800-pound gorilla


800-pound gorilla in healthcare


JC Smith, MA, DC


As the Obama administration begins talks on healthcare reform, the medical cartel is already forming its lobbying efforts and phony advocacy groups to disseminate misinformation to scare the public as we saw during the debate on the Clinton Healthcare Reform Act when Harry and Louise television ads sponsored by the insurance industry frightened the public with untruths.


Columnists like Walter E. Williams have also swayed readers against universal healthcare with exaggerations of despair in socialized medicine as well as embellishment of the truth about for-profit American healthcare that fly in the face of the WHO report showing socialized systems like France and Italy are far superior.


While this debate continues, healthcare analysts ignore the single largest factor that drives up costs—the proverbial 800-pound gorilla that everyone seems to forget.


America’s healthcare dilemma is due to a virtual medical monopoly where the lack of free enterprise has created a marketplace riddled with high costs, ineffective care, poor statistics, and the exclusion of 48 million consumers.


Unlike the free market where meritocracy prevails on an open and level playing field that fosters competition, in the medical cartel where profiteers control the AMA, HMOs, hospitals, drug companies, and every aspect of the healthcare industry, the best mousetrap often fails to emerge in the marketplace because it’s too cheap or done by CAM competitors.


For example, is there any wonder why hospitals still boycott chiropractors—the obviously cheaper mousetrap compared to back surgery? Spinal manipulation has been shown to be a “proven treatment” by the US Public Health Service and now included in the guidelines for back pain by the American College of Physicians and the American Pain Society. [1]


Yet this effective, inexpensive method is not available to anyone in any hospital in middle Georgia. As well, both workers’ comp programs and the military health services at Robins AFB still boycott chiropractors although state and federal laws call for its inclusion. Fortunately, the VA now refers patients to chiropractors, but that also came after years of delay.


The medical establishment has no interest in healthcare reform or a level playing field. Hospitals have no interest in lowering costs, surgeons have no interest in a cheaper competitor, nor do insurance companies that work with a perverse motivation to keep costs high so they can charge more in premiums.


Compound the perverse economic motivation with intransigent MDs who ignore innovative alternative methods, and we have what we have—an expensive medical system that few can afford and rated poorly in the WHO study that showed the USA is #1 in cost, #37th in health care delivery, and 72nd in population health.[2]


People mistakenly believe the medical profession offers state-of-the-art technology and every possible option to their health problem. While high-tech imaging, potent narcotics, and aggressive surgery may appear as advancements, the facts suggest much of medicine is stuck in time with outdated methods.


In fact, for treatments later proven to be ineffective, there was a median time lag of 44 years from initial discovery to being disproved. Experts suggest “For treatments that ultimately proved to be valuable, there was a time lag of ‘only’ 17 years between discovery and scientific validation.”[3] Whether it’s 44 years for outdated treatments to end or 17 years for new methods to become mainstream, it’s obvious the medical monopoly is very slow to change.


Indeed, if the electronics industry had such resistance to change, we’d still be in the vacuum tube era.


The Institute of Medicine courageously concluded that “the American health care system is in need of a fundamental change,” and “what is perhaps most disturbing is the absence of real progress toward restructuring health care systems to address both quality and cost concerns.” Indeed, cartels are not interested in lowering costs, whether its oil or healthcare costs.


“More people are interested in getting on the gravy train than on stopping the gravy train,” says Richard Deyo, MD, MPH, who calls for reform in medical care. [4] ”People say, ‘I’m not going to put up with it,’ and we in the medical profession have turned to ever more aggressive narcotic medication and more invasive surgery.” [5]


Just as the US Government had to break up other monopolies for the betterment of citizens, such as Standard Oil, AT&T, and Microsoft, now is the time to do the same in healthcare by dismantling the medical cartel.


The American for-profit healthcare system is obviously broken, but, ironically, the biggest opponents of healthcare reform are those who claim to be the “guardians of health,” when, in fact, they are only guarding their power and money.


Just as the Reformation led Europeans out of the Dark Ages, it’s time for America to have a healthcare reformation to lead it out of the present dark age of monopolistic medicine.


