Preventing Medicine
Simon, William E.
"Preventing Medicine" William E. Simon Proposing...
...Carter's ebullient HEW Secretary, since the moment of his appointment, has issued an incessant stream of complaints about the system of American health care...
...Thus, whenever he complains about rising costs, he goes to the Social Security Administration's compilation of health care statistics for 1975 and 1976...
...There are, of course, extremely effective preventive procedures...
...And a great deal of money will be spent on us in the process...
...From 1967 through 1977, the maximum Social Security tax increased approxi mately twice as much as health care costs over the same period...
...In fact, if one stretches the span out a bit the results are quite different...
...To my knowledge, that has never happened, and it would be highly unlikely to happen in the complex field of health care...
...For one thing, the line shifts radically from year to year...
...Recently, for instance, a storm briefly swirled through HEW when an internal memo was leaked to the press...
...Agribusiness middlemen are taking a larger proportion of farm profits, while the beleaguered family farmer is squeezed between the rising costs of land and supplies, on the one hand, and a diminishing share of food prices, on the other...
...Then it was moved up to mid-1978...
...Nor are the analyses which occasionally issue from Califano's own bailiwick much more reassuring...
...Therefore, we must institute a system that by the most conservative estimates could add $16 billion a year to those costs...
...William E. Simon Preventing Medicine Proposing National Health Insurance as a solution to the high costof medical care is rather like trying to solve the problem of theImperial Presidency by establishing a monarchy...
...There is little competition in the health care industry, Califano charges...
...The most important preventive techniques are those that detect and prevent major medical problems...
...It just drives up costs, and if we all practice preventive medicine, we won't need it anyhow...
...A cracked rib, an infected eye, an infected ear, bronchitis, viral afflictions of all kinds, a sprain, a strain, a fall, a broken arm, a broken leg-these ailments and others like them form the bulk of the problems that we take to our doctors...
...He looks for whatever apparent weaknesses appear in the present system and he shoots holes in them, and it is irrelevant whether or not his charges are untruthful or exaggerated...
...All items on the CPI during that period rose 31.1 percent...
...True, there may be people both genuinely concerned and genuinely unable to pay...
...But the answer, surely, is not massive federal intervention...
...In private, however, they are saying things that suggest a radical redefinition of the preventive concept, one which more nearly squares with logic but violates every precept of American medicine...
...These are two good years, for the statistics, if taken alone, do seem to demonstrate that health care costs are the major problem...
...All of which, of course, is true...
...Partial federal intervention is now driving prices skyward, as COWPS points out...
...Too many old people...
...Hard and fast federal figures on the subject are difficult to come by, but according to one recent HEW estimate, a comprehensive "sperm-to-worm" program, such as that being proposed by Senator Edward Kennedy, could boost the nation's health care tab to $248.3 billion by 1980...
...Most of us, when someone close becomes very sick, will seek out the very best treatment money can buy...
...But as Schwartz points out, "what is irrefutable is that these and related ideas have recently been actively discussed at the highest policy levels of HEW...
...Change those lifestyles, and there would be far fewer health problems...
...process...
...The first target date for National Health Insurance was late 1977...
...There is the patient with the scratchy throat, the patient concerned with excessive or inadequate body hair, the patient who sometimes gets a funny feeling in his right shoulder, the patient who simply enjoys the attention of a physician and finds his office a satisfying social center...
...that we were not getting what we paid for...
...One wishes, before Califano nationalizes our system of medicine, that he would reassure us all by pointing to just one instance in which government intrusion into the private sector has resulted in less expensive product-or for that matter, a product of higher quality...
...Hypertensive medication for high blood pressure comes to mind, as do certain methods of cancer screening...
...It might mean, for instance, that a child with a brain tumor would not have access to a sophisticated brain scanner that could pinpoint the tumor's location...
...And just last year, Farmland merged with Far-Mar-Co, the nation's largest grain marketing cooperative and proprietor of the world's longest grain elevator (half a mile...
