News Capsules (Winter 1997)

Compiled by Medical Sentinel Editors
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News Capsules
Winter 1997
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No Escape

Those of you — who may find false solace in  blissful ignorance concerning the steps being taken by government towards the criminalization of medicine and/or find comfort in the thought the AMA may have mollified the stern wording contained in the Kassebaum-Kennedy Bill (adding layers of penalties to the waste, fraud, and abuse provisions of administrative laws already on the books) because of the addition of the words “knowingly and willfully” to characterize acts for which physicians can be criminally prosecuted, and the words “knowingly or with reckless disregard for,” or “deliberate disregard” for truth as a requirement for imposing civil monetary penalties —  should think very hard and deeply about this issue. It would take more than a few words to change the intent of legislation.

If in doubt, in the October 1996 issue of AAPS News, “Crime and Punishment,” you should read about the criminal prosecution of Jeffrey Jay Rutgard, M.D. who was sentenced to serve “135 months in prison, fined $150,000, and ordered to pay $16, 206,908 in restitution — the entire gross proceeds of all insurance payments during the entire period,” for conviction for such items as performing surgery deemed “medically unnecessary” between 1988-1992; for routine waiver of co-payments and deductibles; and among other things, charging $25.00 for pre-operative EKGs. The government sought prosecution “from a few anecdotes told by hostile employees...and extrapolated to assert that the entire practice was ‘permeated with fraud’ so that all billings were assumed to be fraudulent and thus, subject to forfeiture.”

I urge you to read this piece, if you have already not done so, for your livelihood and professional practice may depend on it. Dr. Rutgard remains incarcerated thousands of miles away from his wife and 5 children. 400 letters have been written on his behalf by patients.

Cases of alleged Medicare and/or Medicaid fraud covered in AAPS News since 1990 include those of Drs. Carol Brown (exonerated), Wanda Velez-Ruiz, and Mr. Peres-DeLeon. The October 1996 issue of the AAPS News also discussed the case of psychiatrist George Krizek, M.D.


The Corporate Practice of Medicine

In the October 1996 Action Report of the Medical Board of California, Stewart Hsich, JD, Vice President of the Medical Board of California, and Anita Scrul, JD, Counsel, Legal Office, Department of Consumer Affairs write, “the unlicensed practice of medicine is prohibited by California Business and Professions Code, Section 2052. In addition, California has specific ban on the corporate practice of medicine (Code Section 2400): ‘corporations and other artificial legal entities should have no professional rights, privileges, or powers.’ ” These authorities write that the interest of the public must be served and in their words, “simply put, the ban on corporate practice is intended to prevent interference with the physician-patient relationship by a corporation of other unlicensed person and to ensure that medical decisions are made by a licensed physician.” They report the Medical Board of California has been increasingly involved in actions involving the corporate practice of medicine, and in the last several years, the Board has initiated disciplinary action against physicians who allow their licenses to be “used” by lay individuals or corporations. In other words, the State of California is following the lead of the State of Illinois and in combating aggressively the corporate practice of medicine. And, we hope that Georgia and other states follow suit (see also Medical Sentinel, Vol. 1, No. 3, Fall 1996, “Corporate Medicine: Then and Now,” p. 3; and “The Status of Corporate Medicine in Georgia” by Thomas Jackson Tidwell,  M.D., p. 25).


A Harbinger of Things to Come

Coastal Physician Group, Inc., one of the first companies in the business of building networks of physician practices is floundering and “losing money in nearly every line of business,” according to The Wall Street Journal (9/26/96). Apparently when physicians were their own bosses, they worked hard and long hours, but “once the company paid a fat sum for their practices, many of the physician-owners-turned-salaried-employees weren’t as eager to pull in business as they had been...Coastal’s once highly valued stock has been battered with its market value down to only $150 million from its peak of $900 million.”

Coastal’s founder and former CEO, Dr. Steven Scott has been forced to step down and litigation is pending. Whether Coastal’s woes are a harbinger of things to come remains to be seen.


