Junkfood Science: Medical Privacy Update: Healthcare for all

May 29, 2007

Medical Privacy Update: Healthcare for all

For the Food for Thought file...

The May issue of Health Freedom Watch, a publication of the nonprofit Institute for Health Freedom, brought to light some of the realities of the single-payer health plans being proposed in several states around the country. Other healthcare reform proposals and analyses have also been in the news recently. If you’re confused by them all, you’re not alone. It’s difficult to sort out the plans and come to a reasoned opinion because the issues are so encumbered by marketing, politics and special interests. The only thing we can be certain of is that we’re probably not getting all sides of the story from the media.

Everyone seems to be taking “sides” even before we know what problem we’re trying to solve by these sweeping healthcare reforms. Is the main concern inequitable access to healthcare or lack of affordable health insurance coverage among poor and discriminated Americans? Or is it that healthcare/health insurance costs are out of control? If so, where are the biggest wastes of public healthcare dollars? Or do most Americans feel the quality of medical care in this country is inferior or corrupted by special interests?

What is it we’re most trying to fix? And are those problems real — are we working from sound facts — and, if so, how significant are they? How can they be addressed the most effectively and simply without imposing other problems that might be worse? We don’t want to get behind something that just sounds good and feels good, if it won’t be, because we’ll likely be stuck with it for a long time.

“Free universal health care for everyone” sounds wonderful and seems to be the vision most repeated in media, but what would that actually look like?

We might begin to see the picture by reading a few reviews (not making the news) of recent state plans which share remarkable similarities to the national universal health reforms being proposed or have been implemented in other countries.


On July 1st, Massachusetts’ statewide universal healthcare mandate goes into effect. All residents will have to show proof of state-approved medical insurance. According to the Commonwealth Connector website, a health plan that meets the state’s mandates will cost $6,866 to $19,791 annually for a family of four. Compliance will be monitored through people’s state tax returns, and financial penalties of up to 50% of the cost of the insurance will be imposed on those who fail to purchase insurance, by withholding refunds and initiating collection proceedings. [Like all plans, the poorest families will still be covered under Medicaid, and various subsidized programs are in place for lower-income residents. The state’s estimates of $1 billion needed to cover these subsidies, however, have been estimated to be only one-fifth of what the costs to taxpayers will actually be. It’s unclear what provisions have been put in place to care for illegal aliens, a portion of the uninsured.]

Citizens’ Council on Healthcare (CCHC), a nonprofit patient and physician advocacy organization, did an analysis of the Massachusett’s plan last year and made troubling conclusions about its impact for consumers. While the plan was created “to expand access to healthcare for Massachusetts residents, increase the affordability of health insurance products, and enhance accountability of our state’s health system,” they found the plan would create an enormous set of new bureaucracies (no less than ten new agencies, six financial-management funds, and three new programs) to establish, oversee and enforce. There is no evidence to suggest that the government will do things cheaper, better or more efficiently.

The MA state plan essentially creates a monopoly of insurers residents can choose from. Every policy has to comply with the state’s coverage mandates, and mandates always cost more money than they claim to save. There are thousands of insurance mandates that have been passed by state legislatures over recent years and behind every mandate is a special interest that will benefit by the product or service. A recent analysis by the Council for Affordable Health Insurance estimated that mandated benefits increase the cost for basic health insurance for everyone by 20% to more than 50%, depending on the state. Worse, a number of these mandates are for preventive “wellness” programs, screenings and treatments that are unsound, ineffective, costly, unproven, unwanted or potentially dangerous.

One misconception among consumers is that the free market system hasn’t worked, so the government must step in. But we don’t have a free market system with health insurance. A free market system only works if it’s allowed to exist unfettered from government mandates that limit competition and allow certain companies to monopolize markets. The government has catered to special interests and created an insurer managed care system, which has resulted in higher premium costs and more people uninsured. Those who want affordable insurance alone, without a third-party managed care bureaucracy standing between them and their doctor, find it unavailable. Under the current managed care environment, it’s impossible to obtain insurance that stays out of your private life and doesn’t penalize you for a lifestyle or if you’re unlucky enough to have genes that make your health indices (BMI, cholesterol, etc.) targets for intervention.

Under the MA plan, said the CCHC, determinations of what healthcare would be available, how that care is delivered, who gets it and when, will fall under a state “Care Quality and Cost Control Council,” which is directed to lower or contain the growth in healthcare costs while improving quality. “Quality” will be defined by the Council, which will also determine the performance measures for providers, reporting requirements and fee schedules. Healthcare providers will be graded on their compliance and their performance measures posted online; and reimbursement to providers and hospitals will be made contingent on adherence to the state standards. Cost containment efforts will likely drive away healthcare providers and, as has been seen in other single-payer systems, result in shortage of providers and services; rationing of available care and resources; and long waits for tests, surgeries and treatment. [More on that in a moment.]

