Health Law Anti-Fraud Enforcement

I got an update in the e-mail today from a law firm with a major Health Care Law practice. It was an "alert" about anti-fraud enforcement against health care organizations -- part of the Obama health care reform efforts. The fraud that is being investigated is overbilling the government or violating government health care regulations.

So you can guess where I'm going with this.

Some anti-fraud efforts are fine in my book, but all of them miss the point. Fraud against the government in health care is made possible only because the government improperly regulates health care.

Here's my two cents on some of the issues in the update:

Aventis Pharmaceutical Inc., a wholly owned subsidiary of sanofi-aventis U.S. LLC, has agreed to pay the United States $95.5 million to settle allegations that it violated the False Claims Act by . . . knowingly misreport[ing] best prices for the steroid-based anti-inflammatory nasal sprays Azmacort, Nasacort and Nasacort AQ. Under the Medicaid Drug Rebate Statute, Aventis was required to report to Medicaid the lowest, or "best" price that it charged commercial customers, and pay quarterly rebates to the states based on those reported prices.

So the government forces private companies to do business with Medicaid, and insists that these companies charge the government less than they charge anybody else. Of course, business should always be transacted at the best price either side feels it can get -- but no fair when one side gets to force you to sell at gunpoint. Wyeth is about to become the next major victim of this farce.

Another pharmaceutical company, AstraZeneca, has disclosed in its most recent SEC filings that the U.S. Attorney in Philadelphia is investigating the company’s marketing practices of an antipsychotic drug; the company is already facing several state actions brought on behalf of Medicaid programs regarding alleged off-label marketing activities.

"Off-label marketing" means telling people that a drug approved by the FDA for a particular use is also helpful for non-FDA-approved uses. I remember seeing something related to this on the TV series House -- House prescribes Viagra to help a patient's high blood pressure. Off-label laws drive me crazy. On the one hand, you're preventing doctors from recommending drugs they think can improve a patient's health. On the other hand, since the FDA basically has a monopoly on rating drug safety, you're making such doctors look like shady characters for recommending a drug that doesn't have the FDA's seal of approval. Click here for a Bloomberg article about this and other related cases.

On May 20, 2009, Attorney General Eric Holder and HHS Secretary Kathleen Sebelius announced the creation of a Health Care Fraud Prevention and Enforcement Action Team (HEAT). . . . HEAT will undertake a variety of anti-fraud efforts, including . . . creating and using “Strike Force” teams in major cities, including Miami, Los Angeles, Detroit and Houston, to investigate health care fraud . . . .

Now, I have no idea why these particular cities have been targeted. But it does occur to me that these are large cities that probably have a huge underclass of immigrants and other poor people relying on Medicaid. Health care providers probably do more Medicaid business in these cities than in most other places, meaning it's harder for them to make money in these cities. Targeting fraud will probably reduce the availability of health care in these places even further -- companies will flee rather than endure the high cost of doing business and government persecution for the sake of scoring political points.

In each case, anti-fraud enforcement efforts ultimately trace back to the government trying to clean up a mess it created. What we have in the government is a puppy that insists on shitting in the house -- the solution isn't to keep scooping the poop, but to train the puppy to do its business outside.

The Virtue of Lying

I have been re-reading Professor Tara Smith's Ayn Rand's Normative Ethics: The Virtuous Egoist. I just finished that part of her chapter on the virtue of honesty which explains why honesty is not morally required when one is threatened by Nazis, or by a mugger, or while enduring analogous emergent circumstances. She concludes this section by writing:

The thing to appreciate about Rand's position is that it is entirely of a piece with her broader explanation of the propriety of honesty. She condones particular lies not as an ad hoc concession to the vague cliche that every rule was meant to be broken or by claiming that some exceptions are "just obvious." Rather, the rationale for the permissibility of certain lies is a logical extension of the rationale behind honesty itself. Honesty is not intrinsically virtuous or a categorical imperative, to be blindly obeyed regardless of circumstances. Honesty is a practical means of furthering a person's objective values and thus his life. Virtue cannot be properly demanded when it would work against that end, however. Indeed, truth-telling would not be virtue, in the cases in question.

