The United States Health System

Its Development from the Perspective of the Doctor-Patient Relationship and the Ethical Standpoint

by Frederick Nahas, M.D., USA*

The following contribution was presented at the XII "Mut zur Ethik" conference, "Giving Inner Courage – Democracy, Values, Education and Dialogue", which took place in Feldkirch, Austria, from 3-5 September 2004.

Ever since the time of Hippocrates the doctor-patient relationship has been the center point of medicine. A relationship between a doctor and a patient is the most intense of any relationship because of several factors. First, there is a relatively short period of time in which to establish trust. Secondly, there is much at stake when placing one's health into the hands of another person. And thirdly, the overall seriousness of the disease process is a major concern to both doctor and patient.

The doctor-patient relationship is primarily initiated by fear on the part of the patient, who can only guess at what is happening based on a sign or symptom complex such as pain, fever, bleeding or other distressing observations. Every patient considers his problem to be serious and possibly life-threatening until proven otherwise through the careful evaluation and diagnosis of the physician chosen. Every patient knows that all doctors are not created equally and is aware that the wrong diagnosis, delay in care and/or improper delivery of care pose a real risk to a good outcome or possibly survival. Every patient wants to be evaluated and treated by the best physician available without any compromise.

That being said, it is of vital importance that the doctor-patient relationship remain protected from compromise in any way, which can lead to the wrong diagnosis, delay in care, or improper delivery of care.

The doctor brings to the relationship his or her years of training and experience, a commitment to be attentive to the patient's history and accurate in the examination of the patient. The physician must establish a diagnosis by combining the history and physical examination with appropriate diagnostic studies to confirm the diagnosis. Once the diagnosis is firmly established, the physician must outline the most effective treatment. This is not simply a series of steps that can be taken in a "cookbook fashion" and applied to every patient. All patients and their problems are not created equally either.

This process may be hampered by miscommunication, mistakes, misinterpretations, or errors in judgment . The patient may be frightened and unable or unwilling to give a complete history. The patient's memory may be inaccurate. The patient may be unwilling or unable to follow the directions of the physician. There may be errors made by the physician in obtaining the history or performing the physical examination. There may be errors in the diagnostic studies or misinterpretations of x-rays. All these doctor-patient induced pitfalls must be taken into account when dealing with any medical problem. There should be sufficient checks and balances in every doctor-patient relationship so that the possibility of significant error is eliminated or greatly reduced.

Ideally, outside interference with the doctor-patient relationship should never occur. It is not only dangerous to the successful outcome of treatment, but it is unconscionable and unethical to interfere with the delivery of health care. What could be more important and worthy of protection than the patient's health?

Unfortunately, we have seen a great departure from this ideal model of health care delivery occur over the past 40 years. This deterioration has been greatly accelerated in the last 15 years. "Managed care" has become one of the greatest misnomers of recent times. Key events have occurred in the development of health care in the United States that have greatly contributed to this deterioration.

First we will discuss the historical development of "managed care" from its beginnings in the 1930s, when large corporations employed physicians to take care of employees working in remote areas in California. We will then discuss the evolution of the typical health insurance or indemnity policies, the establishment of Medicare in 1965, followed by the emergence of the DRG system, the mutation of the new "managed care" companies, health maintenance organizations (HMOs), and their impact on the doctor-patient relationship.

Before we get to that, I would like you to think about the doctor-patient relationship and all the factors that are impacting that relationship. I would also like you to keep in mind that if you follow the money, you will immediately understand how, and perhaps why, medicine has deteriorated in the United States today. Just follow the money.

In thinking about those factors which affect the doctor-patient relationship, it is easy to understand that the doctor-patient relationship becomes very crowded when you insert family, friends, professional colleagues, professional societies, the legal profession, health care laws, the public health , health maintenance organizations, new technology, the Food and Drug Administration (FDA), the federal government (Medicare and Medicaid), hospitals, the media and all those "organizations" that are quasi medical in nature (Red Cross, Doctors Without Borders, etc.). They all have opinions, by-laws, precepts, rules, protocols, standards of care and/or expectations that directly or indirectly affect the doctor-patient relationship. As we trace the history of medicine over the past 75 years in the United States, we will see that some of the most well-intentioned ideas never quite turned out that way and we will also be able to see that there were many indications along the way that medicine was headed in the wrong direction from the standpoint of protecting the patient from bad outcomes.

