David Warsh: The sleazy Sacklers' lethal painkiller promotions and the need for a 'Health Fed'

President Trump has  declared the opioid crisis a public health emergency, rather than a national emergency, since the Federal Emergency Management Agency is over-extended in dealing with storm relief.  Unfortunately, the Hospital Preparedness and Public Health Emergency Funds are equally strapped for cash, running respectively at 50 percent and 30 percent below their peak levels of a decade ago. Congress will have to act.

It was, therefore, an especially good time for “The Family that Built an Empire of Pain,” to appear last week in The New Yorker. You can read Patrick Radden Keefe’s remarkable story about the wellsprings of the crisis for free online, more easily, if less pleasurably, than in the magazine itself. The sub-head states, “The Sackler dynasty’s ruthless marketing of painkillers has generated billions of dollars – and millions of addicts.”

Others have worked on the Sackler family story over the years, documenting its leading role in producing the opioid epidemic, including Barry Meier, of The New York Times, who first uncovered the extensive marketing efforts for OxyContin,  and the Los Angeles Times team that documented the "12-Hour Problem '' that Keefe describes. But none has achieved anything like the rhetorical force of Keefe’s article. Once it is reworked as a book, I expect that “Empire of Pain” will eventually  attain the status of Rachel Carson’s Silent Spring, Jane Jacobs’s The Death and Life of Great American Cities, and other classics of social criticism. It is an astonishing story. You might as well read it now.

The three brothers of the Sackler family — Arthur (1913-87), Mortimer (1916-2010), and Raymond (1920-2017) – are far better known as philanthropists than as pharmaceutical entrepreneurs.  All three attended medical school and subsequently worked together at Creedmoor Psychiatric Center, in Queens, N.Y.  Arthur put himself through medical school working for William Douglas McAdams, a small advertising agency specializing in medical markets, then bought the business.  In 1952, the three physicians bought Purdue Frederick, a little manufacturer of patent medicines in Greenwich Village (and no relation to the famous university). Each owned a third.

While Mortimer and Raymond built the company, Arthur took a more distant role, concentrating on medicine as editor in chief of the Journal of Clinical and Experimental Psychopathology from 1950-1962. In 1960, he founded a biweekly newspaper, Medical Tribune, which eventually reached 600,000 subscribers.

The Sackler family grew tolerably rich on the sale of Valium, which between 1969 and 1982 was the top-selling pharmaceutical drug in the United States. When Sen. Estes Kefauver (D.-Tenn.) investigated the rapidly growing pharmaceutical industry in the early 1960s, a staff member prepared a memo that read, in part,

"The Sackler empire is a completely integrated operation in that it can devise a new drug in its drug development enterprise, have the drug clinically tested and secure favorable reports on the drug from various hospitals with which they have connections, conceive the advertising approach and prepare the actual advertising copy with which to promote the drug, have the clinical articles as well as the advertising copy published in their own medical journals, [and] prepare and plant articles in newspapers and magazines.''

Enter Raymond’s son Richard Sackler (b. 1945), in 1971, fresh out of medical school. Starting as assistant to his father, during the next 30  years he presided over efforts to develop OxyContin and  turn  it into the best-selling pain medicine in the world.  How the company, re-named Purdue Pharma, managed that forms the bulk of Keefe’s 13,000-word account.

Simply put, thanks to  massive marketing efforts, the long-lasting narcotic came to be widely prescribed, not just for severe pain associated with surgery or cancer, but for almost any discomfort, including arthritis, back pain and sports injuries – despite its obviously addictive properties. Early versions turned out to be ruinously easy to abuse; later editions turned out to be a gateway to the use of cheaper heroin. More than 300,000 lives have been lost to overdoses of opioid drugs since 2000; perhaps 10  times as many have been shattered.

Arthur’s heirs sold their father’s share of the company to his brothers sometime after 1987. Mortimer moved to Europe to spend and save his dividends  Raymond ran the company day-to day for many years, and died only last July. Nine family members are among the directors of the private company.  Past president Richard Sackler was deposed last year, as part of Kentucky’s complaint that many of Purdue’s marketing methods were illegal. A battle to unseal his testimony has ensued.  Many more lawsuits are in train; their tactics resemble the campaign to rein in the use of tobacco. Congress can be expected to again hold hearings.

