Meeting Minutes – 10/12/22


This MPPA Meeting (in its 25th year) was held, Wednesday, October 12, 2022, at 6 PM; a hybrid-Zoom meeting. 9 signed up for being in-person and 7 for Zoom only. A total of 27 replied. Thanks to Jennfier Stratton and her new conference audio-video (Coolpo) machinery, the meeting was glitch free! We are considering buying this $719 machinery for future MPPA meetings.

Statistics: Present were Lee Beecher MD, Merlin Brown MD. Arvind Cavale (Penn. endocrinologist and author), David Feinwachs JD/PhD, Robert Geist MD, Tim Herman, Robert Koshnick MD, Wayne Liebhard MD, Wayne Zuehlke CPA, Sue McLernon PhD, Peter Nelson JD, Doug Smith MD, Jennfer Stratton, and Way Zuehlke.

  • A total of twenty-seven replied, 13 attended; there were numerous last-minute cancelations.
  • The meeting was recorded, but too large to share electronically until someone tells me how sharing might be done (compression? YouTube?). I have put in (brackets) the video minutes for easy comparison to text.
  • Koshnick’s presentation slides are attached—I have capitalized then for easy comparison of text and slide.
  • Once again please note that my own opinions in these minutes are italicized and enclosed in (brackets—rwg). They are for clarification, for balancing of information/opinions, or to deal with obvious issues but not questioned by those present.

The meeting’s focus: Can a Medical Free Market be Affordable and Replace Managed Care Cost and Access Failure?

  1. Can market solutions compete with Democrats’ new price controls and federal subsidies in health care? Peter Nelson, JD.

Peter Nelson began by noting that both liberal and conservatives had a lot in common. They both agree on broad access for all, that costs are too high, and that quality is good but could be better. The problem is that Biden is rolling back the good things that he and colleagues during the Trump administration such as reforms that made ACA look better by making enrollment easier especially for those whose income was < 100% FPL. Subsidies have been extended, and ineligibles are being kept in Medicaid, the ACA family “glitch” has been illegally “fixed”, and price controls on drugs are hidden by coerced ‘negotiations”. MN Republicans in 2018 passed a re-insurance bill that dropped premium inflation from 6.1% to 4.0%. The Kaiser foundation noted that this dropped premium rates by 36%, while the rest of the nation suffered a continued 7% rate of inflation.

  • Peter thought we need new insurance policies that emphasize primary care, increased access vs too narrow networks, allow employer contributions, have price transparency, special policies for chronic illnesses, set pricing (Reference Based Pricing (RBP)?—rwg.) and MN HSA-like policies
  • Trump price transparency laws being delayed by Biden.
  • Three Steps To Achieving More Affordable Health Insurance In The Individual Market, 2021
  • Instead of building on Affordable Care Act (ACA) policies that led to costlier health insurance premiums, we need to find a better way to ensure a stable insurance market that extends affordability to all income levels. The first steps to solving the ACA’s premium cost problem should include 1) a fixed premium subsidy structure, 2) a federal reinsurance program, and 3) codification of federal rules that allow individual coverage health reimbursement arrangements. (See
  • Discussion: Previous attempts at price negotiations failed; instead, one commentator said we have a medical system in “Titanic mode” headed for disaster. Peter discussed “unfair pricing” of insulin (i.e., > $35) countered. An endocrinologist said that nobody in his many years of practice had any diabetic ever gone without insulin because of prices; the price Humalog has gradually dropped 5% over many years—the middleman Pharmacy Benefit Managers (PBMs) and their rebates are the cost culprits. The problem of costly PBM (kickback) schemes has not been solved by either political party because the double-speak of “management” has gained an unfounded political cachet. Apparently, the Biden administration is also delaying PBM regulations completed when Peter was in Washington DC. See Peter Nelson’s extend discussion of drug pricing and PBMs: Drug-Pricing-Report-Final.pdf (
  • Other concerns discussed are the cost of drug advertising, and that price transparency is moot for patients with “full coverage”. It was thought that employers were the ones most interested in price transparency, not employees. It was observed that Amazon sounds like it’s going into the health care business for employees; maybe as an alternative to lack of real price transparency. Peter thought that large employers would not solve medicine’s cost problems; he has written on this subject: Making health care prices more transparent in Minnesota, 2022
    • The high and rising cost of health care remains a persistent problem across America, and Minnesota is no exception. Hidden health care pricing is a key contributor to this escalating cost problem. New federal rules require hospitals and private health plans to finally disclose the prices for each health care item and service they negotiate. Unfortunately, hospitals have been slow to comply with the federal rule. Minnesota should codify the federal hospital price transparency rule and add new requirements to make pricing information more accessible.

