After a week of speaking on health care, I have to elucidate a question which continually arises, but upon which I don’t address.

Is the cost of health care in the U.S. so high because of malpractice and therefore wouldn’t costs decrease if we had tort reform.

For all industries in the U.S., costs are increased because of litigation or fear of litigation.  At the same token, our legal system has kept some really bad actors more honest and compensated some who were gravely injured.  We need a healthy legal system, not a lottery within the courts.

Rising costs of malpractice insurance do add to the cost of health care primarily for physicians and hospitals.  But this cost is not a primary factor in escalating prices. More than the actual premiums paid, which is readily accountable, is the intangible cost of practicing defensive medicine.

What exactly is defensive medicine???

This is the practice wherein a provider may order tests, blood work, imaging studies, invasive procedures or more office visits to solidify a diagnosis or increase the likelihood of a desirable outcome.  In general, the less education a provider has, the more tests may be ordered (except if you are House M.D.).  It may additionally pit providers against one another.

At the AMA meeting, I recently encountered 2 family doctors discussing the validity of a CAT scan in the diagnosis of appendicitis.  When I was a nurse we never did a CAT scan, and yes some individuals did get an appendectomy and later find that they did not have appendicitis.  The doctors comment however, was that the surgeon “only wants to operate” so surgeons don’t care about getting CAT scans to cement the correct diagnosis.

I interjected a conservation I had had last year on campaign trail.  A well-to-d0 businessman was upset that he had to pay $1000 for a CAT scan when his daughter had appendicitis.  The ER doctor said she had it, the surgeon and nurses were fairly certain by her symptoms, physical signs and elevated white blood count indicating infection, but the surgeon ordered a CAT scan.

The scan, of course, confirmed the diagnosis of appendicitis.  His teenage daughter underwent a successful appendectomy and recovered without incident.  But to this father, the CAT scan was “unnecessary care” and done only to boost the revenue stream of the surgeon who ordered it or the hospital who employed him. God forbid, if the doctor was a partial owner of the scanner or imaging facility!!

You see, family doctors consider it standard of care to order a CAT scan and confirm the “clinical” diagnosis.  They would have testified as such in a court of law against a surgeon if a CAT scan was not ordered.  So even if the ER doctor and surgeon were 99% sure that the correct diagnosis was appendicitis, they would be outside the “standard of care” if they didn’t order a CAT scan.

They would face strict scrutiny if an appendectomy were performed and the diagnosis were found to be something else.  And then the surgeon may have performed an “unnecessary” operation, done primarily as a source of income because “they get paid to do things.”  So you can see where I am going with this.

It is why algorithms for treatment are not exact and won’t reduce cost of care or offer true quality.  It is also why the relationship between provider and patient is so important.  If there were a high level of trust, the physician could counsel the patient or family appropriately, and maybe avoid an additional test.  And it is precisely why a third party payer distorts the relationship between the doctor and patient.

It is not as though doctors are constantly thinking that they may get sued or reported, but it does add layers upon layers to the interaction and complicate an encounter. Certainly this adds to the cost.  Mostly, doctors want to do the right thing by their patient.  All providers do.

And sometimes to try to help their patient and avoid accusations of improper care or missed diagnoses, they order tests which may be negative and of low yield.  Thus is a fine balance that is the art of medicine.

So what do we do about it?  Caps on awards or damages for pain and suffering?  Exempt providers?  I suggest that we adopt medical courts as a solution.  Certificate of merits that determine if true negligence has occurred and if there is a correlation would be beneficial and reduce costs of defending a suit.  Adopt the British system where the loser pays for the costs if a lawsuit is brought forward which proves to be frivolous.

A medical court system would have been very helpful in the Dupont litigation for silicone breast implants in which the science was ignored.  The recent asbestosis and silicosis lawsuits would have taken a different flavor and those individual truly injured may have had a larger settlement.

Although President Obama acknowledged the impact, he offered no solutions.  He instead provided a “confirmatory diagnosis” for a disease we already knew we had!

Many of you, including those who aren’t “rich,” have heard this slogan.  Some of you may agree with it and think those who have more, should pay more.  Others may disagree knowing that when the government taxes the “rich” that we all end up being taxed.

I am not adverse to paying the taxes I or we (my husband and I) pay to offer our government the ability to finance those things that we all agree are necessary for society to function well.  Our constitution even outlines those things, but in a very limited fashion so as to avoid concentrating power in the hands of a few within a centralized government.

I have known for years that the vast majority of taxes and federal revenue is procured from a very few of the wealthiest Americans.  I have also known the congressional budget office statistics indicate that if the government taxes greater than 46%, the revenue actually declines rather than increases.  But this is a startling fact I recently learned.

In the current financial crises in California, the voters recently refused to allow Sacramento to increase taxes to close the budget deficit. The government had already increased taxes on the wealthiest Californians, and there are too few of them to have ushered in this refusal of further taxation.

Now, why would the mainstream voter have a problem with further increasing taxes on the rich, and why would the Democrat speaker of the California State Assembly commission a task force that will recommend the state adopt a flat personal income tax and cut or repeal corporate and sales taxes?

Speaker Karen Bass has become concerned about the state’s heavy reliance on about 144,000 wealthy people to pay half of all the income taxes in a state with 38 million people.  That is correct!  Half of the massive budget of  California is dependent on 144,000 individuals.

And those people are leaving at about 10 a day.  They take with them the taxes they used to pay and often family members who also pay income taxes, property taxes or sales taxes.  Even more importantly, they take away small businesses that create jobs or sustain jobs for numerous others, who in turn pay taxes.

If there are less jobs created, there is less need of government services if the population migrates elsewhere.  You don’t need as large a police or fire force.  You don’t need as many teachers or schools.