The emergence of the HMO

In the 1930s, the first health maintenance organizations or HMOs were established in California by the Kaiser Permanente Company to provide medical care for employees and their families located in remote locations where medical care was unavailable. The plan was simple. In order to provide adequate numbers of workers in these remote areas, companies had to provide, among other things, adequate housing and medical care. Work camps were like small cities that sprung up virtually in the middle of nowhere. The companies hired doctors to provide immediate care and in serious illnesses, could at least provide diagnosis and the care plan for the patient, even if it involved transferred to a major city. This was a good thing. It reduced delay in care and usually resulted in appropriate management or referral of the patient. There was no interference on the part of the employing Company with the delivery of health care. The doctors were employed directly and paid a salary. Patients felt more secure having a doctor close by that could handle most routine things and initiate emergency care.

At the same time, the country began the 1930s and The Great Depression. Medical care was available on a fee-for-service basis, technology was minimal by today's standards and in general the cost of care was not considered to represent the massive expenses that are seen today. Office visits were frequently two dollars or less. Diagnosis was primarily based on the history and physical examination of the patient. There was little available in the way of blood testing. The physician performed most x-rays, blood counts, and urine tests in his office.

Medical science and costs increase

As the 1930s ended and the 1940s began, World War II simultaneously boosted the American economy and contributed greatly to the advancement of medical science. After the war, in the mid-1940s, everything in medicine continued to advance technologically. Hospitals began to lose the stigma of being a place where patients went to die. Americans began having their children in hospitals. Many medical and surgical illnesses were being successfully treated in hospitals. Hospitals became a focal point for academic medicine, further advancing the science. Large city hospitals were usually associated with a university and/or school of medicine. Community hospitals started to gain popularity for having babies and minor surgery, because of the closeness to home, but serious problems or surgeries were generally treated at the university hospitals.

The hospital mission in the 1940s

At that time, the mission of the hospital was to provide a clean, well-equipped facility in which doctors could treat patients. Hospitals would hire nurses, orderlies, support staff, and maintenance personnel. It was not until much later that hospitals would hire doctors to run the pathology/laboratory, x-ray, and emergency departments. There was not nearly the sophistication in pathology/laboratory, x-ray, and emergency care that there is today. Most physicians were trained to examine pathologic specimens (tissue, blood and urine), take and interpret x-rays, and provide emergency care.

As the 1940s ended and the 1950s began, there was a proliferation of hospitals, residency programs and services. Specialists became common. Prior to that time, physicians were trained to do almost everything by the time they left medical school including minor surgery and delivering babies. As residencies developed, technology and techniques improved, many physicians became specialists in various fields. The extra training and the application of new technologies opened the door for higher fees. Everything was expanding rapidly in medicine. There were new drugs, better equipment, new residency programs, and modern medical miracles almost every day. The media became involved. The Food and Drug Administration (FDA) was established to evaluate and approve new drugs as they came along. The cost of medical care increased. Many patients could no longer afford medical care beyond the routine office visit with the family doctor. Indemnity health insurance became popular.

The indemnity insurance plan was simple. Patients would pay a premium and the insurance company paid physician fees. Physicians did not fill out insurance forms. Patients merely submitted their bills to the insurance company and the fee was paid. Hospitals submitted bills directly to the insurance company for hospital services on a daily basis. Within a relatively short period of time, costs of care seemed to skyrocket. Medical liability became an issue.

Treatment outcome expectations grow

It was not long before patients expected a successful outcome for each medical encounter. They were going to specialists, having sophisticated testing performed and submitting to more surgical intervention than ever. New drugs were becoming available all the time without the sophisticated trials that are now necessary to pass through the Food and Drug Administration (FDA) approval process.