Distributive Injustice for Chiropractors

In this light, the present WC guideline for back pain and MSDs are woefully outdated clinically, inadequate standards of care, a waste of tax money, and it denies patients access to the best care possible. This has led to increased costs for employers and increased unsuccessful outcomes for patients. It also has denied doctors of chiropractic the right to compete on a level playing field, a concept Dr. Pran Manga, medical economist, refers to as “distributive justice.”

“We would argue that the principle of distributive justice, and a parallel principle of equality of opportunity, require that the government implement all cost-effective substitutions; failure to do so results in unfairness to the taxpayers and unfairness to certain health care professionals…The monopolization of the health care services turf is also inequitable from yet another perspective. It denies some professions equal opportunity to earn income commensurate with their ability, effectiveness and effort…Inefficient use of health human resources is not just economically wasteful, it is also inequitable and generates higher levels of taxation…Equity is likely to become more important as the struggle over the health care turf becomes fiercer, and as taxpayers demand even greater value for the taxes they pay.”[6]

“Chiropractic care is a cost-effective alternative to the management of neuromusculoskeletal conditions by other professions. It is also safer and increasingly accepted by the public, as reflected in the growing use and high patient retention rates. There is much and repeated evidence that patients prefer chiropractic care over other forms of care for the more common musculoskeletal conditions… The integration of chiropractic care into the health care system should serve to reduce health care costs, improve accessibility to needed care, and improve health outcomes.”[1]


In fact, the 1997 Georgia WC statistics posted on the SBWC web page revealed this very point of distributive injustice only too clearly:

Physician Benefits:              $70,066,443                                   

Physical Therapy:    $13,410,394            

Chiropractic:                  $488,027                          

Shocking, isn’t it? Of this 1997 total for total provider (MD, PT, DC) expenses, $83,964,864, chiropractic incurred only $488,027, which equates to less than 1% of these costs; actually it figured out to be 0.58%. Again, considering back problems are the leading on-the-job injuries and SMT is acknowledged as a “proven method,” isn’t it very strange that chiropractic back experts are so under-utilized and paid for less than one percent of these monies?

The fiscal year 2004 is the most current WC claims stats for Georgia and shows that the money spent on chiropractic is only $184,654, the lowest of all healthcare providers. For example, physical therapists accounted for $4,087,587 while physicians accounted for $18,786,118. Hospitals received $21,237,304 and pharmacists got $2,228,745. The total money spent on physician and PT care was over $22,873,705 million compared to $184,654 for chiropractic care, which equates to 0.8% of the budget. It’s obvious that the medical faction in the back pain business overshadows the preferred treatment of chiropractic care.


An even more shocking example of the boycott of chiropractic care in the WC program is revealed by a computer analysis from the Georgia Board of Workers’ Compensation for “Back Injuries” for 1999. This 57 page report indicated that of the 2,829 cases reported in 1999, chiropractic had a total of only 81 cases, a mere 2.8% of these cases. More revealing facts for the discrepancy in monies paid to providers showed:

Physician Benefits: $4,640,602

Physical Therapy:        $970,112

Chiropractic:                   $74,475


Of this total of $5,685,189, the chiropractic costs were 1.3%. Considering that MSDs are the largest injuries and manipulation is a preferred choice of treatment, it appears odd that chiropractic earned such a small amount of the pie. 

Another example of distributive injustice is shown by the 1999 statistics for 284 cases of carpal tunnel syndrome, a.k.a., wrist pain, which is responsive to manipulation:

Physician Benefits:       $581,812

Physical Therapy:            $85,252         

Chiropractic:                          $204

Of the total $667,268 paid for providers, chiropractic costs accounted for only .03%.


Dwindling Chiropractic Care in Georgia’s WC Program

In three short years, the WC program’s institutional bias was able to cut chiropractic claims by over 70% with the virtual boycott of our care for injured workers.[7] The biggest irony of this is the fact that for the same diagnostic codes for acute low back pain, chiropractic has been shown to be faster, safer and cheaper.[8] By avoiding the full implementation of chiropractic care, the WC program is costing taxpayers and business owners much more money than need be.