The salary, pension and health insurance of people listed above, and countless others all depend upon the benevolence of 144,000 wealthy people.  And these wealthy people are crying UNCLE!  They are leaving and taking their money and jobs with them.

The problem we have is not that governments need to cut taxes.  They just need to cut spending!  One should not expect to have a job from which you cannot be fired, health care is better than someone in the private sector, and  pensions permitting you to retire at age 55 and that is comparable to your working salary.

This scenario is a global warming catastrophe waiting to happen and is already happening in Europe and in some cities and counties within the United States. This is not a function of an economic downturn, but of a chronically ill patient refusing to adopt a healthy lifestyle.

This doctor is prescribing a diet!

I have not joined the fray to speak about the resignation of Governor Sarah Palin.  Everyone has jumped in the water, and some are delighted that she has jumped out.

I do not know the rationale other than what she has elucidated.  The constant assaults on her, ethical violations launched without merit and based on political sniping and a new partisanship within Alaska that was absent before she accepted the vice presidential nomination all contributed to her decision.

The personal attacks on her and especially her children were painful, but I don’t think the primary reason.  The continued barrage of media criticism of a personal nature has been grossly derogatory and should by been condemned by all media personnel regardless of political affiliation.

I can attest to the  difficulties of running as a woman and how these insults affect your husband and children.  You have to deal with both your own reactions and how they will play in the press, but even more so how to comfort your family.  But she could handle all this.

However, given her character, I sincerely think that she simply believed that she could no longer function effectively as Alaska’s governor in the current climate.  She was blocked from working for the citizens of Alaska without the willingness of team players.  Instead, it had become a one-on-one hit game.

Surmising her character, the aura she projected as a V-P candidate and her speeches, she has a deep faith in her ideology and philosophy of government.  She is truly a servant of the people who elected her, not a servant of her ego or pocketbook.  If helping Alaska to have the best governance it deserves she resigned in this unconventional manner, she was willing to do so for her state.

Can it be that simple?  Are we so jaded that we no longer believe any politician is there to serve at the consent of the governed?  I think that Governor Sarah Palin’s reading of the Declaration of Independence is the same as mine.  Those elected are to serve the people. Perhaps once again, the experts will be proven incorrect and this will not be the end of Sarah Palin.

Maybe we need more elected officials to resign!

I had a conversation today with one of Ottumwa’s small business owners.  They verified the concerns that small business owners have and the uncertainty that keeps them from expanding or spending money on growing or hiring.

We are all aware of the fact that unemployment for the month of June rose to 467,000 non-farm payroll jobs lost.  This was higher than reported in May and although lower than earlier in the year, it was greater than predicted.  The unemployment rate increased to 9.5% and is a “grim jobs report”, according to Donald Marron a former senior economist with the Council of Economic Advisors.

Marron has dug deeper into the jobs report revealing a decline in hours worked by private-sector employees, now 7% over last year.  Therefore, not only is the economy losing jobs, but there are fewer hours worked for the jobs that remain.

Job loss has expanded from construction and manufacturing to the service sector with a 244,000 drop.  Within that category, 118,000 jobs were lost in the important professional and business-services sector.  Over the past 3 months, average hourly earnings barely increased at 0.7% annually.

Credit is still tight as banks are holding onto their cash for balance sheet expansion and until these excess revenues come down, the effect of the Fed’s monetary stimulus will be muted.  In fact, the real gross domestic product is expected to fall by by 1-2% annually.  Much worse than the expected 3% growth placed into the budget for the deficit projection (meaning the deficit and debt will be greater).

The fiscal stimulus has yet to stimulate!  Although there are some indicators that the economy is improving, it is at a snail’s pace.  Further we have all heard by now and have memorized that the unemployment rate is a lagging indicator.  These hidden facts point to a much more dire predicament for the economy than the unemployment rate and job loss alone would indicate.

The Obama administration and Congress can still right this ship.  The government’s fiscal nymphomania (penned by Larry Kudlow) needs to end and the deprecating talk from the administration needs to stop.  Marginal tax rates for individuals, businesses and investors could be reduced to spur business expansion.

Especially for small businesses and low income individuals, we could suspend the payroll or FICA tax for 6 months.  Too much regulatory change causes unrest and small business owners rightfully do not think they have a level playing field.

The cap and trade debacle which does nothing to reduce carbon emissions, by does a lot to pay off supporters of the administration should be delayed and real debate ensue.  This is also true for the health care reform bill currently sending shock waves through the economy.

Is the administration watching the sell-off in the stock market, and do they care?  Is not this a poll of its’ own?  And if so, is President Obama’s approval rating going the way of the stock market?

Last week the unemployment rate was revised upward for the previous month and attained 9.5% for the month of June with a job loss greater than anticipated or predicted.

As bad as those numbers were  (enough to begin anew a sell-off on Wall Street), we don’t have the “rest of the story”.   Hidden in those figures are some dire statistics.

The economy is taking a toll on the independent entrepreneurs, which are where 70% of jobs are located and created.  Small business growth is the backbone of most economies.  Many of us, myself included, were critical of the stimulus for many reasons, but especially because of the paucity of assistance to small businesses.

Startling is the finding that 36% of business owners surveyed are willing to walk away from their own business to earn more money working for someone else.  This is increased from 30% last year.

When asked about the most challenging aspects of owning a business:

40% chose finding a new business, up from 31% in 2008,and 28% in 2007

23% cited government rules and regulations

11% said managing cash flow, noticeably decreased from 19% in 2008 and 21% in 2007

This should be a warning bell in to this current administration.  Small business owners were ringing the bell, but their voices were invisible in the era of payola politics and growing government.