U.S. health care debate — Part 3: We need more free market incentives by Miguel A. Faria, MD

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Saturday, July 15, 2017

In Part 2, we debunked propaganda, erroneous claims, and phony statistics cited by obfuscating, socialized medicine proponents to tar the U.S. health care system. In Part 3, we continue to debunk misinformation and describe how government interference in the medical marketplace has contributed to, and in certain instances even created, the problems we are experiencing today. Yet, Democrats and proponents of socialized medicine insist more Hospitalgovernment is needed, and that ultimately the single payer system is the solution. Factoids, misinformation, phony claims and misleading statistics are all used in that effort.

When it comes to health statistics, one must ascertain that the data cited have not been tortured until they confess. The U.S. public health establishment has become a willing vehicle because it has become so politicized that figures and statistics must be checked and double-checked, especially when it concerns social and economic issues impacting on health care policy. And make no mistake about it, more than ideology plays a role; the allocation of public funds for programs or research, so intertwined with financial self-interest, is also a major consideration for these “public servant” health officials.

Returning to their criticism of the U.S. health care system, an article by an American economics professor characteristically remonstrated, “administrative complexity and waste are no accident but rather are baked into our private health insurance system and made worse by continuing attempts to use competitive market processes to achieve social ends other than maximizing profit.”

But U.S. private health insurance “are baked” in complexity and bureaucracy, not because market forces are at work but precisely the opposite: Health care is probably the most extensively government-regulated industry in the U.S. The solution offered by this professor is, predictably, the adoption of the government as the single payer! Why would the government do a better job with the health care industry than it has done with every other business, industry, or profession, other than defense, in which it has inserted itself with disastrous consequences? We are left to wonder.

Another article by CBS News states: “Medical care prices increased 4 percent in 2016 according to the Bureau of Labor Statistics, and premiums under Obamacare's second-lowest costing "silver" plans rose 7.5 percent in 2015. Plus, the U.S. spends far more per capita on health care — $9,892 in 2016 — than any other nation.” All this is true, and the article correctly cites some of the reasons why medical care is expensive. Unfortunately, the first factor listed, “high administrative costs” fails to identify the real culprit; instead, like the previous writer, the CBS article blames high administrative costs on the “U.S. having so many payers — from a slew of private health insurance companies to government programs — that physicians have to negotiate with in the regular course of business.”

High administrative costs are the result of government imposed regulations, such as waiting on the phone for authorization for medical testing and procedures, approval for hospitalizations, hospital days, etc., and for this rigmarole an excessive number of billing clerks and bureaucracy is needed.  These regulations begin with Medicare and Medicaid to reduce costs, paradoxically, and soon enough find themselves in the business of “private insurance.” Thus, bureaucracy and complexity in the third party payer system is directly or indirectly government related. A “slew of private health insurance companies” is good for the public; it does not increase complexity per se as claimed, because free market competition and variety of choice in insurance plans, if unfettered by government, would increase freedom of choice and reduce costs, as they do in every other industry.

Other pernicious causes of high cost of medical care are the practice of defensive medicine and the high price of technology. The first has been an insoluble problem because the U.S. has more preying lawyers than any other “industrialized nation,” and in litigious America, fishing expeditions and ambulance chasing have sadly become repulsively too common. Trial lawyer advertising in the quest of fomenting an adversarial society, instead of a harmonious one, is another fact of life. Defensive medicine to protect from medical lawsuits, consequently, will persist, until vigorous tort reform is implemented. High technology will result in high costs because we are at the cutting edge of advances, and research and development is expensive.

The article, as mentioned, identifies the problems, but then as if on cue — like some of the other phony claims and leftist rhetoric that we have encountered — calls for socialized medicine. The sophistry used in this fallacious claim is that universal coverage will bring about a reduction in health care costs, asserting, “When countries cover everybody, they then turn to saving money.”Still waiting? Waiting times in Canada

The article, though, leaves out the real and only possible explanation for how nations with socialized medicine save money. They do so by rationing of medical care, as I stated previously: By queues and waiting lists, restrictions to see specialists, limiting access to life-saving medical treatments, cutting back approved services, and even outright denial of services to the most vulnerable in society, those deemed to have incurable illnesses too expensive for the government to allocate resources, and the elderly, after they reach a certain age.

