Repairing the Healthcare System

A New Study: Massachusetts Health Reform Has Failed

 Stanley Feld M.D., FACP,MACE

 Physicians for a National Health Program have been advocates of a single party payer for a while. Public Citizen has been an advocate for a longer period of time. Sidney Wolfe M.D. is the healthcare director for Public Citizen. I have had difficulty agreeing with the position of both in the past. I agree with the conclusion of this study. I do not agree with its solution.

Both groups have declared the Massachusetts health care system a failure. “In a study released Wednesday, two organizations (Physicians for a National Health Program and Public Citizen) say the Massachusetts health system is a failure and national policymakers should not look to that model as a possible solution". Instead, they propose a single-payer "Medicare for all" system as a better alternative.”

I do not agree with their conclusion of “Medicare for all” in Medicare’s present form. Why would anyone replace one failed system with another failed system? I would rather understand why both systems failed and then fix the reasons for the failure.

 “Massachusetts' healthcare reform, which included an individual mandate that required residents to purchase insurance, has increased coverage, but critics charge that the plan has not decreased costs or improved access to care."

"PNHP and Public Citizen have charged the Massachusetts project has not covered as many people as claimed, not contained costs, and hurt safety-net providers like public hospitals and community clinics.”

“In fact, the individual mandate is merely a "new tax on the uninsured," according to the study.”

 They should have concluded the healthcare plan was written for the advantage of the healthcare insurance industry by politicians who did not understand it. The result is a great cost to the state of Massachusetts and its individual citizens

"We are facing a healthcare crisis in this country because private insurers are driving up costs with unnecessary overhead, bloated executive salaries, and an unquenchable quest for profits--all at the expense of American consumers," says Sidney Wolfe, MD, director of Public Citizen's Health Research Group in Washington, DC.

Sidney Wolfe has developed many effective sound bites. He is a compelling voice for Public Citizen. He believes what he says. I have found over the years that his criticisms are compelling but his solutions are weak. "Massachusetts' failed attempt at reform is little more than a repeat of experiments that haven't worked in other states. To repeat that model on a national scale would be nothing short of Einstein's definition of insanity."

It was pretty obvious that the Massachusetts plan did not address healthcare insurers overhead. The plan was destined to increase premiums. It did not create price competition among insurers or hospital systems.The healthcare insurance companies control the healthcare dollars and the more people insured the more money they make.

 

“ In the study, the two groups said the individual mandate meant more business for health insurers, but didn't address administrative costs associated with private health insurance. In fact, the Massachusetts Connector, which was created to promote the program and help link people to the health plan options, adds 4-5 percentage points to private insurer policies, according to the study.”

 Massachusetts healthcare official have been forced to be defensive in claiming the program is a success as it is going down in flames as stated in my last blog entry.

“Jon Kingsdale, executive director of the Massachusetts Connector level of uninsured is consistent with the stated goal of health reform to achieve near-universal coverage and is only a point or so above the uninsurance rates reported by many European countries with so-called universal access."

 The study's authors claim healthcare costs will increase from $1.1 billion in fiscal 2008 $1.3 billion in fiscal 2009. It was suppose to cost 487 million dollars.

They claim, “If the state had created a public single-payer system, it could save about $8-$10 billion annually through reduced insurer administrative costs, which could go to covering uninsured residents and improving coverage for those with health insurance, according to the study.”

My first criticism of the comment is the numbers quoted do not match. Second Massachusetts outsources the administrative services at a 15% premium to the healthcare insurance industry. Medicare claims a 2% overhead.

Medicare also outsources administrative services to the healthcare insurance industry. Even though Medicare’s overhead is 2%, the healthcare insurance industry builds the additional 15% into its fees. Medicare’s total overhead is 17%. The overhead is obscene.

This abuse will not be solved by a single party payer. It will only be solved by the ideal medical saving account.

The opinions expressed in the blog “Repairing the Healthcare System” are, mine and mine alone.

New Budget Cuts Herald Failure Of Massachusetts’ Bipartisan Universal Coverage Plan

Stanley Feld M.D.,FACP,MACE

 

I have predicted that the Massachusetts bipartisan universal coverage healthcare was destined to fail. I have explained all of the reasons for my prediction.