...For the rest of us, the fact that we procrastinate springs from something infinitely more complex than a physician's fee, and abolition of that fee would make the prospect of a visit to the doctor no more seductive...
...Welfare costs will have risen 11.1 percent over the same period, and health care costs will fall in the middle at 10.9 percent...
...We refuse to exercise, we drive our cars unsafely, and some of us won't even use seatbelts...
...But do we really want that...
...On the face of it, this is an attractive theory...
...To this end we shop for private insurance policies which guarantee that we will be able to pay for it-and if we do not have such insurance, we will go deeply in debt to pay for that treatment...
...For those not so covered, with marginal medical budgets, there are thousands of free clinics...
...The memo, from Robert Derzon, director of HEW's newly created Health Care Financing Administration, suggested that' Califano consider a number of ways to bring costs under control...
...But the advocates of preventive medicine run The tendency for such federal programs to grow tremendously should no be overlooked...
...California Canners and Growers, which grows and processes fruit in its home state, opened a vegetable cannery in Wisconsin...
...In each case, a great deal more money will be spent on such patients than would have been spent had the preventive techniques not succeeded...
...In public, they continue to take the approved line on preventive medicine...
...Medical costs rose 31.5 percent...
...The bulge is commonly thought tosubside after two years...
...Derzon, in typical bureaucratic fashion, has since denied meaning what he said...
...Then there are the consumer products-sugar, coffee, seafood, rib roasts, bacon, ham, tuna fish, potatoes, and, of course, electricity and everything connected with energy...
...In 1975, when farmers discovered that corporate grain sales to the Soviet Union were clogging transportation for their own grain, six regional co-ops jointly bought a Mississippi River barge line...
...Or a woman whose hypertensive problems are brought under control at relatively little expense at 60 may at 70 suffer from advanced senility and be placed in a nursing home...
...Previously the approach was to try to convince us that National Health Insurance was affordable...
...He is a hired gun, and agood one, the quintessential Washington operator, totally loyal owhoever happens to be paying his fee...
...His method is an effective one...
...But these facts are seldom aired, for the men who set the terms of the national debate simply are not interested in hearing them...
...Consider: A man found to have operable prostate cancer at 40 may be saved to enjoy the benefits of a pacemaker at 65...
...and that, although National Health Insurance would be expensive, it would enable the government to exercise control over the quality of care...
...But cost alone is seldom the barrier which prevents us from seeking such treatment...
...None of them would be prevented by early visits...
...What would '--'t mean...
...When the problem is discussed as the solution, we may be right in feeling that things are just a bit out of whack...
...through a comprehensive health insurance program, then minor health problems will be arrested before they develop into major problems, thereby reducing the cost of treatment...
...And the familiarity of several cooperative brand names -among them Sunkist oranges, Welch's grape juice, Ocean Spray cranberry products, and Sunsweet prunes-suggests that the 18 The American Spectator April 1978...
...Here, as in so many other cases, Califano has things backwards...
...Increasingly, national health insurance proponents are depicting hospitals as luxury playgrounds for medical dilettantes, and breathtaking medical technologies as expensive toys for grownup boys...
...It isn't quality we're worried about any longer...
...This increase would take place precisely where it is needed least...
...Califano's tendency to overstate and to use statistics selectively is especially apparent in his frequent assaults on pharmaceuticals...
...During the mid1960s, it cost approximately $1.5 million to develop a new drug and win federal approval to market it...
...Among Derzon's suggestions: discourage the use of sophisticated medical technology...
...Nor are comparative price rises under the present system expected to be particularly dramatic, even though federal programs permit millions of poor Americans to enjoy virtually limitless access to health care...
...A dollar's worth of auto repairs in 1967 now goes for $1.90...
...We perceive health care in America today," says Joseph Califano, "as a vast, sprawling, highly expensive, and virtually non-competitive industry...
...If he and his peers truly wanted to hold down costs and enhance the quality of care, they would start at the other end and attempt to eliminate services on the primary level...
...Now we're being told that we cannot afford not to have it...
...plumbing services are up to $2.10...
