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Overdose of Socialism

On June 23, 1995, a swarm of armed men invaded the Mason, West Virginia medical office of Dr. Danny R. Westmoreland. With their guns drawn, the intruders ordered everyone, including a nine-year-old child, to stand against a wall while the office was ransacked. The marauders were agents of the federal “health police,” and they had violated the sanctuary of Dr. Westmoreland’s office — which is also his home — and terrorized patients at gunpoint in order to execute a search warrant against the physician.

Federal Assault

The armed siege of Dr. Westmoreland’s office was an outgrowth of the Clinton Administration’s Operation Restore Trust (ORT), which was launched after the stunning defeat of the “HillaryCare” plan for socialized medicine. Under ORT, federal and state inspectors investigated home health agencies, nursing homes, and medical suppliers across the country, supposedly seeking to wring fraud and abuse from our health care system. The real purposes of the initiative were less commendable: It was intended to break private practitioners to the saddle of federal authority, amplify the public perception of a health care “crisis” that only the central government could rectify, and generate revenue for the federal health care bureaucracy. ORT eventually produced $200 million in fines and settlements and criminal convictions of scores of physicians who had committed no crime against persons or property, but had merely run afoul of an obscure bureaucratic technicality.

Dr. Westmoreland was relatively lucky. Ben Bailey, the doctor’s attorney, argued, “The agents voided their search warrants by violating the rights of both Dr. Westmorelandand the waiting room patients.” U.S. District Judge Joseph R. Goodwin, who heard the case, was inclined to agree. “I am appalled,” declared the judge after hearing witness accounts of the incident. “I am shocked. And [this] is something this court will not tolerate. It is one of the most outrageous things I’ve ever heard.” The criminal case was dismissed and Dr. Westmoreland filed suit against the agencies responsible for the raid; the litigation is still pending.

The case of Dr. Westmoreland is by no means unique. The home and office of Dr. Jeffrey J. Rutgard in San Diego, California were subject to an armed invasion by the health police, during which the records of some 20,000 patient visits were confiscated. After more than two years of detailed scrutiny, prosecutors brought charges in 218 cases — approximately one percent of those examined. One-third of the charges brought against Dr. Rutgard were summarily dismissed. Four hundred of his patients wrote letters on his behalf, but none were allowed to testify — because the doctor’s supposed victim was not a patient, but the Medicare system, which (according to the prosecution) paid $65,140 for “medical unnecessary surgery between 1988 and 1992.”

In June 1995, Dr. Rutgard was sentenced to serve more than ten years in prison, fined $150,000 and ordered to pay $16,206,908 in “restitution.” This sentence was mitigated somewhat in March 1997, when the Ninth Circuit Court of Appeals unanimously ruled that proven fraud in specific cases does not implicate a doctor’s entire practice. (This ruling, of course, assumed that Dr. Rutgard knowingly defrauded the federal government by seeking reimbursements for medical treatments deemed “unnecessary” by Medicaid commissars.) The appellate court set aside the draconian forfeiture order and vacated the sentence. However, the doctor served more than two and a half years in prison, his earnings were confiscated and his wife and five children were left for nearly six years without a means of support.

These two cases are highlighted from among scores of similar outrages that have been — and continue to be — committed as the leviathan state’s health police consolidate their hold on what has been the world’s finest health care system. While the rejection of the Clinton Administration’s HillaryCare socialized medicine scheme was a victory for both doctors and patients, the sobering reality is that supporters of centralized socialist medicine are pursuing HillaryCare on an installment plan.

HillaryCare Unveiled

One of the most terrifying features of the rejected HillaryCare proposal, through which the Clinton Administration attempted to seize the health care industry and nationalize 15 percent of our gross national product, was the section mandating the criminal prosecution of physicians for “bribery” and “fraud,” which would have included the provision of health care services deemed “medically unnecessary” by federal officials. These enforcement provisions were intended to put the muscle of federal enforcement power at the service of the Clinton Administration’s philosophy of medical rationing.

As explained by Hillary Clinton in testimony to the Senate Finance Committee on September 30, 1994, the Administration’s socialized medicine plan would not deny treatment unless “it is not appropriate,” meaning that in the view of government regulators, it “will not enhance or save the quality of life.” What of doctors who took their Oath of Hippocrates seriously and sought to provide treatments not covered by the federal plan? Under HillaryCare, if doctors provided “unauthorized” treatment on a fee-for-service basis, they would have been subject to fines as large as $50,000, forfeiture of their property, and — in some cases — life imprisonment. When such horrific provisions received widespread publicity, the HillaryCare scheme was defeated — apparently. It is not widely understood that the Administration’s rejected plan to socialize health care merely amplified the statist trend presently undermining our health care system. That trend is best described as “corporate socialized medicine” — or, of one prefers, medical fascism.

