Repairing the Healthcare System

More Disinformation From Paul Krugman

Stanley Feld M.D., FACP, MACE

I just finished watching the movie “Wag The Dog” starring Dustin Hoffman, Robert DeNiro, Anne Heche, and Woody Harrelson. It is movie worth seeing again to understand the Obama administrations campaign to promote Obamacare.

 Idiom Definitions for 'Wag the dog'

To 'wag the dog' means to purposely divert attention from what would otherwise be of greater importance, to something else of lesser significance. By doing so, the lesser-significant event is catapulted into the limelight, drowning proper attention to what was originally the more important issue.

Just days before a presidential election, a Washington, D.C. spin doctor, distracts the electorate from a sex scandal by hiring a Hollywood film producer to construct a fake war with Albania. 

Paul Krugman’s recent Obamacare article contains multiple misdirections and half-truths. It offers fictitious examples that when stitched together sound as if Obamacare is the greatest thing that ever happened to the American people.

Nothing could be further from the truth.

Paul Krugman declares that healthcare reform has worked in Massachusetts since 2006. Therefore, Obamacare, which is essentially the same program, can work in the rest of the nation.

“Massachusetts has had essentially this system since 2006; as a result, nearly all residents have health insurance, and the program remains very popular. So we know that ObamaCare — or, as some of us call it, ObamaRomneyCare — can work.

Does Massachusetts’ healthcare reform really work?

It is true that nearly all Massachusetts residents are insured. The Massachusetts government subsidized healthcare insurance sold in the Massachusetts exchange. Physicians’ and hospitals’ reimbursement is only about 10% more than what Medicaid pays.

Massachusetts physicians seem to be less willing to see the newly insured (with exchange subsidies) than Medicaid patients even though the reimbursement is 10% more than they recieve for Medicaid patients.

Physicians are also less likely to accept Medicaid patients than privately insured patients. This has resulted in a physician shortage for recipients of Medicaid.

In Worcester Massachusetts there is a 3 months wait to see a primary care physician. There is scalping for physician appointments in Worcester.

Patients make appointments and then sell those appointment times to other patients that have to see a physician quickly. The other option is to go to the emergency room.

Many of the healthcare policy wonks that wrote the Massachusetts law wrote the Obamacare law. These same healthcare policy wonks believed that once everyone was insured, patients would go to the doctor’s office for primary care rather than to the hospital emergency room.

There has been a decrease in the demand for care as a result of a decrease in the supply of physicians. The result has been that hospital emergency room traffic is higher today than before health reform in Massachusetts.

There has been an increase in community healthcare centers manned by physician substitutes. This traffic to community health centers is almost one-third higher than it was before reform.

The time it takes to get medical care is growing in every city and town in Massachusetts.  The wait to see a new doctor in Boston today is two months.  This is the longest wait in the entire country.

The only thing that has changed in Massachusetts is the cost of healthcare. A few years ago the federal government had to bail out Massachusetts before it went bankrupt. Massachusetts received 8 billion dollars for healthcare reform from President Obama.

 

“On balance, the only thing that seems to have changed in Massachusetts is that patients are waiting longer. They are going to the same places to get care that they went to before. They are getting the same care from the same providers. In the process, more money is being moved around. A lot more money.”

Paul Krugman states “There are, however, millions of Americans who don’t receive insurance either from their employers or from government programs.”

I agree this must be fixed. However, I believe Obamacare is going to make things worse.

“ They can get insurance only by buying it on their own, and many of them are effectively shut out of that market.”

This is also true. However you cannot force businesses to do things they do not want to do as Obamacare is attempting to do. You also cannot increase medical benefits without raising healthcare insurance prices and permit the insurance industry to take 40% off the top.

The healthcare insurance industry will be taxed for every policy sold and the cost will be passed on to consumers.

You also cannot stop excessive demand for healthcare unless you provide incentives to consumers to decrease demand. Obamacare provides incentives to increase demand by expanding healthcare entitlements. The result will be a further increase in federal and state taxes.

The tax increase will further decrease investment and in turn increase unemployment.

Meanwhile all large and small companies are decreasing full time employment to under 30 hours a week to avoid penalties for not providing healthcare insurance.

Who is getting stuck?

Ordinary consumers are getting stuck. Things are getting worse, not better.

In some states, like California, insurers reject applicants with past medical problems. In others, like New York, insurers can’t reject applicants, and must offer similar coverage regardless of personal medical history (“community rating”).

 Community rating is a concept associated with health insurance, which requires health insurance providers to offer health insurance policies within a given territory at the same price to all persons without medical underwriting, regardless of their health status.

Pure community rating prohibits insurance rate variations based on demographic characteristics such as age or gender, whereas adjusted or modified community rating allows insurance rate variations based on demographic characteristics such as age or gender in a region or city.

It has nothing to do with requiring the issuing of healthcare insurance.

 He says by having community ratings, “it leads to a situation in which premiums are very high because only those with current health problems sign up, while healthy people take the risk of going uninsured.”