The legal profession became involved, believing that a bad outcome for patient may be the fault of the physician. There may be legal liability for less than perfect outcome. The term "malpractice" was coined to describe any error that a physician made, failing to recognize that some errors are unavoidable, some errors have little or no consequence, and, most importantly, that all human beings make errors. Since all doctors are human beings, all doctors make errors. All treatment is not perfect. All outcomes are not always what is expected or completely successful, and some outcome are bad. The public, the lawyers, and the lawmakers crafted a system of accountability so that every mistake that is made by a physician resulting in a bad outcome may be subjected to a lawsuit. Would this be the end of medicine?

Insurance companies, always ready to make a profit, saw the opportunity to provide insurance to doctors against the potential liabilities in treating patients. Doctors could be covered for the cost of litigating a malpractice suit by buying liability insurance (malpractice insurance), for what seemed to be a relatively small premium payment. It sounded like a good idea at the time, but as we all know, the malpractice lawsuit awards became astronomical and the insurance premiums have become unaffordable for many physicians.

Did the "deep pockets" of the insurance companies attract malpractice cases? I'm sure you know the answer to that question to be yes. Generally speaking, it is an unwritten rule that lawyers will not generally seek judgments beyond the limits of the malpractice policy. Most policies are written for $1 million of coverage as a single event and $3 million of coverage in combined cases (aggregate). Today the range of malpractice insurance premium payment is from $10,000 for a general practitioner to more than $400,000 for a neurosurgeon or obstetrician. It is no wonder that doctors are being forced out of the profession.

Medicare in 1965 is welfare

As the 1950s ended and the 1960s began, there was a noticeable increase in the number of elderly patients. People were living longer because of healthier lifestyles and better medical care. As these elderly patients retired, they found that it was difficult or impossible to pay for indemnity insurance for healthcare. Many patients went without any healthcare coverage, even though they were entering those years of their lives that would most likely be fraught with medical illness. Social security checks and pensions were not enough to provide for healthcare.

Government stepped in and crafted the Medicare program in 1965. Medicare was specifically designed as a welfare system for the elderly. It was not designed to provide preventative care. The original preamble of the Medicare description states specifically that Medicare will not cover preventative care. When you think about it that is a very interesting statement because routine office visits may be interpreted as being preventative care and should not be covered by Medicare. Preventative care is one of the hallmarks of good medical management, but Medicare specifically prohibits it.

Medicare initially unpopular

Initially, the American Medical Association and most doctors were against Medicare in 1965. Medicare had two ways in which physicians could participate in the plan. They could be Medicare participants and "accept assignment" for payment of fees or they could not "accept assignment". By accepting assignment the physician agreed to accept the assigned fee minus 20%, for the particular service that was rendered. Medicare would assign a discounted fee for every service. It was the patient's responsibility to pay the 20% balance of the fee to the physician. If the physician accepted assignment, Medicare mailed the check directly to the physician for 80% of the fee, and he or she could not bill the patient for more than 20% of the assigned fee. If the physician did not accept assignment, the physician could charge whatever fee he or she felt was appropriate and bill the patient for that amount. Medicare would still only pay 80% of the assigned fee, but would mail that check directly to the patient. This really became an inducement for physicians to accept the Medicare assigned fee, because often times the patient would spend the money that was sent by Medicare. After awhile, many physicians became "assignment physicians" just so that they could get 80% of the assigned fee mailed to them. Sometime in the 1990s Medicare changed their policy, making it illegal for physicians to build more than the assigned fee. Now, most physicians accept assignment, because there is no advantage to not accepting assignment. In fact, there is a distinct disadvantage to not accepting assignment, because the patient will receive the check for the service rendered and the physician must then try and get the money from the patient.