To prove my point that chiropractic care in Georgia has been severely limited, let me quote directly from a new comprehensive report of WC programs in 8 states, including Georgia, by the Workers Compensation Research Institute titled, “The Anatomy of Workers’ Compensation Medical Costs and Utilization: A Reference Book.” [9]

1)     Georgia’s average claims cost is 20% higher than the median due to an average payment per service that is among the highest in the 8 states polled.

2)    Chiropractors are involved in substantially fewer claims (-70%) than is typical and the average payments made to chiropractors when they are involved in a claim is also substantially lower (-36%). This is a function of lower utilization, in particular, fewer visits per claim (-38%).

3)    Limits on chiropractic services (-12%) set in Georgia’s fee schedule may contribute to this outcome.

On the other hand, the medical statistics in WC claims are higher than the median.

1)     The average payments per service paid to MD/DOs and hospitals is significantly higher in Georgia than is typical, however, this is offset in each case by lower utilization, particularly for hospitals.

2)    The maximum fee levels set by Georgia’s fee schedule is somewhat higher than typical, particularly for surgical services (minor surgery +60.2%; major surgery +20%)

3)    While the average costs per claim for office visits tend to be lower in Georgia compared to other states, costs for surgery are higher. For surgery, it is a higher per service payment that contributes to the higher claim costs.

4)    Of particular note is the lower utilization rate for physical therapy and testing (lower visits per claim and lower percentage of claims receiving services. This may be attributable to the fact that the use of chiropractors is very low in Georgia.

“The Anatomy of Workers’ Compensation Medical Costs and Utilization: A Reference Book.” Workers Compensation Research Institute[10]


The evidence is incontrovertible that the chiropractic profession has been virtually eliminated from the WC program. For the entire year of 1999, chiropractors only accounted for 1.3% of the providers’ costs for back injuries. If this isn’t the profiling of a profession into obscurity, what is?

At the December 8, 1994 press conference introducing the AHCPR guideline on acute low back pain in adults,  Philip R. Lee, MD, assistant secretary for Health and Human Services and head of the Public Heath Services, “These guidelines could save Americans considerable anguish, time and much money now spent on unneeded and unproved medical care.”[11]

Also at the same press conference, Clifton R. Gaus, Sc.D., administrator of AHCPR, also mentioned in the news release that “…a preliminary cost analysis of these guidelines suggests the nation could save as much as a third of the medical expense of treating this condition without any loss of quality of care.”

If the WC Board hopes to improve its program with improved clinical and cost-effectiveness, it must move toward evidenced-based medicine, which means doing what is supported by research rather than what’s most profitable to the status quo.

            According to the comprehensive Canadian meta-analysis on back pain by Pran Manga, Ph.D, “The Effectiveness and Cost-Effectiveness of Chiropractic Management of Low-Back Pain,” this evidence-based study concluded:

“In our view, the constellation of the evidence shows:

1)     the effectiveness and cost-effectiveness of chiropractic management of low-back pain.

2)    the untested, questionable or harmful nature of many current medical therapies.

3)    the economic efficiency of chiropractic care for low-back pain compared with medical care.

4)    the safety of chiropractic care.

5)    the higher satisfaction levels expressed by patients of chiropractors.


Dr. Manga was very realistic about the turf warfare in the healthcare business:

 “There should be a shift in policy now to encourage the utilization of chiropractic services for the management of LBP, given the impressive body of evidence on the effectiveness and comparative cost-effectiveness of these services, and on the high levels of patient satisfaction.

“The shift in utilization from physician to chiropractic care should lead to significant savings in healthcare expenditures judging from evidence in the Canada, the US, the UK and Australia, and even larger savings if a more comprehensive view of the economic costs of low back pain is taken.

“Unnecessary or failed surgery is not only wasteful and costly but, ipso factor, low quality medical care. The opportunity for consultations, second opinions and wider treatment options are significant advantages we foresee from this initiative which has been employed with success in a clinical research setting at the University Hospital, Saskatoon.

