Exploring Human Potential

When Employers Stop Drinking the Kool-Aid.

Posted on | December 5, 2018 | No Comments

Mike Magee

I recently sat down to lunch with a retired veteran health insurance exec and asked her, “Are there still large corporation CEO’s who want to be the providers of health insurance for their employees – and if so, why?” She replied that there were a few and the primary reason was “ego.” She says the few still believe they can do it better and fear encroachment of public funding on private enterprise.

But increasingly, employers are coming to appreciate the value of a single payer/multi-plan health system for themselves, their workers and economic fairness and opportunity for our society.

A few facts help flesh out their reasoning:

1. It now costs more than $10,000 to insure an employee, and $20,000+ for a family – 50%+ more than in other countries.

2. Employers and their insurance partners over the past three decades have employed a wide range of strategies to limit cost inflation – and none have worked.

3. One-fourth of the U.S. health expenditure is devoted to marketing, administration, billing and collections. Single payer/multi-plan methodology would slice off 10% to 15% of the cost.

4. Cost is closing in on $4 trillion a year. (By comparison, the U.S. spends $867 billion on defense and $1.1 trillion on education.)

5. Employer based insurance has been around for over 50 years and now covers 150 million Americans.

6. Employer based insurance exacerbates income disparity. For families living above 400% of poverty level, 83% have employer based insurance. For those with income between 100% and 250% of poverty, flip the numbers – only 38% have employer based plans.

7. Employer based plans skew risk (tending to insure the wealthy healthy) and in doing so raise the cost of insurance for the poor. The numbers reveal as much. Employers cover 1/2 the population but pay only 1/3 of the national bill for health care.

8. Tax policy enables this discriminatory system. The higher your tax bracket, the larger the government subsidy.

For years, employers have drunk the Kool-Aid. But in the era of Trump, we are rapidly approaching a “come to Jesus moment.” The truth is about to set us free. And the truth is, we’ve been suckered for over a half century into a flawed and corrupt system, and we could do much, much better.

Medical Device FDA Regulation: The Basic Problem.

Posted on | November 27, 2018 | 2 Comments

Mike Magee

A global investigative report has shone an unwelcome light on a largely unregulated industry we exposed in detail almost one year ago – the medical-device industry. The report documented that the 190,000 devices currently on the market have been responsible for 1.7 million injuries and some 83,000 FDA reported deaths over the past decade.

In response to the report, FDA Commissioner Scott Gottlieb, pledged reform this week. But it’s unclear whether he will be any more effective with medical device CEOs than he has been with pharma CEOs who he sternly directed to “end the shenanigans.”

Here are the basics on medical device regulation:

1) Most Americans remain unaware that in the eyes of the FDA not all therapies are considered equal when it comes to regulatory approval and oversight. Drugs are one thing, but medical devices are quite another.

2) Even the most high-risk implantable devices are often approved after a single clinical research trial, and most of these are not randomized, controlled or blinded trials.

3) Some 15% of approved devices created by this $150 billion dollar industry in the U.S. are eventually removed from the market, but often not removed from the patients in whom they were implanted. Unlike drugs, devices often remain for a lifetime, subjecting their subjects to continued risk and worry.

4) The FDA regulatory framework is the product of a tragedy. In 1970, Dr. Hugh J. Davis sold his invention, a small fish like implantable uterine device which dragged a porous multifilament string, to the A.H.Robins Company. In 1971, it went to market as an IUD that would be a safer alternative to birth control pills considered high-risk at the time. Called the Dalkon Shield, it was implanted in 2.8 million women. But within five years, its association with infection, septic abortions and death was irrefutably established and linked to its’ mutifilament tail. Within the decade, there were 300,000 lawsuits and A.H. Robins went bankrupt.

5) In response to the public outcry, Congress passed the 1976 Medical Device Amendments to the Food, Drug and Cosmetic Act, and for the first time required testing and approval of “medical devices.” The loose system they put in place had to deal with the fact that all the devices in use at the time had never been independently analyzed or approved. They were effectively grandfathered in.

6) All new products were placed in one of three classes. Class I included low risk devices like tongue depressors or forceps. Class II devices were “cousins” to other devices already in use like joint replacement devices and electrocardiographs. And Class III were new devices which appeared to carry some risk like pacemakers or heart replacement valves.

