PNHP

Reinhardt on the AMA proposal to balance bill Medicare patients

Reinhardt on the AMA proposal to balance bill Medicare patients

Uwe Reinhardt, Ph.D., James Madison Professor of Political Economy and Professor of Economic and Public Affairs, Woodrow Wilson School, Princeton University, responds on the AMA proposal to balance bill Medicare patients:

The AMA must be jesting–but then, the AMA has done many humorous things in the recent past, so this scheme is within that tradition.

Suppose a kindly nation decided to give every family in New York City a $2,000 per month subsidy for the rental of an apartment, but allowed landlords to balance bill on top of that allowance anything that the market would bear. Would that make sense? What would happen to rentals in NYC? Yet the analogue is what the AMA is proposing. Basically, they want to undo Medicare, but not give up the lush public subsidy that comes with Medicare. I have trouble keeping a straight face just thinking about it.

If we do want to depart from the current model of price controls–which has been poorly run, I admit–then I’d propose the following:

1. Every physician must use the Medicare relative value scale (RBRVS).

2. But every physician is allowed to set, at the beginning of each year, his or her own monetary conversion factor to be applied to that RBRVS. The physician would have to use the resulting fee schedule for the entire ensuing year, and for all of his or her Medicare patients (in other words, price discrimination among Medicare patients by the individual physician would be prohibited).

3. Each physician’s conversion factor would be made public through sundry media, to wit:
a. via an 800 number
b. on a web site
c. by posting it in 5 inch letters visibly in the waiting room of his practice.

This would be a market-based pricing system, in lieu of the current administered price-control system, but it would provide transparency and thereby allow the competition everyone talks about.

I had proposed this scheme to the Physician Payment Review Commission, but it was then brushed aside as a flaky idea. The irony of ironies would be if now the AMA prevailed with its truly ridiculous scheme.

Happy New Year!

Uwe

January 2, 2002
Theodore R. Marmor, Ph.D. responds to Dr. Reinhardt’s comments on physician compensation under Medicare:

Here are some brief comments on Uwe’s double contribution.

Uwe’s brief, sharp analysis of the social foolishness of the AMA’s position is very welcome. It has been a long time since the country has had a discussion of what methods to use in paying doctors. Providing a down-payment subsidy on unrestricted fees in a national health insurance program serves no useful purpose other than raising physician incomes. Furthermore, Uwe’s suggestion of an effort to model a reasonable income for physicians in any area and use that as the basis of a firm fee schedule, one that assumes a reasonable amount of daily work, and leaves the reasonable physician with a decent income, is also a worthwhile policy to explore. I agree as well with the idea that doctors are either in or out of a major plan like Medicare; the problem he describes here is important. So, in all these ways, I share Uwe’s views and none of them raise democratic theory issues, as he worries with tongue and cheek.

I do want to urge, however, that Uwe not spend his time developing the 2nd best option–the market-mirroring one where public presentation of prices would be required along with what I regard as the unimplementable regulation that these published prices be required for all patients. I draw that lesson from months of monitoring my father-in-law’s surgical partnership in l967, where the fees they ‘charged’ had little to do with the fees they ended up accepting. They set high fees, used that in the Medicare program, but in fact they discounted fees all over the place to deal with individual circumstances. Anyway, since Uwe’s first-best is in my view best and his second is not a close cousin, I urge further discussion of making the current administered prices model better. After all, the rest of the OECD world has learned how to play the administrative price game; it takes continual adjustment.

Cheers to Uwe

Theodore R. Marmor
Professor of Public Policy & Management
Professor of Political Science
Yale University School of Management

AMA supports Medicare cash infusion – from patients!

