a government ban on prescription drug ads on television.

"Predictably, the AMA claims that a ban on TV drug ads would promote the public's health. Patients, they claim, are demanding well-advertised prescription drugs that are not appropriate for their condition. But when that is the case, it is the responsibility of doctors to explain to their patients why a different treatment may be better. Further, as some AMA members recognize, drug ads encourage people to see a doctor when they otherwise would not.

"There are good reasons to oppose government-protected cartels, but the AMA has just given us another: Politically powerful cartels not only restrict output, raise prices and act to suppress competition, they also attempt to restrict the free flow of information if such restrictions would make their jobs a little easier.

"To uphold the Hippocratic Oath, physicians should uphold the spirit of the First Amendment; drug ads create a more health-conscious public. Restricting drug advertising is bad medicine, and 'protecting' doctors from the need to educate their patients would only feed public skepticism about the medical establishment."

("Doctors Propose Ban on Drug Advertising," Associated Press at


World Freedom Index

"According to the 2001 Index of Economic Freedom, only 12 countries, representing 7 percent of the world's countries, can be considered free. The report is overly optimistic, however; it overstates the freedom and understates the repression in the freer countries, according to Paul Craig Roberts, research fellow at The Independent Institute, in a recent syndicated column.

" 'Hardly any of the index's 12 free countries are really free,' writes Roberts. 'For example, both the United States and Great Britain fall in the 'repressed category' of the index with regard to tax burden, as do Luxembourg, the Nether-lands and Australia.'

"The share of personal earnings collected as government taxes in the index's freest countries often rivals the one-third taken from feudal serfs by their lords or the fifty percent taken from 19th century slaves by their masters.

" 'How can property rights be secure when taxation can claim a feudal lord's or slave master's share of a citizen's working time?' asks Roberts.

"Further, property rights are seldom fully secure even in the index's highest-ranking countries. For example, 'U.S. property owners are at grave risk of many federal, state and local laws that permit their property to be seized on the slightest pretext. In 80 percent of asset forfeitures, no charges are brought against the former owners. To overlook this great insecurity of property in the United States is to concoct a fanciful measure of property rights.'

"What the index really shows, Roberts concludes, is that there are virtually no free countries in the world."

( "Freedom's Unheard Call" by Paul Craig Roberts, at


Reporting on Relative Risk

"In the demon-filled world of the late 20th and early 21st century, risk is everywhere, and among the noblest activities of government is its continual search to slay each and every demonic risk.

"That, at least, is the impression one gets about the American attitude toward environmental, industrial and lifestyle risk from the popular culture. How noteworthy, then, when the press gets the story on risk right.

"In her July 9th column, San Francisco Chronicle reporter Carolyn Lochhead reports the inconsistencies --- and often lunacies --- in promoting 'zero risk' policies across the board. In our daily lives we often undertake pursuits far riskier than the ones we ask lawmakers to prevent. We sunbathe, we barbecue, we drive in small cars. At the same time we worry about global warming, trace levels of impurities in drinking water, and flying in ultra-safe airplanes.

" 'So, while we lie on the beach this summer doing our own little risk/benefit analysis,' Lochhead writes, 'we might ponder another useful summer statistic: more people are injured by tennis rackets than by arrows.' "

("Relative Risk of Fun in the Sun," by Carolyn Lochhead, at

Florida, Pfizer and Medicaid

"Florida has entered into a novel pact with Pfizer Inc. --- the world's largest pharmaceutical company --- which the state hopes will result in Medicaid savings. Other states and other drug makers are watching the deal closely.

° Doctors who treat Medicaid patients can prescribe Pfizer medicines unhampered.

° Pfizer maintains drug prices by saving the state money through a new initiative of preventive health care services known as disease management.

° Pfizer's competitors, will have to offer drug price rebates to remain on the state's 'formulary' of easily prescribed medicines.

"Pfizer's deal in Florida brings the state some relief in health care spending. Florida gets Pfizer to underwrite a trial of a new cost-saving approach, plus $33 million in Medicaid savings over two years through disease management. In addition, the state expects to save $199 million over a year through price concessions that other companies have made to get their medicines on the state's new Medicaid-drug formulary."

(Russell Gold, Scott Hensley and Joni James, "Pfizer Ducks Pressure on Prices in Helping State Save on Medicaid," Wall Street Journal, July 9, 2001.)

Regulatory Takings Still on the Rise

"The Constitution prohibits the government from taking a citizen's land for public use without just compensation. But an increasingly common practice known as "regulatory taking" allows a person to keep his land, while the state declares that he can't develop it or otherwise use it --- and there is no compensation.

"Politicians and environmental activist groups developed regulatory taking as an extremely cheap and speedy way of furthering their environmental agenda.