Never the less, President Obama’s healthcare team is modeling his universal healthcare plan after the Massachusetts plan. It is possible the President’s healthcare team knows this plan will fail. They will then conclude the only remaining option will be a single party payer system run by the government.

However, the government presently outsources Medicare’s administrative services to the healthcare insurance industry. The healthcare insurance industry controls the healthcare dollars and therefore controls the costs and the coverage. A single party payer system will also fail just as Medicare is failing unless the structure of the Medicare system is changed.

The solution is to change the control of the healthcare dollar from the healthcare insurance industry to the consumer.

In the meantime President Obama’s healthcare team will destroy the healthcare system piece by piece.

“Several key public health programs face sharp cuts under the state budget proposed yesterday by Governor Deval Patrick for the next fiscal year.”

“The $28 billion spending plan also freezes Medicaid reimbursement rates for doctors and hospitals who care for poor patients, after steep cuts made in October.”

Massachusetts’ physicians seem to be the most tolerant physicians in the nation. They tolerate continued reimbursement freezes and cuts even though their overhead rises but they are losing their tolerance rapidly.

"We have a state that has been visionary in pioneering health reform and universal coverage," said Dr. Bruce Auerbach, president of the Massachusetts Medical Society and head of emergency care at Sturdy Memorial Hospital in Attleboro. "Anything we do that reduces the ability of physicians to care for Medicaid patients is going to negatively impact our pursuit of true healthcare reform."

You bet it will. Politicians will conclude, as they have in California, is the only way to pull this out of the ditch is to increase taxes. They do not realize that if they increase taxes they could drive business out of the state. The result would ultimately be the reduction of state tax revenue.

The governor's tax proposal also touched on public health: He is seeking new levies on alcohol, candy, and sweetened beverages among other increases in taxes.

This tax idea is not a bad idea. It could encourage lifestyle change and even decrease obesity and alcoholism. The result could be to decrease chronic disease and its complications thereby decreasing healthcare costs.

According to administration estimates, those new tariffs would generate $121.5 million for public health initiatives, if the Legislature goes along with them.

In order to save face the mandated universal healthcare plan was not cut except for one critical element. Eliminating a program that helps the insured enroll will generate more uninsured citizens as unemployment rises during this recession.

“The state's closely observed health insurance initiative, which requires most adults to have coverage, emerged largely, but not entirely, untouched in the budget blueprint. A program that helps the uninsured enroll for health coverage was eliminated, just as thousands of Bay State residents are losing their jobs.”

This is occurring after the federal government has provided Massachusetts with 8 billion dollars in state bailout money. Someday a healthcare plan that aligns all the stakeholder incentives and solves the problem of the complications of chronic disease will be proposed by a governmental body. It would help to ask patients and practicing physicians what they think the solution is. That day does not seem to be on the horizon.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Another Complicated Mistake By A Different Administration

Stanley Feld M.D.,FACP,MACE

Medicare and Medicaid (run by the states) are both on the brink of bankrupting the country. The present path is unsustainable.

It would be prudent to repair both programs by innovations that would render these societal entitlements sustainable. In order to fix the system the government should focus on solving the causes of the largest costs to the healthcare system (go where the money is).

The money is in preventing the onset of chronic diseases and its complications. Eighty percent of the healthcare dollars are spent on treating the complications of chronic diseases.

The complexity of President Obama’s “economic stimulus bill” for healthcare is going to lead to increased government spending and increased control over physicians’ medical judgment. It will be a deterrent to innovative research and thinking.

“Congress will provide 1.1 billion dollars for clinical research to the federal government to compare the effectiveness of different treatments (drugs, medical devices, surgery and other ways of treating specific conditions) for the same illness.”

A new government body will supervise head to head clinical studies. The clinical studies will test the difference between medication, procedures and other treatments for specific diseases. The government will then decide on the best treatment for each disease.

The stimulus package creates another bureaucracy that could add a level of inflexibility to the delivery of effective medical care. The government’s goal is noble. It wants to increase uniformity of care at the lowest cost of care. This could lead to rationing of healthcare and elimination of patient choice.

