Association of American Physicians and Surgeons

Association of American Physicians and Surgeons

Myths about Health care being run by the government:

Myth 1: An electronic medical record could save your life in an emergency
Myth 2: A public plan could save enough on administrative costs to provide coverage to all.
Myth 3. Americans are going bankrupt, and American companies are noncompetitive, because we don’t have “universal health care.”

Myth 1: An electronic medical record could save your life in an emergency

June 29th, 2009

Information technology does not stop bleeding, start IVs, defibrillate the heart, or put in a breathing tube. In an emergency, those are the things that save your life. If you need them, the doctor does not have time to look at your EMR.

In an emergency, the doctor needs to know your blood sugar NOW, not what it was 6 months ago. Ditto for your chest xray. If the test needs to be done STAT, the old results are probably irrelevant, and if it doesn’t need to be done STAT, there’s time to make a phone call and ask for a faxed report.

The most important information in an emergency is what just happened to you, and that will not be in your EMR.

If you have a serious allergy or other problem that your doctor needs to know in an emergency, wear a MedicAlert bracelet or something else attached to your body. In a bad emergency, your ID may be lost, the computer may be down, or the power may be off.

The EMR is being promoted for the convenience of bureaucrats and lawyers, and for the profits of vendors. Sometimes it helps doctors; sometimes it’s a hindrance. Only the doctor can decide.

The EMR costs a huge amount of money, and the costs never stop. It might save a few dollars in preventing unnecessary tests for people who have bad memories or can’t keep track of paper records.

The whole record could be destroyed by a power surge (especially if it’s an electromagnetic pulse or EMP). Or it could become unreadable; tapes, disks, and other media become obsolete and are not necessarily durable. On the other hand, it can be nearly impossible to extirpate errors.

The EMR may prevent some errors, but introduce others, especially ones caused by identity theft, sloppy data entry, poor typing skills, confusing software, dry-labbed information entry by macro, and failure to check data once entered. It could even kill you.

EMR systems are a nonconsented experiment, the results of which may be kept secret by the vendors.

If you’re desperately ill or critically injured, you need a doctor, not a computer. Your doctor needs to be able to keep his records in a way that works for him, and to choose his own tools, computers included.

Additional information:

• “The Syndrome of Inappropriate Overconfidence in Computing: an Invasion of Medicine by the Information Technology Industry” by Scot M. Silverstein, M.D., J Am Phys Surg, Summer 2009.
• “EMR: a Nonconsented Experiment,” AAPS News, July 2008.

Myth 2: A public plan could save enough on administrative costs to provide coverage to all.

June 29th, 2009

It is frequently asserted, especially by groups such as Physicians for a National Health Program (PNHP), that a “single payer” (government) system could “save” enough money on administration to buy coverage for all the uninsured.

The basis for the assertion is the claim that Medicare spends only 2% to 3% of its outlays on administration, compared with private plans’ alleged costs of 20% to 25%.

In fact, data from the Congressional Budget Office (CBO) shows that insurance companies spend at least 50% less on administration than government does on its health programs. (The Congressional Budget Office Reports: Comparing health care admin cost: who’s less costly?)

CMS (Centers for Medicare and Medicaid Services ) divides spending data into care (paid to doctors, hospitals, pharmacies, and others for patient care) and non-care (everything else). For 2009, CMS projects spending on care at $2.13 trillion, and non-care at $424 billion or 16.7% of total spending.

Of the $879 billion projected to be paid in 2009 by private insurance, CMS estimates $128 billion for non-care—12.7%. For all public programs except Medicare, the comparable percentage is 26%, without adjustment for the taxes and assessments paid only by private insurers. Unlike Medicare, other public programs—Medicaid, SCHIP, Veterans Administration, and military programs—are internally administered.

Medicare is externally administered by private companies; its non-care costs are 5.7%. If it were administered like other government programs, administrative cost would increase by $1 trillion over the next 10 years.

There are many reasons why private companies have higher non-care costs for their private plans than for Medicare:

• Private insurance plans must pay government taxes and assessments up to 5% of premiums. When these are factored out, the real net cost of private administration is less than 10%.
• CMS excludes the cost of its own employees who enroll recipients, perform outreach and education, handle customer service, and do auditing and other functions. Private plans include these in overhead.
• Private plans have on average a higher number of claims to process for a given amount of expenditure.
• Insurance companies have to collect premiums. The IRS does that for Medicare.
• Private companies do underwriting; their premiums have to cover their costs. Medicare deficits have to be covered by taxpayers.
• The cost of servicing the public debt is not included in Medicare costs—and Part B is 75% subsidized by general revenues, not beneficiary premiums.