...appliance repair has risen to $2.00...
...He has been told to pave the way for a system of National Health Insurance, and that is what he is doing...
...the first full post-control year, medical care costs as recorded on the CPI shot from 5.7 to 12.5 percent-certainly an alarming statistic when taken in isolation...
...Derzon likes euthanasia...
...and what's more, it would dramatically siphon off dollars essential to our care...
...The solution...
...So the existing system is by definition bad, and anything at all is fair that might help to discredit it...
...How many of us, when we think back over the past year, have been to see a doctor about a problem that an earlier visit would have prevented...
...Human nature presents a profound problem for the proponents of preventive medicine...
...By 1968 the annual cost had jumped to $1.9 billion...
...Abort them...
...Indeed, it might be argued that a government which encourages us to put total responsibility for our health into its hands could end by making us even less responsible for our own health...
...Thus in 1975...
...Health care costs are soaring, we are told...
...One HEW expert, at a recent meeting in Washington, referred to some of the most important technological devices of the century as "whatsy-dutsy machines...
...With the government firmly" controlling the purse strings and determined not to pay for such equipment, it would not be purchased...
...True, there is a cost problem...
...In the same year, the second year in which health care costs were free from controls, the medical care component of the CPI dropped from 12.5 to 10.1 percent...
...And with the massive new increases enacted by Congress-the members of which, incidentally, do not have to contribute-the sky's the limit...
...With unlimited access, concludes a Rand Corporation study of National Health Insurance, treatment in doctors' offices would increase by 75 percent...
...In fiscal year 1977 Medicaid cost $10.3 billion...
...These men have been appointed to bring in a system of National Health Insurance...
...But, public statements about preventive techniques as money savers aside, there are hints that the idea has occurred to high HEW officials...
...In any event, it is surely as fair to compare costs between 1973 and 1976 as it is to complain only about the price rises of 1975 and 1976, without acknowledging the effects of price controls...
...The concept of the divine right of kings would do little to democratize the White House...
...a plan favored by the insurance industry would increase the cost to $234.5 billion.' Logical...
...But in 1974, the year in which the rest of the economy was freed from controls, the CPI for all items jumped from 4 to 9 percent, and in 1975 it climbed to 11 percent...
...But Farmland combines with these ideals the sophisticated management practices of modern business-diversification, vertical coordination, even international operations...
...O ne such theory involves the practice of preventive medicine, and runs this way: If financial barriers to access are eliminated on the primary level (doctors' offices, clinics, etc...
...Nor would the socialization of the health care industry, no matter what else it accomplished, increase competitiveness...
...Too many kids, costing too much...
...Nor does his view of the basic human condition seem much clearer...
...A great transformation is taking place in American agriculture...
...And this is especially true of Califano...
...All this, say preventive medicine proponents, is the result of our "life-styles...
...A subsidiary, Farmland Foods, is the nation's 12th largest meat packer and has entered the frozen foods business...
...But of all the developments in our nation's farmlands, one of the least remarked but most remarkable is the growth of farmer cooperatives...
...Secretary of the Treasury from 1974 to 1977, is a financial consultant with Booz, Allen & Hamilton...
...As even the President's Council on Wage and Price Stability (COWPS) admitted in 1976, after years of avoiding the issue: "It is all too apparent that right now with current reimbursement programs and the ubiquitous and often conflicting morass of regulations, the Federal government, instead of being part of the solution, is part of the problem of rising health care costs...
...Further, to imply that Americans now burdened with medical bills would be miraculously relieved of those burdens if their bills were first recycled through Washington is not only illogical, but downright dishonest...
...a unique system of economic relationships that are commanding, and controlling, an ever larger share of our nation's resources...
...As Harry Schwartz of the New York Times pointed out, "Mr...
...But now the government is talking as though it intends to save us from those urgeswhether we want saving or not-by denying us certain kinds of services and treatment...
...In general, the answer is precious few...
...Closely tied to the theory of preventive medicine is the assault on what Califano and the federal planners call "runaway medical technology...
