Obamacare is Built on a Pile of Junk Science

By John Dale Dunn MD JD

Junk Science can be a basis for bad policy, let’s consider Obamacare–the fix that has failed. Failed the great American Healthcare System and may auger its demise. Shame on us. I cannot provide you with enough information on this tragedy if you are not already alerted. Too bad, you’re stupid.

What if I told you that the American Healthcare system is one of the glories of the American Success story?

The consensus from the elites, the oligarchs, the Ruling Class (think Angelo Codevilla’s revealing expose on the leftist junk science merchants) was that we in America, with access to the most sophisticated healthcare system in the world, by far, had a “Broken Healthcare System” that required the creation of Obamacare, a revamping of an economic sector that is 17% of the American economy, more than 2 trillion dollars per annum and the home of one of the wonders of modern life–the American Health Care providers and the technological and procedural marvel that is so egalitarian that it provides the best of care to the least of people in the society. A beggar can get care at Houston–consider that?

Here we are committing policy suicide by condemning or criticizing a healthcare system that can claim amazing successes and advances that are too numerous to count.

How is it that the junk scientists of the left could take down such an edifice?

Well consider the influence of the media, the commitment to leftist ideas of the Academy, and the influence of the plaintiff attorneys and the complicity of the political class. Shame on us for allowing such a travesty, a despicable take down of the greatest healthcare system in the history of man.

Your author was the Chief Medical Officer and then the CEO of a Health Maintenance Organization (HMO) in Louisiana in the early 80s, the first generation of “managed care organizations” pushed by government. There had been managed care organization before, formed by companies for their employees, some, like Kaiser in California and then beyond, had become enterprises available to the general public. Other managed care entities were strictly in house, on an employee plan for railroads and public entities. The DOD did the same thing for the uniformed services and their dependents.

In response to an increasing chorus asking for projects to hold down the costs of premium for health insurance, the Nixon administration HMO Act of 1973 created community based, non profit, managed care entities that had closed panel in house contract medical provider and hospital resources that provided healthcare, with a single community premium, guaranteed issue, first dollar coverage with some co pays but no deductible, intended to offer to employee groups and individuals good care with few out of pocket expenses. The HMO act was inaugurated in response to an industry, business, community push for health care that was affordable and comprehensive. Start up grants and then operational loans were intended to push the HMOs to a level of self sustaining membership and income.

The rationale was that there was waste and it could be trimmed with managed care. Sound a little like the sales pitch for Hillarycare/Obamacare?

So managed care projects in the 70s were intended to hold down costs on the theory that they could be reduced by utilization controls, incentives for providers, and a subtle form of rationing based on research that showed differences in cost of care in various parts of the country. The research that showed differences was called small areas research by John Wennberg of Dartmouth.


Again, sound like Hillarycare/Obamacare?

So what was the argument for single payer, government healthcare? Well, like most ambitious utopian projects–good intentions and the assertion there was a crisis or a terrible injustice that must be righted. Also a commitment to the concept that a good centrally controlled plan would fix the problem of the social injustice of a private, partially free market healthcare system. Of course to get to that conclusion the geniuses had to ignore the influence of government in healthcare that had already created many problems and interfered with market principles with mandates and regulations.

Here was the mantra:

1. Healthcare was a right and US premiums were too high. No insurance coverage meant the uninsured were dying or suffering.
2. US Healthcare was unsafe and doctors and nurses and hospitals were greedy and negligent.
3. US Healthcare wasn’t even very good, due to greedy and incompetent, ineffective private sector insurers, providers and suppliers. US infant mortality and other measures of health were poor and our life expectancy was also unacceptable, so US healthcare was less efficacious than many 1st world countries, even less satisfactory than some developing countries.

Answers to the arguments and a review of the junk science that supported these claims are provided.

High Cost without benefit and the crisis of the uninsured (thanks to agit prop from Families USA for 20 years).

There is no question that high tech medicine is what is available for Americans, Cadillac care and plenty of it–more high tech and capable than anywhere in the world. If apples and apples are compared the alleged problems like life expectancy, infant mortality go away as discussed below by Scott Atlas, and John Goodman shows that for sick people America is the place to get good care.

There is no uninsured crisis, the uninsured are either eligible for safety net or charity, or healthy and not in need of healthcare. Hard core uninsureds are not 45 million but a third of that and they all have access to care paid for with the safety net and charity system.

