Rep. Paul Ryan has gotten some very important things right.  First, $1 billion may be real money, but it’s nothing compared to our federal deficit.  We need to talk in terms of thousands of billions, i.e. trillions.  Second, we have to stop the hemorrhage from entitlements, or we will bleed to death.  Ryan suggests a switch to a defined contribution plan.
 
His plan for Medicare doesn’t start until 2021, by which time the patient may be dead.  Worse, the defined "contribution" of about $15,000 per beneficiary will go to a "health plan"-even though Ryan explains brilliantly that we got into our current mess because of third-party payments.

Why wait? And why not fix the major flaw, recognizing that benefits belong to the beneficiary, not to the middlemen?
 
Finding $2 Trillion. Since government accounting is so poor and loses track of billions of dollars, it’s hard to figure out just how much is being spent on Medicare. But it appears that Medicare spent about $500 billion in 2009, on roughly 50 million beneficiaries, or about $10,000 each. Some say nearly $12,000 is spent. But like Ryan and other lawmakers, let’s pick a number.
 
At $10,000 each, we’d get to $5 trillion in 10 years, plus something for an increase in the number of beneficiaries.  Ryan assumes we’ll spend $7.4 trillion between now and then. The difference would be about $2 trillion.
 
Putting Beneficiaries in Control of Their Money.  So here is a not-so-modest proposal: Let’s abolish Medicare altogether and instead put $10,000 per year into each beneficiary’s individually owned medical savings account: his or her $1,200 that used to go to Medicare Part B plus $8,800, tax free, from the Treasury.
 
Seniors could access the account via debit card to buy medical insurance or to pay out of pocket for any health-related expenditures. Accounts would be subject to IRS audit, and amounts spent for non-medical consumption would have to be returned to the government, with penalties.
 
In 10 years of good heath, more than $100,000 could accumulate (assuming that interest is paid), which should be enough to cover most medical events. Because the event could occur before the money accumulated, or because occasionally a much more expensive illness occurs, people are prudent to buy insurance. Prudent insurance is for catastrophes only-and is precisely the kind that Medicare does not offer.
 
If they wanted to, seniors could immediately hire their own middlemen to manage and share their windfall. Those friendly folk who answer the Medicare hotlines and shuffle the Medicare claims now could start their own business and compete for the honor of serving.
 
Savings Begin Instantly. The government would save all the Medicare-related expenditures hidden in other line items or departments-such as law enforcement. There might be fraudsters preying on seniors, but the potential jackpot would be much less if we didn’t have $500 billion a year flowing through a monstrous program with notoriously poor government accounting. The $100 billion to $200 billion that the government claims is siphoned off by waste, fraud, and abuse in the current system is not going to slip past the watchful eyes of seniors guarding their money.
 
Medical prices would drop, dramatically. Prices could drop because many costs would evaporate. Almost as much hospital personnel time is now devoted to Medicare compliance as to patient care. And prices would have to drop because patients would be unwilling to spend their own money on overpriced services.
 
The difference could be enormous. In 1980, a psychiatric hospital that took Medicare charged almost eight times as much as one that didn’t, while the latter had better care and far nicer surroundings. In 2011, a regular hospital charges five times as much for out-patient surgical procedures as an ambulatory center that accepts no Medicare.
 
Value-Based Purchasing. The difference between ObamaCare and this system is that the values would be the patient’s, not Donald Berwick’s. Patients could choose to spend their last dime on the chance of living another month. But there would probably be much less "futile" care, or highly expensive care of marginal value-especially if patients could pass along at least a portion of their unspent benefit, say for a grandchild’s education.
 
Past experience shows that medical expenditures always plummet when the patient is the one to benefit from the economizing. Yet valued services, such as doctors’ time for older patients, become available when people are not prevented from paying for them, as by Medicare’s price controls.
 