“The bill creates a council of up to 15 federal employees to coordinate the research and to advise President Obama and Congress on how to spend the money.”

It is obvious to me that it will not stimulate new innovative medical science. It could also drive physicians away from treating patients in government programs.

President Obama should be investing in research that promotes the development of more effective medical and surgical treatments for various diseases. They should not be comparing old treatments to decide on which are better. Physicians should be allowed to exercise medical judgment. Physicians should be given incentives to choose the most cost efficient therapy and not restrict their intellectual property. Presently incentives promote the least cost efficient therapy.

Government regulated and supported research has already judged the therapeutic safety of medication and procedures in a limited and artificial way. President Obama’s healthcare team should learn from the experience in other countries before wasting this money.

“Britain, France and other countries have bodies that assess health technologies and compare the effectiveness, and sometimes the cost, of different treatments.”

“Comparative effectiveness is a useful tool in the tool kit, but it’s not the answer to anything,” Andrew Witty, the CEO of GlaxoSmithKline said in an interview. “Other countries have fallen in love with the concept, then spent years figuring out how on earth to make it work to save money.”

Mr. Witty is the CEO of a stakeholder company that is threatened by President Obama’s initiative. His comments can easily be dismissed by clinical researchers because the comment threatens their vested interest. However it is a common sense comment.

Federal government officials can see this as a way to control costs. However not one has looked at its practical effect in countries that have used this approach. It certainly would restrict access to care.

For many years, the government has regulated drugs and devices and supported biomedical research, but the goal was usually to establish if a particular treatment was safe and effective, not if it was better than the alternatives.

The money for healthcare research should focus on medical and financial outcomes in real time in the real world. Most clinical research studies are short term (1 year to 3 years) with limited follow-up evaluations and no long term financial outcome comparisons. Some clinical research studies are poorly designed and the conclusions can be detrimental to good medical care.

A non surgical approach can be as effective as a surgical approach short term. Long term the patient might need a surgical approach. This is what a physician’s clinical judgment is about. The data that will be captured by this new agency using comparison clinical research protocols is limited and can yield poor conclusions.

An example of a disastrous clinical trial is the Women’s Health Initiative. Both the protocol and the statistical analysis were defective. I believe that the defects in the study will lead to more female morbidity and great healthcare cost in the future.

I believe the “clinical research” is going to result in confusion, senseless debates and inaccurate conclusions.

The government will find the incidence of chronic disease has because obesity and environmental pollution has increased.

Obesity is directly linked to diabetes mellitus, hypertension and hyperlipidemia and back problems. Environmental pollution is directly linked to chronic obstructive lung disease and asthma.

The complications of chronic disease absorb 80% of the healthcare dollars. These are the areas government ought to be spending money to inspire innovative thinking.

The $1.1 billion dollars can go a long way toward controlling chronic disease.

The cost of head to head comparisons makes this endeavor a meaningless waste of money. I was hoping the new administration would have the curiosity and common sense to repair the healthcare system correctly.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

An Abuse By A Stakeholder Overlooked By President Obama’s Healthcare Team

Stanley Feld M.D.,FACP,MACE

President Obama’s healthcare stimulus package only has provisions for money to create new bureaucracies and provide money for old systems. It does not fund the creation of incentives to address systemic problems in the healthcare system. The needed systemic changes would increase efficiency of care and decrease waste.

“A report from the Internal Revenue Service found that a small minority of nonprofit hospitals provide the bulk of uncompensated care for the poor, rekindling concerns about the tax-exempt industry at a time when government aid to corporations is drawing fire.”

All the nonprofit hospital systems in America receive an estimated $12.6 billion of annual tax exemptions from the federal government. The tax benefit given to most hospital systems does not add any value to the care of most indigent patients. The majority of these hospital systems do not provide care commensurate with the tax benefit received. Yet charity hospital systems in major cities and counties (safety net hospital systems) are not receiving appropriate funding and are going bankrupt.

“On average, the study found, the 489 hospitals studied spent 9% of their revenue on community benefit. Overall, 58% of the hospitals reported uncompensated care amounts of less than or equal to 5% of total revenue. A little more than one-fifth of the hospitals reported aggregate community benefit expenditures of less than 2% of total revenue.”