I find this paragraph very helpful, but perhaps not making the point as starkly or clearly as Smith might. I think the basic precept to remember in this case is that at all times, morality requires self-defense, and self-defense requires that one meet the initiation of force with force. To lie to someone in order to gain a value is fraud, and to lie to someone to preserve the value which is your life, while it is not at all fraud, nevertheless is similarly the attempt to get someone to act on that which is not true. In each case, you're using force, albeit indirectly.

I have not yet reached that section of her book, but I would not be surprised if Smith makes the point in this way when she further elaborates on such situations in her chapter on the virtue of justice.

What You WON'T Know Can Kill You

There's something I don't quite understand about the claim in certain studies that much of the healthcare Americans receive "provides little or no real benefit." What I don't understand is -- what do people expect to observe under a regulatory scheme the aim of which is to encourage more doctor's visits?

Isn't true that, since the advent of laws and regulations establishing tax-free health insurance benefits from employers, Medicare, and Medicaid, people have simply made more visits to doctors? Isn't it one of things being touted in Massachusetts, at least in the early days after its coverage mandate, that people were getting to see doctors more? Isn't the goal of "universal coverage" to give people money to go see the doctor -- so that they'll go more often?

And isn't it the case that things that are cheap or free tend to get consumed in higher quantities?

So if policymakers make healthcare cheap or free -- or seemingly so -- wouldn't you think that the resulting extra doctors' visits are made when there really isn't too much for a doctor to fix? Wouldn't that tend to make healthcare under such a system less likely provide any real benefit? I mean, if you're running to the doctor every time you have a runny nose, how much benefit can such visits to the doctor provide?

Plus, how are you supposed to measure the "real benefit" of preventative care visits?

I'm not saying that the studies aren't valid. I'm not a statistician. I'm saying that these studies are trivial. You don't need a study to conclude that when something is free, people will tend to consume it even when they can't get very much "real benefit" out of it. All people have to do is take a brief and honest look at how their spending changes whenever the price of something goes down. But such elementary self-knowledge is apparently evaded en masse.

The real aim of such studies isn't to learn anything, it's to score political points. For though the studies may be trivial, they're being touted to pernicious effect. In response to such studies we observe no critical mass of policymakers making the sensible suggestion, which is to establish a free market in healthcare. In a free-market healthcare system, healthcare professionals would have to compete on price and healthcare consumers would have to do comparison shopping instead of mindlessly consuming healthcare products and services. Policymakers aren't finally admitting they need to deregulate healthcare. The "lesson" policymakers are taking from this "growing body of research" is: healthcare providers have to be regulated even more. They think we need more laws telling physicians what kinds of care will provide "real benefits," and that physicians and patients can't be allowed to decide, based on the facts of a given patient's case, what the appropriate treatment should be.

In other words, today's policymakers act as if the solution to low-benefit healthcare products and services is through strangling regulation to make those products and services even less beneficial. They are at once clamoring that people need to be given money to spend on a product -- and then taking that product off the market.

When private parties decide to forego a certain treatment, that's exercising their right to make decisions in their own lives. When the goverment decides someone should forego a certain treatment, even if they want it and someone else is willing to provide it -- that's mandatory rationing.

But you don't need studies to demonstrate the truth of this, either. Look north to Canada. Look back to the Soviet Union, and the queues of people lining up to buy worthless things because it was either buy those things or paper their walls with useless rubles. When you outlaw buying decisions based on price you end up with government rationing. All the proof needed is right in front of everyone's eyes, it's just as impossible to miss as a "church by daylight." (Thank you, Shakespeare.)

I guess what I'm failing to understand is what I've never understood -- why people are willing to evade facts even when such evasion is literally life-threatening.

"Market Fundamentalism"

"Market fundamentlism" is a new phrase coined by progressives to characterize the recognizition of the morality of economic freedom as an unjustified and dogmatic "faith." Cute.

