AAPS Committee on Medical Economics Annual Report—1968

Our nation is facing one of the most serious crises in her history. Although national income is at an all time high, as is employment, we are faced with runaway inflation and ever-increasing, confiscatory taxation. In spite of full employment, the cost of relief continues to rise and the passage of legislation providing almost free medical and hospital care for elderly citizens, regardless of ability to pay, places an albatross about the necks of taxpayers which will grow ever heavier. Experience tells us that gradual extension of coverage to all segments of the population will be attempted.

In Vietnam we are fighting another no-win war (“perpetual war for perpetual peace”) which is not only destroying the flower of our youth and the morale of millions of others, but is adding fuel to the fires of inflation.

Since 1942 we have given away over 100 billion dollars, in the guise of foreign aid, to practically every country in the world. This has subsidized our competitors in world markets and the gratitude of some of the recipients is shown by their trade with the enemy in Vietnam. What is even worse is the fact that we have directly aided our sworn enemy by substantial gifts to communist nations.

Our national debt is stated to be about 380 billion dollars. However, if unfunded liabilities such as social security benefits and pensions for veterans and federal employees and the costs of Medicare are included, as they should be, the amount is nearer one and one half trillion dollars. Annual interest on our debt is over 14 billion.

The ideals, standards of conduct and religious beliefs which made our free enterprise system great are being destroyed. Nationalism is being downgraded, patriotism ridiculed and our students are being taught that conformity is preferable to individuality so that all may eventually be happy in a peaceful world of faceless robots.

Crime is rampant in our streets and violence is condoned. Class is being set against class and black against white. This was planned by the Communists more than 30 years ago as the first step toward violent overthrow of our government. Thanks to decisions of the U. S. Supreme Court and the apparent cooperation of recent Attorneys General, the Communist party has been given a free hand to actively spark and direct the revolution.

Why and how has this come about? It is a complicated story, but a glance at history may provide some explanations.

In spite of wars and fluctuations in national income and employment our national debt was kept fairly small and steady until 1931. It really started escalating in 1934 when Roosevelt pressured Congress to devalue the dollar and to prevent U.S. citizens from owning gold. Roosevelt also adopted the philosophy of Keynes, the result being a fantastic debt expansion from 17 billion in 1931, to about 380 billion at present.

This incredible debt expansion would have been impossible without one law and one Constitutional amendment, both of which were adopted in the same year–1913.

(1) The Sixteenth Amendment to the Constitution provided for a graduated income tax not apportionable to the States.

(2) On December 23, 1913, when most lawmakers were home for Christmas, the remaining Congressmen passed the Federal Reserve Act. The vital Constitutional power to “coin money, (and) regulate the value thereof” was thereby delegated by Congress to a private corporation, The Federal Reserve System, which since that time has had the power to expand or contract credit and to control the amount of money in circulation. This Act, in effect, permits the “Fed” to order the Treasury Department to print Federal Reserve Notes. These may be used to purchase U. S. Government interest bearing bonds, or to be circulated as currency. Both principal and interest must be repaid to the “Fed,” the only cost being that of printing and engraving. Credit manipulations permit inflation of the monetary base many, many times. Fantastic? Moreover, the Federal Reserve banks, except for real property, are exempt from income tax!

About 1862 President Lincoln issued 365 million dollars worth of United States notes–the so-called “greenbacks.” These were interest free, as the Constitution intended our currency to be. If these had borne interest compounded at 5 percent, it has been reliably estimated that by 1960 the interest on these United States notes would have amounted to 44 billion dollars. The implications are obvious. And these facts clearly explain the statement made years ago by Anselm Rothschild, international financier, who said: “Let me issue the money of a nation, and I care not who makes its laws.”

Most of our gold has been bought by foreigners with paper dollars given away abroad, while the price of gold has not been permitted to rise, thus destroying our gold mining industry. Just recently our silver coins were debased and our supply of silver is almost gone. This leaves our Nation bankrupt and wide open for a rumored international paper currency which would leave every citizen completely at the mercy of the international bankers.

In 1943 we had the “New Deal,” followed by the “Fair Deal;” and now we have the “Great Society” which equals the ”Mixed Economy,” wherein government–through its planners and intellectuals–assumes control of large sectors of the economy, while still permitting a certain amount of free enterprise to flourish. Usurpation of more and more power by the Federal Government reflects a corresponding loss of sovereignty by state and local governments. Unless checked by an awakened people, this trend can lead only to socialism, or some other form of totalitarianism, eventually on a world-wide scale. (This would mean a “police state” with the wholesale executions and concentration camps for so called “enemies of the state.”)