American Medical Association House of Delegates
Resolution: 713

Subject: Measures for the Return of Physician Financial Freedom

Whereas, The past fifteen years have seen the introduction of managed care and inequitable changes in Medicare reimbursement which has been a failure in reducing the rapid rise of medical costs; and

Whereas, Physician reimbursement is less than 20% of total medical expenditures and the time has come to end this miserable experiment and stop unilateral wage control; therefore be it

RESOLVED, That our American Medical Association work to implement the following:

1. Physicians be allowed to balance bill Medicare recipients to the full amount of their normal charge with the patient responsible for the difference between Medicare allowable and physician charges; and

2. Managed Care Organizations be banned from using Medicare reimbursement rates as a basis for their reimbursement and that reimbursement for 2003 should be at least 200% of the usual, customary, and reasonable fee of 1988; and be it further

RESOLVED, That our AMA seek introduction of national legislation to bring about implementation of balance billing of Medicare recipients.

Fiscal Note: No Significant Fiscal Impact

http://www.ama-assn.org/ama1/upload/mm/interim02/j713i02.rtf

Comment: The House of Delegates of the American Medical Association passed this resolution at their meeting in New Orleans in December 2002.

Arthur Traugott, M.D., an Illinois delegate, in the debate preceding the approval of this resolution:

“If we’re going to look at it only from the physician side, we’ll have a bad PR image problem.”

http://www.ama-assn.org/sci-pubs/amnews/pick_03/gvsb0106.htm

T. Marmor on Medicare balance billing

Theodore R. Marmor, Ph.D., Professor of Public Policy & Management and Professor of Political Science, Yale University School of Management, and author, “The Politics of Medicare,” responds to AMA’s resolution supporting balance billing of Medicare patients:

Interesting example of regression to 1966 position, with the effort to use the misery of managed care as a rationale. There is no connection between whatever misery managed care has brought and the old dispute about balance billing. Doctors understandably would like to charge whatever they can; it just so happens that financial freedom, professional autonomy, and widespread health insurance are together practically impossible. Sad to see so little learning.

Ted

Single payer that isn't single payer

USA Today
12/30/02
Health care is in ‘dire need’ of remedies
By Susan Page

Gore, who announced this month that he won’t run for president in 2004, still plans to deliver a speech early next year outlining his proposal for a government-financed program that ensures health care for everyone. The so-called single-payer system is often called a “Canadian-style” plan; Gore says his version will be distinctly American. Associates say his proposal will offer a choice of plans that would be administered by private insurance companies, not the government.

http://www.usatoday.com/news/health/2002-12-29-health-care-usat_x.htm

Comment: Gore’s proposal to offer a “choice of plans” suggests that he will fail to address the problems of cost shifting, adverse selection, tiering of benefits, financial barriers of cost sharing, and other flawed policies that plague our current system. Continuing with these policies and including private insurance companies as a major player also fails to utilize one of the most important advantages of a single payer approach: eliminating the waste of the administrative excesses of today’s system.

95% of Americans want something done about health care costs. Gore’s plan would do that if we were to regulate private plans by requiring mandated benefits, price controls, a “national” community rating, severe restriction of administrative spending, and other measures that might characterize a single payer system. But then, what insurance company would participate in such a system? Only our own publicly administered system could function within a set of rules that would require equity, efficiency, accessibility, comprehensiveness, portability, affordability, and other features assured by a single payer system.

Let’s end the games and get on with real reform. Ronald Brownstein’s words
express the urgency of the problem (Los Angeles Times, 12/30/02):
“More families without care, longer lines in emergency rooms, more hospitals
and public clinics bleeding red ink, more kids sick at school: That’s what is looming if Washington continues to close its ears to the health-care alarm ringing now in California — and soon in state capitals from coast to coast.”

http://www.latimes.com/news/nationworld/nation/la-na-utlook30dec30,0,494996
6.column?coll=la%2Dheadlines%2Dnation%2Dmanual

Single payer that isn’t single payer

USA Today
12/30/02
Health care is in ‘dire need’ of remedies
By Susan Page

Gore, who announced this month that he won’t run for president in 2004, still plans to deliver a speech early next year outlining his proposal for a government-financed program that ensures health care for everyone. The so-called single-payer system is often called a “Canadian-style” plan; Gore says his version will be distinctly American. Associates say his proposal will offer a choice of plans that would be administered by private insurance companies, not the government.

http://www.usatoday.com/news/health/2002-12-29-health-care-usat_x.htm

Comment: Gore’s proposal to offer a “choice of plans” suggests that he will fail to address the problems of cost shifting, adverse selection, tiering of benefits, financial barriers of cost sharing, and other flawed policies that plague our current system. Continuing with these policies and including private insurance companies as a major player also fails to utilize one of the most important advantages of a single payer approach: eliminating the waste of the administrative excesses of today’s system.