(My comments–rwg: (52:36) One caveat to all the discussion of new insurance policies, basic price setting, employer-based insurance changes, technology, data mining, liability reform, and so forth, is that they only nibble at the edges of cost inflation; they all tinker at controlling access to “free care” medical supply, i.e., rationing care and its avoidance, when cost problems are demand inflation and futile (even corrupt) rationing of supply.

  • (Abroad, free care access rationing is the job of NHSs parliamentary franchised cartel monopolies. In the US, corporate managed care organizations (MCOs) were politically created and franchised to similarly ration care access. Why? In 1965 tax-subsidized insurance was suddenly acquired by 85% of the population (employed workers and the official poor, aged, and disabled).
  • (The appearance of “free care” promptly created demand inflation for the first time in 90 years—a result similar to that of “free care’” in rich nations abroad. To control politically created demand inflation, the current US system of rationing care was begun by the HMO Act 1973; it gave the insurance corporations the perverse power to control use of the benefits they insure —something illegal for all other indemnity insurance companies. Today the old “incentive” pay for services contingent restricting the volume of care ordered has been replaced with the sweeter masquerade of “value” pay)
  • (Cost control through rationing care has failed for 50 years. Draconian rationing abroad controls the cost of those various “free care” systems. The US solution, akin to the NHSs abroad, did control costs by draconian HMO rationing of care from 1988 to 1997). But popular and political revolt was successful. Draconian means were abandoned in 1997. Inflation returned unabated. To stop inflation, the more powerful ObamaCare corporate cartel system was enacted in 2010—more on that later. It is interesting that HSA-HDHP legislation implemented in 2004 brought premium inflation down from 15.5% to 5.5% nationally while in MN premium inflation dropped into negative rates—HMOs were threatened with obliteration by free marketplace competition. ObamaCare (ACA) regulated HSA-HDHPs into impotence and created corporate cartels to control costs; in 2011, massive consolidation was legalized by FTC regulations while transfer of insurance risk to “provider” corporations (mostly ACOs) was legalized by CMS regulation and in 2015 by MACRA legislation that empowerment CMS to make all federal program payments contingent on “providers” accepting insurance risk or be ineligible for payments. See This program of legalized public program “kickback” payments (CMS language, not mine) contingent on rationing care success was implemented in 2019 ( ); it has failed.
  • (The distribution of market commodities by money in the hands of American families in all other microeconomic sectors has been replaced in medicine by politically created crony (government backed) cartel rationing of care to “control costs” of politically created and popular “free care” and its nemesis: demand inflation—rwg.)

Are there efforts to control demand inflation through empowering patients (“consumers”) instead of empowering ever more massive (and failing) corporate cartel cost controls? Yes.

  1. Empower patient Accounts: Empower patients. (54:24) Bob Koshnick reviews his book.

He began by noting the problems of the current system: the high cost of US care vs. abroad (slides 2-4) and high administrative costs from massive increase in personnel (slides 4-6)

(It’s of interest that all nations spend about 92% of their income on health care (Newhouse, J.P. The Economics of Medical Care. Addison-Wesley Publishing Co., Reading, Mass., 1978:85), and that global budgeting abroad has led to infrastructure erosion (hospitals (and staffing, technology) and off-the-books queuing costs paid by patients in morbidity, lost wages, and sometimes mortality. Statistical quality in general is equivalent in rich nations although they differ in specific areas (McGlynn EA. There is no perfect system. Health Aff. 2004;23(3):100-102; Schoen C, et al. Taking the pulse of health care systems: experiences of patients with health problems six countries. Health Aff. 2006;w5-509-525)—rwg.)

Bob K noted that after about 1994 administrator growth had increased 4000% by 2021 or about 1000 times more than the number of physicians (slides 5, 6, and 10) . (Note that 1994 was the time that HMOs were massively adopted by business and public policy maker for “cost control”. The NHSs abroad have similar overhead problems that in the UK began early; in 1948 UK bureaucrats quickly cancelled coverage of eye and dental care; in the following decades queueing with scandals such as for dialysis eliminated for those > age 55, infrastructure erosion (hospital and staffing by 2021-22), and failure of HMO-like “at risk” clinic Trusts have occurred—rwg.) The US ratios of support staff to physician is now 16:1 (slide 7). Of all spending, hospitals account for 30.8% and clinics 19.6%. Of funding, private is 27.9%, Medicare 20.1%, Medicaid 16.3%, and out of pocket (OOP) is 9.4% (which is near the lowest in the world; Swiss OOP is > 30%–rwg.) (slides 8-9) One comment was that quality is a problem now that Nurse Practitioners and Physician Assistants are commonly substituted for MDs. Another comment was that the Indiana HIP 2.0 program was like an HSA program, but rejected in Penn. (We ought to note that HIP 2.0 according to the Kaiser Foundation is costly. The “Power Account” of $2500 is fake; only 12% of enrollees ever get any non-uses “savings” which savings vary only from $12 to $328 maximum (i.e., the premium paid)—see Gorman L. this reference has disappeared! Enrollees not paying a premium (from $1 to $35 per month) are punished by stopping eye and dental coverage; sound familiar?—rwg.)