7) Class I and II required quick and inexpensive premarket review, little extra documentation, and simple “premarket notification”. Class III required that manufacturers provide some kind of evidence that the product was safe and effective, but this often came from scientific reviews that were less than rigorous and often anecdotal. In return the company received a “premarket approval.”

8) Liberalization of the process occurred in the years that followed with two tracts created for new product approval: 1) “premarket approval” requiring clinical testing and inspections, or 2) the 510(k) process requiring affirmation that the new device is essentially similar to a device already on the market. 

9) User fees range from around $200,000 for “premarket approval” versus around $4000 for the 510(k) tract. But equivalency can be in the eye of the beholder. For example, the ObTape Vaginal Sling for operative repair of female stress continence sailed through on a 510(k) approval in 2003 based on the manufacturer’s contention that it was substantially equivalent to support tapes manufactured by J&J and American Medical Systems already in use. But when adverse reports of encapsulation and expelling of the material with infection began to surface in 2004, it became clear that the ObTape was made of a dense material poorly incorporated by biologic tissues while the comparators were porous materials that allowed for vessel in-growth.

10) The net effect was that 113 approved devices had to be recalled between 2005 and 2009 because of serious complications or death. Roughly 4 out of 5 of these had avoided vigorous review.

11) In 2010, 500 million individual devices were recalled nationwide, and a review by the Institute of Medicine  found the approval process ”flawed based on its legislative foundation” and that the FDA lacked a “integrated premarket and post-market regulatory framework.”

12) The 21st Century Cures Act, which dramatically drew the support of Joe Biden in the wake of his son Beau’s cancer death, was also loaded with FDA changes that further liberalized approval of medical devices including the use of “data summaries” and “real world observational studies” to support device approval.

13) Add to the “green light” serious issues with Conflict of Interest. Take for example the case of pacemakers. Approximately 400,000 Americans have them implanted each year, with 80% over 65 and 20% over 80 years old. In 1984, there were 56 heart conditions for which the American College of Cardiology approved a pacemaker as treatment. Twenty-five years later, that list had bulged to 88 conditions. Only 5% of those indications were backed by double-blind studies. Some 60% of the approved indications were based on recommendations from a 17 member expert government panel. 11 of those 17 were on the payroll of medical device makers.

 14) Medical devices are fundamentally different than pharmaceuticals in one important respect. If a drug is pulled from the market, a patient can stop the drug and it will eventually clear from the system in a relatively short period of time. In contrast, many devices either cannot be safely removed, or their removal comes at great risk.

15) Medical device manufacturers are part of the Medical-Industrial Complex which now controls 1 out of every 5 dollars in the American economy. Code Blue: Inside the Medical-Industrial Complex, due to be published by Grove Atlantic Press in April, 2019, will reveal that collusion and syndicated profit sharing extends well beyond the limits that Commissioner Gottlieb is prepared to admit. 

Giving Thanks: Medicine vs. the NRA

Posted on | November 19, 2018 | 2 Comments

Mike Magee

This Thanksgiving, I send a special “thank you” to physicians nationwide who refused to buckle to the NRA’s demand that they “stay in their lane”, and stood up for kids across America.

There can be little debate that gun violence is a serious health risk, and that the NRA is enabler in chief. Back on February 18, 2018, four days after the Parkland, Florida school shootings, the American Academy of Family Physicians (AAFP) challenged Congress directly to “take firm action to deal with gun violence as a public health epidemic.”

Now a Stanford study on pediatric gun violence has ignited additional physician resistance. The facts:

1. 2,715 children died of gun injuries in 2015 – 62% homicides and 31% suicides.

2. Twice as many kids died in states with weak gun control laws (5/100,000) compared to states with strong gun control laws (2.6/100,000).

3. In states with laws that require specific limits to child access to guns in the home, pediatric suicides were 4 times less likely (.63/100,000) than in states without protected access (2.57/100,000).

4. Nearly half of the states (23) have no Child Access Prevention (safe storage or gun lock) laws in place.

5. In the 12 states with universal background check laws, pediatric deaths from gunshot wounds were 1/3 less likely (3.8/100,000) than in the 38 states lacking these laws (5.7/100,000).