"Here are a few examples of how landowners have been victimized:

° In Virginia, a retired contractor cannot build a house on a lot he owns --- which is in the middle of a development --- because it might disturb a nearby bald eagle.

° In Oregon, a couple was forced to set aside 37 acres of their 200-acre commercially harvestable forest land to protect the northern spotted owl.

° In California, vintners and farmers have found themselves effectively barred from activity because it might hurt the emergency-listed tiger salamander.

° In Rhode Island, an 80-year-old retiree named Anthony Palazzolo was barred by the state from building on coastal property he had owned for 40 years --- because at some point in his tenure the land had been designated protected wetlands.

"But Palazzolo took his case to the Supreme Court, which this term ordered Rhode Island's courts to revisit the question of whether he is entitled to just compensation for the lost value of his property.

"Environmentalists and their political allies know that the government can't afford to compensate landowners for all the land they want to control. So court decisions which acknowledge the states' responsibility to compensate landowners in such cases are a blow to regulatory taking. Such decisions should curb environmental over-reach."

("The Earth Rebal-anced," Wall Street Journal, July 10, 2001.)


Safety Concerns Over Lyme Vaccine

"Springtime in many parts of the country brings the threat of Lyme disease, a debilitating illness transmitted by the ticks that live on deer and mice. About 17,000 people get the disease every year, so it was exciting news when a vaccine for Lyme was approved a few years ago. But now some patients are saying the shot's side effects can be worse than the disease itself.

Dr. Charlene DeMarco, an osteopathic physician who specializes in treating Lyme disease, said she often sees people with terrible, permanent reactions to the vaccine.

" 'I know of at least 700 who have been hurt by this vaccine,' she said.

"The Food and Drug Administration approved LYMErix in 1998. It's manufacturer, GlaxoSmith-Kline, has distributed more than 1.3 million doses.

"In a statement Thursday the company said, 'All the evidence...establishes LYMErix to be safe and effective.'

"Many medical experts point out that individual stories --- no matter how powerful --- do not prove cause and effect, and no large study has found a danger with the vaccine.

"But a panel of experts that advises the FDA found the stories so compelling that it asked the agency to carry out a large-scale investigation of possible harmful effects of the vaccine.

The agency is not sure yet when the study will be finished..."

(Robert Bazell, NBC News, April 19, 2001.)


AIDS in Southern Black Women

"Poor black women living in the 11 states of the old Confederacy are developing AIDS at an alarming rate, medical experts report. They say that in many ways the epidemic in the South more closely resembles the situation in the developing world than it does the rest of the country.

° Women now account for one-quarter of all newly-diagnosed AIDS cases --- double the percentage of 10 years ago.

° Although black women make up only 7 percent of the U.S. population, they accounted for 16 percent of all new AIDS diagnoses in 1999 --- a percentage that has grown steadily since the syndrome was first identified 20 years ago.

° By comparison, black males made up 35 percent of new cases in 1999, white males 27 percent, Latino males 14 percent, and white and Latino females were each 4 percent.

° From 1981 to 1999, 26,522 black women developed AIDS in the 11 states of the former Confederacy.

" 'While the HIV epidemic is also increasingly affecting men in the South and black men, the overall trends for women are distinct," concluded researchers with the Centers for Disease Control and Prevention in a paper published in March in the Journal of the American Medical Association. 'The HIV epidemic in women initially centered on injection-drug-using women in the urban Northeast, but now centers on women with heterosexual risk in the South.' "

(New York Times, July 3, 2001.)


July 6, 2001 --- Cost of Government Day

"July 6 is Cost of Government Day (COGD) for 2001 --- the date in the calendar year when the average American worker has earned enough to pay off his or her share of the burdens of government at the local, state and federal levels.

"According to Americans for Tax Reform (ATR):

° Americans currently work 187 days to pay off the costs of government, including 87 days to pay for their federal tax burden and 41 days to pay all state and local taxes.

° Additionally, they work 58 days to pay the costs of federal, state and local regulations that make production more expensive for entrepreneurs and prices higher for consumers.

° COGD falls three days later than in 2000, and has advanced steadily and significantly since 1989 --- when it fell nearly three weeks earlier (June 18).

"When COGD advances, it does so because the burden of government has grown faster than national income. That means taxes claim a higher portion of personal income, leaving less to spend on goods and services or to save and invest."

(Ryan B. Horn, "Cost of Government Day Report Calendar Year 2001, Ninth Edition," Americans For Tax Reform Foundation, Washington, D.C. 20036.)


Socialized Medicine in Norway

"Norwegians suffering from achy joints, gallstones, back trouble and a host of other ailments are no longer being told to take two aspirin and call their doctors in the morning but to take two aspirin and call an airline in the morning.

"Waiting lists for nonemergency surgeries in Norway are so long that the Oslo government budgeted $111 million this year to send patients abroad, mostly to Germany, for operations that would take years to get in their homeland.