When a nonprofit hospital system opens a new hospital in a suburb it maintains its nonprofit status in that new hospital without adding value to the care of the poor. This results in an increase in profit.

The entire nonprofit hospital industry receives an additional $32 billion in federal, state and local subsidies each year. The money received is a result of accounting losses reported by the hospital systems on reimbursement shortfalls according to a 2006 report by the Congressional Budget Office.

“Some hospitals provided the IRS their data based on charges, rather than costs, which could significantly skew results since hospital charges are inflated list prices that are negotiated down sharply by the government and private insurers.”

The devil is in the details. The accounting details are not transparent. Few people are interested in studying the details.

“The IRS also found that the top executives at a group of 20 hospitals it examined more closely earned an average of $1.4 million a year. At least one of the 20 hospitals was compensating its top executive excessively, the agency said. It declined to name any of the hospitals in the report.”

I know from private communications that many top executives of nonprofit hospital systems earn much more than $1.4 million dollars per year. When I started in practice in 1970 there were very few hospital administrators in the hospital. Now I there seems to be more hospital administrators in a hospital system than there are hospital beds. All this adds to the hospital systems’ overhead and the subsequent hospital subsidy.

“The IRS report may renew efforts in Congress to develop firm rules about how much community benefit nonprofit hospitals must provide to maintain their tax exemptions. Nonprofit hospitals account for the majority of hospitals in the U.S. In return for not paying taxes, they are expected to provide benefits to their communities, including charity care.”

Senator Charles Grassley the high ranking Republican on the Senate Finance Committee is the only Senator who has discussed this systemic defect in the healthcare system.

I have pointed out many abuses in the healthcare system that would save billions of dollars. These savings would generate enough funds to repair the healthcare system.

Senator Charles Grassely is considering introducing legislation that would require non profit hospital to spend a minimum amount on free care for the poor and set curbs on executive compensation and conflicts of interest for it to maintain its nonprofit status.

President Obama’s healthcare team is not focused on these problems. Right now President Obama is throwing money at the healthcare system much of which will be wasted because he is not focusing on curing the abuses.

"For the hospital sector, it's really unfortunate, the timing of this report, because this gets dropped into a real toxic environment," said Michael Peregrine, an attorney for nonprofit hospitals at McDermott Will & Emery. "You've got people really upset about government subsidies to organizations," he said, noting that many consider tax exemptions a form of subsidy.”

What a meaningless statement. The hospital sector is receiving an undeserved subsidy. This subsidy is one of the reasons for the huge profits of the nonprofit hospital systems. The hospital system profits have resulted in huge hospital building programs. Hospital system must spend some of the profits in a visible manner. This is happening when medical innovation is making the brick and mortar hospital buildings obsolete.

One can say the taxpayer is subsidizing the expansion of obsolescence. Let’s see if the treasury department does anything about the Congressional Budget Office Report that surveyed only 489 hospitals. Only 20% of the hospitals accounted for 78% of the community benefit.

"There are good reasons for real variation in how hospitals meet their community benefit obligations," the AHA said. "A hospital in rural Iowa serves a very different community than one in New York City, and the programs and services they offer should be different."

This is another meaningless statement by a lobbying group for the hospital sector.

The tax exemption and other subsidies accounted for a much greater percentage of revenue than the total expenditure on community care. Clearly the rules have to be changed. If they are, hospitals will be forced to exhibit price transparency and become more efficient, and competitive.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

More Medicaid: Is This What We Want For Our Healthcare System?: Part 2

Stanley Feld M.D.,FACP,MACE

There are always problems with federally funded programs. They are bureaucratic, inefficient, and always seem to contain loopholes that can be taken advantage of by stakeholders.

Most states are desperate for additional funding this budget year. They have large budget deficits despite increasing state tax rate. States raising taxes do not seem to be the solution. People move out of the state as in California. President Obama providing an additional 100 billion dollars to the states for Medicaid bailout is not the solution to Medicaid’s problems or the uninsured problem. .

“The federal and state governments are equally culpable for the program's troubles. The federal government matches state Medicaid spending, paying an average of 57% of costs. States expand enrollment in order to qualify for more federal aid.