6. In the 5 states that require background checks to buy ammunition, there were only 2.3 deaths/100,000 compared to unprotected states (5.6/100,000).

In years past, doctors have been too timid on this issue. But two years of constant assault on human dignity, paired with an increasingly tone-deaf NRA in the wake of the Parkland shootings and other mass disasters, have pushed the majority of physicians into an activist stance.



The American College of Physicians targeted the NRA in a position paper on October 30, 2018 titled, “Reducing Firearm Injuries and Deaths.”

That drew the NRA response  labelling the statement as “every anti-gunner’s public policy wish list, save for the outsized role given to doctors,” and accusing ACP members as “only interested in pseudo­science ‘evidence’ that supports their preferred anti-gun policies.”

Then, on November 7, 2018, as the dust was settling from the mass shooting at Thousand Oaks, CA, the NRA’s leadership felt comfortable taking on organized medicine and caring health professionals everywhere, tweeting “Someone should tell self-important anti-gun doctors to stay in their lane.”

Johns Hopkins trauma surgeon, Joseph Sakran blasted back, “I have Two Words for you Hell No! #Hell No for #ThousandOaks #Hell No for all black men that die & no one hears about it. #Hell No for all those that we still may be able to save.”



The CDC and AMA have taken a stand. And in the wake of the NRA scolding, the ACP invited physicians to sign on to a letter challenging the NRA. Within 48 hours, 23,000 physicians did.

As many commentators have noted, the one silver lining to the past two years has been that President Trump is stress testing the durability of our democratic institutions and our fundamental “goodness” as Americans.

Nearly twenty years ago, our studies clearly demonstrated that patients rely on doctors to deliver three things: compassion, understanding, and partnership. Traditionally, this has occurred in private, behind closed doors. But now we must not only heal and provide health, but also offer leadership that will keep our communities and America whole.

These are not normal times. I give thanks that we physicians understand that Americans and our form of government are now fundamentally at risk and need our full engagement. In rising to this challenge, we are discovering our public voice and our finer selves.

Why We Must Vote on November 6, 2018.

Posted on | November 2, 2018 | 1 Comment

Mike Magee

The Commonwealth Fund’s David Blumenthal calls recent anti-ACA moves by Trump “a bleak example of American exceptionalism – no other nation fails people who are ill so spectacularly as we do.”

What has him so riled up is twofold: 1) the erosion of private health insurance with Trump’s executive order with HHS follow through allowing degraded plans to satisfy a citizens requirement for health care coverage under the ACA, and 2) the cynical claims of Republican candidates that they stand foursquare against denial of coverage for pre-existing conditions even as 20 Republican state governors press forward with a federal suit to – yes – “deny coverage.”

By the way, 8 in 10 Americans say denying coverage based on ones prior medical record should be illegal.

The link between poverty and health coverage in the U.S. couldn’t be more self-evident. And the threat of “under-insurance” is a big part of it. A recent Commonwealth Fund survey, with 9 of 10 respondents technically insured, found that half had serious financial woes tied to illness.

National estimates peg numbers of Americans caught in this financial death spiral last year include some 15 million who exhausted their life savings after taking ill, and 9 million who came up short on utilities, rent, and even food.

And all this for a national “investment” of $4 trillion a year –  which if applied properly could not only achieve universal coverage but also bolster a range of weakened social determinants of health and erase the ubiquitous presence of erosive disincentives to access like co-pays and deductibles.

What’s truly amazing is the willingness of Republican governors to vote against their self-interest. Consider the fact that the highest rates of maternal deaths and premature births are in the South and lower Midwest.

Over the past three years in the U.S., 27,000 additional babies have been born prematurely in large part due to poor prenatal care. Top honors go to Mississippi at roughly 14% of all births before 37 weeks gestation. Vermont’s rate is half that. Race, educational level, and employment are all determinative of risk of prematurity.

Tomorrow’s vote is a health care vote for sure. But it is also a values vote. Who are we? What are we? Why are we here on this Earth, at this time, in this place? All of the answers hang in the balance.

Words Matter in Health Reform: Part III – Voters And Health Reform.