This is a misinformed statement. If there are many young people in a community the insurance rates should be lower regardless of whether they have insurance.

 The claims experienced by the healthcare insurer will be higher if the young people do not sign up for insurance. Therefore the healthcare industry wants to set prices on claims not community performance.

Again, the government should not be able to force consumers to purchase a product they do not want. The Supreme Court said the government could tax consumers if they do not purchase healthcare insurance.

If the tax is 10% of the cost of insurance and you cannot afford the insurance you would pay the penalty and forgo the insurance. A consumer would also try to avoid the penalty.

Paul Krugman proclaims the principles Obamacare demands.

Obamacare closes this gap with a three-part approach.

 First, community rating everywhere — no more exclusion based on pre-existing conditions.

This is good but costly unless you change the profit structure for the healthcare insurance industry.

Second, the “mandate” — you must buy insurance even if you’re currently healthy.

This is against the law.

Third, subsidies to make insurance affordable for those with lower incomes.

This is also O.K. but it will create a situation that is unsustainable for the federal government. The federal government is going to want to stick the unsustainable costs on to the states after the first three years of complete federal funding. The federal government cannot afford the first three years.

Paul Krugman then goes on to play the very effective blame game.

“Some people are too poor to afford coverage even with the subsidies. These Americans were supposed to be covered by a federally financed expansion of Medicaid, but in states where Republicans have blocked Medicaid expansion, such unfortunates will be left out in the cold.”

I thought the Obamacare was going to set up health insurance exchanges in states that refused to participate.

 Paul Krugman goes on to say,

“There will probably be a lot of administrative confusion as the law goes into effect, again especially in states where Republicans have been doing their best to sabotage the process.”

“States like Texas whose politicians are doing their best to undermine it, the sheer mean-spiritedness of the Obamacare opponents will become ever more obvious.”

Maybe, just maybe Texas and the governors of the other 24 states that are not participating because they are smart. They see the coming train wreck. They understand that Obamacare is unsustainable. They do not want to be stuck with the obligation to adopt an unsustainable program. They want to avoid bigger state deficits. They want to avoid raising state taxes for a program that cannot work.

If the Obama administration wants to execute the program let it do it on its own.

The Obama administration has not taken steps to set up health insurance exchanges in states that are not participating.

They are taking steps to develop a campaign to promote Obamacare and steps to blame the states that are not interested in participating in its demise.

Paul Krugman is a pawn for the Obama administration. He is helping the administration construct a similar blame game scenario that had been so effective in passing Obamacare and in winning reelection for President Obama.

The states that are not participating should organize and offer a strong offense describing the obvious reasons they are not participating in the health insurance exchanges.

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

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Obamacare’s Medicaid Deals With States Are Deceptive

 

Stanley Feld M.D.,FACP, MACE.

Tennessee Gov. Bill Haslam (R.) has asked the Obama administration for flexibility in implementing Obamacare's Medicaid expansion; he has been rebuffed.

It is becoming clear to me that the Obama administration is heavy on the posturing and light on the reform. The goal seems to be to have the healthcare system fail completely in order to create a public panic.

The panic will result in the federal government taking over the healthcare system completely and instituting a healthcare system that controls patients, physicians and hospitals.

Some might call it socialized medicine. I call it total impingement on incentive, initiative and innovation which will decrease productivity and economic growth.

This is all being done by the Obama administration with a total disregard for cost. President Obama’s assumption is cost overruns can be covered by increased taxes. However, he is not considering the effect of increased taxes on economic growth. He is also not considering the effect of increasing taxes and increasing the money supply on purchasing power. An increase in economic growth usually translates to an increase in GNP and increased federal revenue.

Several examples come to mind immediately.

1. States who have thought out the Obamacare expansion of Medicaid through health insurance exchanges have discovered that they are going to have tremendous cost overruns when the federal government stops paying the total costs. Originally the federal government was going to share the costs with the states.
2. The 100% federal funding will be in effect only from 2014 to 2016. Then the states pick up their share of the burden. The problem is the federal government will continue to control all the rules. This leaves no room for states to be innovative.
3. We have seen HHS refuse to give Indiana’s Medicaid improvement plan a waiver even though it is wildly successful. Its success can be attributed to several factors.
4.  It provides incentives for patients not to overuse the system.
5.  It expands the income requirements for eligibility into the system.
6. The definition of poverty is an obsolete 1955 definition. Obamacare eligibility requirement is 133% of the poverty level or $14,400 per year.
7.  Indiana requires eligible consumers to put up a small percentage of their income (2-5%) to enter into its Medicaid system. It also permits recipients to put money not spent into a health saving account for future use.
8. The effect of this is to encourage patients not to overuse the healthcare system and not to show up in emergency rooms for care that can easily be performed in less complex facilities.
9. Simple observations have led to intensive studying of the population that costs the most money to treat. 