Most physicians and the American Medical Association initially rejected Medicare. As time passed from 1965 until the early 1970s Medicare gradually increase their fees and indemnity policies began to reduce their payments to physicians in an effort to become identical with Medicare assignment fees. Indemnity insurance companies established similar policies to the Medicare plan and would identify fees as "usual and customary". There were many efforts to establish a national fee schedule, but cost of living differences in various parts of the country, among other things, prevented a universally accepted fee schedule.

Health care costs soar and fraud and abuse are alleged

In the mid-1970s to late 1970s, there was much in the media about the spiraling costs of medical care and that the government should do something about alleged fraud and abuse. Fraud was investigated and Medicare started to reduce their reimbursements for various services and change their descriptions of services in an effort to rein in the costs of care. For example, Medicare would pay a single fee for admission, surgery, hospital care, and follow-up care for most surgical procedures. They would, in effect, "bundle" the fee so that physicians could not charge individually for the admission to the hospital, the surgery, the hospital days following the surgery and the office visit follow days. Initially, they paid slightly more for the bundled fee than the surgery alone, but after a short period of time began to reduce those reimbursements. Private insurance policies followed a similar pattern of bundling services.

Diagnosis related groups (DRG)

During this time, in an effort to reduce costs, Diagnosis Related Group (DRG) was established. The idea behind DRG was that each disease process resulting in a hospitalization was paid a fixed amount regardless of the number of days spent in the hospital. For example the diagnosis of congestive heart failure would pay for four days in the hospital regardless of how long the patient stayed for treatment. This was started in an effort to provide an incentive for the physicians and the hospitals to get the patients and out of the facility, usually "sicker and quicker". If the physician and the hospital managed to get the patient out in 2 days, the hospital was still paid for four days of hospitalization. On the other hand, if the patient stayed six days, the hospital was still only paid for four days of hospitalization. This did not affect the reimbursement to the physician very much, because generally he was in the hospital every day anyway. So there was not much incentive on the part of the physician to discharge the patient early. This is where the hospital and the physician parted company as being partners in providing care for patients. Hospitals began to see that they were losing money if physicians kept patients longer than the DRG allowance. In an effort to make more money, hospitals created "case managers", who were usually nurses, who would make rounds on all the patient records and try to determine if the patient could be discharged early. The case managers job was to put pressure on the physicians to discharge patients early or at least "document specifically in the record" why the patient had to stay longer. Eventually, the documentation that physicians would provide became less and less acceptable to the case managers and the insurance companies. As an example, it is a well-established medical principle that you do not discharge patients with a fever. Case managers have personally hounded me for not discharging the patient with a fever of less than 101° F. Suddenly, it is acceptable to insurance companies, hospitals and case managers to send patients home with a fever as long as it is under 101°F. There is nothing in the maedical literature to support the safety of this insurance company induced rule. There are many other examples of well-established medical principles being broken for-profit.

As time went on the DRG system made a positive monetary impact on the insurance company. Their profits grew. After the first year, if it appeared that four days for congestive heart failure was resulting in the hospitals "making money", the DRG allowance was reduced to three days. Gradually this put to squeeze on patients and hospitals, as hospitals began to lose money and patients began to lose their lives.

The new HMO model

Ultimately, the DRG system was dropped as the new HMOs began to become established. The new version of the HMOs was reinvented us by a pharmacist named Len Abrams who started US Healthcare. His concept of HMOs had nothing to do with the original HMOs of the 1930s. He used the term health maintenance organization to sell his idea is to large employers and tie the benefits to pension plans offered by the companies so that the HMO would be protected by certain ERISA (Employee Retirement Income Security Act of 1974) regulations from antitrust laws. His idea was that he could get physicians to work at a discount as long as he gave them a volume of patients. Once he established a patient population for the physician, he would gradually reduce reimbursements for services. He approached large employers with health plans that were far less expensive and indemnity plans. When he undercut indemnity plans he was protected from antitrust by the ERISA laws, even though these employees were not retired. The benefits were tied to their retirement plans. He then went to physicians in a particular area offering them exclusive patient populations if they would sign a contract for a reduced fee.

