September 1995 Vol. XII, No. 5




American hospitals are being closed and their equipment sold to Saudi Arabia at ten cents on the dollar.

Physicians' practices are being bought up by hospitals and ``managed'' or ``coordinated'' care corporations, which form spider webs called networks.

Groups of patients are being bought and sold like commodities. The plan that owns them farms them out at a capitated price to gatekeepers or primary care providers (PCPs).

One job of the gatekeeper is to keep the patients away from bad guys: purveyors of state-of-the art technology and physicians with highly specialized skills. Another job is to serve as a ``feeder'' providing ``network access''─the strands of the web capture patients and the associated revenue.

As in many other areas of the American economy, emphasis is shifting from real products or actual productive work (drugs, imaging equipment, improved diagnostic tests, surgery, or hands-on patient care) to ``information technology.''

This type of information is not to be confused with knowledge. Rather, it is the collection of standardized bits of data, by a minimally qualified technician, to be input in electronic format and widely disseminated through a network. The end product is outcomes data (such as customer satisfaction and cost-effectiveness) that can be used to attract more revenue.

Continuing Medical Education seminars presented by managed care Medical Directors focus on what is needed to get your office charts to pass inspection by a nurse. Or perhaps on the latest consensus-based guideline on the management of back pain─but not on the latest drugs or technology.

Physicians may allow themselves to be wined and dined at the expense of drug companies, while telling them frankly that they will make no use of the product under discussion. New drugs are not on the managed-care formulary, and doctors can't be bothered to remember information that pertains to only 15% of their practice. And as to the indications for diagnostic procedures, physicians defer to the utilization review/quality assurance committee, on which physicians are probably outnumbered by businessmen and accountants.

The strategy followed by the corporate invaders is best described in their own literature: ``Nothing causes market evolution faster than the first domino falling.'' Their terms come from the arms race. There's a ``race to acquire PCPs.'' The goal is market ``penetration,'' and this requires ``critical mass'' (Marsh and McLennan Companies Quarterly, Fall, 1994).

The most important bulwark against the destruction of medicine is the conscience of physicians. However, the new morality of social responsibility (under which physicians advocate maximum death in a nuclear war) has undermined respect for absolute moral law. Further, many physicians are enslaved by debt.

One physician steadfastly maintained that his patient of many years needed a bone marrow transplant to save her life. At the age of 36, she was dying of metastatic breast cancer. Her managed care plan was contractually obligated to pay for the procedure but refused to do so. Even her physician advocate changed his mind about the benefit and necessity of the procedure─right after a visit from a representative of the company that controlled 90% of his practice income.

The patient ultimately had the transplant─too late─only because of a lawsuit, in which the jury awarded an $85 million judgment.

Legal and regulatory remedies, including tort and antitrust law, are not very effective and cause much collateral damage. Still, the situation may worsen if they are diluted, as by new legislative proposals to allow Physician Hospital Organizations to form vertically integrated networks, immune from certain laws that constrain insurance companies.

The only alliance that is capable of turning back the invasion is the one between patients and physicians─with patients in control.

``No way,'' said a corporate executive (who has a vested interest in managed care). ``The playing field has been tilted in favor of the provider of care. To correct course, it must be tilted in favor of the payor.''

Unfortunately, nearly everyone has forgotten that the payor is the patient. All the money held by the government or other third party was earned by patients.

Neither our nation's defense, nor our medical system, nor our economy, can be set right until the power (and of course the money) are back in the hands of the people. In medicine, this means breaking the stranglehold of third-party middlemen.

Strong vested interests will deploy a lot of firepower to keep this from happening. Medicare, for example, was designed, perhaps inadvertently, to make a billionaire out of someone like Ross Perot, founder of EDS. Electronic data processing companies (such as EDS, CIS, WEDI, and AT&T) were well represented on Hillary Clinton's Health Care Task Force. They have discovered that the real profit in medicine is made not by healing the sick, and not by assuming risk, but by managing the flood of money that healthy people prepay in ``insurance'' premiums.

Unlike real insurance (as for fires and motor vehicle accidents), most health ``plans'' cover small and predictable expenditures and therefore cost about ten times as much as your car insurance. About 61% of Medicare beneficiaries file claims for amounts totalling less than about $1,000 in a year. That's less than the premium that most of them pay for their Medigap policy. The cost of processing (or churning) each of those small claims is about the same as the cost of a processing a claim for a major operation. Additionally, most of the claims are for services that are not emergencies. Patients spending their own money could and would make price comparisons and might substitute less costly services or even do without.

If the money that now pays relatively small medical bills went directly to those who supply the goods and services, instead of through the middleman, about 68% of Americans would save money every year. This money would end up in their pockets instead of the insurers'. Not surprisingly, people like John Burry, CEO of BlueCross BlueShield of Ohio call this idea ``A Quick Fix That Could Destroy the American HealthCare System.'' He means it could shut down his little gold mine.

Burry wants to continue processing reports on people with sniffles, and squeeze the 10% of expenditures that help people who are really sick.

It's the same mindset that wants to defend America against fertilizer but not against Russian or Chinese nuclear weapons.

The demise of the Clinton ``Health Security Act,'' like the end of the Cold War, is not the end of the fight to preserve the American way of life.




At the best attended annual meeting in DDP history, the threat of proliferation of weapons of mass destruction─nuclear, chemical, and biological─was the predominant theme.

The Edward Teller Award for the Defense of Freedom was conferred on Lowell Wood, the inventor of the Brilliant Pebbles method of space-based defense, by Edward Teller. Dr. Wood's address on the biological threat is available on request. Audiotapes or videotapes of all presentations are also available-use the enclosed order form or call DDP at (520)325-2680.

The Petr Beckmann award was conferred on Dr. Jane Orient.

Next year's meeting will be held in Salt Lake City.


Send all correspondence (manuscripts, address changes, letters to editor, meeting notices, etc.) to:

DDP, 1601 N. Tucson Blvd. #9, Tucson, AZ 85716, telephone 520-325-2680.