The editorial board of The Wall Street Journal also addressed the topic, uncharacteristically ignoring the supply side in favor of demand factors, in a piece headlined "The Opioid Puzzle'' (subscription required). The editorial board’s interest was piqued by “the government’s role is allowing too-easy access to painkillers, particularly among society’s poor and vulnerable.”

Medicaid recipients receive prescriptions for twice as much pain medication as those not covered by the government’s low-income plan, the editors wrote, citing government figures. And one out of every three Medicare beneficiaries received opioid prescriptions last year, half a million of them in extravagant doses. “The only way to explain this cascade of pills is an epidemic of fraud,” the editors concluded.

Better to put the two analyses together.  OxyContin sales are estimated to have been around $35 billion over the last 20 years.  An enormous portion of that was surely paid by the government as insurance subsidies.  Only when you see the two programs unfolding together do you begin to comprehend the nature of the problem – the entrepreneurial genius of the Sackler family on the one hand, developing and marketing popular mood-altering and painkilling drugs since the 1950s; on the other, the rise of government medical insurance since 1966, when the Medicare program went into effect.

Throw in the mostly unrecognized extent to which big pharmaceutical manufacturers have discouraged all manner of research on the painkilling applications of medical marijuana, and you have a real witches’ brew.

The U.S . health-care industry may be, in certain respects, the best in the world; certainly it is the most expensive.  As the opioid epidemic demonstrates, it offers a colossal field for mischief. The editorial board of the WSJ is right about this much:  innovation is the answer, to the opioid crisis, and much else among the medical sector’s many other ills.  In this case the desideratum is regulation – not Pentagon-style hierarchy, but rather the decentralized and consensual decision-making represented by the Federal Reserve System.

The blueprint developed 10 years ago by former Senate Majority Leader Tom Daschle (D.-South Dakota) in his run-up to a presidential campaign that was ultimately overtaken by that of the junior senator from Illinois, Barack Obama, is still the only model that make sense. Daschle imagined a dozen or so regional health-care authorities, sharing power among regulators, physicians, hospitals, insurers, device and pharmaceutical providers, governed by a federal board of governors insulated as much as possible from politics.

A Health Care Fed eventually will deliver efficiency –  and diminish freebooting – in the enormous sector, in much the same way the Federal Reserve Board stabilized the similarly turbulent banking industry a hundred years ago.  It’s just going to take more time – another generation or two, I would guess.

David Warsh, a long time financial columnist and an economic historian, is proprietor of economic principals. com, where this first appeared.

Sam Pizzigati: Payroll tax deeply discriminates against low- and middle-income people

Via OtherWords.org

How much did your paychecks total last year? You know the answer, of course. So does the Social Security Administration. The totals for every American’s paycheck income are sitting in Social Security’s computers.

Once every year, Social Security does a serious data dump out of those computers to let us know just how much working Americans are actually making. The latest totals — covering 2016 — have just appeared.

Most of us, the new numbers show, are simply not making all that much.

In fact, nearly half of our nation’s employed — 49.3 percent — earned less than $30,000 in 2016. A good many of these Americans lived in poverty. In 2016, families of four that earned less than $24,339 ranked as officially poor.

We don’t have an “official” figure for middle class status. But the Economic Policy Institute has calculated the costs of maintaining a no-frills middle class existence in various parts of the United States. In Houston, one of our nation’s cheaper major cities, a family of four needed $62,544 in 2016 to live a bare-bones middle class lifestyle.

Nationally, according to the new Social Security payroll income numbers, over three-quarters of working Americans — 76.4 percent — took home less than $60,000 in 2016.

Some Americans, on the other hand, took home a great deal more. The Social Security Administration counts 133,119 Americans who pocketed over $1 million in paycheck income last year.

Now which of these two groups — the millionaires or the under-$60,000 crowd — do you think paid a greater share of its income in Social Security taxes?

The millionaires could certainly afford to pay the bigger share. But they didn’t.

Individuals who took home $1 million in 2016 had $16,265 deducted from their paychecks for Social Security and Medicare. Those deductions totaled a meager 1.6 percent of their paycheck income. Working Americans making $60,000 last year, by contrast, had 7.65 percent of their take-home deducted for Social Security and Medicare.

In other words, Americans making $60,000 paid over four times more of their income for Social Security and Medicare than Americans who made $1 million.

How could that be?

Our tax code currently has a ceiling on earnings subject to the Social Security tax. That ceiling this year rests at $127,200. All paycheck income up to that level faces a 6.2 percent tax for Social Security and a 1.45 percent tax for Medicare.