“A prominent medical organization, the North American Spine Society, has recently concluded that spinal manipulation, and specifically chiropractic adjustment, is an acceptable and effective treatment for most patients with lumbosacral disorders. This review, when coupled with more thorough analysis by prestigious institutions such as RAND Corporation, adds measurably to the growing credence in spinal manipulation as a therapy of choice for most low back pain.”

“However, the desired change in the healthcare delivery system will not occur by itself, by accommodation between the professions, or by actions on the part of Workers’ Compensation boards or the private sector generally. The government will have to instigate the reform and monitor the progress of the desired changes called for by our overall conclusion.” [12]


Perverse Motivation

Considering the plethora of recent research[2] that shows the cost and clinical-effectiveness of manipulative spinal therapy (SMT) compared to the medical methods for the vast majority of back problems. Knowing the low back pain business is a $50-75 billion industry in the U.S. alone, logic would dictate that the most cost effective methods would be or should be employed.

As all business owners know, workers’ compensation insurance is a very expensive program and, when used, employers are penalized with higher rates. This is especially true if the workers’ compensation carrier is a “for-profit” insurer as opposed to “self-insured.” Most employers do not realize that these carriers work on a “cost-plus” basis, which explains why these insurers are not concerned about increasing expenses. They simply charge higher premiums to cover their costs.

This for-profit, cost-plus incentive is the leading economic reason why the better mousetrap concept is being ignored in health care. Medical economists and futurists, such as Clement Bezold, Ph.D of the Institute for Alternative Futures deem this incentive as a “perverse motivation.”[3]   This cost-plus, perverse motivation is one reason why workers’ compensation insurance is so expensive—there is no real incentive on the insurers’ parts to decrease costs. Simply put: higher gross cash flow = higher percentage take.



[1] Bigos S. et al. US Dept. of Health and Human Services, Public Health Service, Agency for Health Care Policy and Research, Clinical Practice Guideline, Number 14: Acute Low Back Problems in Adults AHCPR Publication No. 95-0642, December 1994.

[2] World Health Organization, The World Health Report 2000: Health Systems—Improving Performance, 2000.

[3] Refuting Ineffective Treatments Takes Years The BackLetter® 101 Volume 23, Number 9, 2008.

[4] Reed Abelson, Financial Ties Are Cited as Issue in Spine Study, NY Times, January 30, 2008 .

[5] “With Costs Rising, Treating Back Pain Often Seems Futile” by Gina Kolata, NY Times, February 9, 2004.

[6] Manga, P and Angus, D. “Enhanced chiropractic coverage under OHIP as a means of reducing health care costs, attaining better health outcomes and achieving equitable access to select health services.” Working paper, University of Ottawa, 98-02.

[7] Eccleston, S. et al. “The Anatomy of Workers’ Compensation Medical Costs and Utilization: A Reference Book.” Workers Compensation Research Institute, Cambridge, Mass. June, 2000

[8] Mushinski, M. ibid.

[9] Eccleston, S. et al. “The Anatomy of Workers’ Compensation Medical Costs and Utilization: A Reference Book.” Workers Compensation Research Institute, Cambridge, Mass. June, 2000.

[10] Eccleston, S. et al. “The Anatomy of Workers’ Compensation Medical Costs and Utilization: A Reference Book.” Workers Compensation Research Institute, Cambridge, Mass. June, 2000.

[11] http://www.worldchiropracticalliance.org/tcj/1995/jan/jan1995a.htm

[12] Manga Pran, PhD et al. “The Effectiveness and Cost-Effectiveness of chiropractic Management of Lob-Back Pain, “ Ontario Ministry of Health, 1993

[1] Manga P. Economic case for the integration of chiropractic services into the health care system. J Manipulative Physiol Ther 2000 Feb;23(2):118-22.

[2] Manga, P et al.  The Effectiveness and Cost-Effectiveness of Chiropractic Management of Low-                Back Pain.  Ontario Ministry of Health, 1993.

[3] Bezold, C. “The future of chiropractic: Optimizing Health Gains” Institute for Alternative Futures. July 1998.