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Saturday, December 17, 2011

"Arm chair economists" vs MD/MBA and Expert in Healthcare Economics

I have read with amusement the letters to the editor in today’s (12/17/2011) Albuquerque Journal criticizing Dr. J. Deane Waldman’s recent editorial regarding out of control health care costs and the government’s role in regulating and/or contributing to those costs. It is interesting that all three letters published were all critical of Dr. Waldman’s analysis with no counter opposing view(s) supporting his analysis. I don’t know if that means there were no letters to support Dr. Waldman or if the Journal simply chose not to include any letters that supported his views.

Regardless if there was any supportive letters sent to the editor, it is both interesting and amusing to see three non-medical (and assuming, non-health care economics) professionals—unless one counts “45 years experience as a health care advocate” as qualifying as a health care professional—trying to rebut the thoughtful analysis of not only a practicing physician who has practiced for more than 2 decades within our “sick system”,but is also an MBA who is a published author and expert in healthcare economics and reform.

It is obvious from the reading of all three letters that the basis of their rebuttal is not based on any real facts or data from scholarly journals in medicine or economics, but rather simply on personal political ideology and opinion. All three letter writers obviously espouse a more liberal “more government is better” philosophy towards healthcare—vis-à-vis “Obamacare”-- and two of the letter writers ignominiously attempt to discredit Dr. Waldman’s analysis as merely the musings or political ranting of just another ill-informed or unenlightened “conservative”.

Regarding the first letter by Mr. Richard Valdez, he somehow manages to shift the argument that more government regulation is more or less cost efficient based on the merits—or lack of—of governmental bureaucratic efficiency , instead arguing for the benefits of more government regulation in healthcare in order to improve patient safety. In other words, he is trying to compare apples to apples, but using oranges as an example. On top of that,he insinuates that Dr. Waldman just magically pulls his data (of 40% of healthcare expenditures not going to pay for direct patient care) out of the air if not from a “conservative think tank” while offering his own simple statistic from the CDC and Institute of Medicine (which by the way is a liberal think tank) of “100,000 to 135,000 deaths annually due to doctor and/or hospital error”. Now, did I miss something? I thought we were discussing money and bureaucratic efficiency/inefficiency here and not the number of potentially preventable patient deaths per year attributable to medical errors. What does one have to do with the other? I’m deeply sorry that he has lost two sons, but his argument that more government spending or regulations would have saved them may or may not be true, but have absolutely nothing to do with the argument that the government can or cannot be more efficient in managing healthcare!

While this letter is meant to offer a critique of the letters criticizing Dr. Waldman’s analysis and not a separate analysis of how we can best prevent medical errors in healthcare or what the government’s best role is in preventing medical errors, I do want to point out—using Mr. Valdez’ own statistics—how easy it is to pick and choose random statistics disingenuously to support one side or another of an argument. While Mr. Valdez correctly contends that there are anywhere from 100,000 to 135,000 (actual range is 85,000 to 195,000)deaths annually attributable to doctor and/or hospital errors, he conveniently fails to indicate that number one, these are classified as “potentially preventable deaths” and number two, that these potentially preventable deaths represent an extremely small fraction (0.00005%--using the higher number of 200,000) of the nearly 1 billion (995 million) doctors visits, outpatient clinic visits, ER visits, and hospitalizations (CDC data) seen each year!

You don’t have to be a "Black Belt” in Six Sigma --an extremely rigorous business ideal advocating for near perfection or 99.99966% error free processes—to see that in medicine, we get pretty damn close! Now as a physician and a father-- and a healthcare consumer-- I understand that we are talking about human lives here and not the manufacturing of ball bearings and that even 1 preventable death due to medical error is tragic and regrettable, but from the dawn of civilization, we have never been, currently are not, and never will be perfect in medicine or in any other human endeavor!

Mr. Raymond Schall and Mr. Byers both just simply spout standard democratic party line demagoguery in their justification for and defense of “Obamacare” and increased government involvement in one of the most personal aspects of our lives without providing any real or objective data or logic to buttress their criticism of Dr. Waldmam’s analysis. Mr. Schall tries to
also pick and choose some “statistics” to bolster his support of “Obamacare” by citing that the “Health and Human Services recently released their long awaited rules requiring insurance companies to spend at least 80 to 85 percent of their revenue on actual patient care. What he failed to mention is that in the United States, most private insurance companies spend about 6 to 11percent of revenues on “administrative costs” and 89 to 94% on “patient care costs” (multiple sources). He also did not mention that from at least 2000 to 2010, Medicare consistently has spent 19 to 31% more on true “administrative costs” than private insurance companies. He also tries to tout the benefits of “Obamacare” by stating that “more than 100,000” New Mexicans have “received free preventative health care” and “more than 18,000 students have received primary and behavioral healthcare” because of “Obamacare”.

Now Mr. Schall obviously has never heard of or does not believe in the 1st principle of economics which basically states “there is no such thing as a free lunch”. He uses the word “free” as if “the free market tooth fairy”—to borrow a trite little phrase from Mr. Byers (the 3rd letter writer)—suddenly dropped the money into the government coffers to pay for the “free care”! Excuse me, but just because the patients received “free” or discounted health care doesn’t at all mean that it was “free”—somebody(you and I—and not the tooth fairy) in the form of increased taxes and or both increased premiums has to pay for that “free health care”! Beyond that, the medical providers providing the “free care” do so at a deeply discounted government mandated rate that often is below the amount required to sustain a viable practice!

Finally, Mr. Doug Byer’s letter is nothing more than old and tired progressive-socialist and “new” OWS dogma lamenting the evils of capitalism and free markets thinly—as well as feebly--disguised as an attempt in intellectual discourse.

I conclude my critique of the letters to the editor with some rather interesting “statistics” to ponder:

1. There are approximately 1800 pages each in both Harrison’s textbook of Medicine and the American College of Surgeons textbook of Surgery which could be considered the "bibles” of Western Medicine and Surgery and which represent the collection of
at least 3000 years of medical and surgical science and knowledge. This compares to 1000 pages in the Patient Protection and Affordable Act (aka “Obamacare”), 670 pages in the HIPPA regulations, and over 132, 000 pages of Medicare rules and regulations collected over the last few decades (this does not include the various state and local rules and regulations regarding the practice of medicine in States and local localities)!

2. There are approximately 650,000 practicing physicians and surgeons in the United States and it is estimated that for every physician, there is 2 to 5 or (1.2 to 3.25 million) “non-medical administrative” workers (most of them Federal and State employees) per doctor “administering healthcare”!

3. The Medicare Trustees have projected that Medicare (which administers to approximately 30.5 million Americans) will be bankrupt by 2024 at current spending projections and somehow we want to expand that government bureaucratic behemoth to cover 10 times that much? This is what a “real” doctor in health care economics has to say about that:

“Contrary to the claims of public plan advocates, moving millions of
Americans from private insurance to a Medicare-like program will result in
program administrative costs that are higher per person and higher, not lower,
for the nation as a whole.”

Robert A. Book, Ph.D., is Senior Research Fellow in Health Economics in the Center
for Data Analysis at The Heritage Foundation


John R. Vigil, MD

Dr. Vigil has a blog titled “What’s Wrong With American Healthcare Today;
The Musings of a Working Doc” and has been a practicing physician and surgeon for over 20 years. His interests in medicine are healthcare economics, improving healthcare delivery, and history of medicine and surgery. He has completed 1 year towards his Master’s degree in Business Administration at the Anderson School of Management, University of New Mexico.

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