Income above that ceiling faces no Social Security tax at all.

Until the Obama years, income above the earnings ceiling faced no payroll tax for Medicare either. But President Obama succeeded in getting that changed. Individual income over $200,000 now faces an additional 0.9 percent Medicare tax.

If all income over $200,000 faced a Social Security tax as well, we’d have enough new revenue to significantly improve Social Security benefits.

The Trump administration is moving in the opposite direction. Earlier this year, the White House tried and failed to get the Obama Medicare tax on the rich repealed.

Now the administration is pushing a tax “reform” that totally ignores the unfairness of the current Social Security payroll tax and instead hands America’s wealthiest a stunningly generous assortment of tax giveaways.

If this Trump tax plan passes, Americans making $60,000 will still be paying over four times more of their income in payroll taxes than Americans who make $1 million. And America’s millionaire-packed top 1 percent will get 80 percent of the new Trump tax cuts, the Tax Policy Center calculates.

The Trump tax plan, in other words, makes the U.S. tax code even more millionaire-friendly than the current code. The White House calls that “reform.” The rest of us ought to call it an outrage.

Sam Pizzigati, an Institute for Policy Studies associate fellow, co-edits Inequality.org. 

Triumph of the old

From Robert Whitcomb's "Digital Diary'' in GoLocal24.com

U.S. public policy helps the old far more than the young. Consideran International Monetary Fund study that found that the lifetime net tax benefit in the U.S. – that is, the value of what we receive in government benefits compared to the taxes we pay – is positive for everybody over 18 but with the biggest benefit for those over 50.

But of course deficit spending (i.e., borrowing from the Chinese, etc.) has been paying for much of this. That suggests that eventually, younger people must pay much more in the new few years to cover the cost of old people on Medicare and Social Security. 

The attitude of many oldsters is: “Don't cut my Medicare, don’t cut my Social Security; I paid for those benefits!’’ Well, they only paid for part of them. As long as so many young people decline to take 20 minutes to vote, the heavy-voting oldsters will get an ever bigger slice of the pie.

The GOP eyes gutting Social Security

Adapted From Robert Whitcomb's "Digital Diary'' in GoLocal24.com:

There's a move underway by some Trump advisers and Republican lobbyists to eliminate payroll taxes used to fund Social Security and Medicare Part A. (Medicaid is financed from general budget funds), with the ultimate aim of throwing more people on the tender mercies of Wall Street to finance their retirements.

Associated Press writers Josh Boak and Stephen Ohlemacher reported: “This approach would give a worker earning $60,000 a year an additional $3,720 in take-home pay, a possible win that lawmakers could highlight back in their districts even though it would involve changing the funding mechanism for Social Security, according to a lobbyist, who asked for anonymity to discuss the proposal without disrupting early negotiations.’’

Well, yes, that might be an initially popular way to destroy Social Security. The George W. Bush administration tried to give Wall Street  lots of Social Security cash. But the public, understandably doubtful that people in the financial-services industry would put customers’ interests first, pushed back. Then came the Great Crash of 2008….

Robert Whitcomb; Treatment for Brexit bathos; 'The Genius of Birds'

This first ran in Robert Whitcomb "Digital Diary'' column in GoLocalProv.com.

"There's been a little bit of hysteria post-Brexit vote, as if somehow NATO's gone, the Trans-Atlantic Alliance is dissolving, and every country is rushing off to its own corner. That's not what's happening."

--   President Obama

Quite right. And the Western World has been prosperous for long stretches without the E.U.!

The 51.8 percent vote  in the United Kingdom to leave the European Union stemmed from, among other things, the failure of the E.U. to slow the flood of refugees from nasty places and, somewhat related, the dwindling job prospects of millions of people hurt by globalization and computerization. Outgoing British Prime Minister David Cameron, for example, had vowed to cut net immigration into the U.K. to 100,000 a year. In fact,  it rose to  333,000 in 2015.

Then there was the desire to protect the orderly British way of life.

The British and many people on the Continent understandably fear for their tolerant and opensocieties when so many people from illiberal, corrupt, religiously fanatic and indeed barbaric cultures flee to Europe for its safety andprosperity, not to mention welfare benefits, butrefuse to give up some of the nasty archaic aspects of the cultures whence they came. The British “Leave’’ voters want to adjust the influx of immigrants from non-Western cultures to a pace that  allows for thegradual education of these newcomers so that they come to accept the values of an open, tolerant, democratic and secular society.