Posted on | October 31, 2018 | 6 Comments

Mike Magee

Republican’s decade long attempt to torpedo the Affordable Care Act has largely failed, except in serving as a teaching tool for the American public which in majorities now supports universal access to health care and greater government oversight and planning.

But to advance to the next step as a nation, we need to agree on nomenclature and be accurate in our terminology. As we have seen over the past two segments of this 3-part series, “words matter.”

In Part I, we learned that the Canadian system is not technically a “single payer” system, in that provision of insurance (set to national standards) and the delivery of the care is the responsibility of individual provinces, not the national government. A more accurate label for their system would be “Single Oversight Authority/Multi Plan”.

In Part II, we took a look at America’s status-quo, and examined our performance as a health care system, and the role that profiteering, complexity and inequality play in undermining health and productivity in this nation.

In our final segment, let’s explore reasons for optimism – what are our assets, what do we have to work with as we move to transform our system?

These formidable assets include the following:

1. Nearly $4 trillion already committed, even if misallocated, to the nation’s health.

2. A remarkable array of educational institutions devoted to the creation of a highly skilled health-professional workforce.

3. An incredibly dedicated network of public health schools and practitioners, and  a well-distributed but underutilized group of pharmacists anxious to contribute at their full potential.

4. A rapidly expanding primary-care army bolstered by nurse practitioners and physician assistants.

5. A testing ground of 50 different states offering the ability to customize various approaches to care within parameters set by the national government.

6. A majority of the population that now supports health care as a right, and a move toward a single-payer authority/multi-plan model in national polls.

7. A first-class and highly profitable scientific research and discovery community that could well stand on its own without diverting resources from health planning or patient care.

8. An enormous number of health system middlemen currently involved in non-real work who could be redirected toward strengthening services that would contribute positively to the social determinants of health—including improvements in nutrition, education, environment, housing, transportation, and safety.

In a polarized society like ours, though, trying to drive change solely through a communitarian ideal that prioritizes social cohesion is probably not a winning proposition  on its own. The winning argument at the end of the day is economic.

The true impact of spiraling health care costs and their secondary effects—including stagnant wages, income inequality, a lack of job mobility, high rates of medical bankruptcy, the closure of rural hospitals, an inability to invest in infrastructure repairs, and our growing national debt – is staggering.

Warren Buffett, a man who knows something about sustainable growth, said recently: “The health care problem is the number-one problem of America and of American business. . . . Medical costs are the tapeworm of American economic competitiveness .”

On a percentage basis, the U.S. is now the fifth highest debtor nation (as a percentage of GDP) in the world after Japan, Greece, Italy, and Portugal.

Republicans are currently resurfacing the notion of cutting health services for the elderly, the poor, the marginalized and discriminated against – to “save Medicare” and address budget deficits that they themselves have exacerbated through recent tax cuts for the wealthy.

But let us be clear – there is another way. We could have the courage and the will to reapply our more than ample health care assets and reject the status quo. We could vote in change. We could elect leaders willing to honestly address a simple, long overdue question: “How do we make Americans healthy?”

Words Matter in Health Reform: Part II – “Single Payer” or “Single Oversight”

Posted on | October 25, 2018 | 3 Comments

Mike Magee

In Part I of this 3 part series, “Words Matter”, we learned that the Canadian system is not technically a “single payer” system, in that provision of insurance (set to national standards) and the delivery of the care is the responsibility of individual provinces, not the national government. A more accurate label for their system would be “Single Oversight/Multi Plan”.

The single authority is Health Canada which provides formalized government health planning as well as insurance standards and oversight. Approximately 24% of the funding for defined “essential benefits” in the Canadian plan is provided by federal taxes, while provincial taxes make up the rest. The national government is the guardian of universality and (often overlooked) simplicity. Providers provide. Provincial government pays. Patients concentrate on health and wellness, and are not plagued by insurance gamesmanship and endless bill bickering on the local level.

On the most fundamental level, the U.S. has no such governmentally-directed, national health planning apparatus.

Service levels and reimbursement vary widely across a endless range of private and public offerings that have devolved into a “free-for-all.”

Employers historically have been heavily involved in offering tax-incentivized health benefits and lately funding their own health insurance plans, though the extent of benefits and number of employers underwriting health care is highly variable and in decline.