Government programs distort markets and utilization (the free lunch factor). For example the introduction of Medicare/Medicaid in the late 60s clearly increased healthcare spending and costs and distorted the market. Moreover decades of government regulation with mandates and limiting competition, even suppressing market sensitive insurance programs like Health Savings and Medical Savings Accounts prevented market dynamics from reducing the effect of the free lunch, first dollar coverage, moral hazard problems of 3rd party payer insurance.

Amy Finkelstein demonstrated the effect of government programs in her research for the National Bureau of Economic Research.

Finkelstein A. The effect of Medicare on medical expenditures,mortality and spending risk. National Bureau of Economic Research Report, fall 2005.

http://www.nber.org/aginghealth/fall05/w11619.html. Oct. 2010.

If one would argue that managed care fixes the problem the failures of the managed care experiment of the 80s should be a sobering consideration. Now we see a revival of all the managed care myths, this time with a large dose of government control and the proven inefficiencies of the government system. Is no one checking the history of these proposals? Managed care of the 70s and 80s will suddenly become successful if the strategy of the government project?

So is there a crisis for the uninsured?

In a word, no.

In the last 15 years policy makers retooled to impose new managed care mandate, cost containment projects after the rejection of HMOs, but the political crusade kept beating on the Families USA theme of the uninsured.

Multiple studies have shown that uninsured status is not a risk for bad health or death and that the cost of care for the uninsured is a small percentageof the total cost of healthcare in the United States, nothing to justify a complete overhaul of the system.

Junk Science studies were done that claimed lack of insurance was a killer. The studies are exposed below as false confirmation bias exercises and exaggerations.

Cost of care for the uninsured cannot, under any circumstances, justify the catastrophe of revamping into a government controlled system, a sector that is 2 trillion plus. Studies showed that total care for uninsured was less than 100 billion, less than 5 % of the total cost of healthcare at the time–more than 2 trillion.

Herrick D. Crisis of the uninsured: 2007. National Center for Policy Analysis No. 95, Sep 28, 2007. Available at: http://www.heartland.org/policybot/results/23202/Crisis_of_the_Uninsured_2007.html.

Hadley J, Holahan J, Coughlin T, Miller D. Covering the uninsured in 2008:current costs, sources of payment, and incremental costs.
(Millwood) 2008;27(5):w399-w415.

Robert J. Samuelson, Obama’s illusions of cost-control. Washington Post, Mar. 15, 2010


Goodman J, Does lack of insurance cause premature death? National Center for Policy Analysis,
www. healthaffairs.org. Sept. 21,2009.


http://www.ncpa.org/pdfs/2009_harvard_health_study.pdf commenting on

Tate W. 45,000 uninsured deaths? , Oct 23, 2009.


Asch SM, Kerr EA, Keesey J, et al. Who is at greatest risk for receiving poor quality health care? NEJM 2006:354:1147-1156.


Levy H, Meltzer D. The impact of health insurance on health. 2008;29(April).


And my essay on the big picture, and myths that drive healthcare system repair projects
Dunn JD ObamaCare Policy Myths: Warnings from a 1980s HMO Executive


However in the world of ambitious mandarins, the false crisis of the uninsured requires an ambitious government fix like Obamacare.

Patient safety issues

In the early 90s as a part of the project to denigrate American Healthcare, patient safety was added to the mix as another reason why government healthcare was the only answer, at the same time costs continued to increase and regulations reduced the impact of free markets, insurance companies were mandated to provide more benefits, people continued to expect little out of pocket expenses but utilized the system heavily.

I analyzed the results of the notorious Harvard study of New York Hospitals publish in the New England Journal of Medicine and found the junk science methodology. In fact almost a decade later Troyen Brennan MD JD, lead researcher in the Harvard group, admitted their methods were unreliable and their judgements as to what was malpractice or negligence or preventable were not necessarily reliable. He said in an essay in the New England Journal of Medicine

Dr. Brennan said:
Troyen Brennan M.D., J.D. — a lead Harvard researcher on the two studies that were the backbone of the IOM report and the source of the negligence death numbers that scared so many — asserted in an essay in NEJM that the research of the Harvard group was weak and was being misused by the IOM. Brennan wrote:

–”I have cautioned against drawing conclusions about the numbers of deaths in these studies.”

–”The ability of identifying errors is methodologically suspect.”

–”In both studies (New York and Utah/Colorado) we agreed among ourselves about whether events should be classified as preventable…these decisions do not necessarily reflect the views of the average physician, and certainly don’t mean that all preventable adverse events were blunders.”