95% of Americans want something done about health care costs. Gore’s plan would do that if we were to regulate private plans by requiring mandated benefits, price controls, a “national” community rating, severe restriction of administrative spending, and other measures that might characterize a single payer system. But then, what insurance company would participate in such a system? Only our own publicly administered system could function within a set of rules that would require equity, efficiency, accessibility, comprehensiveness, portability, affordability, and other features assured by a single payer system.

Let’s end the games and get on with real reform. Ronald Brownstein’s words
express the urgency of the problem (Los Angeles Times, 12/30/02):
“More families without care, longer lines in emergency rooms, more hospitals
and public clinics bleeding red ink, more kids sick at school: That’s what is looming if Washington continues to close its ears to the health-care alarm ringing now in California — and soon in state capitals from coast to coast.”

http://www.latimes.com/news/nationworld/nation/la-na-utlook30dec30,0,494996
6.column?coll=la%2Dheadlines%2Dnation%2Dmanual

E. Christiansen on health care in mainland China

Elinor Christiansen, M.D., President of the American Medical Women’s Association, responds to Professor Uwe Reinhardt’s comments on the health
care system in mainland China:

I believe Uwe Reinhardt is mistaken in his statement that “the Communist Peoples Republic of China on the mainland has a basically capitalist health system with millions of uninsured, among them all children.”

The Communist Peoples Republic of China has provided free health care, including immunization and birth control, to everyone living in their country through government assigned clinics for forty years. Their public health achievements have been remarkable with eradication of epidemic diseases such as tuberculosis, malaria, yellow fever, liver fluke and other intestinal parasites, tetanus (which used to be the major cause of infant mortality prior to communism), and sexually transmitted diseases. Unfortunately sexually transmitted diseases and other infectious diseases had crept back into mainland China with opening its doors to the outside world.

Also unfortunately many of the government clinics, especially in rural regions, are staffed by “barefoot doctors” who are persons with minimal education and limited medical training, perhaps similar to a nurses aide, or in some cases an EMT. Some of the government clinics provide only traditional Chinese medicine, whereas others provide Western medicine (usually in urban areas), and some clinics provide both traditional and Western medicine (also usually in urban areas).

Hospitals are exceedingly well staffed with an abundance of well-trained physicians and registered nurses who are often housed in high rise residences on the hospital grounds. Quality burn care, reattachment of traumatic amputations, and organ transplants are done in hospitals in all the major cities with excellent outcomes. And the entire cost is paid by the government. Physicians, nurses and other health care workers are salaried by the government.

Recently, since the Tien An Men episode, retired physicians have been allowed to open private offices to see private patients on a fee for service basis (very modest cost). This recently permitted alternative allows patients (parents and their children who do not want to wait to be seen in the public clinics to which they are assigned a convenient alternative at their own expense.

I do not know Uwe’s source of information or misinformation, but if Uwe or anyone else wants to know more about the universal health care which has been in place in mainland China for probably five decades they may contact me.

Elinor Christiansen, MD

R. Covell on health care in mainland China

Ruth M. Covell, M.D., Associate Dean, University of California at San Diego
School of Medicine, responds to Elinor Christiansen, M.D. on health care in
China:

Elinor and I must have been in a different country (5 years ago)….I
experienced good physicians but 1930s equipment, record keeping, technology
etc. in several medical school hospitals.

Elinor and I must have been in a different country (5 years ago)….I
experienced good physicians but 1930s equipment, record keeping, technology
etc. in several medical school hospitals.