Only as if in passing, the article makes the subtle but astounding admission that some officials recognize the real problem of high medical care costs and are trying to break through the bureaucratic haze to provide real free market solutions: “A few providers in the U.S. and abroad are experimenting with a more direct approach to patients paying for primary care, in which patients pay a monthly fee to the office as they would pay a premium, then pay directly for visits and procedures.” But there the suggestion stops and no effort is made to pursue the thought to its logical conclusion and allow the invisible hand of the free market to function unhindered. 

Government is the problem! Reforms are needed but in a completely different direction. We have been traveling in the wrong direction for the last several decades — that is, more and more government intervention, which has worsened the situation that liberals created in the first place and now decry. We need instead more free market incentives and deregulation, and the removal of the monopolistic protection that the government has extended to the big insurance carriers. With these reforms, the health insurance industry would be subject to more competition and less government protection, improving access and facilitating coverage by making insurance more affordable.

Lack of competition is the major reason, for example, that Health Savings Accounts (HSAs) have not been expanded in many states, remain a very limited option, and truly affordable catastrophic health insurance has not been made available.  So, admittedly, there are problems in the health care system, which need addressing. Both medical care delivery and prescription drugs are also too expensive. If costs and bureaucratic red tape could be reduced, the number of the uninsured would further decrease without the need for government compulsion and penalties. Likewise, pharmaceutical competition would bring down the price of prescription drugs. So it’s worth repeating, the underlying cause of dissatisfaction is not that we need more government involvement, but that we need more competition and more free market incentives.

Since third party payers — whether private insurance or government programs — foot most medical bills, doctors and patients do not even discuss fees for elective medical and surgical procedures. The perception (and reality) is that someone else pays the bill, so that both patient and doctor are reluctant to discuss fees, even though 96% of medical encounters are routine, not requiring emergency care.

Recently, I had the opportunity to see just how much the invisible hand of the free market has been constrained by the direction we have taken in fee-for-service medical care. Asking my wife’s surgeon for his fee for an elective procedure that she was contemplating, he dismissed the question, finally saying he didn’t know, and that we needed to ask someone in the business office. Later, he admitted that some dentists and cosmetic plastic surgeons had a competitive and better system because patients pay for their own health care in those settings.

The point is that to bring prices down in health care, as in every other consumer transaction, fees and prices must be discussed to bring about competition. We have found other physicians to be more price-conscious and happy to help their patients obtain competitively priced and equally effective medications, even from other countries.

But because of the perversions of the free market that have been created by government interference, progressive theoreticians want to overhaul the entire system and throw the baby out with the bath water. Another writer, for example, identified the problem with the U.S. health care system, as not having enough free market incentives (which is true) as well as being a “medical monopoly” (which is not true) — and then proposes the contradictory and completely wrong remedy: the government as the single payer. Go figure!

In the face of this avalanche of misinformation and misguided solutions — let’s keep and improve the best medical care in the world with the correct free market incentives.

Written by Dr. Miguel Faria

Miguel A. Faria, M.D. is a retired clinical professor of neurosurgery and long time medical editor. He is the author of Vandals at the Gates of Medicine (1995); Medical Warrior: Fighting Corporate Socialized Medicine (1997); and Cuba in Revolution — Escape From a Lost Paradise (2002). His website is http://www.haciendapub.com.

This article may be cited as: Faria MA. U.S. health care debate — Part 3: We need more free market incentives. HaciendaPublishing.com, July 14, 2017. Available from: http://www.haciendapublishing.com/articles/us-health-care-debate-%E2%80%94-part-3-we-need-more-free-market-incentives-miguel-faria-md

Similar versions of this article have appeared in the Telegraph (Macon), GOPUSA, and AIM

Copyright ©2017 Miguel A. Faria, Jr., M.D.

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Comments on this post

Canadian health care

Dr. Faria hits a home run with his analysis of health care. Look at the waiting times for needed surgery in Canada. Of course, if waiting times are long enough, surgery will not be needed - the patient will be dead. The British courts took months to decide that Charlie Gard was beyond help - which by that time was correct.

Do you recall Otzi the Iceman? His 6000-year-old frozen body was found in an Alpine glacier. For years, scientists speculated about the cause of death. Some of their ideas were quite creative. But finally a CT scan was done, and an arrowhead was found. Perhaps Otzi trespassed on someone else's land, or looked at someone else's woman. However, Otzi's views on the subject were not available.