Physicians and hospitals in the U.S. are paid according to set rates and formulas for various government sponsored programs like Medicare and Medicaid. Physician payments rely heavily on a relative value scale (RBRVS) pricing controlled primarily by the AMA. But they also negotiate their participation and fee schedules with countless other private insurers. Fee-for-service remains the rule for non-hospital based physicians though over half of all physicians are now employed by large health care firms.

Hospitals rely on bundle payments for episodes of care under the DRG payment system  for Medicare, and through mirror offerings from most private insurers. Fraud in coding is not uncommon. Hospital and insurance execs engage annually in often hostile negotiations making long term planning neigh impossible.

Hybrid public/private “Medicare Advantage” (Medicare Part C) plans provide a broader array of services than traditional Medicare in return for patient acceptance of restrictions in physician and hospital choices. Incentive payments to manage complex patients have been subject to abuse.

Supplemental Medicare plans are heavily marketed by associations like the AARP which quietly splits profits with its private partner United Healthcare.

Medicare Part D plans cover a portion of the pharmaceutical costs of Americans over 65. Rates of coverage (governed by tiers) vary widely from one participating insurer to the next, and also increasingly direct the patient to only use approved pharmacy outlets.  Rules on individual medicines covered change constantly, drug to drug, making yesterday’s wise consumer decision today’s big mistake.

Long term care and nursing homes receive significant financial support through the Medicaid program. Under the Affordable Care Act, nearly 20 million uninsured Americans received coverage mainly through expansions of state Medicaid in participating states, and are  heavily subsidized by federal dollars.

Patient co-pays, co-insurance, and deductibles are ubiquitous in the U.S. system (fewer than 5% of consumers understand these terms), and are further complicated by a series of legal kickbacks and opaque financial inducements and conflicts of interest managed by Pharmacy Benefit Managers (PBMs) – offshoots of insurers, drug manufacturers and retailers – that secretly cross the collusive boundaries between medicine, industry and governmental bodies.

Privatization has become more aggressive of late with moves to syndicate vertical integration (like CVS/Aetna, Cigna/ExpressScripts) and realize outright ownership of supply chains of providers and services that will likely restrict patient choice further without delivering lower cost or resolving patient confusion and complexity.

In short, our health care system, strictly from an economic standpoint, is an intentional complex mess that now consumes 1 of every 5 American dollars.

What are our current assets upon which we might build a comprehensive national health care plan that provides  “Single Oversight/Multi-plan” simplicity?

That’s next.

Words Matter When It Comes To Health Reform: Part I.

Posted on | October 22, 2018 | No Comments

Mike Magee

Americans views on healthcare reform are evolving. The decade long battle by Republicans to “repeal and replace” Obamacare is fading slowly into the background. Now those same  voices who worked so diligently to destroy the plan pledge undying support to prevent denials based on prior conditions, even as they pick away with “skinny plan” intrusions.

Today the greatest risk to continued movement toward universal coverage and rational health planning is nomenclature. To avoid talking past each other, we need to define the terms of this debate while agreeing on common end points.

For example, “universal health care” is an end point goal which reinforces the principle that health is a human right rather than a privilege for the most entitled. “Single payer” is one strategy or tactic for efficiently delivering on the promise of universal coverage. It is something of a misnomer, a term that suggests a comprehensive and centralized public approach to health coverage, but one that may be less than comprehensive and paired with additional private plans which are allowed to emerge on the side. More on that in a moment.

As Americans have struggled to accommodate and absorb a new vision of health care, they have often leaned heavily on other national approaches, notably Canada, with careless approximations rather than laser accurate descriptions of what these systems are or are not.

Let’s take a careful survey of Canada and consider each word. Here are a few key questions with answers:

1. Does Canada have a universal health care system?

Yes. Canada provides equal access to defined “essential health services” to all of its citizens.

2. Who pays for the care?

Canadian citizens fund the care through targeted national and provincial tax payments. Provinces, with some level of federal financial support, are responsible for health planning, budgeting, negotiations with providers, and delivery of quality care.