Patient Confidentiality

Now that President Clinton has won re-election, what will a second term in his presidency mean as far as preserving the patient-physician relationship and patient confidentiality, as far as their medical records? If the intention of his advisors and his own deeds and actions are any guide: He will keep his own medical records private and those of everyone else, an open book! As Jane M. Orient, M.D. writes in The Washington Times (10/9/96), “[The] Kassebaum-Kennedy law which sets up standards for electronic data transmission establishes the machinery to assign everyone a unique identification number,” and follows closely the steps of the State of Maryland. Unfortunately, as Senator Kennedy, Ira Magaziner, and Hillary Clinton have intimated, the Kassebaum-Kennedy Bill is only the first salvo at a second attempt at instituting socialized medicine (single payer) in the land and handing us a Health Security card so that Big Brother can keep tabs on us and our consumption of “scarce, finite health care  resources.”

Investors Business Daily (10/21/96) reports that both Clintons admit they still like and still have plans for their Health Security Act of 1994. In July, The White House Bulletin quoted the First Lady on health care: “I think that basic model is still the right model.” And, Ira Magaziner told the Hospital Association of Rhode Island in May that the president was still committed to “a comprehensive health care system...Indeed, the president will try again if a more receptive Congress is ever elected.”


Canadian Medicine

Ontario, Canada’s largest province, is making arrangements for pregnant women to get medical treatment in the United States. Between 50-60 Ontarians could be shuffled off to Buffalo if doctors withdraw their services. The Ontario health ministry has confirmed pregnant women have already been sent to Grace Hospital in Detroit because they could not obtain obstetrical care in Ontario. Ontario physicians have warned they will stop seeing new patients and possibly commence withdrawal of some emergency services unless an agreement can be reached with the government.

The exodus across the U.S. border is not restricted to obstetrics patients. Pediatric, orthopedic, and general surgery patients could all be moved across the border for medical care (Toronto Star, October 12, 1996).

The seeming collapse of socialized medical care in Canada is a result of the bitter dispute and showdown with doctors and hospitals over health care funding. Hospitals across Canada are closing as provincial governments slash funding. Doctors are emigrating across the U.S. border, and conservative politicians are raising the “once-taboo” possibility of revising the health system to allow some privately funded care.

(See the comprehensive article, “Re-privatizing Medicine in Canada — by the Back Door, by William E. Goodman, a Canadian physician in this issue of the Medical Sentinel).


Euthanasia Down Under

Clerics and concerned physicians fear the Northern Territory city of Darwin will become Australia’s “Death City” and plan to challenge last year’s euthanasia law that went into effect this past July. The Associated Press (9/27/96) reports some aboriginal leaders are supporting the challenge because they believe euthanasia — as now performed in Australia with a portable IV unit machine operated by a laptop computer — is a form of witchcraft.

Meantime, Cardinal Edward Clancy, head of the Roman Catholic Church in Australia, calls legalized euthanasia, “an act of reckless disregard for the convictions of people around the globe and will be widely condemned.”


Concealed Guns Reduce Crime

In a forthcoming article in the Journal of Legal Studies (January 1997), John R. Lott, Jr. and David B. Mustard at the University of Chicago reveal in a scholarly, well-conducted study that concealed guns reduce violent crime. “Allowing citizens without criminal records or histories of significant mental illness to carry concealed weapons deters violent crimes. That is the finding of an analysis of 16 years of data from all the counties in the United States. Right-to-carry laws also result in no significant increase in accidental deaths from handguns.” Moreover, if those states without right-to-carry laws had adopted them by 1992: Murders would have fallen by 8.5%, rapes by 5%, and aggravated assaults by 7%. This would translate to “at least 1,570 murders, 4,177 rapes and more than 60,000 aggravated assaults would have been avoided yearly...” at a saving of $6.2 billion yearly.

“Concealed weapons laws have a much greater deterrent effect on murder, rape and aggravated assault in counties with high crime rates, and on robbery and property crimes in counties with low crime rates.” (National Center for Policy Analysis, Executive Alert, Vol. 10, No. 5, September/October 1996.)