Health insurance coverage is not the same as access to care.

The state plan mandates all acute hospitals and ambulatory surgical centers to assess a surcharge on top of service charges, and enrollees will be required to pay the state-determined insurer commissions. Under the MA plan, there is also a troubling hint of price control on the insurers in the name of cost containment, which over time will remove even the limited degree of consumer choice among insurers, as they drop out of the state program because it won’t be profitable for them, thus strengthening monopolies among the few remaining.

Raising privacy concerns, the MA plan establishes an electronic database to track individual’s insurance status, verify incomes and personal records, and mandates penalties for healthcare providers and employers who do not turn over data to the state Council.

According to the CCHC, like all managed care plans, the MA state plan includes a provision for monitoring people’s lifestyles and their compliance with “wellness” goals established for them by the state:

The executive office of health and human services shall implement, in cooperation with the department of public health, a wellness program for MassHealth enrollees…The executive office shall report annually on the number of enrollees who meet at least one wellness goal.

Overall, Twila Brase, RN, president of CCHC, said of the plan:

[A]n intrusive and prescriptive bureaucracy will be authorized to ration health care and make decisions about who gets what health care when. Health-care decisions will be taken out of the hands of patients and doctors as the agendas of special interests, not the needs of patients, take precedence. The legislation is extremely intrusive.

To sum it up: People will have no choice but are being forced to buy the insurance plans the state dictates. But these are not health insurance plans, as might be believed or some might desire, which protect people from catastrophic health problems, this is managed care. The state is also the regulator, payer and enforcer — a recipe for conflicts of interest.

Some say that we are forced to get car insurance for the good of society, but that isn't a real comparison. At least we select a car insurance plan of our own choosing to protect ourselves and the public from financial catastrophy. Car insurance doesn't cover oil changes, tire rotations, body waxing, and basic preventive maintenance - if it did we'd have all sorts of mandates on how often we must change our oil, wash and wax our car, what products we must buy, who we can hired to do the work, the precise air pressure our tires must be and oil we put in our car (whether it's the best choice for our vehicle and usage), etc. You get the idea. Soon, to be perfectly safe, we'd have to have weekly preventive maintenance check-ups...


The Institute for Health Freedom also reviewed the Minnesota health insurance Exchange proposed under the Governor’s Health and Human Services omnibus bill.

The Governor’s website says the “Healthy Connections Health Care Reform” proposal will transform the state’s health care market. The new plan is “to drive down health insurance costs, improve quality, and increase access to affordable health care for the uninsured.” These goals will purportedly be achieved by paying providers according to new quality standards and rewarding consumers who “meet preventive care goals” and comply with disease management.

Concerns raised by consumer groups surrounding this state plan are very similar to those noted in Massachusetts. People would no longer be allowed to purchase health insurance privately because it would only be available through the Exchange or their employer. There would be no competing health insurance companies to help keep costs down (competition brings down costs, monopolies don’t) and the Exchange would be empowered to charge administration fees on top of health insurance premiums.

“The Exchange is a large ‘single-seller’ bureaucracy that threatens to assume powers over all aspects of health insurance. It will increase health-care costs, violate individual rights, and leave the public without the personalized services and options we have today,” Twila Brase said. “In the future, the Exchange could be empowered to determine insurance benefits, limit choice of insurers, set prices, and monitor every aspect of the insurance industry, included the insured.”

Other concerns that have been raised are that it violates individual’s privacy because the state Exchange would have full access to personal information on insurance, usage and medical conditions. And concerns have been raised about the lack of state liability for their actions.

To sum up: People would have no choice but to buy the health plans the state determines and these, again, are managed care programs, not true insurance plans. People would be forced to get the screening and preventive care, treatments and medications the state determines; lower their health indices to state-approved numbers; and their medical care would be managed by the state.

Healthcare professionals will be compensated according to their compliance with state-determined care guidelines, which as we’ve examined, may or may not be sound or “universally” best for everyone. Many also lead to compulsory prescriptions which may not be supported by the best clinical evidence. Government mandated practice guidelines also disregard the education and years of experience of physicians, and the actual situation and desires of each individual patient that are weighed by doctors when making clinical judgments. Healthcare providers are understandably concerned not only about having their care second-guessed by government bureaucrats, but also that “containing costs” may mean further losses of income. Medicare and health plans have been systematically cutting reimbursements for doctors to below their costs of doing business, insurers reject a significant portion of claims submitted, and physicians face their incomes falling further. Why doctors won’t flee the profession as predicted, like nurses have for years, and result in dangerous shortages of providers is an important consideration.