Under the ethics of Hippocrates, the physician must place the interest of the patient above that of the practitioner or society at large. But under corporate socialized medicine, or what is more commonly known as “managed competition,” the physician is required to place cost considerations and the interest of third-party payers — such as insurance companies and Health Maintenance Organizations (HMOs) — above the concerns of the patient. This leads to the adoption of what Swiss physician-philosopher Ernest Truffer calls the “veterinary ethic,” in which the human patient is treated like a pet and provided with the type of medical care determined by the “master” — in this case, the person or corporation responsible for paying the medical bills.

Even without the enactment of Hillary Clinton’s ghastly socialized medicine program, America’s health care system is in serious danger of being shackled with the worst aspects of HillaryCare — rationing of health care and the criminalization of transitional medicine. For the first time in the history of American medicine, physicians are being coaxed or coerced — depending on the stubbornness of the practitioner — into rationing health care by restricting their patients’ access to specialists or to specialized treatments.

Fascist Template

The emergence of HMOs began in the years 1971-74, during which time President Richard Nixon openly embraced Keynesian economics and enacted such measures as wage and price controls. The imposition of the managed care/managed competition ideology on our health care system is part of the same package of government interventions. The mechanics of managed competition were carefully worked out with the diligent cooperation of President Nixon and Senator Ted Kennedy (D-MA), who has been one of the most consistent champions of government controlled medicine. Working in collaboration with private sector interests, the Nixon/Kennedy axis created the template for a fascist health care system in which government-approved entities — HMOs, and similar health care provider networks — would deliver medical care under government supervision. This arrangement is the direct ancestor of the federally operated “health care alliances” envisioned in the rejected HillaryCare plan.

Doctors employed by HMOs are required to practice a form of rationing, called “cost-effective analysis” or “economic credentialing.” HMO administrators, in turn, employ utilization review data to assess doctor performance in terms of financial impact rather than sound medical judgment of patient needs. Physicians who are deemed cost-ineffective, including those who incur expenses by treating the sickest patients and dealing with the most difficult cases, confront not only the loss of year-end bonuses, but also the possible loss of their membership status in hospitals and health care networks.

Predictably, corporate socialized medicine is bringing about health care rationing in an indirect fashion as well as by driving many of the best and most compassionate doctors into early retirement. This dire trend is being abetted by the federal Medicare program, which drives much of our corporatist medical system. Liberal Washington Post columnist Charles Krauthammer, himself a medical doctor, laments: “We are about to lose a whole generation of our most skilled and senior doctors to early retirement. Early and, in a way, forced. With Medicare decreeing ever shrinking reimbursement — and insurance companies following suit — [doctors] find themselves losing ground even as they work harder.”

Federally driven cutbacks in reimbursements have led to “rationed care, rushed care, standardized care,” continues Krauthammer. “But there is another price: inexperienced care, because of the coming death of medical elders” — skilled, experienced physicians who build a practice based upon detailed, empathic acquaintance with their patients. Under corporate socialized medicine, writes Krauthammer, the typical physician is a skilled, overworked practitioner supervised by “some 24-year-old HMO functionary who knows as much about medicine as he does about cartography demanding to know why Mrs. Jones, the diabetic in renal failure, has not been discharged from the hospital yet. Dictated to by medically ignorant administrators, questioned about every prescription and procedure, reduced in status from physician to ‘provider,’ [many] doctors want out.”

“Public/Private Partnerships”

Although proponents of socialized medicine delight in scoring rhetorical points against free market medicine by reciting horror stories about HMOs, the managed care/managed competition philosophy should not be considered free market medicine, but rather a form of collusion between private entities and government. Most Americans are unaware of the extent to which our health care system is dominated by the central government. In Canada, a country with a nationalized “single-payer” system, government controls 74 percent of all health care expenditures; in America, as of 1992 — before the expansion of such programs as Medicare and Medicaid — the corresponding figure was 42 percent.

When Hillary Clinton and Ira Magaziner assembled a health care brain trust to “reform” the existing system, they staffed it with many architects of the current system of corporate socialized medicine. As the Association of American Physicians and Surgeons (AAPS) discovered in a landmark lawsuit filed against the Clinton Administration (AAPS v. Clinton), the secretive health care task force was staffed with representatives from corporate managed care entities such as the Henry Kaiser Permanente and Robert Wood Johnson Foundations.