Saturday, January 4, 2003

Uwe Reinhardt responds to Elinor Christiansen’s comments on health care in mainland China:

We recently visited China and spoke with people both in major medical centers and in the Ministries of Social Affairs and of Health. None of them would agree with Dr. Christiansen. The rural health system has all but collapsed, we were told. The urban system is now run on a fee for service system, leaving out many uninsured altogether. Employed persons usually receive health insurance on the job, but it does not cover their children. That is what we were told.

The system Dr. Christiansen describes would not be recognized by the people we contacted and spoke to.

The future of employer coverage

Alliance for Health Reform
12/16/02
Employer Coverage: Mounting Challenges, New Approaches

An Update on Employer-Based Health Insurance
Jon R. Gabel, Vice President, Health Research and Educational Trust

Final slide of his presentation:

The Immediate Future – More of the Same
. Double-digit increases in premiums
. A soft economy will make employees more vulnerable to rising costs
. Increased employee contributions, copays, deductibles and coinsurance
. Heavily managed care as a niche product
. Consumer-driven care as a niche product
. More uninsured Americans


http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=736

Frist Will Not Help Health Care's Ills

Dec 27, 2002
Frist Will Not Help Health Care’s Ills
by Jamie Court & Frank Smith
 
This article appeared in the San Diego Union Tribune on December 26th: by Jamie Court and Frank Smith

Capitol Hill’s well-heeled lobbyists and political cognoscente have proclaimed that with a doctor in charge of the U.S. Senate, health-care reform is imminent. Unfortunately for the public, the doctor running the chamber, Sen. Bill Frist, typifies the GOP’s new health-care strategy: care most about the health of corporations that elect you.

If the public does not stop Frist and K Street’s hired guns, the gains of the patients’ rights movement will be erased and the freedoms of drug companies, HMOs and hospital chains will be expanded at the expense of patients.

A heart and lung surgeon, Frist sponsored legislation this year limiting legal liability for drug-maker Eli Lilly and other manufacturers of a mercury-based additive to vaccines that is linked to autism in children.

The provision drew outrage from parents of autistic children as special-interest pandering when it passed as part of the Homeland Security legislation just after the election. The corporate pork was the first payback for pharmaceutical companies’ heavy last-minute financing for key Republican Senate candidates that changed the balance of power in the Senate. The Washington Post also reported recently that Eli Lilly bought 5,000 all copies of Senator Frist’s recent book.

As head of the National Republican Senatorial Campaign, Frist raised more than $100 million for GOP senators’ election campaigns. It is in this fund-raising role that observers say Frist won his new post. In 2003, the debts to these donors, many from the medical-insurance complex, will come due. As Senate majority leader, Frist will have the power to schedule or not schedule votes on legislation, determine committee assignments and control all debate, absent a super majority against him. (Given these powers, it is little wonder there were few words of criticism about his election even from Senate Democrats.)

Frist’s ownership of and entanglement with one of America’s biggest corporate criminals, hospital chain Columbia/HCA, shows where his loyalty is and should have prevented him from leading the U.S. Senate. In total, the company, now called HCA, will pay more than $1.7 billion in civil and criminal penalties – the largest amount ever in a health-care fraud case.

Frist’s family founded the company, which the government prosecuted for massive billing fraud. USA Today reported that U.S. Senate disclosure statements show he owned as much as $25 million in company stock. His wife has more than $1 million in stock. Frist claims the money is in a blind trust, but when a trust is invested heavily in a company, rather than an industry, it is all too visible. Rep. Pete Stark, the senior Democrat on the Ways and Means health subcommittee, recently stated that the government’s HCA settlement may have understated the fraud and could benefit the Frist family greatly. If Frist was a patriot, he would have sold his HCA stock a long time ago.

In the Senate, Frist has used this influence to further HCA’s interests by successfully blocking a strong patients’ bill of rights, gridlocking a mandatory Medicare prescription drug benefit, and promoting arbitrary caps on legal recovery by innocent victims who sue negligent hospitals like HCA.

With the heart and lung surgeon in charge, a whole new set of “health care” issues are likely to make the Senate tick.