Things are heating up there. Governor Schwarzenegger supports a plan similar to the one in Massachusetts, ensuring coverage for all, while saying the government ultimately shouldn’t run healthcare. While a Universal Health Insurance bill (SB-840) in the legislature calls for a plan similar to Canada’s. You may have read about the Governor’s recent proposal to make health insurance mandatory. As the Los Angeles Times reported, “people who refuse to obtain health insurance could be tracked down by the state or a private contractor, enrolled in a plan and fined until they pay their premiums.” The first draft of his plan also included an initiative use state and private databases to track down those without insurance and “to attach the wages of people who don’t buy insurance and to increase the amount they owe in state income taxes.” Like the Massachusetts and Minnesota plans, those who might prefer to self-insure won’t have that option.

While the insurance industry understandably supports mandated insurance coverage, it’s apparent they don’t like one aspect of the California Governor’s proposal seen favorably by consumers — elimination of discrimination so that insurance is equally accessible for everyone. The San Francisco Chronicle and Associated Press reported this weekend that Blue Cross of California has set aside $2 million for a campaign to market against the plan in California. They object that it requires state-approved insurers to cover everyone, regardless of medical history. They want a public-funded pool to cover those with health conditions that make them more expensive to cover. [Isn’t that essentially admitting they cherry pick who they cover to include only the most profitable, negating the idea of risk pooling?]

With single-payer health plans, regardless of their permutation, will we solve one problem but make another one worse? Will we trade what we have for a system that will end up costing more and leave us unable to find doctors or having to endure extraordinarily long waits for basic care?

An analysis of Canada’s universal healthcare system by Frazier Institute in Vancouver, British Columbia, last August, for example, found 1.2 million Canadians were unable to find a regular physician in 2003 and that Canada has significantly fewer doctors per capita than most other developed nations. Their October report found Canada’s waiting times were increasing, with an average of 17.8 weeks wait time to see a general practitioner, with the longest waits of 31.9 weeks in some provinces. “[M]illions of Canadian patients wait so long for treatment that they are no better off than uninsured Americans,” said Brett Skinner, Director, Health, Pharmaceutical and Insurance Policy Research at the Frazier Institute. Yet, Canadians are forbidden to have private insurance or pay for care out of their own pocket unless they leave the country — although some countries with government healthcare have two-tiered care with the wealthier purchasing private insurance.

While it is popularly believed that universal healthcare systems save money and are financially sustainable, a careful examination shows that’s rarely the case. The Frazier Institute’s December report looked at costs adjusted for age, and found Canadians spend more on healthcare than any other industrialized OECD country except Iceland. Canadians are said to pay about a 50% tax rate for their free healthcare, but that coverage does not include many advanced medical treatments and technologies commonly available in the U.S. There are also fewer doctors, less high-tech equipment, older hospitals, and less availability of advanced medicines than in America, said Mr. Skinner. Of greatest concern, is the growing consensus among researchers in Canada that public spending on healthcare is growing faster than public revenue and their system faces financial crisis.

Would Americans want universal coverage if they knew it would mean higher taxes, rationed care, fewer choices, and long waits?


Speaking at George Washington University on Thursday, Senator Hillary Clinton announced her proposed healthcare initiatives to lower costs, improve quality and ensure everyone is insured.

· Obesity. She made the “obesity crisis” the cornerstone to her plan and her very first strategy is to “install a groundbreaking national prevention initiative to reduce the incidence of obesity and diseases such as diabetes and cancer that impose huge human and financial costs.” She said obesity has driven spiraling healthcare costs: “About 30% of the rise in health care spending is linked to the doubling of obesity among adults over the past 20 years.” Another third of healthcare spending is on diabetes, asthma and heart disease, she claimed. She said an “epidemic of chronic illnesses... some of which can be prevented, account for more about 75 percent of health care costs.” [sic]

She repeated the popular beliefs about obesity and childhood obesity: “Obesity contributes to a wide range of chronic conditions, from diabetes to stroke to cancer. If trends continue, children’s life spans may be shorter than that of their parents for the first time in about a century.” Citing the importance of obesity intervention for elderly women, she also said: “If obesity among the elderly were to return to the level in the 1980s, then savings could total a trillion dollars over a 25 year period.” She said fewer than half of Americans had had preventive services and been advised by their doctor about their weight, nutrition or exercise habits.