Just Two Questions. There’s the nagging little question of where the $8,800 would come from. All of it would have to be taken from working people, of whom there will only be two or three per retiree. (The trust fund is an accounting fiction, remember.) They might object to paying $2,500 to $4,000 per year for some retired person’s medical savings account. Isn’t such a forced transfer of wealth from one person to another unconstitutional?
 
Now there’s the big question. If it is unconstitutional to redistribute $5 trillion to retirees in this way, what about redistributing $7 trillion to middlemen, with some spent on retirees, as we do now, or as we might do through "premium support"?
 
People may like Medicare-retirees because they think they paid for it and are getting a good return, and workers because they think they are pre-funding their own care. But the truth is that the retirees were robbed while they were working, and the workers are being robbed now. The "social contract" is to tax the young to pay off earlier investors in what was a Ponzi scheme from the beginning.
 
The scheme will not continue as is because it can’t. Will we kill the old people, or impoverish the young, or do some combination of the two?  Or can we find a way to unwind the scheme so as to do the least damage? This thought experiment is meant to help reveal the questions that need to be confronted.

About the author:
Jane M. Orient, M.D.,  On Air contributor speaking on Healthcare Reform.  Dr. Orient has appeared onsomeof the largest TV and Radio Networks in the country and her op-eds have been printed in hundreds of local and national newspapers, magazines, internet, followed on major blogs and covered in the Wall Street Journal and The New York Times.

Doctor Orient is the Executive Director of Association of American Physicians and Surgeons and has been in solo practice of general internal medicine since 1981. She is a clinical lecturer in medicine at the University of Arizona College of Medicine. She received her undergraduate degrees in chemistry and mathematics from the University of Arizona, and her M.D. from Columbia University College of Physicians and Surgeons. She is the author of Sapira’s Art and Science of Bedside Diagnosis; the fourth edition has just been published by Lippincott, Williams & Wilkins. She also authored YOUR Doctor Is Not In: Healthy Skepticism about National Health Care, published by Crown. She is the executive director of the Association of American Physicians and Surgeons, a voice for patients’ and physicians’ independence since 1943. Complete curriculum vitae posted at www.drjaneorient.com. Additional information on health-related issues: www.aapsonline.org and www.takebackmedicine.com.

This undeclared war will hit your home, work, and all activity involving money.  A Department of Defense Irregular Warfare report, “Economic Warfare: Risks and Responses,” is very clear.  The author, Kevin D. Freeman, in an exclusive interview with Tulsa Today said, “My analysis was designed to demonstrate that there is a body lying in the street and here are the suspects with motive, means, and opportunity.  We now have the responsibility to determine forensically which suspect could have done it.”

While written as a hypothetical Freeman said, “The report proves without a doubt that it could have happened.  I will stand behind that very strongly.  Saying that it could have happened then, in a war games simulation effort for the Pentagon, is tantamount to saying this is a national security threat – an exposure America has that is so severe that it must be dealt with immediately.”  To read the full report, click here. (Tulsa Today PDF)

Why do you not know about this war on your financial security?  You may if you read The Washington Times story by Bill Gertz, “Financial terrorism suspected in 2008 economic crash.”  You may have seen Freeman’s interviews with Fox News Live with Megyn Kelly or CNBC with Maria Bartiromo, but when Glenn Beck featured the report, Freeman wrote on his blog, that “the story went on overdrive.”  Beck did not contact Freeman and said on-air he gathered a copy of the report from a “patriot in the Defense Department.”

Continue reading →

Editorial: The 50 governors of the United States are beginning to demonstrate some backbone. They now must remind the federal government that with ObamaCare it has overstepped its bounds.  

Andrew Cuomo, Democrat governor of New York, divulged the fact that 1 in 4 New York residents is on Medicaid.  Medicaid is the social safety net set up in 1965 with the elusive dream of making everyone equal.  President Lyndon Johnson actually stated that this program would help eliminate poverty within seven years.  Instead, it has served to spread the pain of poverty far beyond what anyone could have imagined. 