– Patients’ rights

Instead of expanding patients’ new rights to hold HMOs legally accountable for delaying or denying care, the Senate debate will now be about limiting the rights of innocent victims of medical delays and negligence to hold accountable doctors, hospitals and the HMOs they work for.

– Medicare prescription benefit

Rather than force price controls on a pharmaceutical industry that turned the tide for the GOP, the Senate will create a “voluntary” prescription drug program with insurers selling a new product to seniors with new profits.

– Universal coverage

Forget a national Medicare plan for everyone who needs affordable health coverage. The Senate will focus on Medical Savings Accounts (MSAs) which force the public, instead of insurers, to pay for their health care; bare-bones insurance policies that do not pay for drugs, hospitalization or maternity costs; and mandatory insurance laws that force people to buy an unaffordable, low-quality product.

Watch out, America. If the public does not lash out, health-care reform will be about new burdens on patients and new freedoms for industries.
Court and Smith are co-authors of “Making a Killing: HMOs and the Threat to Your Health” (Common Courage Press). Court is executive director of the Foundation for Taxpayer and Consumer Rights. Smith is a senior fellow at Civil Society Institute.

Frist Will Not Help Health Care’s Ills

Dec 27, 2002
Frist Will Not Help Health Care’s Ills
by Jamie Court & Frank Smith
 
This article appeared in the San Diego Union Tribune on December 26th: by Jamie Court and Frank Smith

Capitol Hill’s well-heeled lobbyists and political cognoscente have proclaimed that with a doctor in charge of the U.S. Senate, health-care reform is imminent. Unfortunately for the public, the doctor running the chamber, Sen. Bill Frist, typifies the GOP’s new health-care strategy: care most about the health of corporations that elect you.

If the public does not stop Frist and K Street’s hired guns, the gains of the patients’ rights movement will be erased and the freedoms of drug companies, HMOs and hospital chains will be expanded at the expense of patients.

A heart and lung surgeon, Frist sponsored legislation this year limiting legal liability for drug-maker Eli Lilly and other manufacturers of a mercury-based additive to vaccines that is linked to autism in children.

The provision drew outrage from parents of autistic children as special-interest pandering when it passed as part of the Homeland Security legislation just after the election. The corporate pork was the first payback for pharmaceutical companies’ heavy last-minute financing for key Republican Senate candidates that changed the balance of power in the Senate. The Washington Post also reported recently that Eli Lilly bought 5,000 all copies of Senator Frist’s recent book.

As head of the National Republican Senatorial Campaign, Frist raised more than $100 million for GOP senators’ election campaigns. It is in this fund-raising role that observers say Frist won his new post. In 2003, the debts to these donors, many from the medical-insurance complex, will come due. As Senate majority leader, Frist will have the power to schedule or not schedule votes on legislation, determine committee assignments and control all debate, absent a super majority against him. (Given these powers, it is little wonder there were few words of criticism about his election even from Senate Democrats.)

Frist’s ownership of and entanglement with one of America’s biggest corporate criminals, hospital chain Columbia/HCA, shows where his loyalty is and should have prevented him from leading the U.S. Senate. In total, the company, now called HCA, will pay more than $1.7 billion in civil and criminal penalties – the largest amount ever in a health-care fraud case.

Frist’s family founded the company, which the government prosecuted for massive billing fraud. USA Today reported that U.S. Senate disclosure statements show he owned as much as $25 million in company stock. His wife has more than $1 million in stock. Frist claims the money is in a blind trust, but when a trust is invested heavily in a company, rather than an industry, it is all too visible. Rep. Pete Stark, the senior Democrat on the Ways and Means health subcommittee, recently stated that the government’s HCA settlement may have understated the fraud and could benefit the Frist family greatly. If Frist was a patriot, he would have sold his HCA stock a long time ago.

In the Senate, Frist has used this influence to further HCA’s interests by successfully blocking a strong patients’ bill of rights, gridlocking a mandatory Medicare prescription drug benefit, and promoting arbitrary caps on legal recovery by innocent victims who sue negligent hospitals like HCA.