Junkfood Science readers will no doubt have reason to wonder about the efficacy in the rest of her plan, given the inaccuracies and untenable conclusions in these statements.

· “Wellness programs.” Her first idea to tackle “spiraling healthcare costs” is to require participation in government and workplace “preventive wellness programs” that must be “incentivized.” Of course, as we’ve examined, these programs are unsound and don’t actually save costs. To support her contention, however, she exampled Safeway Inc. that through its preventive wellness program supposedly lowered its healthcare costs by 15% for nonunion workers. That wasn’t the full story. As the San Francisco Chronicle reported in February, the company had instituted a new plan for nonunion workers in January 2006 that raised their deductibles to $2,000 ($3,000 for families). That was the primary factor in reducing the company’s costs for health insurance, not the “preventive” care or incentivization of “good behavior.” In fact, according to the Chronicle: “Safeway projects that this year outlays will be flat. The company said it enrolled more employees in the plan and added new chronic diseases to its care management program, all of which increased costs for 2007.”

· Government disease management. Her next initiative was centralized government management and coordination of treatment for those with chronic health conditions, such as heart disease. There again, as we’ve examined, while these disease management programs sound intuitively good, they do not lower costs or necessarily improve outcomes.

· Discrimination. While her plan was similar to the California Governor’s proposals in ending insurer discrimination against people with pre-existing conditions, such as obesity and high cholesterol, thus making getting insurance more equitable; once insured, people with those conditions will be targeted for discriminatory intervention and mandated compliance under preventive wellness programs and weight loss interventions.

With a single-payer system, however, there will be nowhere else to get coverage and you can’t fire your insurer if you don’t like it or it under performs. It is also much more difficult to sue should something go wrong, and damages would be limited as they would raise insurance costs for all, since the government pays claims and suing would go against “the common good.”

· Government practice guidelines. To drive down costs, Clinton would establish a “public-private Best Practices Institute to determine what drugs, devices, surgeries and treatments are best.” As we’ve seen with far too many government-funded health programs and clinical practice guidelines, they don’t necessarily follow the best evidence, as they become encumbered by various interests. According to an Institutes of Medicine report on patient safety, establishing best evidence is not clear cut: “There are gaps and inconsistencies in the medical literature supporting one practice versus another, as well as biases based on the perspective of the authors, who may be specialists, general practitioners, payers, marketers, or public health officials.”

While cost containment is critical, when it is the overriding, immediate consideration, the potential impact on slowing or inhibiting the adoption of new technologies and treatments, or the availability for treatments for less common or costly conditions, are additional concerns that deserve careful consideration.

· Electronic medical records. Among her other key proposals is computer technology to expand electronic databases to increase “accessibility of medical records” by spending another $3 billion a year. Those who most stand to benefit from electronic databases are large managed care insurer plans that provide insurance and nearly all of the care, including prescriptions. They are also behind the most aggressive efforts to institute electronic medical record databases, and they also have access to the most information on members to make them possible. These efforts are supported by America’s Health Insurance Plans, the main lobby for the insurance industry.

But Senator Clinton’s proposal appears to underestimate the costs and problems that have surfaced for more than ten years and overestimate the return. In fact, Information Week just published a comprehensive analysis of electronic medical records entitled: “Why Progress Toward Electronic Health Records Is Worse Than You Think.”

“Kaiser Permanente, which has the country’s most ambitious e-health effort, is in the midst of a $4.5 billion, 10-year project,” said Information Week. “Yet Kaiser Permanente’s experience — even with the advantage of closely held data and doctors who work for the company — shows how much work lies ahead of the rest of the industry.”

A number of attempts to establish electronic medical record systems across the country have found it more problematic and costly than any predictions. Santa Barbara County Care Data Exchange recently “shut down after spending at least $20 million over the past nine years trying to electronically link three hospital systems, county health care programs and dozens of doctors,” according to an investigative report in the San Diego Union-Tribune. “Despite undeniable advances, most hospitals and doctors remain years away from full-scale electronic records and for those that do use electronic records, there is little, if any, way to share information.”

Information Week reported the Santa Barbara program died when “the healthcare community didn’t see enough value to keeping it going.” Their conclusions on electronic medical records said:

Just 10% of doctors' offices use them. And while hospitals are expanding their use, the most difficult work—the exchange of data among health care providers, especially with rivals--has barely begun. Technology itself has caused problems, such as a system outage last year of a medical records network run by health care company Kaiser Permanente. There are legal questions, privacy issues, and competitive pressures surrounding the technology, as well as concerns about return on investment. And data-sharing practices have yet to be widely tested in the real world.