If you wait long enough to do diagnostic tests and administer treatment, the question becomes irrelevant and meaningless. This is called "queueing." In the extreme, it represents the Final Solution to the health-care problem. No, we're not there yet. But the time to sound the fire alarm is when you smell smoke, not when the whole structure is in flames.
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Dr. Faria replies: Dr. Stolinsky, this brings to mind my idea of socialized medicine as rationing by death but you have come up with a more vivid illustration of the problem, the ultimate, cosmic, philosophic meaning of universal coverage that everyone should ponder:

"...Socialized medicine is “good” because of “universal coverage.” Overlooked is the fact that U.S. survival figures for most cancers are the best in the world, while the figures for Britain’s National Health Service are dismal. The Brits have “universal coverage” – with six feet of dirt. Also overlooked are the prolonged delays for elective procedures, and sometimes even for necessary procedures, in Canada, in Britain, and now here. And if officials refuse cancer care, they suggest assisted suicide. But it’s “free” and “universal,” right? Well, so is death.

"Europeans have an excuse for believing in socialism and a powerful central government. They lived under kings for centuries. The French, Germans, and Russians recall that their nations were more powerful when they were ruled by kings. They yearn to be taken care of by an authority figure. But America was built by individual initiative. What’s our excuse?"--- Dr. David Stolinsky, January 15, 2015

McCain vs. The Chappaquiddick Swimmer

I was sorry to hear this morning of McCain's diagnosis on the way to work. I don't like him, but despite the positive spin several news outlets are trying to put on it, I don't need to tell the many neurosurgeons here what is going to be the outcome, when you know the median survival time is one year.

Contrast that to the patient whose was first operated on by Dr. Loyal Davis in January 1926, and whose case writeup I linked to several days ago on a followup to a series of posts about George Gershwin. In those days, the patient had perhaps several months less to live following first craniotomy then today. That is not so impressive. In over 90 years, the classic triad of surgery, radiotherapy, and chemotherapy seems to have reached its limits. I believe that was first stated by neurologist Dr. Fred Plum in 1969. He felt it was about the number of tumor cells removed during cytoreductive surgery. If one can only remove 95% of a glioblastoma, then ancillary aids to surgery will not be effective. He then calculated that the glioblastoma could be cured if 99% could be removed and then the ancillary methods of radiotherapy and chemotherapy applied. The problem is that in practice, 99% of the tumor can NEVER be removed, so that is why unless some new radically different approach is developed, very few if any will be cured.

Dr. Davis reports using Zenker's solution to treat the tumor bed. I suppose one could consider that chemotherapy in the 1920's was Zenker's solution. It is used as a fixative by biologists, as an alternative to formaldehyde. As such, it is a cell poison, and it was popular in the early 1900's with surgeons because by treating the tumor bed of an excised malignant glioma with it, they felt they could kill residual tumor cells they knew were there but could not see so they could not resect them.

What irks me is that I see all over the liberal blogs complaints that McCain is receiving treatment that none of the rest of average Americans would ever have. I am presuming that is because he is a "rich white Republican male."

That is NOT true. He will receive the same ineffectual treatment that any of the rest of us would. It is not rocket science to resect a glioblastoma, and there are no new advances in radiotherapy or chemotherapy that only he would receive.

BUT SINCE he is not a murderous Kennedy, I guess that is why that charge was not raised in 2009, and you know Ted Kennedy did not use any plan connected with Obamacare. Plus, Kennedys have more money than God, so if the rich receive the best treatment in the USA, why did he die anyway, with the usual course of the illness that would be seen in any patient with far less money than him?