With the heart and lung surgeon in charge, a whole new set of “health care” issues are likely to make the Senate tick.

– Patients’ rights

Instead of expanding patients’ new rights to hold HMOs legally accountable for delaying or denying care, the Senate debate will now be about limiting the rights of innocent victims of medical delays and negligence to hold accountable doctors, hospitals and the HMOs they work for.

– Medicare prescription benefit

Rather than force price controls on a pharmaceutical industry that turned the tide for the GOP, the Senate will create a “voluntary” prescription drug program with insurers selling a new product to seniors with new profits.

– Universal coverage

Forget a national Medicare plan for everyone who needs affordable health coverage. The Senate will focus on Medical Savings Accounts (MSAs) which force the public, instead of insurers, to pay for their health care; bare-bones insurance policies that do not pay for drugs, hospitalization or maternity costs; and mandatory insurance laws that force people to buy an unaffordable, low-quality product.

Watch out, America. If the public does not lash out, health-care reform will be about new burdens on patients and new freedoms for industries.
Court and Smith are co-authors of “Making a Killing: HMOs and the Threat to Your Health” (Common Courage Press). Court is executive director of the Foundation for Taxpayer and Consumer Rights. Smith is a senior fellow at Civil Society Institute.

Uwe Reinhardt responds on Malaysia's single payer proposal

Capitalist Taiwan (the Republic of China) has had such a single-payer scheme since 1995. Malaysia may well be inspired by that system.

Oddly enough, the Communist Peoples Republic of China on the mainland has a basically capitalist health system with millions of uninsured, among them all children. Employed persons in urban settings are covered by a form of social insurance system, but not their children. There’s virtually no insurance coverage in rural areas. Finally, there’s not much of a safety net. Hospitals are not set up to give charity care. There’s no one to shift costs to.

Happy holidays,

Uwe Reinhardt

The Doctor as Dealmaker?

Lawmaker by day, good Samaritan by night, Sen. Bill Frist (R-Tenn.) is a wealthy doctor-turned-politician who occasionally attends art openings at his family-endowed museum-but prefers to spend his vacations visiting remote African villages to dispense lifesaving care.

It goes without saying that he pilots his own plane.

So Frist fits neatly into the melodramatic script of Trent Lott’s fall from power, cast as the new majority leader called on to rescue the party in a moment of peril. “He really shows the true compassionate conservatism,” says Sen. Kay Bailey Hutchison (R-Tex.).

But this plot twist raises a thorny question that only time will answer: Can those delicate surgeon’s fingers manage the backslapping, arm-twisting, hand-holding and pocket-picking that comprise the sometimes grubby backroom reality of a Senate leader’s life?

His supporters point to the bills Frist has co-sponsored with politicians as wily and seasoned as Sen. Edward M. Kennedy (D-Mass.), and to his acclaimed leadership of the National Republican Senatorial Committee, where he captained the recent campaign to regain the Senate majority.

They also acknowledge that Frist’s background-well-born, expensively educated and drawn to the notoriously independent life of the superstar surgeon-was not an obvious preparation for his new life of haggling and dealmaking. “There are a lot of key senators who don’t really think they need any leadership,” a Capitol Hill veteran said. “Leadership is not a problem in the Senate. Followership is.”

The expertise that has made Frist an effective force in health care legislation will become relevant in a smaller-though still important-segment of his life. The close working relationship he has forged with President Bush will be, at least initially, viewed with some suspicion by senators who resent the role the White House is perceived to have played in Lott’s demise. And the idealism that Frist says motivated him to run for the Senate in 1994 will be a difficult candle to keep burning when the winds of political expedience start gusting.

Frist spoke of the difficult balance between nitty-gritty politics and a Dr. Kildare idealism in a recent Boston Globe interview. “There is this tension between two forces I am engaged in, between raw political power versus . . . the real quest, the real drive for substantive issues.” It is a tension that will only grow.