What happens next?

Future events might include:

·      The U.K. deciding not to leave the E.U. after all. For one thing, the referendum isn’t legallybinding!

·      Letting Scotland veto Brexit since, under one legal interpretation, leaving requires the Scottish Parliament’s approval and the Scots have strongly favored staying in the E.U.

·      Renegotiating the U.K.’s membership in the E.U. -- for example, giving Britain and other member nations more power to control population movements into their nations.

The U.K. will muddle through with new arrangements with the E.U., perhaps along the lines of non-members Norway and Switzerland and, I hope, develop  even closer connections with its offspring the United States.

Brexit should remind us that we need to strengthen the unity of the wider West – Europe, the U.S. and Canada --  especially as aggressive dictatorships, particularly Vladimir Putin’s Russia, as well as Islamic terrorists, pose intensifying dangers.  NATO must block Putin’s obvious plan to take over the Baltic Republics and that  part of Ukraine he hasn’t already grabbed. And the U.S., the U.K and the E.U. need to accelerate negotiations  to enact  the TransatlanticTrade and Investment Partnership to strengthen the West on both sides of the Atlantic.

An analysis at the World Economic Forum in Davos listed the 10 best nations to live in. All except Japan are Western democracies. Brexit may spawn new ways of thinking to keep it that way.

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MontyBurnham, who chairs the Preservation Society of Newport County,  controlled her exasperation in her recent status report on  long-delayed upgrades to three Newport mansions – upgrades that would draw in more tourist money to the City by the Sea.

Tedious Nimby legal actions have long held up a long-overdue welcome center at The Breakers as well as refreshment services at Marble House and The Elms. The society will almost certainly finally triumph this year, letting these improvements be implemented next year. But what a pity it will have taken so long to offer these amenities. America has become an increasingly difficult place to do public projects, no matter how good for the general public.

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Republican leaders have long denounced the Affordable Care Act without coming up with a detailed plan with a cost-benefit analysis to replace it.

The tradition continues with House Speaker Paul Ryan’s election-year healthcare replacement “plan’’ for the ACA. As usual, it involves further complicating the tax code -- in this case,  with a new tax credit for people (including rich folks) to buy insurance in markets to be regulated by the states.

The speaker doesn’t project how much the credit would be worth, what the total cost would be, how many people it would cover and the range of  health conditions to be covered by such policies. So, at this point anyway, it means pretty much nothing.

Meanwhile, the most cost-effective and least complicated way to improve American healthcare – extending Medicare to everyone – remains off the table. Lobbyists rule!

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Jennifer Ackerman’s new book, The Genius of Birds, about birds’ cognitive abilities, is quite something. Birds use tools, plan, have capacious memories and complex social lives. Many species are anything but what we think of as ‘’birdbrained’’.

But then,  the more we learn about nonhuman animals the more we’re surprised by how many species are smart and deeply feeling creatures. Pigs, certainly. (And some fish?)

And yet we continue to terrify, kill and eat intelligent animals.

Robert Whitcomb is overseer of New England Diary.

Philip K. Howard: Congress needs to clean out the stables of long-outdated laws

Government is broken. So what do we do about it? Angry voters are placing their hopes in outsider presidential candidates who promise to “make America great again” or lead a “political revolution.”
 

But new blood in the White House, by itself, is unlikely to fix things. Every president since Jimmy Carter has promised to rein in bureaucratic excess and bring government under control, to no effect: The federal government just steamed ahead. Red tape got thicker, the special-interest spigot stayed open, and new laws got piled onto old ones.

What’s broken is American law—a man-made mountain of outdated statutes and regulations. Bad laws trap daily decisions in legal concrete and are largely responsible for the U.S. government’s clunky ineptitude.

The villain here is Congress—a lazy institution that postures instead of performing its constitutional job to make sure that our laws actually work. All laws have unintended negative consequences, but Congress accepts old programs as if they were immortal. The buildup of federal law since World War II has been massive—about 15-fold. The failure of Congress to adapt old laws to new realities predictably causes public programs to fail in significant ways.

The excessive cost of American healthcare, for example, is baked into legal mandates that encourage unnecessary care and divert 30 percent of a healthcare dollar to administration. The 1965 law creating Medicare and Medicaid, which mandates fee-for-service reimbursement, has 140,000 reimbursement categories today and requires massive staffing to manage payment for each medical intervention, including giving an aspirin.