The barriers to medical care listed in Part 1 have resulted in extreme shortfalls in physician coverage for Medicaid patients.

a. A government survey in 2002 for the Medicare Payment Advisory Committee found that "approximately 40% of physicians restricted access for Medicaid patients" because reimbursement rates are so low.

b. Only about half of U.S. physicians accept new Medicaid patients, compared with more than 70% who accept new Medicare patients.

c. Several recent studies trace the difficulty in getting Medicaid patients seen by specialists to low fees and payment delays.

d. Technologies are also restricted. Many expensive but important drugs aren't paid for under various state drug formularies.

Newspaper headlines continue to point out Medicaid fraud by various stakeholders.

“ James Mehmet, New York's former chief Medicaid investigator, was quoted in the New York Times as believing that at least 10% of state Medicaid dollars were spent on fraudulent claims, while 20% or 30% more was siphoned off by what he termed "abuse."”

Think about this. The implication is that physicians are at fault but the states are the entities siphoning off large amounts of money for “other uses” and not for medical care.

40% of physicians did not accept Medicaid patients in their practices in 2002. I am sure the percentage is higher today. 50% of the 60% remaining physicians who have Medicaid patients in their practices do not take new patients. Medicaid patients do not have the choice of their physicians. Their choice is limited to the remaining 35% of the physician workforce. This workforce is overburdened with Medicaid patients.

Some of these physicians see many patients a day or restrict access to care. A small percentage of these physicians have figured out how to leverage their practice. They see an unserviceable number of patients a day. Many call these practices are called Medicaid mills by healthcare policy wonks. In some locations they are the only practices available to service Medicaid patients.

Newt Gingrich has complained about these physicians. He has called them fraudulent. My guess is that less than 10% of the 35% (3.5%) might be fraudulent. Newt’s solution is force all physicians have an EMR so the government can capture “fraud” instantaneously.

“ Even if the federal government wanted to hold states more accountable for peoples' health, Medicaid claims data is poorly gathered in most states, making meaningful oversight hard.”

I would suggest that the states get better electronic data systems. I believe EMR’s are essential in physicians’ practices but not for the punitive reason expressed by Mr. Gingrich.

“Barack Obama's team and Democratic leaders plan to change the federal matching rate to reduce the amount of state funding that is required for maintaining a given level of federal Medicaid spending.”

The issue of states receiving increased funding for Medicaid is very complicated. Some states are trying to change the definition of poverty to include people earning up to 63,000 dollars a year. The rationale is the states need to encourage low paid workers to stay in their state. Other states are keeping the 1955 definition of poverty and siphoning money that should be spent on Medicaid care for “other uses”.

If someone had the desire to do it right, the government would change the criteria for the definition of poverty. President Bush was uninterested. He wanted to eliminate Medicaid as a federal entitlement and put the burden on the states.

“ Mr. Obama would give Medicaid tens of billions more in federal dollars as part of the fiscal stimulus bill. And he wants to extend Medicaid to some unemployed workers, with the federal government paying the entire cost -- a watershed expansion of the program.”

President Obama,s healthcare advisors do not understand that throwing money at the Medicaid system will not fix the system. It will reduce the number of uninsured. It will increase the number of people who have inadequate healthcare insurance..

The “stimulus” will not increase the quality of medical care delivered. I fear the biggest accomplishment will be to increase the incentive for the misuse of more taxpayers’ dollars. Medicaid’s open ended funding must stop.

a. The states must be held accountable for their healthcare subsidy spending .

b. The states must be held accountable for providing incentives for patients to sign up for this healthcare insurance.

c. The states must be accountable for providing incentives for patients to become responsible for their own healthcare.

d. The states must be accountable for decreasing environmental risks to their citizens (stop developing coal burning plants).

e. The states must be accountable for giving physicians incentives to participate in the system.

The ideal medical savings account in the Medicaid system would be effective. It would put patients in charge of their healthcare dollar and their health care. The states and federal government would be responsible for helping patients be responsible purchasers of their medical care.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

More Medicaid: Is This What We Want For Our Healthcare System?: Part 1

Stanley Feld M.D.,FACP,MACE

As the recession deepens and more people are unemployed, the Medicaid roles are increasing. President Obama has promised the states that he will increase federal subsides to the states to cover this increase in participants.