William F. Frist, 50, is the son of a Tennessee legend, the late Thomas H. Frist, physician to six governors and founder of the Hospital Corporation of America, now known as HCA. The future senator grew up in Nashville’s wine-sipping GOP precinct Belle Meade, an exclusive suburb, and went to school at the elite, all-boys Montgomery Bell Academy before heading off to Princeton and then to Harvard Medical School. He was a daredevil lad, speeding on motorcycles at 15 and making his first solo flight a year after that.

Though Frist invested from an early age in HCA stock-the basis of his multimillion-dollar fortune-he decided that he would never play a role in the company that his father and brother, Thomas Frist Jr., built into the largest chain of for-profit hospitals in the country. Instead, Frist threw himself with consuming intensity into becoming a transplant surgeon. In an episode that he now says he deeply regrets, Frist toured animal shelters around Boston, offering to care for stray cats that he then killed for medical experiments.

“Medical school,” he wrote, “was in the business of stripping human beings of everything but the raw, almost insane, ambition you must have simply to get through.”

Frist’s background was Southern, but not Deep South. Nashville was home to an established black middle class and a thriving Jewish community. By living in New Jersey, Boston and Northern California, Frist became a cosmopolitan member of the American wealthy elite. It suggesting that he may have more in common with the last majority leader from Tennessee-Howard Baker-than with the two more recent GOP leaders, hardscrabble Kansan Robert J. Dole or Lott, the son of a Pascagoula shipyard worker.

After his training, Frist returned to Nashville to practice at Vanderbilt University’s well-respected hospital-again avoiding the family chain. He specialized in transplant work, heart and lung replacements, sometimes flying his plane to retrieve an organ, then rushing it back for installation.

The distance he maintained from HCA probably saved his political life.

In the late 1980s, the Frist family company was swallowed in a hostile takeover, and Frist’s father and brother ceded management control to the owners of what became Columbia/HCA. In 1997, FBI raids on company hospitals turned up widespread Medicare fraud. According to attorneys for the whistleblowers who revealed the massive overbilling, HCA engaged in illegal practices even before the takeover. But Thomas Frist Jr. returned to the helm of the company as unpaid chairman and chief executive, and worked to restore trust in the company.

This week, HCA (the old name is back) announced that it would pay the federal government $631 million to settle fraud claims-bringing the total payments by the company to $1.7 billion.

When Frist challenged Sen. James Sasser (D-Tenn.) in 1994, he disclosed that $13 million of his $20 million in assets was in HCA stock. Much of his wealth, and that of his wife and three sons, is in limited blind trusts with a value of between $10 million and $35 million, according to his 2001 financial disclosure report.

But this distance from HCA has not entirely shielded Frist from attack. “With the health system in crisis, Republicans are considering a Senate majority leader who made his millions from a family-run company that defrauded Medicare, overstated expense statements, billed for services ineligible for reimbursements and paid kickbacks to physicians to encourage referrals to HCA facilities,” said Physicians for a National Health Program, which has clashed with Frist over health care issues.

Spending $3.7 million of his own money, Frist capitalized on the Republican tide of 1994 to crush Sasser by 14 percentage points. In the eight years since then, he has personified the Bush administration dream of conservatism with a friendly face. Frist is “part of the conservative core of the caucus,” a leading Republican said yesterday, “but stylistically he is cool; he has a different set of credentials and a more bipartisan, moderate demeanor than a lot of people with identical voting records.” Frist has voted with Lott, for example, more than 90 percent of the time.

Being the first physician elected to the Senate in more than 50 years is a big part of that. Republicans have played up his medical expertise, drawing credibility from Frist’s medical degree on such key issues as patients’ rights, Medicare and prescription drug benefits. “Dr. Bill Frist” is the preferred mode of address for Bush and Senate colleagues. Party leaders get dreamy-eyed when they picture the new majority leader saving a life on the Capitol grounds-as Frist has done a couple of times in the past eight years. (Once, he resuscitated a collapsed tourist; another time, he tended to the grievously wounded gunman who killed two Capitol police officers. )

Frist has basked in the attention. He appears regularly as a party spokesman on television. On one of his missionary trips to Africa-Frist is a devout Presbyterian-he toured AIDS-ravaged countries with rock star Bono. And his recent book on bioterrorism-billing him as “the Senate’s only doctor”-was a bestseller.