Brennan TA. The Institute of Medicine report on medical errors — could it do harm? NEJM 2000;342:1123-1125.


Here are my two essays on why the methods and finding and scare tactics of the patient safety movement were junk science:

I showed my proof by comparing my data on studies of more than 300,000 hospital admissions analyzed by the Texas Medical Foundation, compared to the 30,000 admissions study in New York.

I concluded that the patient safety crisis was manufactured with unreliable methods and exaggerated claims. The misleading methods include using a small study, big projection game that starts with outcome bias and confirmation bias, then uses the small study numbers to project to a large population, voila big crisis.

This first paper I wrote in response to the panicmongering generated by the Institute of Medicine (Subdivision of the National Academy of Sciences) release of “To Err is Human” that claimed doctors and nurses were killing up to 98,000 people in hospitals in America every year.

Dunn JD. Patient safety in America: comparison and analysis of national and Texas patient safety research. 2000;96:66-74. Available
at: http://www.heartland.org/custom/semod_policybot/pdf/ 23751.pdf.

The second essay was in response to another effort to gin up a safety crisis in the New England Journal of Medicine.
Dunn JD. Patient safety research: creating crisis. Jan 10, 2005. http://www.acsh.org/factsfears/newsID.487/news_detail.asp.

The claim that the US compares badly on quality of healthcare in the world.

The World Health Organization published a report in 2000 that claimed by means of junk science analysis that United States health care was the most expensive in the world, but only ranked 37th in quality and good results.

Scott Atlas MD, Stanford Neuroradiologist analyzed the biases and methodological problems of the socialist tract, and declared it “the worst study ever.” Well that might be hyperbole in our eyes, as regular analysts of junk science.

As demonstrated by Atlas’ essay in Commentary, as the editors assert:

In fact, “World Health Report 2000″ was an intellectual fraud of historic consequence—a profoundly deceptive document that is only marginally a measure of health-care performance at all. The report’s true achievement was to rank countries according to their alignment with a specific political and economic ideal—socialized medicine—and then claim it was an objective measure of “quality.”


So again our expensive advanced healthcare system is subjected to a Junk Science analysis and world wide survey conducted by socialista at the UN World Health Organizatio (WHO). The Conclusion by the elite socialist mandarins–we need an ambitious government fix, a socialist utopian healthcare system in Amreica, We need to take down their private free market healthcare, it is repugnant to us socialists.

So the ambitious United States government fix is projected to cost more in the hundreds of billions, destroy the private care system and compromise an already shaky Medicare program, while driving insureds to the government exchanges looking for a way to avoid the increases in premium. The project looks like a calculated way to eliminate private sector health insurance, drive people into a Medicaid on steroids program, and destroy innovative and successful private market based healthcare–in favor of an ambitious government fix.

Now the proponents of government controlled care look at the crash site for Obama care, and say the old system is no good, broken and we can’t go back, Obamacare needs to be refitted/reworked/adjusted/modified because it’s the only solution. No repeal–fix it, modify it, make it work. Agency and political lunkheads say-lets put lipstick on a pig.

Byron York points out that government is always inclined to keep big ambitious central planning, even if it is a catastrophe, because it expands the role of bureaucrats, apparatchiks, the nomenklatura, elites, elected or appointed officials, with the control of bigger purse. York advises in this insightful essay that opponents of Obama care should not fall for the trap of trying to fix the train wreck.


So the politician/central planner delusion survives what would be, in the private sector–a basis for sacking all those responsible.

Now we are expected to let these clowns try to make it palatable when it is inedible, even toxic? Is there ever a time when government elites and geniuses get fired for stupid and incompetent? Answer–did anyone get fired for what happened on 9-11-2001?

American government has been engaged since FDR in an 8 decade effort to make people compliant with ambitious government programs. We shall see if this current problem of the largest government program ever in the ditch is enough to wake the citizenry up. Or do we slide into the mediocrity and tyranny of European socialism?

Is it surprising that an overly ambitious government plan would be poorly conceived and poorly executed? Really? Socialists live in the negative and rarely are focused on solving problems–their goal in life is acquiring power and control while mouthing the words of good intentions.

Think about it, I do.

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16 responses to “Obamacare is Built on a Pile of Junk Science

  1. Short version: We’re Screwed.

  2. “What if I told you that the American Healthcare system is one of the glories of the American Success story?”