 It turns out that, “According to a report released earlier this year by the Agency for Healthcare Research and Quality, 1 percent of patients accounted for roughly a fifth of all health care spending in 2009, or more than $90,000 per person. Five percent of patients accounted for half of overall health care costs. By contrast, 50 percent of patients accounted for only 3 percent of health care spending, the AHRQ report found.”

The high spending by this small percentage of high utilizers is not linked to a patient simply being uninsured without access to a primary care physician.

According to a recent report from the IMS Institute for Healthcare Informatics, 1 percent of patients in a survey of 10.6 million health plan members accounted for 25 percent of their plan's total costs, and 5 percent accounted for slightly more than half, mirroring the AHRQ survey.

Most ER physicians and social workers know who shows up in emergency rooms over and over again and which patients are readmitted to the hospital over and over again. These physicians also know the reason for this. However, no one ever asks these physicians the reasons.

Isa Gorman analyzed the data of the value of insurance for the indigent in saving lives.” Does Lack of Health Insurance Kill?” She demonstrates that all the studies that support the notion of a lack of insurance are in error.

The Richard Kronick study proves they are wrong.

Kronick found that “adjusted for demographic, health status, and health behavior characteristics, the risk of subsequent mortality is no different for uninsured respondents than for those covered by employer-sponsored group insurance at base line.”

 He concluded that “the Institute of Medicine’s estimate was that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect.”

Arkansas Gov. Mike Beebe (D.) first announced that he had reached a deal with the Obama administration to use the Affordable Care Act’s private insurance exchanges to expand coverage to poor Arkansans.

His Democratic base for the deal congratulated Governor Bebee. Arkansas was able to accept health insurance exchanges. The Republican majority in the state’s congress was skeptical. 

Governor Beebe reached a deal with Kathleen Sibelius to provide the poor in Arkansas with higher quality private insurance through the health insurance exchanges.

“Then the Good Friday memo came from HHS stating that its deal with Arkansas is not that different from its traditional endorsement of the use of private managed-care plans to administer the Medicaid benefit.”

“The memo makes clear that it will only permit state variations on the coverage expansion that are “comparable” to what HHS would have spent otherwise.”

“The HHS memo explicitly states that these private plans cannot modernize the design of Medicaid insurance to make it more cost-effective.”

 Governor Beebe was surprised and deceived.

“A Good Friday memo from the U.S. Department of Health and Human Services, however, splashes cold water on that aspiration. It’s now clear that the Beebe-HHS deal applies a kind of private-sector window dressing on the dysfunctional Medicaid program, and it’s not obvious that the Arkansas legislature should go along.”

According to the law these low income individuals will be automatically enrolled in Medicaid with significantly expanded insurance coverage. Medicaid has been plagued by concerns about its quality, access, and financing virtually since its inception.

Obamacare is supposed to add 17 million new patients to the rolls of Medicaid.

Medicaid had posed a severe fiscal threat to many state budgets. The federal restrictions on the states Medicaid program’s management has limited the state’s ability to manage states budgets and adjust payment of the severe low reimbursement to Medicaid providers.

The result has been severe underpayment of physicians. The underpayment resulted in a lack of physicians’ participation in the Medicaid program and limited access to care. In turn this has led to significantly worse outcomes and higher mortality rates for Medicaid recipients vs. private insured and Medicare.

“Under the Obamacare, individuals and families with incomes between 138 percent and 400 percent of the Federal Poverty Level (FPL) will be eligible for generous premium subsidies and cost-sharing credits, which they can use to offset the cost of purchasing private insurance on state or federal insurance exchanges created under the law.”

I have a feeling Governor John Kasich (R) of Ohio fell for the same bogus deal as he agreed to sign up for the health insurance exchanges. His Republican base is screaming their lungs out.

He will get his rude awaking soon as HHS changes the deal he thought he got.

Medicaid is a failed program medically and fiscally. Adding more recipients is not going to solve Medicaid problems. Accepting the health insurance exchanges is going to make the states’ budget problems worse.

An innovative program such as Indiana’s Health Plan can do much more toward making Medicaid viable. The Obama administration has objected to this plan.

Why? I can think of several possible reasons including the desire to have the healthcare system result in total collapse.

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

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Another Obama Political Campaign Has Started

Stanley Feld M.D.,FACP,MACE

I have predicted Obamacare will fail ever since its passage. Proponents of Obamacare believe Obamacare is America’s last hope for meaningful healthcare reform with affordable care for all.

They now admit there are some problems with Obamacare but little tweaks will fix it.

Obamacare is not America’s last chance for healthcare reform. Obamacare is a series of regulations pasted on to an already dysfunctional healthcare system. It is destined to collapse on it own weight and regulations. There are over 20,000 new regulations to date with thousands coming each week as we get closer to January 1,2014.

I believe the business model I outlined using 2013 technology is the system that will align all the stakeholders’ incentives and provide universal care at an affordable cost for all.

It will provide freedom of choice and enhance the patient physician relationship. It will be a system that is patient centered as opposed to Obamacare being government and outcome centered.