In education, compliance requirements keep piling up, diverting school resources to filling out forms and away from teaching students. Almost half the states now have more administrators and support personnel than teachers. One congressional mandate from 1975, to provide special-education services, has mutated into a bureaucratic monster that sops up more than 25 percent of the total K-12 budget, with little left over for early education or gifted programs.

Why is it so difficult for the U.S. to rebuild its decrepit infrastructure? Because getting permits for a project of any size requires hacking through a jungle of a dozen or more agencies with conflicting legal requirements. Environmental review should take a year, not a decade.

Most laws with budgetary impact eventually become obsolete, but Congress hardly ever reconsiders them. New Deal Farm subsidies had outlived their usefulness by 1940 but are still in place, costing taxpayers about $15 billion a year. For any construction project with federal funding, the 1931 Davis-Bacon law sets wages, as matter of law, for every category of worker.

Bringing U.S. law up-to-date would transform our society. Shedding unnecessary subsidies and ineffective regulations would enhance America’s competitiveness. Eliminating unnecessary paperwork and compliance activity would unleash individual initiative for making our schools, hospitals and businesses work better. Getting infrastructure projects going would add more than a million new jobs.

But Congress accepts these old laws as a state of nature. Once Democrats pass a new social program, they take offense at any suggestion to look back, conflating its virtuous purpose with the way it actually works. Republicans don’t talk much about fixing old laws either, except for symbolic votes to repeal  the Affordable Care Act. Mainly they just try to block new laws and regulations. Statutory overhauls occur so rarely as to be front-page news.

No one alive is making critical choices about managing the public sector. American democracy is largely directed by dead people—past members of Congress and former regulators who wrote all the laws and rules that dictate choices today, whether or not they still make sense.

Why is Congress so incapable of fixing old laws? Blame the Founding Fathers. To deter legislative overreach, the Constitution makes it hard to enact new laws, but it doesn’t provide a convenient way to fix existing ones. The same onerous process for passing a new law is required to amend or repeal old laws, with one additional hurdle: Existing programs are defended by armies of special interests.

Today it is too much of a political struggle, with too little likelihood of success, for members of Congress to revisit any major policy choice of the past. That’s why Congress can’t get rid of New Deal agricultural subsidies, 75 years after the crisis ended.

This isn’t the first time in history that law has gotten out of hand. Legal complexity tends to breed greater complexity, with paralytic effects. That is what happened with ancient Roman law, with European civil codes of the 18th Century, with inconsistent contract laws in American states in the first half of the 20th Century, and now with U.S. regulatory law.

The problem has always been solved, even in ancient times, by appointing a small group to propose simplified codes. Especially with our dysfunctional Congress, special commissions have the enormous political advantage of proposing complete new codes—with shared pain and common benefits—while providing legislators the plausible deniability of not themselves getting rid of some special-interest freebie.

History shows that these recodifications can have a transformative effect on society. That is what happened under the simplifying reforms of the Justinian code in Byzantium and the Napoleonic code after the French Revolution. In the U.S., the establishment of the Uniform Commercial Code in the 1950s was an important pillar of the postwar economic boom.

But Congress also needs new structures and new incentives to fix old law.

The best prod would be an amendment to the Constitution imposing a sunset—say, every 10 to 15 years—on all laws and regulations that have a budgetary impact. To prevent Congress from simply extending the law by blanket reauthorization, the amendment should also prohibit reauthorization until there has been a public review and recommendation by an independent commission of citizens.

Programs that are widely considered politically untouchable, such as Medicare and Social Security, are often the ones most in need of modernization—to adjust the age of eligibility for Social Security to account for longer life expectancy, for example, or to migrate public healthcare away from inefficient fee-for service reimbursement. The political sensitivity of these programs is why a mandatory sunset is essential; it would prevent Congress from continuing to kick the can down the road.

The internal rules of Congress must also be overhauled. Streamlined deliberation should be encouraged by making committee structures more coherent, and rules should be changed to let committees become mini-legislatures, with fewer procedural roadblocks, so that legislators can focus on keeping existing programs up-to-date.

Fixing broken government is already a central theme of this presidential campaign. It is what voters want and what our nation needs. A president who ran on a platform of clearing out obsolete law would have a mandate hard for Congress to ignore.
 

Philip K. Howard, a New York-based lawyer, civic leader and writer, is the founder of the advocacy group Common Good and the author, most recently, of The Rule of Nobody.