Greg Dattilo and Dave Racer conclude: “Though one has to dig for the truth, the CBO report makes the case: Competition in a private health insurance market saves tens of billions each year that government agencies would waste on administrative cost.”

Benjamin Zycher of the Manhattan Institute for Policy Research also notes that it costs the economy more than a dollar to send a dollar to Washington (Wall St J 10/29/07). The lowest plausible assumption for the excess economic cost of the tax burden, 20%, would raise the cost of delivering Medicare benefits to at least 24% to 25% of Medicare outlays, and a more realistic estimate to about 52%, or four to five times the net cost of private insurance.

Other facts to remember about Medicare administration:

• The information given on their “customer service” hotlines about their own rules is inaccurate 85% of the time.
• The threshold for investigating fraud by carriers is about $200 million.
• Physicians are subjected to career or life-destroying audits, civil monetary penalties, or criminal prosecutions, over what should be simple billing disputes (Libby RT, The Criminalization of Medicine: America’s War on Doctors, Praeger 2008, reviewed in J Am Phys Surg, summer 2008).

Additional information:

• “The Administrative Cost Fallacy,” AAPS News, September 2002.
• “Medicare Attacks; a Practice Survives,” by J. Philip Smith, M.D., J Am Phys Surg, spring 2004.

Myth 3. Americans are going bankrupt, and American companies are noncompetitive, because we don’t have “universal health care.”

July 2nd, 2009

For years, advocates of “single payer health care” have been warning that middle-class Americans are only “one serious illness away from bankruptcy”—even if they have insurance. Obama has claimed that medical costs cause a bankruptcy in America every 30 seconds. Divided We Fail claims that “millions” go bankrupt every year because of medical costs.

American companies are also going bankrupt and losing out to global competition, allegedly because they are having to bear workers’ high health costs.

Both problems would be solved, say proponents of a government takeover, if the U.S. adopted a universal tax-funded medical system, which would purportedly drive down expenditures, while imposing them on taxpayers instead of individuals and employers.

The facts are these:

• The actual number of “medical bankruptcies”—by the single-payer advocates’ definition—fell by 220,000 between 2001 and 2007. There were a total of 822,590 bankruptcies filed in 2007.
• According to Ning Zhu of the University of California at Davis, author of a study of 2003 bankruptcies in Delaware, only about 5% were caused by medical problems. If this percentage holds, (.05) (822,590) or about 41,000 were caused by medical costs—far from Obama’s 30/sec or 1,051,200.
• The mean net worth for “medically bankrupt” households was –$44,622, while their average out-of-pocket medical costs came to $17,943. Single-payer advocates attribute bankruptcy to medical reasons if the debtor reported uncovered medical bills exceeding $1,000 in 2 years, or lost at least 2 weeks worth of income because of illness or injury. Bankruptcy is caused by debt, and a loss of the income needed to service it.
• Many companies are in trouble, especially if they have acceded to union demands for unsustainable “gold-plated” benefits that encourage overconsumption of medical services. But American industry as a whole also faces an increasingly hostile business environment of taxation, regulation, and litigation, as well as high wages compared with the developing world.

Universal tax-funded medical care only compounds the bankruptcy problem. The existing single-payer systems in America—Medicare and Medicaid—are themselves unsustainable and on a course to bankrupt both federal and state treasuries. The price controls they impose on physicians and hospitals lead to cost shifting to private insurers and self-paying patients.

European social welfare systems are even more financially challenged than those in the U.S. Spending growth is about the same in the U.S. and other developed countries.

The entire world is in an economic crisis. “Universal health care” is much more likely to be a contributory cause than a solution.

Additional information:

• “Medical Bankruptcies Hyped,” AAPS News, July 2009, p 2.
• “Distorted Evidence, Juggled Statistics, False Logic,” AAPS News, April 2009, p 2.
• “Medical Bankruptcy,” AAPS News, October 2008.
• “Bankrupt Medical Bankruptcy Claims” by David McKalip, M.D., FMA Council on Medical Economics 9/9/08.
• “Bankruptcy,” AAPS News, March 2005.

Tags: medical bankruptcies