An outcome centered healthcare system puts the government and the healthcare insurance industry in control of medical care decisions. It will control access to care and result in rationing medical care.

The passage of Obamacare was a political farce.

The bill was slipped through the Senate just before dawn three Christmas eves ago with only one Republican vote in both houses of congress. Obamacare is not a bipartisan act.

Nancy Pelosi told the American public and congress that we would not know what is in it until we pass it.

We have been told that most of congress has not read the act completely.

The new entitlement’s start-up date is October 2013. The implementation date is January 1,2014. No one is ready for either date.

 “The size and complexity of the Affordable Care Act meant that its implementation was never going to easy. But behind the scenes, even states that support or might support the Affordable Care Act are frustrated about the Health and Human Services Department's special combination of rigidity and ineptitude.”

Individual state governments have tried to get a clear idea of how Obamacare would work in practice with the health insurance exchange.

 The states are terrified of the economic burden the health exchanges could impose on their deficit-ridden states.

The Supreme Court has given the states a choice of signing on whereas there was not a choice in the original bill.  

Some states felt they could not turn down the health insurance exchange because the Obama administration was offering them too much money,

The Obama administration is starting to make preliminary deals with states that have rejected the health insurance exchanges at this point.

The administration is giving Ohio and Arkansas more money to pay for health insurance for people earning up to 133% above the poverty level. (Income of $14,400 a year). This deal nowhere as creative as the Indiana Health Plan and will cover many fewer people.

This offer will not cover people who really need insurance.

The preliminary deals with Arkansas and Ohio will be more costly that deals with other states. It is questionable whether the Obama administration has the authority to spend the additional money.

As new regulations keep being produced none of the real hard operational questions are being answered.

A regulation usually requires 60 days of public comment. The Obama administration has unilaterally shortened public comment to 30 days. The shortened public comment period for new regulations can be challenged by the states and congress.

There are other problems that states are having with Medicaid and Obamacare. Many feel that HHS is treating states not as partners but as serfs to the federal government.

The central government is building a data hub to determine who is eligible for Medicaid and Obamacare health insurance exchanges. This new federal bureaucracy will dispense insurance subsidies and police the market.

Many states want to cut their administrative costs to balance their budget. They are combining the application process for Medicaid, food stamps, cash assistance and other antipoverty programs into one agency.

HHS's privacy rules say the hub can only be used for Obamacare. HHS will force states to become less efficient by having a free standing bureaucracy for Obamacare and has flatly refused to consider participating states’ requests for combining all the agencies under one roof.

Twenty-four (24) states have still refused to participate as of May 15^th. The Obama administration will have to run a federal exchange in those states.

HHS has not revealed how it will handle these exchanges. The agency running the federal exchange won't reveal how it will operate.

The irony is that many of the states would participate if HHS gave them more flexibility to manage their own programs and control costs.

“At a House Energy and Commerce hearing on Thursday, Obamacare point man Gary Cohen all but took the Fifth on how he'll deal with this and other challenges.”

It seem as if it is going to be a vast undertaking that can not possible be in place in October or operational on January 1^st, 2014.

Chris Christie (N.J.) and Bill Halsam (Tenn) wanted to participate but now feel the health insurance exchange in not a sane or rational marketplace. The costs and risks were too high.

“This is all-or-nothing political gambit is meant to put the governors of states not participating in a bad political spot at home if they don’t participate.”

“At this point, the total administrative burden on the federal government has massively increased. Yet neither the federal government nor the states have the human or financial resources to discharge these tasks in a timely fashion, making it highly unlikely that these exchanges will be up and running by January 1, 2014.”

 

 

 Making things worse for Obamacare is no fewer than 18 Democratic Senators came out against Obamacare's $28 billion tax on medical device sales.

The list of Democratic Senators includes Chuck Schumer, Dick Durbin and Patty Murray. Either they believe it or the lobbyists got to them.

The medical device industry has received little guidance about how to comply with the tax. This has caused significant uncertainty and confusion for medical device businesses.

These are some of the problems Obamacare is facing.

President Obama is unfazed. In the face of criticism from Democrats about his incompetent implementation of Obamacare, he is going on the road to spin some misinformation and make it look like Obamacare is great and his critics are political.

President Obama co-opted Mother’s Day in his latest campaign to sell Obamacare that begins now and will last until the 2014.

President Obama kicked off another campaign-style effort to get people to sign up for the so-called Affordable Care Act.

“In a statement dripping with condescension Obama tried to blame misinformation for his health care troubles.”

He said, “Precisely because there’re been so much misinformation, sometimes people may not have a sense of what the law actually does.   

He continued,   “We’re going to need everybody out there to make sure they get the right information.”

“Don’t just read a blog or some commentary from some pundit that has a political agenda.  Make sure you know what the actual facts.”

Don’t let people confuse you.  Don’t let them run the okeydokey on you.  Don’t be bamboozled.”

Doesn’t this sound like his political campaign of 2012?

President Obama seems to have forgotten that a lot of misinformation about Obamacare results from his statements.