    I confess not reading the rest of the article after seeing this line.

  3. While I generally agree with junkscience. This guy is nuts. The US health care system is not nearly the best in the world. Its just the most expensive. The idea that somehow the government take over off the health care system dates to medicare is also nuts. The AMA (ie doctors, like the author of this article), suborned the government many years ago, and bribed congress to implement laws so that the AMA artificially controls the supply of doctors to force up health care prices. By both limiting the number of doctors, and requiring a doctor for even the most basic health care such as a prescription for strep throat, the AMA is probably the group most responsible for the extremely high cost of health care in the US. And by requiring proof of insurance, or the ability to pay prior to any but the most basic emergency care, doctors allow people to die every day because they simply cannot afford the price of health care for serious illnesses such as cancer. The biggest reason Obamacare passed is that it finally does something for a nearly broken system. The problem with Obamacare is that it doesnt address the real problem, that is the cost of health care.

    • It isn’t nearly as bad as you bias it out, the new parts only make it worse, and there is no reason other than contrary belief to have thought it could be better this way.

      • Its not that bad? I am not sure how much worse it can get. A young friend of mine was recently in a car accident, and had to go to the ER for a whole 5 or 6 hours, and he walked out with just bruises. His bill was $40000. That is a broken health care system. He will probably end up taking personal bankruptcy since he cannot afford the bill on a night watchman’s salary.

        • i would seriously audit that bill for a few hrs in er mri ct xrays and nothing wrong he was robbed and if your uninsured never pay the first list price hospital bill most states regulate car accidents as your required as the privilege to drive to have car ins,

          • Here’s another consideration based on my admittedly limited experience as an emergency physician, there are a lot of CTs but not any MRIs in trauma cases–cts are often defensive, but very expensive, and they eliminate misses.

            But the amount billed is not, I repeat, not, the amount that will be accepted, particularly on contracts with negotiated amounts for payment or in situations where there is a fixed med coverage amount–as in med coverage for auto.

            In the case of auto crash med coverage, my experience that hospitals will accept the amount of the coverage available as paid in full if it’s a decent amount, then the ancillary bill might still be pending, which would also be subject to the allowable even if within the deductible.

            So the auto coverage should be offered in safisfaction of the amount when what it will satisfy will be decided, and the amount paid should always be the allowable even if paid by the insured, since that’s all the insurance company would pay.

            The auto medical is first up for payment, then the deductible, then the health insurance, and when there are overlapping coverages and amounts to be paid sometimes the insurance companies are in line for liabilities. All so nutty, but happened because of negotiated rate contracts and percemtage of base amounts determining the amount of the allowable.

            distrotions of market forces get pretty silly, because there are so many suits involved.

  4. William Nuesslein

    When I was a kid, Blue Cross/Blue Shield was a near monopoly for Rochester, NY. It cost a mere 2% load on Medical Costs. Then some reformer associated with Ralph Nader said that competition would lower costs. That was ridiculous because a 2% load is very low. The competition did provide lower costs for some through underwriting. Total costs increased because of underwriting and marketing expenses. The ACA is just going back to community ratings and seems reasonable in that regard.

    The problem we will see in the ACA is that Republicans chose to demolish the ACA in total and gave power to the many Democratic Party idiots who believe in preventative medicine and magic incantations. One positive side effect of the ACA is that health insurance costs will be felt more directly by our people. They will have some motivation to trim costs. Right now women see free mammograms as their God given right. If they paid for them, they might have a more realistic view of them. Tons of unnecessary anxiety comes from the high false positive rate of mamograms. “We need another look MS … ” tears the average woman apart.

    • I have to agree with your reasoning but disagree with your conclusion due to one error of fact. That is that the ACA hides medical costs more than ever with its mandatory no-cost coverage of huge swaths of medical care, including all “preventative care”.

      Going to high deductable cunsumer-driven-health-plans would show the costs and reduce total costs. However, these are being weakened and some plans are being outright banned.

      How are you thinking that the ACA will show health care expenses to people better?

      Oh and John, you are not addressing certain things, such as the astronomical cost of emergency care, even for brief non-checks (I once spent $4,000 in the ER for a doctor to put a splint on my arm that my cub scout master would have failed me for, give a referral to a surgeon that was not covered by my insurance, and make lewd passes at my wife, and that’s after the insurance coverage.

      • I would not dispute the points made with regards to the crazy billing system that has developed.