In effect, he was eliminating the free choice of the patients to choose physicians and limiting the numbers of physicians who would be able to treat those patients. Again, antitrust didn't apply, because of the ERISA laws. Many physicians took the bait and signed on for reduced fees, thinking that although they would be making smaller fees, they would see more patients and eliminate their competition. Eventually, "the competition" might have to leave the area because of a lack of patients and then their practices would get even larger. If physicians "A" didn't take "the deal", then physician "B" would. Things and always didn't work out for the best. Sometimes the physicians signing up with US Healthcare would be so overrun with patients seen for a discount, that they could not see many patients with other forms of insurance for the full fee. In a sense, these physicians became "patient poor". They were seeing too many patients for fees that were too low to support the infrastructure of their practice. Remember that US Healthcare would rarely increased fees to physicians they had under contract. Sometimes the US Healthcare contract physicians would have to leave the area because they couldn't afford to continue to treat the US Healthcare patients, and "the competition" was taking care of all the rest of the regular fee patients. There was also a tendency for US Healthcare physicians to run patients through the office, thinking that "time was money". This was a disaster. It was a disaster for patients and it was a disaster for doctors. US Healthcare had similar contract negotiations with hospitals. They were often able to get hospital day rates at 70% of what was being paid by regular insurance companies and it is my understanding that they were even paying a lower day rate than Medicare.

It was extremely successful for US Healthcare, which made almost $2 billion for Mr. Abrams when he sold the company to Aetna. As I understand it, the deal included $940 million in cash, a place on the board of Aetna and an undetermined amount of stock in Aetna. Aetna wanted to learn from Mr. Abrams why his company was 13 times more profitable than the Aetna HMO.

The power of the HMO model and money

US Healthcare became the single most profitable healthcare organization in the history of American medicine. US Healthcare was most successful at manipulating the doctors, the hospitals and the patients with a number of tactics to increase profits by avoiding payment for services. The HMO model worked on the "gatekeeper" theory. As the name implied patients were funneled into the general practitioner's office as a mandatory first step in seeking medical care. HMO patients were instructed that they must see their primary care physician first. They could not go to the emergency room unless given approval by the primary care physician and the primary care physician was only allowed to give permission for them to go to the emergency room under specific circumstances. US Healthcare realized that emergency rooms were very expensive places to obtain medical treatment. They wanted those patients treated initially and the primary care physician's office where the fees were discounted or the primary care physician was working on a per diem basis.

US Healthcare frequently contracted their primary care physicians based on a fee payment per month per patient. For example if US Healthcare enrolled 1000 patients and they were assigned to physician A, that physician would be entitled to a payment of five dollars per month per patient regardless of how many times he sought any patient in that group of 1000 patients. If that physician's charge for a routine office visit was $50, $5,000 worth of patient visits would equal 100 patient visits per month. It is quite likely that more 10% of those thousand patients (100 patients) are going to be seeing that physician that month. It is unlikely that less than 100 patients will be seeing that physician that month. If more than 100 patients see that physician his $50 fee for an office visit just went down. If the physician sees 200 patients, the office visit then becomes $25. So the incentive is for the physician to avoid seeing patients and avoid providing care. If that physician does see patients there is an incentive to treat them quickly and take up less time. Remember the physician gets paid the same $5,000 per month whether he sees one patient or 300 patients. There is a clear disincentive to treat patients. Already, the primary care physician has an incentive to make himself/herself less available to the patient. Not good!

US Healthcare would closely monitor referrals made by the primary care physician. They would publish patterns of referral for all the primary care physicians and eliminate the physicians that were referring patients most frequently. Again there was a disincentive to refer patients.

US Healthcare would do a similar monitoring of the primary care physicians ordering of laboratory tests, x-rays and studies. Again, the physicians coursing US Healthcare the most would be eliminated from the panel.