A discussion of the unaffordability of deductible costs ensued regarding the usefulness of HSAs. Empower—Patient Accounts (E-PA) (1:12:03, 1:13:04, 1:14:50) are intended to be more flexible compared to the too regulated HSAs which regulations have increased costs. Health Resource Accounts (HRAs) were thought to be too restrictive especially since they are not owned by the worker—the employee lock-in problem. Another program problem to fund buying care from independent clinics is that apparently 74-80% of physicians are corporate employed. Could and E-PA card be used for corporate care? One commentator thought that unionization for doctors might be their only professional-economic protection—”who will be the Jimmy Hoffa of medicine”! Is it any longer realistic for a medical graduate to set up an independent practice? Is business training in Med school a good idea? It was alleged that business is frowned upon by academics. (It is interesting that medical school faculty at the UMN are instead having med students take a woke anti-white supremacy oath (Rufo CF. Minnesota Medical Students Swear Oath to Fight ‘White Supremacy,’ ‘Honor All Indigenous Ways of Healing’. MN Medical Students Swear Oath to ‘Honor All Indigenous Ways of Healing’ (—rwg.)

Bob K noted the litany of problems created by the current employer-based insurance system (EBI) including cost to the businesses and their inability to compete in a global market place. (This ignores the fact that all insurance premium dollars come out of worker take home pay—employer expenses are for human resource staffs and for contract fights with unions to avoid costly strikes: over health care benefits!—rwg.) Bob K’s solution recommends allocation of resources not by politics (using 3rd party insurance corporations) but rather by free market prices as is true in all other microeconomic sectors (Cassidy J. The price prophet. The New Yorker. February 7, 2000:44-51.). He believes that practicing medicine in a free market would solve the problem of physician burnout (>50% in most surveys). This would remove the stress of onerous administrative controls (production mandates, etc.) and government regulations.

He notes that there are 3 kinds of primary care: Direct primary care (DPC) using monthly fees for primary care services, a hybrid model of monthly fees and insurance, and last, simple fees for services. His hope is that competing small independent DPC practices would recreate professional autonomy, while the expense of third party and government mandates including elimination of prior authorization would obliterate the average $82,000 staffing costs of current-day MN physicians.

To implement and fund an E-PA system to pay for DPC services (see slides 12-18) Bob K thinks that the means to empower patients would be general inflation adjusted federal block grants to (more flexible) state controls, which could include transparent reference-based pricing for services and could fund all market factors including indemnity (high-deductible) insurance for catastrophic expenses. (Video 1:12:23) (slides States could set up a legal trust entity for E-PA Medicaid accounts while congressional law would fund income adjusted tax credits/rebates for others. The E-PA credit card would be connected to a financial institution to pay for “qualified” services (private sector defined benefits?—rwg). The program structure would include government funding of a smart debit card with $3000 (or if individually funded using taxable money). Like an HSA, unused E-PA funds belong to the individual. The government could set up and fund high deductible health plans (HDHPs) for major expenses. (Is this similar to current attempts to create public option insurance?—rwg.) Bob K recounted the numerous benefits of using the E-PA means of paying for services (video 1:29:52) including elimination of 3rd party controls and PBM drug price schemes, a benign work environment to prevent clinician burnout, and result in increased availability of affordable primary care through elimination of expensive prior authorization and creation of transparent market-driven real prices. (Slides 19-22) (See for a full accounting of a DPC system—rwg.) The plan summary is detailed on slides 23-24 (video 1:41:01). There was vigorous discussion, which is not recounted to keep these now too-long minutes as brief as possible. (I hope that finding a means to compress the video will allow future viewing for everyone—rwg.)

  1. November Election Speculations. In the few minutes remaining, our discussion leader was Dave Feinwachs. He opined that in MN that two major issues that would determine the election outcomes would be abortion and inflation. Gov. Walz feels no need to debate Scot Jensen but instead his campaign depicts Jensen as an abortion denial extremist. Although inflation concerns are increasing, Dave F thinks that Walz (and “as usual”) most incumbents will win.
    • At his point good friend Sue McLernon in Duluth chimed in to tell us of her new Health Care masters program at St. Scholastica.
    • On that pleasant note, the meeting came to an end at 8 PM


Future meeting: the agenda for a February 9, 2023, meeting is pending.

The new website is open to the public, It is a work in progress needing additional re-formatting and the addition of various publications by members.

The meeting adjourned at 8 PM.

Respectfully submitted,
Robert W. Geist MD, secretary pro tem