Robert Whitcomb: Hospitals should be insurers, too

  This piece first ran in the Huffington Post.

Steven Brill's latest book, America's Bitter Pill: Money, Politics, Backroom Deals, and the Fight to Fix Our Broken Healthcare System, has gotten a lot of attention in large part because of Mr. Brill's vivid anecdotes about the "jalopy'' of American health care. They're memorable stories, gathered with his famous work ethic and intense curiosity, though there's a bit too much about his own deluxe heart-surgery adventures at Manhattan's very expensive New York-Presbyterian Hospital, which comprises some of the narrative glue of this book.

(I found my own open-heart surgery a couple of years ago to be tedium interspersed by fantastical hospital "chargemaster'' billing. A doctor friend told me that the bills had little connection to the reality of the final  total bill.)

Since we're all healthcare consumers, it would be nice, even in this post-literate society, if most adults read this book, to see how their money is being spent. Mr. Brill brings a lot of transparency to this all-too-opaque sector.

Mr. Brill is a rich entrepreneur and journalist and very much a member of the elite, luminaries of which he has easy access to. But he also displays strong compassion for the low- and middle-income people with whom he talks. Many of these folks have a brutal time paying for essential care (especially the unexpected kind) and navigating the obscenely complicated and contradictory U.S. healthcare "system''. His richly reported book provides a colorful, disturbing and occasionally encouraging look at our medical maze.

It's also a sort of thriller about the near-death saga of getting the Affordable Care Act enacted amidst relentless lobbying and political conflicts of interest. Then comes the Obama administration's efforts to recover from the disastrous launch of the HealthCare.gov website. Mr. Brill provides a heartening counter-example by telling us about the triumph of healthcare reform in -- perhaps surprisingly -- the Red State of Kentucky.

Most readers are at least vaguely aware of the institutionalized squalor of much Washington lobbying by some healthcare constituencies, and Steven Brill doesn't stint on telling us more about that. One recalls the famous line by Otto von Bismarck to the effect: "Like sausage-making, you don't want to see how laws are made.''

But there aren't many big surprises, except perhaps that you may find from reading this book that the profiteering by the pharmaceutical and medical-device industries -- for which the public pays much -- is even more extreme than you thought.

Meanwhile, there hasn't been nearly enough comment on his very good ideas to improve the ''system's'' egregious lack of coordination, reduce its gigantic costs and even improve medical outcomes, of all things.

In my view, his most interesting proposals are to encourage more hospital systems to get bigger (and hence to offer broader population-health care and better, most cost-efficient care of individual patients, especially the chronically ill) and to be insurance companies as well as care providers.

And in fact more and more systems have been getting into the insurance business in recent years. It may be the best way to incentivize both care coordination and cost control. Most of hospitals' and their clinicians' financial incentives to over-treat and over-test would disappear if the hospitals were also stuck with the claims costs!

Mr. Brill emphasizes what most people in the public don't seem to get: That hospitals with cost-plus "chargemaster'' billing, big operating profits and hugely compensated senior execs have driven much of the health-cost surge. That very much includes the "nonprofit'' hospitals, many of which are hugely profitable. "Nonprofit'' usually just means that things are arranged so that these enterprises don't pay most taxes.

It is the insurance companies, with relatively small profit margins, they get unfairly blamed for just about everything in U.S. health care. (Mr. Brill would also have done well to note that U.S. physicians are by far the highest paid in the world.) Hospital-insurer mergers don't mean that all independent insurers would go away. They'd still be needed (barring extension of Medicare to everybody) to cover bills from small, independent hospitals, independent physicians and some other clinicians.

Hospital system-insurer combined entities are well-positioned to collect and analyze data about patients to improve care and better allocate resources. Indeed, Mr. Brill says, the bigger the hospital system in a region, the better opportunity a system has to coordinate a patient's care in various inpatient and outpatient venues and cut costs through efficient, expense-saving "bundling'' in treating individual patients' injuries and illnesses over time. This includes treatment at the outpatient clinics that systems are increasingly establishing as the number of inpatient beds steadily declines.

Mr. Brill quotes Jeffrey Romoff, the chief executive of the big-foot University of Pittsburgh Medical Center system, which has an insurance company, on provider-payer marriages:

"All the incentives are aligned the right way. It's the beauty of being the payer and the provider at the same time. When the interests are not aligned, it's why seniors dying of cancer get chemo when they should just get hospice care.''