I go off course....I apologize...I just wanted to say that this same thought was going through me on and off today. With effective complete control of the government, why again do Republicans shoot themselves in the foot and act against the president? It wins them no friends with the left to oppose repealing Obamacare. If they still do not get it, we could easily lose all we have gained. ---ARB

PS. Yes, it is partially about Obamacare working in favor of Republican (and Democrat) politicians, but I still see it as Republicans still never developing the backbone Democrats always had.
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I found a one year survival tops for glioblastoma, and I reached that with only a few patients, after much misery from the chemotherapy that adds the two or three extra months of life. I had one patient that went much longer than that with just two major surgeries (no neurological deficits) and radiotherapy. He became a friend of my entire staff, and as a local iron works executive, he personally made a very nice piece of work for a treasure of a mine, a Meso-American sculpture (another one of my interests). We still think of him warmly! I've other unforgettable patients who succumbed to this dreadful disease after courageous struggles. I cannot say the same for some of my low back pain patients with secondary gain who tried to milk the system--- MAF

Glioblastoma Treatments

I can sympathize. I have lost family members, friends, and even grad school advisors to them! That would include two neurologists!

The tumors defy comprehension in their viciousness. I recall in the 1930's it was thought that if the tumor seemed confined to one lobe of the brain, a total removal of the lobe might be curative. Many frontal lobectomies were done to test this out, but it was found the tumor invariably reoccurred. This suggested that by the time the patient reached the surgeon, the tumor had already seeded distantly.

I presented an interesting case at a lab meeting once. If you recall, my lab in grad school was interested in the neurobiology of memory. Well, there was a woman who developed a temporal glioblastoma which invaded the hippocampus. Complete temporal lobectomy was done, in the hopes of removing all the tumor. This time it seemed a relative success, but as we know, both hippocampi can communicate with each other via a thin bundle of axons connecting the two. When the woman began to show signs of memory loss, MRI diffusion tensor imaging of the white matter showed the tumor had invaded the contralateral hippocampus via just these few axons connecting the two.
I assume she eventually died, but since one temporal lobe had already been removed, they could do no surgery on the other, and she was left totally bereft of memory. She lived completely in the present.

Then there was a great aunt of mine who developed a gross exaggeration of a previous neurotic personality, along with "word salad." The psychiatrist thought it best to involuntarily place her in Gracie Square Hospital, which is a New York psychiatric hospital.

A keen young psychiatric resident noticed the "word salad" was really Wernicke's aphasia, and also that she had a slight right pronator drift. She was transferred to Lenox Hill Hosptial and then Memorial Sloan Kettering where CT showed a thalamic glioblastoma so large, it was touching the meninges of the temporal lobe. When a knife happy Pakistani told her family that he could remove all of it, they asked my dad for advice and he said don't let him touch it. They ignored him, and they let the surgeon operate. He did remove most of it, by he didn't care how many cranial nerves were cut through in the process. What that did to her emotionally was not worth the one year of extra life it gave her. Plus, he must have damaged the cortico-bulbar fibres, as it was even harder to tell her emotions, since she developed pathological laughing and crying.

On some level, these tumors must be fundamentally different from all of the rest of the intracranial neoplasms. How else can you explain so little progress we have made in curing them since Rickman Godlee removed the first malignant glioma in 1885? His patient died a month later of meningitis and the autopsy showed his brain was tumor free, but I am sure if he did not die of other causes, it would have returned. -ARB

Winning strategy in ObamaCare repeal

“This week’s news that the Senate failed to repeal Obamacare is a bitter disappointment to the 18 million people in the individual market struggling with unaffordable premiums and deductibles. It’s also bad news for another 8 million who are opting to pay hefty penalties rather than buy those unaffordable plans. And things are only getting worse. Health insurers are asking for giant rate increases this fall, as high as 50 percent in Connecticut, Maryland and Virginia. Ouch.

“If members of Congress were feeling the same pain, they’d be more focused on repealing and replacing the collapsing law. But they’ve got a sweetheart deal. Even though the Affordable Care Act requires them to purchase their coverage on Obamacare exchanges and follow the same rules as the rest of us, President Obama set up a way for them to weasel out of it. They get to choose from 57 gold plans and have John Q. Public pick up most of the tab. Meanwhile, in nearly half the counties in the nation, ordinary folks will have only one insurer available. Or none at all..."

Read the full article at GOPUSA

Betsy McCaughey is a senior fellow at the London Center for Policy Research and a former lieutenant governor of New York State. she is a frequent health care writer at GOPUSA,



Diary of Dreams performs at the 2016 M’era Luna festival in Hildesheim, Germany. M’era Luna, “one of the biggest dark music events in Germany,” is held each year on the second weekend in August. Close to 25,000 people attend the festival annually to hear gothic, metal and industrial music performed on two large festival-style stages.