I refer you back to Moises’ story and his inability to qualify for Medicaid because he earns more than $900 per month ($2200 per month). Texas’ poverty level is defined as earnings of $900 per month

Medicaid is supposed to provide coverage to the poor. The Medicaid program is probably better than being uninsured in case of an emergency.

The poor have a very high incidence of chronic disease. Prevention of chronic diseases and its complications are the biggest burden to the healthcare system. Eighty percent of the healthcare dollars are spent on the complications of chronic diseases.

Providing Medicaid for more people is not going to solve our healthcare problems. Preventing chronic diseases and its complications will. Unfortunately the Medicaid system presents barriers to appropriate and timely medical care.

Here are some of the barriers;

1. Reimbursement rates are very low.

2. Billing Medicaid is complicated.

3. Access to specialized care is difficult.

4. Permission for timely interventions is difficult to obtain.

5. Medicaid is replete with paperwork for both patients and physicians.

6. Regulations, rules and rejections are common.

7. Qualifying for Medicaid is difficult.

President Obama’s economic stimulus package is going to supplement Medicaid with about 100 billion dollars to the states. The states are not under any obligation to do anything to improve delivery of care or remove the barriers to care.

There are many reports of poor medical outcomes for chronic diseases by Medicaid recipients. The poor medical outcomes are a function of both the severity of the chronic diseases, patients’ compliance and the difficulty in accessing medical care in the Medicaid program.

Chronic diseases need early diagnosis, treatment, patient education and appropriate follow-up to avoid complications. The patients need to be taught to be the “professor of their chronic disease” so they can avoid the complications of their chronic disease.

It is my belief that most patients who are afflicted with a chronic disease would love to understand their disease process. They would love to know how they can avoid complications no matter what their socioeconomic group. The treatment of Diabetes Mellitus has taught us that lesson.

Do patients on Medicaid have better or worse medical outcomes than patients on Medicare or private insurance?

“One study published in the Journal of the American College of Cardiology (2005) found that Medicaid patients were almost 50% more likely to die after coronary artery bypass surgery than patients with private coverage or Medicare. The authors suggest this may be a result of poorer long-term, follow-up care.”

“Another study in the journal Ethnicity and Disease (2006) showed that elderly Medicaid patients with unstable angina had worse care, partly because they were less likely to get timely interventions or be treated at higher quality hospitals.”

“Three other recent studies showed that Medicaid patients presenting with heart attacks or unstable angina received cardiac catheterization less often than Medicare or private paying patients.”

Coronary stents to open blocked coronary arteries has become the standard of care. There is a large body of evidence proving improved outcomes. Coronary stents have come under attack lately. The argument against stents is they are overused. This could be true but under use of coronary stents would certainly result in poorer medical outcomes.

“A study of adults with cancer published in the journal Cancer (2005) found that patients on Medicaid were two to three times more likely to die from the disease even after researchers corrected for differences in the location of the tumor and its stage when diagnosed.”

President Obama’s notion that expanding Medicaid will improve medical care for the uninsured is faulty. Increasing the quality of care is the key. The incentives in the healthcare system for all stakeholders must be changed. This can only be accomplished by patients’ ownership of their healthcare dollar as well as responsibility for their care and not expanding defective government plans such as Medicaid.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Dear President Barack Obama: Part 7

 

Stanley Feld M.D.,FACP,MACE.

You should disqualify Tom Daschle and his entire healthcare team. Their policies are a rerun of the 1993 Clinton healthcare plan in a different cloth. They are policies of the past that will fail. You have only to look at the state of Massachusetts to see the impending failure.

Please reread my previous letters to you to see what should be done.

In your book “The Audacity of Hope, Thoughts on Reclaiming the America Dream” you said “perhaps more than any other time in our recent history, we need a new kind of politics, one that can excavate and build upon those shared understandings that pull us together as Americans. That’s the topic of this book: how we might begin the process of changing our politics and our civic life.”

In your inaugural address and your first couple of weeks in office you have set expectations consistent with your philosophy in “The Audacity of Hope”. America is rooting for you.