Obviously the hospital systems becoming insurers take on new processing costs, but think of how much money could be saved by cutting out the third-party middleman. For one big thing, the hospital-insurance combo doesn't worry about paying dividends to insurance-company shareholders or insurance execs' multimillion-dollar salaries. And the new combos might become a little more disciplined about the hospital execs' compensation.

Mr. Brill also suggests capping operating profits of hospitals (including "nonprofit'' ones) to, say, 8 percent. While he doesn't use the term "public utility'' I was reminded of the old-fashioned model of state regulators allowing about that percentage for electricity and natural-gas utilities. Maybe it's time to look at hospitals as public utilities, which they sort of are.

This doesn't address pharmaceutical and medical-device companies' astronomical profit margins, protected by Washington lobbyists who are even more effective than the insurers' and hospitals'. They drive up healthcare costs a lot. But the increased transparency and rigor in looking at the unimpressive medical outcomes associated with some heavily marketed medicines and devices will help constrain their pricing.

Mr. Brill also wants to cap salaries of hospital executives. I'm always  leery of government micro-managing internal decision-making in nongovernmental organizations -- too clunky -- but the idea should be studied.

So let's hope that state and federal regulators don't put too many roadblocks in the way of many more hospital systems becoming insurers.

Extending Medicare to everyone might be the most cost-effective reform but economic constituencies, and ideology often divorced from macro-economic realities, in Washington will prevent that, at least for the foreseeable future.

But Mr. Brill's prescriptions could help a lot. Meanwhile, let us hope that the shrinking number of paid healthcare journalists, such as Steven Brill, do what they can to disinfect a  system with all-too-often mediocre care and exorbitant costs that threaten to bankrupt America. More sunlight equals more reform.

Robert Whitcomb (rwhitcomb51@gmail.com) is a partner and senior adviser at Cambridge Management Group (cmg625.com), a healthcare-sector consultancy, a Fellow of the Pell Center for International Relations and Public Policy and overseer of newenglanddiary.com. He's a former finance editor of the International Herald Tribune, a former editor at The Wall Street Journal and former editorial-page editor at The Providence Journal.

A morning on this and that

A few Boxing Day observations:  

New Englanders are always complaining about their high electricity  rates even as they let frenzied and often well financed  and affluent not-in-my-backyard folks keep out the additional natural-gas pipelines, hydro-power, wind power, nuclear and even solar power that would bring down those rates and diversify their power sources so they aren't so vulnerable to one power source's price and supply gyrations.

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As a nifty series in The Wall Street Journal implies,  you could expand healthcare if you really went after the physicians and other providers who are defrauding Medicare by many billions of dollars a year.

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Donald Hall's latest book, Essays After Eighty, is well worth buying. The New Hampshire-based poet/essayist's take on aging is good medicine for all of us rapidly heading toward, or already in, old age.

As for me, I'll repeat the observation of other old people that the best thing about being  elderly is being able to easily say no to requests to do something you really don't want to do but may have felt compelled  to do by a sense of duty or the desire to be liked, or at least not disliked. Those concerns fall off like a snake shedding its skin.

And both those who liked you and disliked you disappear from the scene at an accelerating rate.

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It's sad to know that  Turkish  President Recep Tayyip Erdogan is now a  kleptocratic, narcissistic, bigoted and anti-women dictator who is installing a police state. Turkey is a member of NATO but it's hard to know how long that can continue, since, in principle anyway, NATO members are supposed to be democracies. Erdogan is also cozying up to fellow dictator Vladimir Putin.

Erdogan, increasingly pathological in his lies, will presumably continue to use state apparatus to squelch dissent, and, like, Putin play the xenophobia card, as would any good demagogue.

--- R0bert Whitcomb

Medicare for all would have been better

More and I more I feel as if I have always been right on U.S healthcare reform. Instead of the overly complicated Clinton and then Obama proposals, those administrations should have pushed all out to extend Medicare to every0ne. They didn't want to take on the insurance companies but pushing Medicare for all would have been a much  clearer, and therefore easier,  fight for these administrations if they had summ0ned the will at the start to take on the K Street lobbyists. After all, even the Tea Party types constantly talked about the need to "save Medicare.'' (That's in part because the Tea Partyers include a lot of older people getting or about to get Medicare.)

If it is so great for old people, why not for everyone? Much lower overhead than the private insurers, easier paperwork and fair.

--- Robert Whitcomb