As we’ve reported here, privacy concerns among consumers have increased with the development of electronic databases and continue. Cost has proven a special hinderance for physicians. It will be at least 10 to 15 years before electronic medical records are adopted by physician practices, according to the National Coordinator of Health IT Office. That’s understandable, given the $30,000 it costs an office to implement — an amount difficult for most practices to afford.

· Medical error disclosure. One final aspect of Senator Clinton’s proposal deserves note, as it may be unfamiliar to consumers, although has been heavily debated among healthcare professionals. She proposes to reform medical malpractice to curb costs and reduce medical errors by enacting a National Medical Error Disclosure and Compensation (MEDiC) program, run by the Dept. of Health and Human Resources. She said this mediation program will give liability protection to doctors who disclose “medical errors” to patients and, rather than malpractice suits, this program will negotiate a fair compensation with patients.

While there are favorable aspects of this proposal — who can oppose improving communication between healthcare providers and patients? And government mediation to settle a malpractice case without going to court will clearly save the insurer and hospital money. But there may be reasons why it never got anywhere when she and Barack Obama first sponsored it back in 2005 in Senate Bill 1784. It’s worth taking a moment to consider, especially in light of her other proposals.

According to GovTrack.us (database of federal legislation), “this bill never became law.” It had been heavily promoted among medical professionals, such as a Perspective written in the May 2006 issue of the New England Journal of Medicine by Sen. Clinton and Barack Obama. It once had the support of such powerful interest groups as the insurance industry, American Medical Association (doctors trade organization), and the National Business Group on Health, while being opposed by groups such as the Association of American Physicians and Surgeons, Inc.

Going to the actual text of their bill, under this program, health care providers (defined as “a doctor, nurse, physician assistant, nurse practitioner, clinical nurse specialist, certified nurse anesthetist, certified nurse midwife, psychologist, certified social worker, registered dietitian or nutrition professional, physical or occupational therapist, pharmacist, or other individual health care practitioner”) would have been required to submit confidential reports to the government office about any incident involving a patient thought to be “due to medical error, negligence, or malpractice.” Under the Bill, patients had to receive the root cause analysis report of the incidence within five days of the analysis and be offered mediation to settle quickly.

But looking more closely at the actual text, a root cause analysis meant “an examination or investigation of an occurrence, event, or incident to determine if a preventable medical error took place or the standard of care was not followed.” Deviating from the “standard of care” would be treated the same as an error, noted the Association of American Physicians and Surgeons, Inc. And who will determine the standard of care? This is a covert way to pressure healthcare providers to comply with state mandated guidelines, regardless of whether in a physician’s clinical judgment they are appropriate for that particular patient. Providers can’t afford to risk deviating. Any adverse outcome in a patient could become a hunt for any departure from treatment measures.

Most healthcare providers want to do the right thing by the patients under their care and live with deep regret when an error occurs. And mistakes will happen. But most providers also know from experience that “confidential” incident reports are not confidential. Especially for nurses and others lower on the food chain of a large hospital or healthcare institution, writing an incident report means retaliation. But there were no provisions for protecting whistle blowers.


Are we being realistic to believe the promises being made in these popular, sweeping healthcare reforms? Free care for all. Can any government bureaucracy really dictate and contain costs; deliver quality, efficient care to everyone; and know what’s best for each of us — while remaining uncorrupted by special interests?

Can we trust politicians to suddenly start ignoring the huge contingent of health insurer and pharmaceutical lobbyists in Washington that have outnumbered congressmen on both sides of the aisle for years? As the New York Times reported, for example, as of July 12, 2006, Senator Clinton had received more campaign money from pharmaceutical and health insurance companies than any other candidate, with the exception of Senator Rick Santorum.

Being pro-government, trusting the government to know what’s best for us, and eager to obey government rule is antithetical to America’s long-held sense of individuality and anti-big government sentiment. Americans value freedom to make their own choices and independence from government intrusion into their private lives. So, most Americans and medical professionals probably read of these far-reaching government proposals with concern.

Whether Americans care enough to get involved and do the work to help identify and remedy the problems in our healthcare system is yet to be seen. It takes work to get involved, critically think and dig for the facts that might not jive with whatever is politically correct. It isn’t popular or easy to stand up to special interests and political agendas. But doing the best thing isn’t always easy.

© 2007 Sandy Szwarc

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