FDA Strikes Again and Again

Dale Gieringer in the Cato Journal estimated that while FDA regulation might have prevented 1000 deaths in America between 1950 and 1980, as many as 120,000 lives (and as high as 200,000, according to Robert Goldberg of Brandeis) have been lost per decade due to drug approval delays. For example, delays in approval of just one drug, propranolol, a beta-blocker used for treating angina and high blood pressure may have caused the death of as many as 100,000 lives. Despite the FDA’s claim their policy protects Americans, the fact is less stringent regulations in other industrialized countries have not resulted in sufferance for patients.

It has been estimated as many as 500 beneficial drugs have not made it to the U.S. market because of FDA red tape in approving medications. Moreover, the delays and time lag in bringing drugs to market cause them to be exorbitantly expensive. The average cost of R&D of a drug runs $427 million over 15 years, according to the Office of Technology Assessment. “Between 1961 and 1983, only one in every 60,000 substances studied was ‘highly successful,’ generating more than $100 million in annual sales. These successful drugs must recoup all the development costs of themselves and the other 59,999 money losers.” IPI Insights, July/August 1996.

It has been pointed out with ghastly detail how the FDA’s gag rule policy of off-label uses of drugs, harm countless patients in need of those medications. For example, take aspirin, in which, despite overwhelming evidence compiled from the Physician’s Health Study that small doses of aspirin taken daily reduces heart attack and stroke by 1/3 in men over age 50, the FDA proscribes manufacturers and their representatives from promoting those benefits. Yet, 40% of all prescriptions written by physicians are for off-label uses of medications. National Center for Policy Analysis, Brief Analysis, Number 214, September 27, 1996.

The cost of the FDA’s regulatory burden: The regulatory burden on the American economy is estimated at $583 billion by The Wall Street Journal (4/13/96) or about 8% of our $7 trillion GDP. And the cost in human lives: One human life lost per $7.5 million increase in the regulatory overkill on Americans, according to the White House Office of Information and Regulatory Affairs. Wealth, not regulatory burden, increases life expectancy. (Civil Defense Perspectives, “Death by Bureaucracy,” July 1996.)

When a Georgia mother developed a drug diagnostic test kit that would enable parents to administer a urine test to check for illicit drug use in their children, the FDA stepped in to “prevent family discord.” An FDA “warning letter” stated that Mrs. Sonny Cloud’s urine plastic cup, box, and mailing labels did not have the FDA approval such “devices” require. George Will in the Conservative Chronicle (10/9/96) writes, “[Regarding plastic cups, the FDA considers them Class III devices]...only when used by parents to protect their children...Parents will be more inclined to seek evidence from home tests that preserve anonymity and confidentiality than from emergency room or other procedures that generate medical records.”

Meanwhile, “the AMA collaborates on FDA plan for drug guides [presumably to give patients more prescription information],” writes AMNews (9/23-30/96). “Those objectives are contained in Healthy People 2000, the HHS’ blueprint to improve the nation’s health.” Unless objections are made by interested parties including physicians and pharmacists, HHS has the power to allow the FDA to assume “the authority under the new law [signed by President Clinton last August] to institute its own Medguide program.”


Switzerland Watch

“One government,” reports Civil Defense Perspectives (July 1996) “located at the crossroads of European wars, has succeeded in avoiding war for the entire 20th century, and 85 years of the 19th century. Switzerland lacks: purple hearts, military cemeteries, war widows and orphans, and battlefield cripples. Switzerland has: troops too tough to battle, tank traps too brutal on tanks, impregnable fortifications, deadly fields of fire, sky-high antiaircraft positions, booby traps par excellence, and protective shelters for its citizens.”

Efforts at further welfare reform in the U.S. should take into advisement Switzerland’s example. Unlike the social democracies of Western Europe, Switzerland’s welfare is financed and run at the local level (municipalities) and not the central (federal) government. Thus, residents “work hard” to insure welfare recipients get off the welfare rolls as soon as possible. In other words, there is strict accountability and time-limits, and local “communities help recipients get back on their feet and into the work force.” Local involvement is crucial, and the casualties of welfarism, such as crime, drug abuse, illegitimacy, etc., are much lower than those in the social democracies and the U.S. Forbes, February 27, 1995.