        I would advise anyone who is presented with one of these gigantic bills, never pay it, run it past your insurer even if its below your deductible to find out what they would pay.

        That’s for starters.

        I was astounded on a bill for an overnight stay for a family member after an accident. Then the hospital settled with the insurer for less than 25 % of what they had on the bill as the amount available.

        Then the other bills came up and the providers accepted the contractual amount allowable, which is often a negotiated amount that is unrelated to the amount that goes on the bill sent.

        The whole thing is cockeyed. A real market where people have to pay and providers have to offer service that has a tolerable and competitive price was lost with the 3rd party, 1st dollar coverage nonsense.

        Most providers, and that includes hospitals, can’t tell you’re their cost of providing a service, but most businesses know that number ot they can’t price their products or services.

        in healthcare the billed price could just as easily be described as unrelated to reality.

        And it is incomprehensible and irritating to see these enormous bills, which is why every body is grumpy.

        I would say the market is distorted and has been distorted by gov and insurance company as well as some provider nonsense–plenty of blame to go around, but gov ain’t gonna solve a problem that gov caused.

        The solution is to force market senstitivity back into the system, but even that might be less than satisfactory, for example lawyers fees for most people are absolutely astounding, and 3rd party insurance doesn’t play much of a role.

        • and then the hospital claims the 75% as charity write offs
          hospital bill are fiction i worked for a regional lab for 10 yrs.
          and when i lived in Pa we had us healthcare HMO best care and service i got from ins. then Hollywood decided HMOs were evil and ruined it
          every medical show and movie dissed them and politicians followed
          and nothing is perfict but ocare is disaster the estimate for me would be my entire yr draw from my 401k that i have to live on

          • The American public and the media did ruin any chance of managed care success.

            So much whining and complaining, like coverage of the homeless whenever a republican in in the WH.

  5. Scott Scarborough

    Isn’t there a difference between insurance and medical care? It seems like insurance is the problem. Insurance is what distorts the price of medical services. I have always worked for large corporations and they have always paid my medical insurance. Why should that be so? Why should it be so much more expensive to purchase insurance individually?

    • I won’t belabor your excellent point.

      That’s the problem I see with some of the inane comments about the American Healthcare system.

      Insurance and financing the healthcare system is not about medical care, it’s about financing it, which has gotten all screwed up.

      What is so damn hard about distinguishing what is wrong with the administrative/financing side as opposed to the care side.

      Nobody is perfect. I know some grumpy physicians and some bozos. However, my experience in the care of patients has been extraordinarily rewarding for me and those patients and I am not unique.

      I get a little tired of the smart asses who focus on their experiences that may have been negatively effected by their smart ass attitudes. Get it?

      • John, with the advent of EMRs, where the benefits are almost entirely on the billing side, and the drawbacks are almost entirely at the hands of front line physicians (most heavily on the Emergency Room), our government has decided what the most important part of medicine is.

        In the words of Douglass Adams
        ….”[earth] has, or had, a problem which was this: Most of the people living on it were unhappy for pretty much all of the time. Many solutions were suggested for this problem, but most of these were largely concerned with the movements of small green pieces of paper… which is odd, because on the whole, it wasn’t the small green pieces of paper that were unhappy…”

        • most of ed work is on t sheets, not emrs.

          emrs are becoming more important. In the military there has been a very serious fight to prevent EMR ED records because the t sheet approach is much better for many reasons.

          I will not comment on how many eds use emrs, but I know that hundreds of EDs use T sheets, which were originally the idea of my friends Woody Gandy and his partner at Irving Hospital in the Dallas Fort Worth Midcities.

          Irving is the home of the original Cowboys stadium, just s little east of the new one.

          in any event the level of eval is dependent on the sections of the h and p covered and the nature of the decision making. It is supposed to be enough to allow an appropriate eval and management, which provides a basis for physician billing.

          facility billing is resource intensive, then there’s billing for lab radiology and Drrruuuuugs and fluids from the pharmacy–also repspiratory/ventilator services. That’s about it.

          the 5 levels of evaluation and management coding are all driven by the number of catagories documents and the complexity described in the decision making section.

          The EMR doesn’t capture anything better than the T sheet, which is a check off sheets that is very dense.

          the cost of the ED visit is driven to a great extent by the facility fees and the lab radiology stuff.

          so I bill 3 or 4 hundred for a complicated case, the facility fee and diagnostic studies could easily be 2000 with fees for radioligists on top of that.

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