This is indeed a gloomy picture and unknown to the vast majority who would scarcely tolerate the situation if they understood it. Unfortunately the honest, tax-paying middle class is being destroyed, while the very wealthy preserve and increase their fortunes and power through the use of tax-exempt foundations.

But what of physicians? Medicare and state programs are the first stage in the complete socialization of medicine. Experience in other countries has shown that over usage and ever-increasing costs lead to serious trouble.

Doctors become the scapegoat for soaring costs and a demand is then artificially created for reduced, controlled fees and eventual capitation through prepaid plans. The cries for regional programs, hospital based practices, prepaid plans, and the alleged advantages of practice in large groups, are straws in the wind. The refusal of some state aid programs to pay, except by direct assignment to physicians–in spite of the fact that federal law provides the alternative of payment to patients–is another. Bureaucrats, through edicts and directives, have ways of interpreting the law to suit themselves, thus often thwarting the will of the people.

The immediate result of state and federal aid has been an increased work load together with larger incomes for physicians. However, rising salaries of secretaries and office nurses, plus escalating prices of supplies, equipment and rent will soon reduce net incomes. In the near future, physicians in private practice–like Alice and the Red Queen–will have to run faster and faster just to stay in the same place. Since there is a physical limit to the amount of work one physician can do in a 16 hour day, it seems obvious that more and more duties must be delegated to specially trained para-medical assistants. This in turn will reduce net income and–unless carefully watched–can lead to a more depersonalized type of patient care.

Wage settlements by big industries include not only higher wages, but increased fringe benefits in the area of medical care. And the cry of labor is persistent for “complete coverage”–in spite of the exorbitant cost. This in turn pressures unions and employers as well to work for lower medical costs: Medical fees are always the prime target. And it should be noted that the Federal government is the largest employer. This suits the socialists in government, like Wilbur J. Cohen, who are masters in the art of propaganda. Since their words command attention, the medical profession can easily be blamed for the costly mistakes inherent in socialized medicine.

Another real danger to the practice of private medicine is the unrealistic and truly fantastic awards being made in malpractice suits. As a result the costs of liability insurance are soaring and no end is in sight. The only answer would seem to be legislation at the state or national level to limit such awards–a very sticky subject. Few, if any, medical societies have sufficient assets to back self insurance. However, unless a logical solution is found under our free enterprise system, the cost of insurance may rise to a prohibitive level. This could be used as a club to drive physicians into federalized medicine.

Just a word about so-called “Social Security.” This is another albatross around our necks, even though eagerly sought by some of our gullible colleagues as desirable “insurance.” It is nothing but a tax with no exemptions and no limit. The base and the tax go ever upward. Just recently, Vice President Humphrey promised, if elected, to raise the benefits by 50 percent. And thus–as so aptly exposed by Dr. Marjorie Shearon–”Social Security” lends itself as an effective weapon for the destruction of freedom by redistributing the wealth and making serfs of the taxpayers.

What can we physicians do to help preserve our Constitutional Republic and our way of life? No one knows all the answers and each man must abide by the dictates of his own conscience, while using his knowledge, devotion to principles and ability in whatever lawful manner appeals to him as both logical and feasible.

Some suggestions:

1. Educate yourselves and others to the dangers of socialism–not only in medicine–but in every segment of our economy. Talk to your patients. Most of them respect and trust you: They will listen.
2. Become active in local politics. Take part in community activities. Do not be afraid to speak out. There are times when silence is golden–and times when it is cowardly.
3. Write your congressman and compose timely letters to your newspaper editors; persuade others to do so.
4. Work for and vote for conservatives regardless of party. We need fearless, intelligent, well informed and honest men in office–not party hacks.
5. Consider incorporation to help preserve more of the money you have rightfully earned. Some states now permit this and the principle may soon be recognized on a national scale. Businessmen are granted this privilege–why not physicians?
6. Practice good medicine at reasonable fees (as probably 98 percent of us now do). Refuse assignment–this is the road to eventual serfdom. Raise fees only when necessary to cover increased costs, or if justified by experience and knowledge.
7. Become active in medical societies and make your opinions felt by those in official capacities.
8. Recruit members for AAPS not only among your colleagues, but from the ranks of medical students, interns and residents.
9. Support the Liberty Amendment and sound money. We are being destroyed by taxation, inflation and fiat financing.
10. And lastly–be a good citizen of these United States. The fate of the world depends not upon a brazen idol in the guise of the United Nations but upon the preservation of a strong and free United States of America.

Do not forget the words of the late James P. Warburg, International financier, in his testimony before a Senate subcommittee considering revision of the U.N. Charter. On February 13, 1950 he stated: “We shall have world government, whether or not we like it. The question is only whether world government will be achieved by consent or by conquest.“