US Healthcare established a preservice approval process. This means that before and "expensive" test like a CAT scan or an MRI or an arteriogram could be ordered, the primary care physician had to personally talk with someone that US Healthcare to obtain approval. The "someone" was not necessarily a physician or even a nurse, but sometimes someone with as little as two weeks of medical terminology training and a "cookbook" in front of them at the computer terminal to ask of the "appropriate" questions about the patient and provide "guidelines" to the physician regarding treatment. You can understand where this is going from the standpoint of reducing costs and increasing profits. Not infrequently, physicians would just avoid ordering "expensive" tests just so they could avoid the encounter with the US Healthcare Representative.

US Healthcare established the preservice approval process for referrals to specialists as well. Any hospitalization required preservice approval. Emergency hospitalizations required contact with the US Healthcare Representative at the time of admission. It was not uncommon to receive phone calls from US Healthcare Representative's on a daily basis, checking on a patients progress in the hospital. The motivation was obviously to get the patient out of the hospital as quickly as possible.

Deviation from the rules resulted in no payments for services rendered. This applied to primary care physicians, specialists and hospitals. It even applied to laboratories, x-ray facilities and other providers of services if the paperwork was not filled out properly or approvals were not obtained. This was all about money.

US Healthcare, HMOs in general and other types of healthcare plans who provided prescription plans for medications frequently reduced costs, by illuminating from their drug panels "expensive" medications. They would send lists of commonly prescribed drugs by class, indicating which drug was the least expensive in that particular class and recommending that physicians prescribe that medication unless there was a compelling, documented reason why a more expensive drug should be used. This occurred even if the patient had been on a particular medication for years, switched to an HMO with the prescription drug plan, and sought renewal of that medication. If there was a cheaper substitute in that class, the HMO was not going to pay for the drug that patient had been on for years. Frequently, new medications are not allowed to be on the "available drugs" until they are approved by the HMO panel of supervising doctors/pharmacists, even though they have been fully approved by the FDA and have shown greater efficacy.

US Healthcare was one of the first HMOs to insist that primary care physicians treat their patients suffering from depression with drug therapy alone and avoid referral to psychiatrists/psychologists. Many HMOs provide incentives for primary care physicians to treat dermatologic conditions including minor surgical procedures rather than refer patients to dermatologists.

It has been accurately estimated that indemnity insurance companies and HMOs spend about $.12 of every health-care premium dollar on medical care including pharmaceuticals, hospital care, physician fees and all related services. $.88 of every health-care dollar stays with the insurance company or HMO.

With the advent of managed care and the greater divergence of interest and patient care between the hospitals and the physicians, many hospitals have entered the patient care arena by hiring full-time physicians for hospital care in direct competition with physicians that are or have been admitting patients to the hospitals for years. It has not been unusual for hospitals to hire full-time surgeons, intensivists, emergency room physicians and hospitalists to provide care for patients. The hospital will generally pay the physician a salary, and the hospital will bill for the physicians services at the regular fee. This way they can control admissions and discharges, reduce hospital stays and obtain significant streams of income from physician fees. This is called the vertical integration of medical care and, not surprisingly, is all about money. The Hospital Board hires a CEO, who in turn hires a director of medical affairs. The director of medical affairs is usually a physician, who is given the responsibility of hiring and monitoring other physicians on a contract basis to include radiologists, emergency room physicians, pathologists, staff surgeons, intensivists, hospitalists, and on-call physicians for in-hospital emergencies.

The government, in an effort to control costs, avoid opposition from physicians, and eliminate "certain" physicians has established and number of methods and rules. Most of what the government has done, although it may have been well intentioned, has resulted in a reduction in the quality of care.