The publisher of Frist’s book confirmed yesterday that Eli Lilly and Co. helped boost the book by purchasing 5,000 copies, which the pharmaceutical giant distributed in 13 cities as part of an educational effort to help health care professionals deal with bioterrorism. Jed Lyons, president and CEO of Rowman & Littlefield, said the sales had resulted from the company’s marketing to corporations, and neither Frist nor his staff had had anything to do with the sale or were aware of it. Under Frist’s contract, Lyons said, all royalties go to two Tennessee charities designated by the senator. “Bill Frist is way too smart to risk his reputation by trying to make a special sales arrangement with corporations that could embarrass him,” Lyons said.

Nevertheless, Frist has close ties to Lilly, which has been a major contributor to his campaign and to the NRSC when he was chairman. Frist wrote a provision, enacted into law, that restricted the ability of plaintiffs to sue the company for injuries resulting from Thimerosal, a mercury-based preservative used in vaccines against childhood diseases. The Lilly provision was quietly woven into the legislation creating the Department of Homeland Security .

Even his political opponents say Frist has been an astute and willing negotiator on health care issues-though seldom willing, in the end, to stray far from his conservative views. Rich Tarplin, assistant secretary for legislation at the Department of Health and Human Services during the Clinton administration, recalled working with Frist on a law in 1997 that vastly strengthened the Food and Drug Administration’s regulation of tobacco. Tarplin said he was struck by Frist’s “ability to synthesize very, very complex subject matter”-a facility Frist demonstrated two years later when they worked together on highly charged legislation to revise the nation’s method of allotting human organs for transplants.

Frist has also worked to provide greater access to health care in impoverished communities-including programs to train minority doctors and nurses. A policy analyst called Frist “a Boy Scout in all the positive ways,” though a political consultant added that he can come across as “sickly sweet and condescending.”

Smooth demeanor, mixed with dependable conservatism, has helped to make Frist a favorite in the Bush administration. Though he volunteered in 1992 to support the first President Bush’s reelection campaign, Frist caught the attention of Team Bush when he was touted by then-Sen. Paul Coverdell (R-Ga.), the Bush liaison in the Senate. Coverdell’s death in 2000 left a hole in the campaign, and Frist stepped in. Soon after, he found himself co-chairing the GOP platform committee.

For a while, at least, his closeness to the White House may trouble more than help him. Senate insiders predict he will be watched closely by GOP senators who resent a president trying to tell them-directly or indirectly-what to do. Democrats likely will dare him to stand up to Bush whenever they see a chance.

In one recent example, several Democrats chastised Frist for failing to get the $500 million he said was needed to fight AIDS in Africa. After initial promises, the White House cut the funding dramatically, then restored it in phases, then killed it in a larger fight over spending. Frist has said he still hopes to get the money.

Almost since his arrival in Washington, people have wondered how high the doctor would rise. Lott told friends several years ago that Frist was a likely successor. Others believe he has his sights on the White House in 2008. By stepping up to the current crisis, Frist has turned such speculation into a stern test. It has been said that politics isn’t brain surgery-but it isn’t heart surgery, either.

Staff writers Amy Goldstein and Dan Morgan contributed to this report.

© 2002 The Washington Post Company

http://www.washingtonpost.com/wp-dyn/articles/A20079-2002Dec20.html

Uwe Reinhardt responds on Malaysia’s single payer proposal

Capitalist Taiwan (the Republic of China) has had such a single-payer scheme since 1995. Malaysia may well be inspired by that system.

Oddly enough, the Communist Peoples Republic of China on the mainland has a basically capitalist health system with millions of uninsured, among them all children. Employed persons in urban settings are covered by a form of social insurance system, but not their children. There’s virtually no insurance coverage in rural areas. Finally, there’s not much of a safety net. Hospitals are not set up to give charity care. There’s no one to shift costs to.

Happy holidays,

Uwe Reinhardt