Wasn’t he was the guy that said, “If you like you doctor you will be able to keep your doctor and if you like your healthcare plan you can keep your healthcare plan.”

None of this is true including free choice, affordable healthcare insurance, and free access to care.

I wonder when Americans are going to get tired of President Obama’s misinformation and false promises.

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

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Chargemaster Data And Transparent Pricing

Stanley Feld M.D., FACP, MACE

 The chargemaster, or charge description master (CDM), is a comprehensive listing of items billable to a hospital patient or a patient's health insurance provider. It is published every year from billing data and payments.

 Chargemasters include thousands of hospital services, medical procedures, drugs, supplies, and diagnostic evaluations such as imaging and blood tests.

Each item in the chargemaster is assigned a unique identifier code and a set price that are used to generate patient bills.

The impact of the chargemaster is such that those with good insurance pay the least for that care, whereas the uninsured, and others who pay out-of-pocket for healthcare pay the full chargemaster listed price for the same services.

There are multiple list prices for hospital services and one price the government pays. Some of the list prices are unconscionable. They are not tied to the cost of the service. A drug most often quoted is the price of an aspirin. An aspirin cost a penny a pill. Hospitals charge $45.

With the ubiquitous Internet, we as patients and we as physicians can easily look up what the hospital systems are overcharging for each service and procedure.

Both the list price and the price paid by the government’s for each hospital system is in the report. The government pays different hospital systems in the same area different prices.  The reason for this is not transparent.

When I send a patient for a test in the hospital, I have no idea of what the test costs the patient. If I knew the prices and felt the patient was overcharged, I would sent the patient another hospital for that test. 

There are two important issues to notice here.

 1. Hospital systems are trying to buy physicians practices so physicians have no choice for his patients.

 2.Hospital systems are trying to consolidate with other hospitals so physicians cannot send their patients to another hospital system.

3. The Obama government thinks this is a good thing. I think decreasing local competition is a bad thing for patients.

"The important issue will be for those folks that end up having to deal with chargemaster charges, which is the uninsured consumers,"

Chargemaster is "For them and their advocates, something to use in negotiation around how the cost of their care should be discounted."

It will not affect the insured who already have had prices negotiated by their healthcare insurance company. However, many consumers are going to be uninsured as companies drop it healthcare insurance coverage. Consumers might choose to go bare. All of a sudden prices will be forced to be transparent.

Something unfair is still going on. The average Medicare payment for people treated for respiratory infection and inflammation with major complex comorbidities ranges from $24,084 at the University of California San Diego Medical Center, to $18,862 at Sharp Memorial Hospital to $11,989 at Pomerado Hospital.

Treatment given in each hospital system is probably not different. The political connections are different.

These price differences go on all over the country.

The distraction from the politics in the chargemaster list price for the respiratory infection described above was as high as $133,347 at Sharp Chula Vista Medical Center. This difference between list price and paid price is absurd.  Hospital systems search for the highest price they can get.

Medicare Advantage plan beneficiaries might find chargemaster very useful.

If they go to a hospital out of network they might find themselves liable for the entire retail price of the hospital charges.

The rules are unfavorable to Medical Advantage policyholders.

The Obama administration wants to eliminate the popular Medicare Advantage program.

The trick for Medicare Advantage patients is to go only to hospitals within the network for their plan.

“Joseph Fifer, President and CEO of the Healthcare Financial Management Association, says he thinks “hospitals should publish all of their charges for all of their DRGs on their webpages. And that will happen, he thinks, but it will take some time.”

Until now, he says, "hospitals didn't know what other hospitals were charging. The restraint of trade lawyers would put the fear of God into their chief financial officers saying, we can't find out what the pricing is at other hospitals for fear of (being accused of) anti-trust behavior."

This is a hollow excuse not to create transparent fees and to continue to confuse the public.

 I believe the government should require hospital systems to post prices that the government pays for services, procedures and hospitalization.

If a hospital system refuses to post its prices, the state government should withhold that hospital systems license until it does.

The alignment of incentives should alway be in favor of consumers.

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

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Obama Administration Continuously Declines To Renew Indiana’s Medicaid Waiver

 Stanley Feld M.D.,FACP,MACE

In light of the recent alleged IRS scandel targeting certain groups, I am reminded of the Medicaid incident in Indiana. I believe the incident is resolved now with the Obama administration granting a waiver to Indiana after two years of bureaucratic haggling.

In 2007 Governor Mitch Daniels (R.) was successful in getting the Indiana state legislature to pass a Medicaid reform plan called the Healthy Indiana Plan. It is an expansion of Medicaid. It uses a consumer-driven health plan to encourage low-income beneficiaries to take control of their health and healthcare dollars.

This healthcare plan is a variant of my ideal medical saving account.

 The Healthy Indiana Plan has been very successful.

Healthy Indiana Plan has been the most innovative and successful reform of Medicaid in the history of the Medicaid program.