Instead of encouraging the drive and ingenuity of the American spirit, it tells one-in-four New York residents that he cannot care for himself or his family and is a victim of others.  

Government has turned its people into pawns of the state, easily manipulated by those seeking to enrich themselves at the expense of the prosperity and independence of those it has purported to "help."  And at a cost of $50 billion per year in New York alone, the productive private sector workers who must fund such excess, are forced to cut back on things that would enrich their own lives. How many homes cannot be improved because there is simply no money left to do it after taxes? How many idle contractors thus have nothing to do and finally wind up on welfare themselves?  The downward spiral is cruel. The people are burdened by a government that has gotten too big.

Cuomo has proposed Medicaid reforms, battling his own legislature to reduce the generous benefits offered by the system.  And now he is looking to his own President to stop the inevitable growth of this mammoth system that is bankrupting everyone.  He is horrified by the proposed expansion of Medicaid that is a major feature of ObamaCare.

Governor Cuomo may be on to something.  The Medicaid system has morphed into something that was never intended– a highly bureaucratic system that pays and gives generous benefits to many people that fill in forms and shuffle papers.  But when it comes to delivering health care to the poor, Medicaid only meddles, restricts, coerces, and grossly underpays those who actually see and touch the patients.  As in England, it is a national system that grows in bureaucracy while delivering less and less care.

So what is the solution? A proposal is circulating the State of New Jersey to phase out the Medicaid for acute care services, saving $2 billion.   

Since women and children in poverty need care, not "insurance,” we ought to encourage the private sector set up a network of free charity clinics.  

Physicians would be asked to donate 4 hours per week, submitting no claim forms to the state for reimbursement.  As their only reward, we would ask that the state provide the same medical malpractice coverage as it provides to attendings, residents and students of the state medical schools, to the entire practice of those physicians who volunteer.

It would cost the taxpayers nothing unless a lawsuit were brought, and these would be reduced.  Lawyers are less likely to sue the state than a private physician.  

Physicians would benefit from the lowered office overhead in their private practices and the freedom to work without having to defensively order so many extra tests.  

Poor patients would benefit by having a place, right in their community, to go when they find themselves ill with no money to pay for care.  Baby boomers would step up to staff the volunteer clinics, realizing that they would be improving the prosperity of their children and grandchildren.

The huge state Medicaid bureaucracy would melt away, freeing those workers to find private sector jobs fueled by the remarkable reduction in taxes.  Since NJ spends $5 billion of its $30 billion budget on non-elderly Medicaid, it is not hard to envision the prosperity that would ensue if such an expense were greatly reduced.   Though the federal government pays half, this is money that has lured us into the sense that we are really being helped. The strings attached to that "help" are strangling us.

The Governors need to stand up and just say "no" to the federal government.  Tell the feds to keep those Medicaid dollars and put its own house in order.  Let each state develop a common sense way to care for its poor and let there be 50 crucibles of innovation, ready to be emulated by others.  May the best state win!

(WASHINGTON, D.C.) – U.S. Senator Tom Coburn, M.D. (R-OK) released the following statement today regarding a new Government Accountability Office (GAO) report that takes an unprecedented look at duplication in the federal government.  Dr. Coburn offered an amendment to last year’s debt limit vote which required GAO to do the report by law.  The amendment was approved by a vote of 94 to 0 on January 26, 2010 "Roll Call" vote.  A summary of the report follows.  GAO will make the full report available later today.  

“This report confirms what most Americans assume about their government.  We are spending trillions of dollars every year and nobody knows what we are doing.  The executive branch doesn’t know.  The congressional branch doesn’t know.  Nobody knows,” Dr. Coburn said.

“This report also shows we could save taxpayers hundreds of billions of dollars every year without cutting services.  And, in many cases, smart consolidations will improve service.  GAO has identified a mother lode of government waste and duplication that should keep Congress busy for the rest of the year,” Dr. Coburn said.