The government, by its involvement in the Medicare and Medicaid programs, has established numerous guidelines, many of which are either an appropriate or ill advised. The basic premise of Medicare is to provide welfare for the elderly. The government has realized that Medicare has become an economic and budgetary nightmare. The basic structure of Medicare is administrative. The government through the Department of Health and Human Services (HHS) contracts with large insurance companies to provide the employee base for the processing of healthcare claims. These large insurance companies adopt an established within their infrastructure Medicare policies for payment and requirements for documentation. The government has given the responsibility of providing ICD-9 codes to the American Medical Association. The American Medical Association publishes the ICD-9 codebooks on a yearly basis, changing a few codes and code descriptions, thereby necessitating the purchase of these books by virtually all physicians and healthcare providers billing Medicare or Medicaid. This provides the AMA with a healthy income stream and precludes significant critical analysis of the Medicare system by the AMA. The AMA is an organization with over $50 million worth of reserve money, actually only representing about 25% of the active physicians in America, and provides little or no political support for physicians and patients.

Medicare with the guidance of the AMA frequently reviews procedures and diagnoses to provide physicians that framework with which to work and providing care for patients and submitting claims for payment. It is virtually impossible to follow the coding guidelines for office visits, consultations and emergency visits. In 1997, Medicare attempted to publish guidelines for coding office visits. The initial document was over 50 pages in length and was filled with contradictions, confusing statements and uncommonly used formats. After reading the document in 1997, I sent Medicare a 12 page letter requesting clarification on a number of points. I have yet to receive a response. Medicare has created a document with which to hang virtually all physicians for coding violations. As an example, there are five levels of office visits based on intensity of service and they are coded 99211, 99212, 99213, 99214, and 99215 with 99211 being the office visit with the least intensity of service, not even requiring a physician to render the service. 99215 is a highly complex office visit requiring all sorts of documentation. The other codes are for lesser degrees of intensity than 99215. The reimbursement difference from one level to the next is probably less than $25. It would make sense, in an effort to avoid trouble with coding, to just choose the lowest code routinely. That would be a violation of Medicare policy and subject to punishment. Medicare insists that you follow the guidelines precisely. The penalty for "fraudulent" coding is a felony conviction for fraud, which could include mail fraud, and up to the $15,000 fine for each incorrect code. The felony conviction could result in five years imprisonment, up to $250,000 fine and loss of Medicare participation and/or medical license. If you don't participate in Medicare it is almost impossible to obtain hospital privileges. The government estimate is that for every dollar invested in investigating doctors, over $23 is generated in fines.

In summary, what I have demonstrated is that the doctor-patient relationship has been severely impaired from its simplest and purest origins as described by Hippocrates to something that has become a free-for-all impacted by family members, friends and the media with unrealistic and unobtainable expectations. Colleagues and professional societies dictating standards of care which may or may not be realistic or appropriate. The law and lawyers prepared to create and enforce laws that make every physician vulnerable to malpractice claims. Malpractice insurance companies are feeding the fires of malpractice claims while extracting huge sums of premium money from physicians. Public health organizations like the Red Cross and Doctors Without Borders who are ready to establish unpredictable and untenable policies and services. There is the FDA, which is an organization making it increasingly more difficult to evaluate and bring to market effective drugs at an affordable price. And there is the government, which is criminalizing the practice of medicine in an effort to generate money. There are companies involved in the advancement of medical technology, which are escalating the cost of equipment and devices out of proportion to their worth. There are hospitals that are increasingly competing with physicians for the provision of medical services in an effort to increase their bottom line and promote the vertical integration of medicine. There are Health maintenance organizations and indemnity policies, which are charging more in premiums and providing less for patient care.

As we have recently heard from Alan Greenspan, our legislators must address the shortfall that will exist for the delivery of health care for seniors within the next 10 years. Basically, he is saying that the Medicare system will fail for lack of funds. I agree with that statement, if we stick with the same system that is gouging the public of its healthcare dollars.

There are alternatives. We must think in terms of buying healthcare and not buying health insurance. The model is simple to construct and relies on contract law, which may greatly reduce the malpractice dilemma. In contract law, disputes may be settled by binding arbitration. The principal of bringing together the patient population and a cohort of doctors willing to provide care to that cohort of patients for a specific dollar amount per contract period, has true value because it addresses the excesses of insurance companies and eliminates the overutilization that is believed to be contributing to the escalating costs of medical care.