...Their job is not an easy one, however...
...But perhaps we needn't worry...
...National Health Insurance is simply not the most effective way to guarantee the nation's good health, nor is its method d allocating the health care dollar either wise or just...
...It's cost, pure and simple...
...Together the two cooperatives' sales amount to more than $3 billion a year, enough to make Farmland the 75th largest firm on the Fortune 500, and the single largest enterprise based in Kansas City...
...Consider, as well, the bite the Social Security tax is taking out of consumers' paychecks...
...But in the case of the CPI for all items, itwas a three-year process, while the figures for 1975 and 1976 coveronly the first two years of the health care component bulge...
...Now, however, the line has shifted again...
...Between 1965 and 1973, for instance, health care costs rose 9.6 percent more rapidly than other costs...
...One, favored by the American Medical Association, could raise the nation's health care bill to $243.8 billion by 1980...
...Then came Medicare and Medicaid, the problems of equity and access were alleviated, and we were told that, although we were all getting it, American medical care was shoddy and incompetently practiced...
...During the same period, however, the price of prescription drugs rose just a bit less than 19 percent...
...Giant corporations, as we are constantly informed, play an increasingly dominant role in the processing, marketing, and exporting of farm products, and in the provision of farm supplies like pesticides and machinery...
...Save us from one thing, and we will eventually suffer from and die of another...
...Medicaid was supposed to cost $200 million per year when it was proposed in 1966...
...And because he does it well, it occurs to few that his facts are frequently either distorted or simply wrong...
...But logic seems to play no role in the discussion...
...Nor is its current rationale in any way logical...
...But this is not the case...
...At least not all of them...
...Right now their t A "living will" spells out the conditions under which a person would not want to continue living-e.g., dependence on a life-support system...
...Gold Kist, once a Southern cotton growers co-op, recognized the need to diversify: Its operations now include the world's largest peanut-processing industry, a large poultry division, and a fishing fleet off the coast of Peru...
...Neat...
...Now Califano is talking about early 1979...
...But they are already covered by Medicaid or Medicare...
...Over one-fifth of Medicare expenditures are for people in their last year of life," Derzon observes pointedly...
...In effect, the Califano approach consists of taking resources from those who genuinely need them and distributing them among those who do not...
...And in comparison to the systems of those nations-especially Great Britain-where medicine has been socialized, it doesn't look bad at all...
...And as third-party payments increase-and with them the illusion of free medicine-so do such patients increase proportionately...
...When one compares the figures year foryear, as Califano does, the comparison between the cost of medicine and the cost of everythingelse must inevitably be distorted...
...Take his most basic assertion-health care costs are spiraling out of sight...
...16 The American Spectator April 1978 But they're not, of course...
...It is not quite fair, of course, to confine such an analysis to the 1973-1976 period...
...As matters now stand, doctors are plagued by a horde of patients with self-treatable or nonexistent afflictions...
...Thus,the relevant comparisons would be between 1974 and 1975, andbetween 1975 and 1976...
...Owned by 2,277 local co-ops, which in turn are owned by over 500,000 farmers, Farmland embodies the traditional ideals of the cooperative movement by electing its board of directors democratically-one co-op, one vote-and by annually returning its profits to its members, according to their patronage...
...Such a predilection on the part of the high HEW official who will probably be tapped to run any system of national health insurance is something less than reassuring...
...But until then, if Califano actually believes that a socialized system would compel us to trot obligingly into our doctor's office so that he can tell us to stop smoking so that we can then go home and do so, his view of human nature is hopelessly muddled...
...If this forecast is at all accurate, the situation seems much less alarming than Califano would have it...
...That figure is especially remarkable when you consider the effect of FDA regulations on the drug industry...
...That is the essence of Califano's complaint...
...legal expenses have risen to $2.00...
...Not everyone quite appreciated the simple beauty of Derzon's approach, however...
...Consider, for example, Farmland Industries, a regional cooperative whose chief function is to provide its members (mostly in the Great Plains and Midwest) with petroleum, fertilizer, feed, and other farm supplies...