GAO did not provide a specific estimate of the cost of duplication in its report but Dr. Coburn estimated it to be at least $100 billion.  Moreover, GAO only examined a fraction of the federal budget and only a handful of missions of varying scope.  Dr. Coburn expects future reports will identify even greater overlap, duplication, and mismanagement.

Key GAO findings and examples of duplication, mismanagement and waste:

•    Dangerous lack of coordination regarding defenses against biological terror threats.  At least five departments, eight agencies and more than two dozen presidential appointees oversee $6.48 billion related to bioterrorism.  GAO writes: “There is no national plan to coordinate federal, state, and local efforts following a bioterror attack, and the United States lacks the technical and operational capabilities required for an adequate response.”

•    $1 trillion for special tax benefits, many of which are redundant.   GAO writes: “For fiscal year 2009, the U.S. Department of the Treasury listed a total of 173 tax expenditures, some of which were the same magnitude or larger than related federal spending for some mission areas.”

•    Financial literacy education offered by a government with a $14 trillion debt.  Twenty agencies operate 56 programs dedicated to financial literacy but GAO and agencies can’t estimate what they cost.   

•    Economic development programs with little evidence of economic development.  The federal government runs 80 economic development programs across 4 agencies at a cost of $6.5 billion.  

•    Highways programs have not been rebooted since 1956.  The Department of Transportation (DOT) spends $58 billion on 100 separate programs run by five DOT agencies with 6,000 employees.  GAO says the programs have “not evolved to reflect current priorities in transportation planning.”

•    Special treatment for catfish.  GAO found that the Farm Bill assigned the United States Department of Agriculture responsibility for monitoring catfish, thus splitting seafood oversight between USDA and FDA.  Fifteen federal agencies administer more than 30 food related laws.

•    Senseless duplication among military branches.  GAO found that the military wastes untold billions on duplication and overlap.  For instance, Army and Air Force transportable base equipment, which includes mobile housing and dining facilities, could be used by both service, but are not.

This report is the first of what will be an annual report from the GAO on duplication.  Specifically, the amendment Dr. Coburn attached to last year’s debt limit vote (S. AMDT. 3303 Division I to H.J. RES. 45) “directs the Government Accountability Office to annually identify federal programs, agencies, offices, and initiatives with duplicative goals and activities, to estimate the cost of such duplication, and to make recommendations to Congress for consolidation and elimination of such duplication.”

Editorial:  If you’d like a preview of what your medical care might look like after 2014, when the Patient Protection and Affordable Care Act (PPACA) is fully implemented, take a look at schools in Wisconsin: they’re closed.

The teachers, members of a public employees union, are not exactly on strike, as that would be illegal. Instead they are at the state capital, obstructing government as well as education. They might still be getting paid because they are taking sick false leave.  True, they are able to stand outside in the cold for hours, holding signs, but they do have a doctor’s excuse.  They are “stressed,” or “sick of Governor Walker,” or “anxious” about their future taxpayer-funded benefits, or “depressed” about pending legislation.  This has been coded and documented in appropriate medical terminology by a credentialed provider, on a properly executed form.

Under PPACA, doctors and other medical workers (now all lumped together as “providers”) are likely to be unionized too.  They’ll have to follow work rules, or the equivalent, in any case.  These rules are designed to prevent too much work.  If doctors join the new type of collective practice, called an accountable care organization, they’ll be punished if too much money is spent providing too much care.  Or if there are “disparities” because patients belonging to a “majority” (non-disadvantaged) ethnic or racial group got more than their fair share of the resources.

In addition to studying complex rules and performing administrative busywork, providers will spend a lot of their time writing work excuses, a high-priority function in a socialized economy.  In England, for example, absenteeism nearly doubled in the first year of the National Health Service.