The federal government’s waiver for the plan was given in 2007 and set to expire on December 31, 2012. Indiana applied for an extension of the Medicaid wavier in early 2011. In November 2011 the Obama Administration rejected the state’s request to extend its federal waiver.

Over 45,000 poor Hoosiers on Medicaid were scheduled to lose this innovative Medicaid coverage in 2013.

Medicaid is theoretically run by the states in cooperation with the federal government.  In reality, any time a state wants to make the tiniest changes in its Medicaid program, it has to go hat-in-hand to the U.S. Department of Health and Human Services with a formal request for a waiver and these waivers are usually denied.

 This federal control has been part of the disagreement states have with the federal government over health insurance exchanges. The central government wants to shift the financial burden on the states while controlling the states’ decisions.

Indiana succeeded in gaining a waiver in 2007 because it was seeking to expand Medicaid to a group of people who weren’t then eligible for the program and because the state’s effort required no additional outlays from the federal government.  Governor Mitch Daniels paid for the Medicaid expansion by increasing the state’s cigarette tax by 44 cents. It made sense to everyone except the people that smoked. 

Patients had skin in the game because they had to pay 2 -5% of their income for their insurance coverage. The plan provided financial as well as wellness incentives.

“We did a lot of reading on criticism of health savings accounts,” says Seema Verma, who was the architect of the Indiana program. “One of the criticisms was that people didn’t have enough money to pay for preventive care. So we took preventive care out, made that first-dollar coverage.

“ Also, people said that people didn’t have enough for the deductible, so we fully funded it. Then, you have to make your contribution every month, with a 60-day grace period. If you don’t make the contribution, you’re out of the program for 12 months. It’s a strong personal responsibility mechanism.”

 I described the Healthy Indiana plan in detail in January 2008 pre President Obama.

Medicaid patients get a specified amount of preventive care for free.  Included are free annual physical exams, pap smears and mammograms for women, cholesterol tests, flu shots, blood glucose screenings, and tetanus-diphtheria screenings.

Medicaid beneficiaries have no cost-sharing requirements (co-pays, deductibles, etc.) except for non-urgent use of emergency rooms.

The money remaining in the Medicaid patients’ POWER accounts at the end of the year can be applied to the following year’s contribution only if they obtain the required free preventive disease services.

“The program has been, by many measures, a smashing success. “What we’re finding out is that, first of all, low-income people are just as capable as anybody else of making wise decisions when it’s their own money that they’re spending,” Mitch Daniels explains in a Heritage Foundation video.”

“And they’re also acting more like good consumers. They’re visiting emergency rooms less, they’re using more generic drugs, they’re asking for second opinions. And some real money is starting to accumulate in their [health savings] accounts.”

The program has been very popular. Ninety (90) percent of enrollees are making their required monthly contributions. Employers didn’t dump their workers onto the program, crowding others out, because you needed to be uninsured for six months in order to be eligible for it.

 “The program’s level of satisfaction is at an unheard-of 98 percent approval rating,” Verma told Kenneth Artz.

Lower income families are not too stupid to be wise healthcare consumers despite popular belief.

A 2010 study by Mathematica Policy Research found that in the program

71 percent met the preventive care requirement and were able to roll the balances over to the following year.  Only 39% obtained preventive care in the first six months. It proves financial incentives work.

The lack of physician access is the biggest reason why health outcomes for Medicaid patients lag far behind those of individuals with private insurance.

Healthy Indiana pays better than traditional Medicaid. The physician access trend has been reversed. Preventive care participation rates are higher than the privately-insured population.

Why would the Obama administration, which controls the states’ Medicaid programs, refuse to grant a waiver for Indiana’s successful program?

The first excuse HHS used was “ HSS  hadn’t written the regulations for Obamacare yet.”

According to Seema Verma  “the state will now have to file a much more complex “State Plan Amendment” that may not get approved before the Healthy Indiana program is set to expire.”

Before his term expired Gov. Daniels had written to HHS Secretary Kathleen Sebelius asking her for permission to use the Healthy Indiana Plan to handle Obamacare’s mandatory expansion of Medicaid. He had not heard back.

The Obama Administration claims to be on the side of the poor.  Why would it not approve a waiver of a popular program for the poor that provides the poor with superior health care?

Whatever the reason, tens of thousands of people will be needlessly harmed.

Regulatory burdens and “poison pills” have been thrown at the Indiana health plan. One such poison pill is not allowing the state to include the $1100 Power account given to Medicaid patients to make wise medical care choices.

Yet the government pays the healthcare insurance industry for help desks and rent for buildings where there are help desks as direct patient care instead of expenses.

It is not only bewildering, it is obscene.

The controversy continued throughout 2012 past the expiration date of the 2007 waiver into 2013.

Mike Pence, the new governor, kept fighting off bureaucratic rules but got nowhere through March of 2013.

The subtext of all of this is the Obama administration wants a top down centrally controlled Medicaid system with the financial burden on the states and Indiana wants to control its own destiny with its successful plan.