...But what Califano and others who single out these two years do not discuss is that the size of the figures is due not so much to costs out of control as to costs under controls-the Nixon controls, that is, which remained in effect in the health care field a year after they were lifted in most others...
...Senator Kennedy has called for (but not held) hearings on drug prices...
...But on reflection it makes little sense, for the vast majority of our health problems are not problems that early care can prevent...
...Nevertheless, despite the figures, the prices of drug products are under almost constant attack in Washington...
...Califano would have us believe that the increase in these costs is outstripping the increase in the costs of all other commodities...
...But these were the years of the great gathering together of federally insured patients, and that increase is directly attributable to federal programs...
...This is as it should be, for that is what American medicine is all about...
...But, again, perhaps the unstated argument is that the single best way to save money is to prevent life from lingering...
...A Ithough he remains relatively calm about welfare and unusually silent on the subject of education, Mr...
...Get rid of all that frivolous technological stuff, the attitude seems to be...
...Yet in 1976, when other costs were rising 5.7 percent, drug prices rose only 3.9 percent...
...If Califano and his colleagues really believe that, then they're bananas...
...If he were to take a similar approach to education, he might end by funding postgraduate courses for cafeteria help and janitors, while denying them to all students with an I.Q...
...But this is rather like saying that the way to solve the problem of the Imperial Presidency is to establish a Monarchy...
...Simple...
...encourage welfare mothers to get abortions...
...But Califano is not interested in figures that undermine his case, and he chooses his statistics carefully...
...When the time comes for each of us, we would probably prefer to have had our money spent in this manner...
...Adam Meyerson Co-op Capitalism Cooperatives are not only one of the most rapidly expandingforces in American agriculture, but also one of the mostcreative institutions in our market economy...
...Some day, of course, they may have us all out at lunch hour, exercising in the parking lots to the tune of loudspeakers...
...and persuade the states to adopt "living wills" by threatening to withhold federal funds.' Abortions would be beneficial, explained Derzon, because "every unwanted birth prevented saves about $1,000 annually in welfare payments and another $100 in Medicaid funds...
...Between 1967 and 1977, according to the Social Security Administration, prices for all goods rose approximately 44 percent...
...It might mean that the hospital nearest to the heart attack victim would not have a cardiovascular unit...
...In the meantime, as the projected NHI cost estimates continue to soar, the American people, already afflicted by inflation and threatened by a huge new Social Security tax bite, may decide they simply do not want to foot the bill for aa nationalized system of medicine...
...U...
...house reshingling, $2.33...
...He intends to encourage more utilization on the primary level by providing free and unlimited access to services, while at the same time limiting access at the upper level...
...total federal intervention would accelerate the William E. Simon, U.S...
...Economists call this phenomenon of post-control prices rising totheir natural level a "bulge...
...In comparison, insurance and finance charges which cost a dollar in 1967 have risen today to $1.97...
...Farmland has also begun to market farm products...
...What is seldom acknowledged is that hospital improvements and medical technology aim either to preserve life or to enhance its quality...
...Farmland is the largest of America's more than 7,000 co-ops, but its aggressive and entrepreneurial spirit is by no means unique...
...But to characterize such techniques as "money saving" is surely to miss an important point-we all die anyhow, and few of us die healthy...
...In 1976, the third control-free year, the CPI for all items levelled off at 7.1 percent...
...If, for instance, one averages the medical price rise between 1973 and 1976, and then compares that increase with the rise in costs of all other items, the rate of increase is almost exactly the same...
...Among all major industries, pharmaceuticals have been most successful at keeping prices down, and in terms of real dollars we are paying considerably less for our prescription drugs now than we were a decade ago...
...As any physician will tell you, this is where health care expenditures are truly wasted...
...Many other costs have also outstripped medical costs...
...We cause most of our own basic health problems by eating too much, smoking too much, and drinking too much...
...Today, that cost has risen to an estimated $15 million...
...That means that since 1973, health care costs have risen at a rate less than one-half of one percent higher than all other items...