The opposite of free markets is government spending. Until that blessed day when governments are voluntarily financed by their citizens, government spending equals taxation. This is no news to anyone, not even progressives.

The proffered justification for taxation is that it arises out of big-D Democracy. Taxation supposedly arises by consensus, which is only fair, right? We should govern according to "shared values," after all, isn't that so?

Democracy is simply government by majority vote. A pure democracy is a tyranny of the majority, which no one wants. That's why governments must recognize individual rights. It's not enough for a majority to want something, or for some body to declare that certain actions must be taken to reflect our "shared values." Might does not make right.

In the end, the opposite of free markets is: spend other people's money, which has been taken from them by force. The claimed justification for spending the tax dollars of dissident minorities is: it's for their own good, which they're too stupid or brainwashed or evil to recognize.

So here's the question: "good" by what standard?

My standard is: the good is what in reality, on this earth, makes possible the exercise of reason, which is man's basic means of survival, and can only be exercised by each individual using his own mind. There's no such thing as a group mind, there is only the agreement between individuals. In the social context, freedom is the basic requirement of the exercise of reason. And freedom doesn't mean "freedom" to enact miracles, or "freedom" to initiate physical force against other humans. Freedom means: individuals have inalienable rights that must be respected in others to be claimed for oneself.

The standard of the good of progressives and their ilk is: the good of some group, of "society." Here's how Ayn Rand puts it:

This mean[s], in logic—and, today, in worldwide practice—that “society” stands above any principles of ethics, since it is the source, standard and criterion of ethics, since “the good” is whatever it wills, whatever it happens to assert as its own welfare and pleasure. This meant that “society” may do anything it pleases, since “the good” is whatever it chooses to do because it chooses to do it. And—since there is no such entity as “society,” since society is only a number of individual men—this meant that some men (the majority or any gang that claims to be its spokesman) are ethically entitled to pursue any whims (or any atrocities) they desire to pursue, while other men are ethically obliged to spend their lives in the service of that gang’s desires.

I've never seen or heard any argument for "group rights" or "social good" that doesn't reduce to: a group has a right to take whatever it wants from any individual it can overpower through sheer numbers. Never, never, never.

I realize this is a very unoriginal and self-indulgent rant. But this new attempt to frame the debate as a question of refuting "market fundamentalism," as if it's some kind of religion, and recommending instead that the smart and sensible thing to do is realize that might is right, is really making me crazy.

How *original*!

I found an Op-Ed urging technology as the solution to environmental issues, instead of making it more expensive to pollute. The article seemed to be criticizing liberal hypocrisy and latterday Luddites, which is a good days' work in my book. So I decided to learn more about the authors.

What I found was a nonprofit called Breakthrough Institute. What a disappointment, although I should have known better, given that the Op-Ed was originally published in The New Republic.

The "breakthrough" for which the institute is named is in a 119-slide presentation available at the institute's website, called "Beyond the Pollution Paradigm: Why We Can’t Leave Saving the Planet to Environmentalists." I hope you're sitting down, because here comes the breakthrough: we need $50 billion U.S. tax dollars (and a total of $150 billion global tax dollars) invested in research, development, and public works projects, which will supposedly "Make Clean Energy Cheap." The institute thinks this strategy is supported because all major technologial breakthroughs are supposedly government-funded, and would not have happened without the government behind them.

One slide is a picture of a computer chip on a finger -- I guess this is meant as an example of a technological breakthrough made possible by the government. This is disingenuous, to put it mildly. Lots of people have extolled the role of private initiative largely free of government regulation in the great success of information technology. I'm too lazy to look it up, but if you're going to imply that computer chips are so cheap because of government, you'd better not be that lazy -- which these people apparently are.

Ironically, another one of the slides purporting to show some kind of technological breakthrough based on government support is a studio still of Gary Cooper in The Fountainhead. This is stupid, because Ayn Rand's novels give about give about 50 billion reasons (OK, exaggeration) why goverment innovation has to be an oxymoron. I assume I'm missing something, here -- there is no text on the slide, so who knows what the presenter actually says when this slide is onscreen.