Stuff like the following has been going on. Diane Gerrits, CMS' director of state demonstrations and waivers, wrote in a Feb. 25 letter that the state will have to resubmit its application because it had not yet held two public hearings required by law.

CMS said as a result of the failure to comply with the transparency portion of the proposal, the state must begin a 30-day state public comment and notice period. The state must follow with an additional 30-day federal public comment.

This has been going on since 2011

Governor Mike Pence fired back,

 "The Feb. 25, 2013, letter from HHS does not indicate in any way that the waiver application process has been jeopardized," he wrote Thursday. "It does, however, speak to the flawed bureaucratic process that has impeded progress on our successful Healthy Indiana Plan."

The Obama administration is trying to destroy all health savings accounts both public and private. This is probably the reason for these artificial delays.

Suddenly, in mid April, under public pressure and possibly the impending IRS scandal Indiana’s waiver request was approved.

This is a happy ending to the Indiana saga and perhaps a model to get all the Medicaid programs out of the deep ditch they are in.

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

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Why Does Congress Want to Exempt Itself from Obamacare?

 Stanley Feld M.D.,FACP.MACE

In mid-April Max Baucus one of the authors of Obamacare and a major proponent of the law made the following statement to Health and Human Services Secretary Kathleen Sibelius at a Senate hearing.

 

  .  
 

http://youtu.be/Y9airckwqA8

Unfortunately only 11,723 people watched this 29 second You Tube.  The traditional media gave his statement sound bite coverage without explaining the reasons for him saying Obamacare is going to be a "train wreck."

West Virginia Senator Jay Rockerfeller said Obamacare is beyond comprehension.

  

http://youtu.be/Fy6vc9yWE_U

Only 157 people looked at this You Tube whick has been up for 3 weeks.

It would have been a good idea for congress to have read and understood the bill.

Meanwhile, congressional leaders in both parties have been engaged for months  now in high-level, secretive confidential talks about exempting lawmakers and Capitol Hill aides from Obamacare’s  health insurance exchanges that they are mandated to join as part of President Barack Obama’s health care overhaul, sources in both parties said.

These talks involve the Obama administration, Senate Majority Leader Harry Reid (D-Nev.), House Speaker John Boehner (R-Ohio), along with other top lawmakers.

“These talks are extraordinarily sensitive, with both sides acutely aware of the potential for political fallout in the 2014 mid term elections from giving carve-outs from the hugely controversial law to 535 lawmakers and thousands of their aides. “

Politico along with other Internet news agencies has been the only news agency to have in depth coverage of this attempt to exempt congress and its aids from Obamacare and its health insurance exchanges.

Henry Chao, the Administration’s chief technical official in charge of  the implementation of the Obamacare’s health insurance exchanges, “just hopes that Americans can avoid a “third-world experience.”

Why would both Democrats in congress want to avoid participating in Obamacare and its health insurance exchanges?

We need to be reminded that the Democrats had overwhelming majorities in both houses of congress at the time of passage of the law in 2009 without a single Republican vote.

I am reminded of Nancy Pelosi’s argument for Obamacare's passage.

  

http://youtu.be/KoE1R-xH5To

 Now that congress knows what is in Obamacare they want to be exempt.

Congress is content to let the rest of us suffer.

What is congress afraid of?

 

1. Higher healthcare costs for themselves, their families and their aides.
2. Being mandated into Obamacare’s health insurance exchanges will result in  them not qualifying for government subsidy.
3. Congresspersons and their aids could also lose their employer-based coverage.
4. This is also true for millions of ordinary Americans.
5. They would also face higher costs of insurance through health insurance exchange.
6. Every policy the healthcare insurance industry sells will be taxed. It will result in passing the tax on to the policy holders.
7. Contrary to the President’s promises, independent analysts expect health insurance premiums to rise sharply, particularly for younger workers and their families.       

Congressional members have other fears if they fail to create an exemption for themselves and their aides. These fears are:

1. They fear the impact on Capitol Hill employment.

2. The increase in healthcare insurance costs “could lead to a ‘brain drain’ on Capitol Hill, as several sources close to the talks put it.”  

3. Ordinary Americans who run businesses are also faced with the same problem. President Obama and Democratic congressmen have refused to be responsive to the dilemma faced by ordinary businessmen.

4. American business owner fear they will not be able to hire or retain valued employees.

5. These businessmen are presently reducing full-time workers to part-time employees in order to avoid Obamacare’s mandatory insurance coverage or penalty.

6. This will have the consequence of increasing the unemployment rate and decreasing consumer spending.

7. In turn it will create an unending spiral which will seriously impact economic growth.

8. The question Americans must ask is “what about me.”

 

The Obama administration and congress have done similar things before in their effort to passing Obamacare.

Obamacare was passed using backroom dealings such as the “Cornhusker Kickback,” the “Louisiana Purchase,” and the threats to political careers.

This congressional exemption also brings back memories of (more than 1,200 waivers) to favored businesses and unions who received special exemptions from Obamacare’s insurance rules.