3. What is the national or federal government’s role?

The 1985 Canada Health Act on a national level requires that each province maintain coverage for “medically necessary” hospital, diagnostic, and physician services. The formal plan must be “publicly administered, comprehensive in coverage, universal for citizens, portable (providing coverage when in other provinces), and accessible (without additional co-pays/user fees).”

Health Canada is also responsible for promoting nationwide health objectives, addressing the needs of vulnerable populations, food and drug safety, and medical device and technology review.

Separate from Health Canada, the nation also maintains the Public Health Agency of Canada which is responsible for public health programming, emergency preparedness, infectious disease prevention, and chronic disease management programs.

4. What is the national versus provincial financial contribution?

The national government funded 24% of the provincial health budget in 2017, while provinces covered 76% of public plan funding.  Combined public coverage paid for 70% of total health expenditures, with 30% coming from private supplemental coverage/private pay plans.

5. What major services are not covered by the Canadian plan?

Prescription drugs, dental care, vision care, long-term care/nursing homes, and over-the-counter medications are not covered. These may be covered in part or whole by widespread use of supplemental health plans offered by employers, unions and other organizations.

6. How are physicians paid?

Reimbursement of physicians is based on fees-for-service using bills that are created using the same diagnostic (ICD-10) and procedural (CPT) coding systems used in the United States. Some physicians are private while others are paid on salary by hospital or health care organizations. Physicians are not allowed to “balance bill” – add charges beyond the agreed upon annual government rates. On average, Canadian physicians earn slightly more than their American counterparts ($324K vs. $303K).

7. Do patients pay any “co-pays” or “deductibles” with the Canadian plan?

No. There is no cost-sharing for professional, diagnostic or hospital services. Patients are not involved in billing. Providers bill the government, while patients receive the agreed upon care services.

8. How are hospitals organized and paid?

There is a mixture of public and private hospitals. Private hospitals are mostly non-profit and often have a religious delineation. Hospitals are traditionally paid through annual global budget allotments negotiated directly with the provincial government or through regional health authorities empowered by the provincial government. Recently, certain provinces have begun to explore the use of “activity based funding” to incentivize efficient “through-put” of cases to address wait times in the system.

9. How does the government control health care costs of its plans?

Cost-control strategies are intrinsic to public plan design and include mandatory annual global budgets for hospitals/health organizations, negotiating of physician fee schedules with provincial medical societies, restrictions on approval of new technology, and negotiated drug pricing.

Introductory prices of new patented medicines are set by the government after review of prices in other “reference nations.” Provinces through the Pan-Canadian Pharmaceutical Alliance have negotiated price reductions on nearly 100 brand name drugs and many generic drugs. Direct-to-Consumer broadcast advertising is illegal.

10. How does the government control health care quality of its plans?

The provincial government is responsible for managing the quality of their public plans. Expectations for quality service through Health Canada is clearly defined and largely delegated to the responsibility of provincial physician and hospital organizations servicing their fellow citizens.

A range of quasi-public organizations collect and distribute quality outcomes data to providers for their quality improvement reviews. Accreditation Canada is a non-profit voluntary accreditation service that accredits approximately 1200 hospital and heath service organizations across Canada.

The Canadian Institute for Health Information is a nationally endorsed non-profit established in 1994 and governed by a cross-province board of mostly governmental health executives which oversees data collection from 28 pan-Canadian databases, and manages their analysis and sharing with health system providers. Among other programs, they manage the Canadian Patient Safety Initiative which issues regular transparent reports on preventable patient safety problems in Canada’s acute care hospitals.

11. Is Canada technically a “single payer” system?

No. More accurately, it is a “single payer/multi-plan” system. It is “single” in the sense that  “essential services” are required of all provinces, portable coverage between provinces is assured, all tax payers contribute, and rules that govern provider-patient interaction and reimbursement procedures are generally consistent across all provinces.

But, the various plans in each province function largely independent of each other. Specifically, each province determines its own governance structure, negotiates its own annual global budgets and priorities, and customizes certain elements of the program including integration with other social services and protections.

Further, Canada’s national health program covers only 70% of the total health care costs of Canadians. Payment for uncovered services is an individual responsibility, often managed by the purchase of private supplemental health coverage plans.

12. What can we learn from Canada and what have we learned from the Affordable Care Act?

For that answer, tune in next time for Part II of “Words Matter.”

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