The inequities between the haves and have not are wider than ever. Business cannot continue as usual. It is time for America to show its compassion. This explains the principle reason you were elected. You have given America hope.

You have spoken of the importance of ethics in your administration and set up rules against influence peddling that are admirable.

The issue is not that Tom Daschle should be confirmed because you have confidence in him. The issue is can America maintain its confidence in you if Mr. Daschle is confirmed.

Your continued support for Daschle would be a slap in the face to Americans who are counting on you to help change the culture of self-entitlement in Washington.

I hope you can stick to the expectations you have set and the hope you have given us.

Last week it was revealed that Tom Daschle survived your vetting process even though he did not pay $128,000 in income tax.

“Today Senate Democrats rushed to save the nomination of Mr. Daschle, their former leader” “and the White House spent the day trying to explain how he survived its vetting process despite his failure to pay $128,000 in taxes. “

In my view his confirmation process should have ended at that moment.

“Tom Daschle, was aware as early as last June that he might have to pay back taxes for the use of a car and driver provided by a private equity firm, but did not inform the Obama transition team until weeks after Mr. Obama named him to the health secretary’s post, senior administration officials said Saturday.”

There are several issues in the financial disclosures that have avoided discussion.

1. Financial Disclosures

a. $128,000 in back taxes for a car and driver computes at a 35% tax level to earned income of $426.666.

“ Daschle used the Cadillac and driver around Washington while working as a consultant to a New York City private equity firm, InterMedia Advisors. He used the limo 80 percent for personal use – resulting in unreported income of more than $255,000 for the three years.”

b. The numbers do not match even if you add the unreported income of $83,333. There is also the discrepancy between Mr. Daschle’s financial disclosure forms stating InterMedia paid $2 million dollars since 2005 and InterMedia’s claim of payment for consulting fees at a rate of $1 million per year for the last four years. This amount alone adds up to almost $5 million dollars Mr. Daschle claims to have earned since leaving the Senate

“Senate Finance Committee documents show. InterMedia paid Daschle consulting fees at a rate of $1 million a year – or $83,333 a month. Daschle’s financial disclosure forms put his income from InterMedia at more than $2 million since 2005.”

1. Conflict of Interest for the Secretary of Health and Human Services

a. Mr. Daschle was hired by the lobbying arm of Alston&Bird as a “special policy adviser” of the firm because the law prohibits elected officials from lobbying for one year after leaving the Senate. Among his advisees were CVS Caremark, Abbott Laboratories, HealthSouth and the National Association for Home Care and Hospice, all healthcare related organizations with a vested interest in the healthcare system.

“The firm was paid $5.8 million between January and September 2008 to represent companies and associations before Congress and the executive branch, with 60 percent of that money coming from the health industry “Daschle's salary from Alston & Bird for the year 2008 was reportedly $2 million”.^[“\4]

I could not find how much Alston&Bird paid Mr. Daschle between 2005 and 2007.

b. Mr. Daschle also received at least $220,000 for speeches to health care, pharmaceutical and insurance companies. He also received nearly $100,000 from health-related companies affected by federal regulation.’

c. The conflict of interest that bothers me the most is Mr. Daschle’s association with United Healthcare. I have not been kind to United Healthcare because of its abuse in both the private insurance and Medicare arenas.

“Another client paying for his policy advice was UnitedHealth, a giant insurance company with many issues pending before the Department of Health and Human Services. About a third of its $81 billion in revenue last year came from federally regulated sales of Medicare Advantage and Medicare supplement and prescription drug plans.

The company boasted in its annual report that “one in five Medicare recipients participates in a UnitedHealth Group Medicare program.” (Mr. Daschle has said he will recuse himself from matters involving former clients.)”

President Obama, the issue is not about Mr. Daschle. The Democratic Senators (with and approval rating of 30%) boast that he is a highly respected person. The issue is your credibility. You made a promise that you would change the way Washington does business.

“Senate Majority Leader Harry Reid says he's confident Daschle would survive a vote by his old colleagues.”

The sheen will be off Mr. Clean. It will be bad for the hope you have instilled in the country’s psyche.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

Healthcare Leaders In Massachusetts Told To Rein In Costs: Wake Up America!