"The project, launched in February, has already sent 400 Norwegians abroad and aims to finance 10,000 procedures by the end of the year, said project manager Jan-Ove Nisse of the Norwegian National Insurance Administration in Oslo. While oil-rich Norway has been unable to train or attract enough doctors and nurses to treat its 4.5 million citizens, Germany has more hospital beds and surgical talent than it needs at the moment.

"Part of that abundance stems from its having inherited an oversupply of medical facilities from the former East Germany and having invested heavily in the last decade to bring that legacy up to western Germany's high standards...'I've already waited three years, and I have so much pain I can't sleep nights,' a patient said of the condition that has kept her out of work for 18 months. 'There's a good hospital here, but there just aren't enough doctors to do anything but emergencies...' "

How long Germany will continue to serve as a safety valve, remains to be seen.

(Los Angeles Times, April 27, 2001)


Waste, Fraud and Abuse

"There is $220 billion worth of waste, fraud and abuse in federal spending, according to a months-long analysis of 17 federal agencies and departments by the Inspectors General of all the federal agencies and the General Accounting Office.

"Their study, called 'Government at the Brink --- Urgent Federal Government Management Problems Facing the Bush Administration' (June 2001) was released by Sen. Fred Thompson (R-TN) on his last day as Chairman of the Senate Governmental Affairs Committee, before the Democrats took control of the Senate.

"The Senate Governmental Affairs Committee staff lists the top 10 most egregious examples, including, for example, 'The Big Dig' --- an as yet uncompleted highway and tunnel in Boston that has become the most expensive federal infrastructure project in American history, with a projected cost now of $13.6 billion, a 525 percent increase from the original estimate of $2.6 billion.

"Mismanagement appears to be rampant, according to the report:

° The Department of the Interior cannot account for $3 billion it holds in trust for American Indians and the agencies that serve them.

° The Department of Defense cannot account for what it spends.

° Medicare lost $12 billion to improper, but easily identified, mis-spent funds in the fee-for-service plan alone.

° The IRS has no idea what it collects in Social Security and Medicare taxes.

"The new chairman of the Senate Government Affairs Committee, Joe Lieberman (D-CT) has an opportunity to follow-up on the report, notes former Delaware Gov. Pete Du Pont, and thereby get a leg-up on the 2004 presidential campaign."

(Pete Du Pont, policy chairman, NCPA, "Lieberman's Chance to Eliminate the Triple Threat," Knight-Ridder, June 22, 2001.)


Medical Liability Rising in England

"According to an investigation by the National Audit Office (NAO), National Health Service hospitals in England face massive liabilities totaling around $6 billion for clinical negligence.

"In a report to Parliament, the spending watchdog said 23,000 claims of clinical negligence were outstanding in March last year. Further claims were expected from incidents that had not yet been reported.

"Although medical litigation in the UK is not as common or as costly as in the United States, the report shows that Britons are learning fast from their American cousins.

"Consider: The rate of new claims rose by 72 percent between 1990 and 1998, and there were 10,000 new claims last year alone.

"According to the report, legal costs exceeded the damages paid in two-thirds of all small- and medium-sized claims. Claims sometimes took 10 years to settle.

"The NAO recommends that the government investigate setting up arbitration panels to offer apologies and other non-financial remedies for small- and medium-sized claims.

° Research shows that only 30 percent to 39 percent of patients want money when they lodge a claim.

° But 50 percent or more want an admission of fault and an investigation to prevent recurrence.

° A similar report from Wales recently found that most claims are due to misdiagnosis.

° Followed by surgical mistakes, drug complications and delay in treatment.

"Negligence claims are administered by the NHS Litigation Authority, which offers hospital trusts a range of insurance schemes in return for varying levels of premiums. The trusts pay all costs of settlement below their insurance excess level and 20 percent above it. The Litigation Authority pays the balance."

(Reuters Health, "English Hospitals Face 3.9 Billion Pound Bill For Clinical Negligence," May 3, 2001.)


More Guns, Less Crime

"Newspapers across America in recent months have reported increased gun ownership and the lowest crime rate in 30 years --- but they never report these two items together...Everything from the Wall Street Journal to the Los Angeles Times has reported the two facts, the liberal Times finding a causative link 'incomprehensible.'

" 'It makes you wonder what part of 'more guns, less crime' the Los Angeles Times and other major newspapers just don't seem to understand,' America's 1st Freedom concludes in its July issue."

(, July 3, 2001.)


This edition of News Capsules was compiled by Miguel A. Faria, Jr., M.D., Editor-in-Chief of the Medical Sentinel of the AAPS. It appeared in the Medical Sentinel 2001;6(3):75-80. Copyright©2001 Association of American Physicians and Surgeons (AAPS).

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