Union benefits will be protected by government, as the government is protected by unions. Waivers from onerous provisions of PPACA are generously granted to unions, which generously contribute to friendly politicians from the dues extracted from workers. If the majority (“We won”) party should lose that status in an election, because of taxpayer concerns about the impending bankruptcy of the state, it can still win by hiding out in a luxury hotel in another state. By making it impossible to obtain a quorum, they can keep the legislature from voting to diminish taxpayer-funded union benefits. This maneuver is not a boycott or a strike—when used by the union’s friends.

Once the PPACA passed, it seemingly became immune to repeal, like unsustainable union pensions—as long as its chief advocate (for whom PPACA is often called “ObamaCare”) rules over the executive branch and has the power to veto repeal.  Administrative agencies can redistribute the benefits to friends, and the burdens to enemies—a great way to increase the number of supporters and neutralize opponents.  The executive branch is also in charge of the police, the prosecutors, and the prisons.  They enforce the very punitive laws against violating ambiguous and enormously complex rules.  Phony work excuses for union members get a wink and a nod and a pass—and a paycheck.  A wrong code or an extra service to an ineligible patient gets the doctor an “F” for “fail”—and possibly a fine and a prison term for “fraud.”

The courts are a weak barrier against overreaching by the executive. Judge Vinson, in a case brought by a majority of the states, ruled PPACA unconstitutional. The Obama Administration is forging ahead unhindered. On the other hand, if the legislature passes a law it doesn’t like, the Administration can decide on its own, without benefit of a court, that the law is unconstitutional and refuse to enforce it. (That kind of law seems to involve restrictions on gay marriage or abortion.) PPACA will go to the Supreme Court. But one wonders whether the question once asked about the Pope will be asked in another context: How many divisions does the Supreme Court have?

The “community organizers” who support unions and “reform” can mobilize thousands.  Organizing for America, which uses the Obama “O” as its logo, is bussing protestors to Wisconsin.  It is also raising money to fight the repeal of PPACA.

“The people are speaking” in the street here, though not as violently as in Egypt.  Governor Walker is being portrayed as a Hitler or a Stalin.  Signs say “Don’t Retreat, Reload; Repeal Walker,” and show Walker’s face in the crosshairs.  Such a graphic on a map of congressional districts got Sarah Palin accused of instigating the shooting of Congresswoman Giffords.  But venomous, hate-filled rhetoric is apparently okay when used by unions and their friends.

Education and medicine are key targets in the progressive agenda to “fundamentally transform” America. Government schools are already in its grip. By their actions in Wisconsin, unionized teachers are setting an example of cheating and lying. Is that what their students are learning? The union defines right and wrong, sickness and health, truth and falsehood—to suit its purposes. Some doctors are already collaborating with this agenda.

In Wisconsin’s government schools, more than half of the students don’t learn to read well. What will happen to patients in medical facilities run on the same principles?  Many may get nothing more than a work excuse.

Wisconsin is showing us the face of progressive reform. We need to study it, and learn.

About the author:
Jane M. Orient, M.D., has appeared on some of the largest TV and Radio Networks in the country and her op-eds have been printed in hundreds of local and national newspapers, magazines, internet, followed on major blogs and covered in The Wall Street Journal, The New York Times and Tulsa Today.

Doctor Orient is the Executive Director of Association of American Physicians and Surgeons and has been in solo practice of general internal medicine since 1981.  She is a clinical lecturer in medicine at the University of Arizona College of Medicine.  She received her undergraduate degrees in chemistry and mathematics from the University of Arizona, and her M.D. from Columbia University College of Physicians and Surgeons.  She is the author of Sapira’s Art and Science of Bedside Diagnosis; the fourth edition has just been published by Lippincott, Williams & Wilkins.  She also authored YOUR Doctor Is Not In: Healthy Skepticism about National Health Care, published by Crown.  She is the executive director of the Association of American Physicians and Surgeons, a voice for patients’ and physicians’ independence since 1943. Complete curriculum vitae posted at www.drjaneorient.com. Additional information on health-related issues: www.aapsonline.org and www.takebackmedicine.com.  Doctor Orient resides in Tucson, AZ.