To add insult to serious injury, this slide show claims that the time is ripe for this kind of initiative because "[m]arket fundamentalism [has been] increasingly discredited." We can thank Mr. Greenspan for that nonsense.

Anyway, the point here is -- the Breakthrough Institute is calling for . . . new government programs funded by involuntarily-collected tax dollars. Back to the future of New Deal public works programs.

How original.

Ghosts in the courtroom

I think the ACLU needs to nuked from orbit. People think the ACLU is all for rights, but half of the "civil rights" the ACLU pushes for require the violation of someone else's rights.

Here's the newest thing: the ACLU thinks that freedom of religion includes the right of a Muslim woman to keep her face covered while she testifies in court.

A Michigan court dismissed a civil suit brought by a Muslim woman when she refused to remove her "niqab." As a result, the Michigan Supreme Court is considering a proposed rule to give judges "wide discretion" on regulating witnesses' attire.

What's on the line for a Muslim woman if she removes her niqab? The ghost she believes in might get upset. What's on the line if the ability of a court to judge a witness's credibility is compromised because her face is hidden? The life and property of a defendant.

The true individual right at stake here is the right of an accused to confront witnesses against them. If you've been hauled into court and your property or life is now at stake, it is wrong to allow someone's irrational belief's to violate your right to defend your property or life.

Courts (and goverments) have no business recognizing religions of any kind, in any context. They might as well recognize astrology. Then witnesses could refuse to testify on the grounds that the Moon is currently in an evil transit of their House of Testimony.

Models and mortals

Tom Brady, the great New England Patriots quarterback, is in a long-term relationship with Gisele Bundchen, former Victoria’s Secret supermodel. The star jock gets the most beautiful girl. Not only that, but they’re both rich because they’re so physically gifted. Tom’s a hall-of-fame quarter back for a Super Bowl-winning football team. Gisele is the highest-paid fashion model in the world.

Why do these two have such charmed lives, just because of their physical gifts? Is there something wrong with this picture?

Emphatically, NO. The reason Tom and Gisele are rich is because of the best within us.

Clearly, they both have great natural gifts. Both of them must also productively use those gifts, and they have. Tom Brady works hard, practices hard, is a leader on his team and respected by his teammates. He’s no slacker. Gisele has to be professional, easy to work with, must maintain her physical beauty through healthy living, good diet habits, working out, taking care of her skin, and so on. She must learn how to photograph as well as possible by being aware of how she looks best on camera, and taking direction well from the photographers with which she works. While both Tom and Gisele have a head start, so to speak, they both have put effort into earning the rewards that come with the productive use of those natural gifts.

The monetary rewards are given to them completely voluntarily by the people who enjoy watching what they do. Football fans voluntarily buy tickets to watch games. Men and women voluntarily buy the magazines featuring Gisele’s modeling. Moreover, many, many people willingly, happily, pay for the pleasure of witnessing what is possible to such physically gifted human beings. Why are people willing to shell out their hard-earned money not on food, clothing or shelter, but on things that arguably are not staples of existence?

It is because they get pleasure out of seeing star athletic performance and looking at a beautiful woman, selfish pleasure which makes them happy to pay to watch them. Consider what the alternative could be. People such as Tom Brady and Gisele Bundchen could be identified and then not rewarded for the pleasure they bring to people, but punished on the grounds that they don’t deserve the physical talents they were born with. Instead of paying to see them, people could imprison them or torture them, or somehow try to destroy their gifts.

But that doesn’t happen. Each of us individually who willingly pays to see them, with those choices contribute to the monetary rewards Tom and Gisele enjoy. That Tom and Gisele are rich is a tribute to the human capacity for enjoyment, and of the human capacity to take inspiration, not discouragement, from the achievement of others.

The day when it is no longer possible to become rich because of athletic prowess or physical beauty is the day when people stop taking inspiration from what is possible to humans, and instead wish only to destroy what used to inspire. It will be time to write a requiem for the human race.

So let's hope they continue to rake in the dough!