Typifying the relentless mendacity that has characterized Bill Clinton’s Administration, Hillary and Magazines insisted that since the task force was composed of federal government employees, it did not have to make its deliberations open to the public under the Federal Advisory Committee Act. However, documents wrested from the Administration through the AAPS lawsuit disclosed that at least half of the task force’s members were representatives of government-favored corporate entities.

HillaryCare was intended to create yet another “public/private partnership” that would use HMOs to administer federally approved medical care under government enforced guidelines. Public/private partnerships, once again, are the defining institutions of a corporate, fascist economy., Had this corporatist medical scheme succeeded, the independent practice of medicine, guided by Hippocratic ideals, would have been eradicated altogether. Doctors who now chafe beneath the yoke of Krauthammer’s proverbial “24-year-old HMO functionary” would have been sentenced to serve under the same medically illiterate bureaucrat — who would be backed by the enforcement power of the central government.

“Buying in” to Medicare

But it is important to remember that statism can kill when taken steadily in increments smaller than a lethal dose. As Krauthammer points out, the ongoing wave of health care rationing is being driven by Medicare. Even though Medicare is being led to bankruptcy and destruction in 2002, the Clinton Administration decreed on January 6, 1998 that it was expanding the program to cover the “nearly-elderly” by allowing those 62 years of age and older, and those 55 and older, who have lost health care coverage, to “buy in” to the federal program. As Health and Human Services Secretary Donna Shalala acknowledged at the time, Medicare expansion is just one of the “deliberate, strategic steps” the Administration is taking “to fill in the gaps of the health care system — the public/private system that we have.”

There are two crucial admissions found in Shalala’s statement. The first is that America, thanks to federal intervention, does not have a private, free-market health care system, as its detractors frequently claim: rather, we have a “partnership” system in which government — which, because of its coercive power, is always the senior “partner” — is devouring what remains of the private health care economy. The second key admission is that this is happening through “deliberate, strategic steps” being taken to enact the malignant HillaryCare vision that was overwhelmingly rejected by Congress and the American public. Bill Clinton, in an unwonted moment of candor, admitted as much in the September 15, 1997 speech before the Service Employees International Union: “If what I tried before [socializing the health care system outright] won’t work, maybe we can do it another way. That’s what we have tried to do, a step at a time, until we finally finish this.”


Another of the steps being taken by the Clinton Administration and its allies to “finish” the project of “filling in the gaps” between the embattled remnants of independent medicine and the federal bureaucracy was the so-called “Insurance Portability and Accountability Act of 1996,” also known as the Kennedy-Kassebaum law. Much of the measure’s language appeared to be lifted directly from the HillaryCare plan, especially the sections dealing with instances of “fraud” allegedly committed by doctors who provide Medicare-reimbursed services that are not deemed “necessary” by federal bureaucrats. In order to give enforcement officials greater leeway in prosecuting doctors, the measure specifies that proof of specific intent to defraud Medicare is not required.

Kennedy-Kassebaum also undermines the principle of patient confidentiality. The measure stipulates that in any investigation of a purported “federal health care offense,” the Attorney General “may require the production of any records that may be relevant.” Officials who subpoena patient records “shall not be liable in any court of any State or the United States to any customer or other person for such production or for nondisclosure of that production to the customer.” The federal government is also empowered to make use of patient information if it is obtained in an investigation “related to the receipt of health care or payment for health care.” This provision, if applied with rigor, could bring about the end of patient privacy and allow the federal government to use medical records to prosecute almost anybody at whim.

The measure’s administrative sections dealing with immunization empower the Secretary of Health and Human Services to “adopt standards for electronic health information transactions” and to adopt a Unique Health Identifier (UHI) for each individual, employer, health plan, and health care provider. This will accelerate the development of computer-based patient records, the formation of patient databases, and the transfer of private medical records for use within HMOs and provider networks. Since those networks are “public/private partnerships” collaborating with the federal government, this aspect of Kennedy-Kassebaum effectively federalizes immunization records.

Once immunization records are collated into a federally controlled database, the system will inevitably be expanded to include entire medical records, thereby giving the central government unfettered access to such information — and ending patient privacy.