 

Stanley Feld M.D.,FACP,MACE

It was obvious to me at the onset that the Romney Massachusetts universal healthcare plan would fail. The healthcare insurance industry has remained in control of the healthcare dollars. The state of Massachusetts, rather than the individuals, would become victim to the rising costs. There was no evidence in the Romney plan that the quality of medical care would increase. The plan was not designed to provide incentives to improve the behavior, patients or hospitals. Massachusetts has already received an 8 billion dollar federal bailout and is seeking an additional 2 billion dollars to stay afloat.

“Governor Deval Patrick yesterday asked the state's most prominent hospital and health insurance leaders to take quick action to hold down rapidly rising healthcare costs, suggesting that if they did not take steps on their own, they might face new government regulation.”

The state did not alter the healthcare insurance industry’s control of the healthcare dollar in the healthcare system. It generated more insured patients for the healthcare insurance industry. It did not lower the premiums as predicted. The premiums continue to increase. A lack of real price transparency is the reason for this. The state’s universal healthcare plan did not alter patients’ or physicians’ behavior. It lacks patients’, physicians’ and hospital systems’ incentives to change behavior. The Massachusetts plan provides a guarantee for universal coverage but did not improve coverage, or quality or decrease costs.

“Governor Patrick said he is considering holding hearings on health insurance premiums and the primary driver of premium increases - the rates hospitals charge insurers for members' medical care.”

The governor knows exactly who the primary driver of the costs is. It is the healthcare insurance industry with hospital system collusion. However, he will never be able to prove it without a requirement for real price transparency.

" “ Insurance executives at a meeting said they would welcome such an investigation", according to Charles D. Baker, chief executive of Harvard Pilgrim Health Care, the state's second-largest health insurer.”

The inspector general (Mr. Sullivan) asked the healthcare insurance executives to refrain from signing new contracts that cover patient care beyond this year until the government has time to consider potential reform measures.

Mr. Sullivan singled out the largest private contract in Massachusetts, the state's dominant provider, Partners HealthCare, and its largest insurer, Blue Cross and Blue Shield of Massachusetts. The Boston Globe has had multiple stories exposing the abuse to the state and patients by these providers.

“The two agreed last summer to a multiyear contract that calls for annual rate increases of about 5 to 6 percent. Spokesmen for Partners and Blue Cross said yesterday the agreement was final.”

Got cha, tough luck.

The state of Massachusetts response has been to set up a reform payment commission. The commission will examine alternatives to the traditional payment model in healthcare. In Massachusetts the large hospital systems hire most physicians and pay a salary. Physicians have little control over their charges and salaries. I suspect the hospital systems are profiting from physicians intellectual property.

Partner's healthcare executives and healthcare insurance executives are trying to distract the state from the real issue which is inflated charges.

“ Many insurance executives and healthcare reformers argue that providers should be paid for healthy outcomes, not as they are now - based on the number of tests and procedures they perform on patients.”

“Dr. James J. Mongan, chief executive of Partners, said Patrick "understands [healthcare costs] are national issues, but the state of Massachusetts showed it could lead on national issues with [healthcare] coverage and it's going to try and lead on national issues with costs."

This rhetoric has not fooled Governor Patrick. However, he seems to be powerless to do anything about it because Partners and Blue Cross control his work force.

“Governor Patrick "made clear that this is sort of a today issue, not a tomorrow issue.”

A state sponsored Spotlight team reported a deal made by Partners and Blue Cross in 2000. Blue Cross would pay for services of Brigham and Women’s and Mass General Hospital (Partners) in exchange Partners would insist on receiving payments from other insurers that were at least equal.

“Healthcare costs have risen dramatically since that time.” Healthcare coverage has also decreased

Tufts Medical Center announced it would stop accepting Blue cross insurance company patients because Blue Cross is paying Tufts 32% less than they are paying Mass General and the Brigham.

“Blue Cross says demands for higher payments by Tufts would increase healthcare costs.”

The state of Massachusetts wanted to do the right thing (universal coverage). It became the victim rather than the cure. In the words of Yogi Berra it is “Deja vue” all over again.

Please listen carefully to Tom Daschle’s proposals for healthcare reform. It is similar to the failing Massachusetts plan.

Wake Up America!!