...Califano, however, is working from the other end...
...control its sources of supply: The co-op is now the nation's second largest fertilizer producer (the largest is CF Industries, another cooperative), and its many energy projects include oilwells in Colombia, part ownership of an interstate pipeline, and, at Farmland's phosphoric acid plant in Florida, the extraction of uranium for a subsidiary of Westinghouse...
...The only real way to save money on that man with the prostate cancer is not to treat him at all...
...Not only are co-ops one of the most rapidly expanding forces in American agriculture, but they are one of the most creative institutions in our market economy: Through them, farmers are becoming middlemen themselves, and they are erasing some of the distinctions between corporate agribusiness and family farming...
...And his solution...
...But they are...
...Land 0' Lakes, the Minneapolis dairy co-op, began to manufacture and market margarine when confronted with shrinking opportunities for butter...
...Such estimates cannot be accurate, they say, because they do not take into account the basic cost-cutting theories now espoused by the government...
...According to a projection by Predicasts, Inc., expenditures for education since 1957 will have risen in 1990 by a yearly average of 8.2 percent...
...17 The American Spectator April 1978 I n each of the areas discussed here-preventive medicine, the "drug ripoff," spiraling costs-the fashionable indictments of the present health care system collide with a collection of real-world facts...
...National Health Insurance to protect all Americans from the crushing burden of medical expenses is essential...
...Besides, as most Americans who think about it have come to understand, we already have a comprehensive national health care system, created by the private sector...
...In 1976, the national health care bill came to just under $140 billion, a difficult figure to come to grips with...
...On the whole, the diseases involved here-are of such consequence that those fearful of being afflicted would not find a relatively modest doctor's fee in any way a cause for procrastination...
...15 The American Spectator April 1978 into trouble when they attempt to explain just how free medicine would effect a significant life-style change...
...slap controls on doctors' fees...
...Even a dollar's worth of blue jeans in 1967 goes for $1.90 today...
...According to an analysis of the CPI by the American Medical Association, the equivalent of a dollar's worth ofmedical care in 1967 costs $1.85 today...
...Califano and his health-care planners simply skip around the figures, never taking them seriously, even when the government itself puts them out...
...Ten years back, when the economy was booming, we were told that although National Health Insurance would be expensive, it was necessary because many Americans were receiving unequal care...
...From being primarily a distributor of farm provisions, Farmland has moved to Adam Meyerson, formerly managing editor of The American Spectator, is a student at the Harvard Business School...
...Give them the power to pay the total health care bill, they say, and they will hold down those costs by refusing to pay for certain procedures and types of treatment...
...and postal fees, under government supervision, have risen to $2.22...
...That, of course, is something no American doctor would think of doing...
...Perhaps the first thing to note here, in both Califano's statement of the problem and his proposed solution, is the striking lack of logic...
...In fact, according to the Consumer Price Index (CPI), medical costs over the past decade have not risen nearly as rapidly as the costs of many other essential services...
...Living wills, an approach which encourages oldsters to acquiesce in euthanasia...
...argument is that what needs controlling most are costs at the upper level...
...Occasionally, when pinned down, they will acknowledge the figures, but argue that they are inaccurate...
...Other proposals before Congress are little better...
...Therefore, nationalize it...
...Most of the HEW planners are simply doing their jobs...
...And Califano, in his peculiar rococo style, talks of "patent monopoly pots-6f gold at the end of the research rainbow...
...The Naderites, in their sixties, with-it fashion, talk of "drug ripoffs...
...Were the same approach taken to welfare, able-bodied bachelors might be encouraged to go on relief, but disabled women with dependent children would be discouraged...
...limit the supply of doctors...
...According to most measures and nearly every honest estimate, a federal takeover of the health care system would push prices up very near the outer limits of our ability to pay them...
...over 125...
...Such techniques by definition must cost, rather than save, money...
...But here again, in the government's characterization of such techniques as "money saving," we run into one of those great reversals of logic...
Vol. 11 • April 1978 • No. 6