Election Watch

On Tuesday, Nov. 5,  the American people voted to re-elect Bill Clinton and Al Gore with 49% of the popular vote.  Pres. Clinton is the first Democratic president since FDR (1936) to have accomplished that feat.

The GOP retained the House and, despite the coffers of the AFL-CIO pouring down money to defeat the 70 or so conservative Republicans of the ‘94 freshman class, all but a handfull won re-election. In the Senate, the GOP gained two seats (55 vs 45) and with a host of new conservative faces, now seems more conservative than the House.

The congressional elections also set new historic records: For the first time since 1928, the Republicans retained control of Congress. While the GOP won control of Congress in 1946 under Truman, they lost it in 1948.

Despite confusion in some quarters, Thomas Jefferson, our 2nd President (1800), founded the Democratic-Republican party, emphasizing per-sonal liberty and limited government. The origin of today’s Democratic party is traced, a generation after Jefferson, to a splinter group of radical democrats (supported by a coalition of Southern interests and Northern workers) who gained power with the election of Andrew Jackson in 1828.


Books in Brief

The Danger of Socialized Medicine, edited by Jacob G. Hornberger and Richard M. Ebeling, The Future of Freedom Foundation, 11350 Random Hills Road, Suite 800, Fairfax, VA 22030, 1994, 88 pp., ISBN: 0-9640447-0-6, (Soft cover).

All the essays in this book appeared in the monthly publication of The Future of Freedom Foundation’s (founded in 1989) Freedom Daily. The various essays in this marvelous collection satisfy without bounds the foundation’s “uncompromising moral, philosophical, and economic case for individual freedom, private property, and limited government.”


Galileo — Decisive Innovator by Michael Sharratt, Cambridge University Press, 1994, 247 pp., ISBN: 0-521562-19-8, (Hard cover).

This biography of Galileo Galilei by a Roman Catholic priest and lecturer from Upshaw College, Durham, follows the career of this great scientist from his innovations with the telescope to his decoding of nature’s universal language of mathematics.


Vanishing Republic — How Can We Save the American Dream by Mark Anthony, Encore Publishing, Inc., Orlando, FL 32822, 1995, 384 pp., ISBN: 0-9646138-0-8, $24.97 (Hard cover).

In graphic and well-documented detail the author passionately enumerates and explains the many ways our Constitutional Republic has been subverted by run-away government, despite our cherished principle of limited government with the consent of the governed — so established by our Founding Fathers. These enumerations include: How the balance of power has been dangerously tilted by the federal government; how inflation is created and our money devalued (we work more for less); how our constitution and sovereignty have been eroded; how wealth redistribution has been enacted under a myriad of agencies; and how democratic socialism has been erected in our nation step-by-step, etc. The good news is the author offers constructive solutions by which newly awakened, informed and vigilant citizens can regain control of their Vanishing Republic.  One disadvantage is the book has no index; nevertheless, it’s a good book for the initiate.


Ideas Becoming Reality

Physicians, including AAPS members, are putting their ideas about Medical Savings Accounts into reality. In Boise, Idaho, physicians have started a coalition with the mission to “promote MSAs and help alleviate the bureaucratic interference plaguing the current health care system.” Patients Choice, Inc., 200 N. 4th St., #300, Boise, ID 83702.

Likewise, Research Enterprises, Inc. is promoting R•E•MEDI® to establish “a competitive market and bringing down health care costs.” Research Enterprises, Inc., P.O. Box 3081, Richland, WA 99352.

And, in California, MediSmart to “put our ideas about Medical Savings Accounts into practice and form a company that produces a product for the American public consistent with the values of individual liberty, personal responsibility, and free market exchange.” Astorino & Associates, 1525 Superior Ave., Suite 101, Newport Beach, CA 92663.

Originally published in the Medical Sentinel 1997;2(1):6-9. Copyright ©1997 Association of American Physicians and Surgeons.


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