Patient Care — With a Catch

Another important incremental step toward the realization of socialized medicine occurred during “balanced budget” negotiations in early 1997. Tucked away in an inconspicuous corner of the Balanced Budget Act of 1997 was Section 4507, which, when originally offered by Senator Jon Kyl (R-AZ), was a proposal to allow Medicare recipients greater flexibility in contracting for private health care. However, during closed-door negotiating sessions this proposal underwent the alchemy of “bipartisanship” and emerged as yet another dramatic enrichment of the federal health care bureaucracy.

Under Section 4507, observed Dr. Robert E. Moffit, a medical affairs analyst at the Heritage Foundation, patients covered by Medicare now “have less personal freedom than their counterparts in the British National Health Service (NHS). If physicians in Britain’s government-run health care system want to treat patients on a private basis, they may do so without being forced to give up their patients in the NHS. If patients want to ‘go private,’ they may do so without jeopardizing their government health benefits.” In the U.S., writes Dr. Moffitt, under Section 4507, “If you are on Medicare and want to go outside the system to pay for your own doctor directly, with your own money, for a medical treatment or procedure already covered by Medicare, you can do so. But there’s a catch: Your doctors will first have to sign an affidavit agreeing not to submit a payment claim to Medicare for any other Medicare patient for a full two years.”

“In other words, your doctor will be dealt a substantial financial blow if he does business with you on a private basis,” continues Dr. Moffitt. “Your right to contract privately with him outside of Medicare will depend entirely upon your doctor’s ability or willingness to give up all other Medicare patients for two years. Of course, few doctors can make such a sacrifice.”

The entire purpose of this provision is to expand federal government control over physicians. Kathleen Buto, director of the Bureau of Policy for the Health Care Financing Administration (which administers Medicare), has explained: “A physician can choose not to treat Medicare beneficiaries. However, once a physician renders services to a Medicare beneficiary, he or she is subject to Medicare’s requirements and regulations, regardless of the physician’s participation as a Medicare provider.”

This is a singularly audacious — and malicious — enrichment of the principle that federal control follows federal subsidy. Under Section 4507, a physician who does not receive federal subsidies becomes subject to federal controls by treating patient covered by Medicare — even if no federal money is involved.

KidCare Ploy

The 1997 Balanced Budget bill included $24 billion for “KidCare,” through which was enacted another significant portion of the rejected HillaryCare plan. Hailed by statist commentators in both the lay press and specialized medical journals as the largest federal health care initiative since the enactment of Medicare and Medicaid in 1965, KidCare purportedly extended insurance coverage to “millions of uninsured children.”

As Paul Bedard of the Washington Times reported, KidCare “was to be the ‘precursor’ to universal health care sought by First Lady Hillary Rodham Clinton in a secret White House fallback plan prepared in April 1993” Internal Administration documents have revealed that Hillary’s Health Care Task Force “plotted to push a ‘kids first’ insurance program as the start of a universal health care program if Mrs. Clinton’s grander effort failed, as it did.” The KidCare program enacted with bipartisan support, reported the Times, is a “duplicate” of the original White House stopgap measure.

According to a statement issued by the First Lady on April 20th, KidCare — which was re-christened the Children’s Health Insurance Plan (CHIP) after it was inserted into the Balanced Budget agreement (for implementation by the states) — enrolled about 1,000,000 children in 1998. Mrs. Clinton boasted that the program “enables states to insure children from working families with incomes too high to qualify for Medicaid through non-Medicaid state programs, Medicaid expansions, or a combination of both programs.” What Mrs. Clinton did not point out was that the program is intended to help “fill in the gaps” in federal control over our health care system.

Patient First

Many proponents of a “single-payer” system — that is, a nationalized socialist health care system modeled on Canada’s program — protest that America is developing a “two-tier” health care system, in which only those who have insurance through a health care network or HMO are able to get quality care. This complaint is accurate, as far as it goes. What it does not address is the fact that the “two-tier” system is largely a product of federal intervention, and that while under a “single-payer” system coverage would be universal, access to care would be rationed by the central government or its agents.

Genuine reform of our health care system must remove the omnipresent government regulations which are helping to drive good doctors out of practice and frustrating the efforts of patients to find good, affordable health services. We must overturn the existing veterinary ethic in favor of a reinvigorated commitment to the Hippocratic principle that the doctor must place the needs of his patient first. The “managed care/managed competition” ideology that undergirds our present system of corporate socialized medicine must be overthrown in favor of a consumer-oriented, free market system.

Written by Dr. Miguel Faria

This article originally appeared in The New American, Vol. 15, No. 13, Jun 21, 1999, p. 11-14.

© Copyright 1999 American Opinion Publishing Incorporated.

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