“If Congress quietly wants to exempt itself from Obamacare, that’s great—so long as it includes the rest of us in that midnight amendment.”

If you are "mad as hell and do not want to take this anymore"  sign this petition.

  

 

http://youtu.be/QMBZDwf9dok

 

Please click on this link to sign up and send the link on to your friends.

https://www.change.org/petitions/force-congress-to-obey-obamacare

This is the petition

To: 
Senator Harry Reid, Senate Majority Leader 
Rep. Nancy Pelosi, House Minority Leader 

You told me we had to pass Obamacare to find out what was in it. Now your gold-standard health insurance is on the chopping block as Obamacare is implemented. 

If the tin-plated plan is good enough for me, my family, and my friends, it is good enough for you and your staff. 

You passed the law -- now live with it like the rest of us. Or overturn the whole rotten thing!

Stop the effort by liberal Democrats to seek an exemption from Obamacare for Members of Congress and their staff.

Sincerely, 
[Your name]

Some of us will remember Walter Cronkite’s signature was ending each newscast with the phrase, "And that's the way it is".

 I am adding this “it is now up to you ladies and gentlemen.”

 

Please sign the petition. Thank you.

 

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

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Obamacare’s Actions To Destroy The Healthcare System

Stanley Feld M.D., FACP, MACE

The Obama administration is doing everything it can to destroy the healthcare system. President Obama continues to campaign that he is going to save Medicare and Medicaid and provide universal care while saving $4.25 trillion dollars.

It does not add up.  The Obama administration keeps raising taxes, decreasing benefits and increasing deductibles on Medicare and Medicaid premiums. The administration is decreasing the work force by regulation and executive order.

Everything that is being done increases the burden on seniors and insured workers.

To my amazement no one in organized medicine except the American Association of Physicians and Surgeons (AAPS) has protested.

I applaud Jane Orient M.D. executive director of AAPS and her Board of Directors for stepping forward and trying to defend the rights of patients and their physicians.

At stake are patients’ ability to choose their physicians and physicians’ ability to practice medicine as they choose.

Where are the AMA and all the specialty organizations in the federation medical organizations?  It is little wonder these organizations are losing members.

All medical organizations should join with Jane Orient M.D. and her Board of Directors lawsuit against the government.

AAPS filed suit against PPACA three days after it was signed into law, but the National Federation of Independent Business (NFIB) and 26 states stayed the case pending a Supreme Court decision in the case brought.

All of us know that the Supreme Court upheld the Obamacare law. It was deemed by Chief Justice Robert that the executive branch has the power to levy a tax. It is not within the power of the executive branch to create a mandate. President Obama insisted throughout the legal process that this was a mandate and not a tax.

 

http://youtu.be/hV-05TLiiLU

In my opinion this decision by Justice Roberts was a big mistake. Obamacare is a terrible law that will not create universal healthcare. It will be ineffective and inefficient. It will destroy the healthcare system. Obamacare cannot possible work.

I think this is President Obama’s goal.

The Supreme Court in its decision acknowledged, "any tax must still comply with other requirements in the Constitution."

No one except the AAPS has challenge this point.

“The motion filed by AAPS is the first to ask an appellate court to rule on whether PPACA violated the Origination Clause of the U.S. Constitution, which requires that all "bills for raising revenue" originate in the House of Representatives.”

More and more physicians are not participating in Medicare. Physicians still have the ability to choose to participate in Medicare and Medicaid.

At the beginning of 2013 a new regulation went into effect. Previously, if a physician did not participate in Medicare the patient had to pay the physician his fee. The patient could then bill Medicare and collect 70% of Medicare’s allowable fee.  Medicare does not pay the patient after January 1^st,2013.

Non-participating physicians may use laboratory, x-ray departments or consultants that participate in Medicare. The participating consultants, labs and x-ray departments can bill Medicare directly and receive their usual and customary fee from Medicare. 

Effective May 1, 2013 (a new regulation issued March 1, 2013 by HHS) the Department of Health and Human Services will deprive patients of benefits for blood tests, x-rays, and specialist consultations—benefits for which they were forced to pay all their working lives, and which would be covered if ordered or referred by a non participating Medicare physician.

I believe the Obama administration’s goal is to force physicians to participate in Medicare.

"Because of Medicare's increasingly costly and restrictive rules placed on doctors, many Medicare-eligible patients are receiving medical care from physicians not enrolled in the program," states Jane M. Orient, M.D., executive director of the Association of American Physicians and Surgeons (AAPS).

AAPS filed an emergency motion for injunctive relief  in the U.S. Court of Appeals for the District of Columbia Circuit.

The Founding Fathers fought for independence largely because of excessive taxation without representation. When the Constitution was drafted, the founders insisted that taxes originate in the House, the legislative body closest to the people, both in representation and in election cycles.

“ObamaCare originated in Senator Reid's 2000-page amendment to a 6-page House bill about tax credits for members of the armed forces who are called into overseas assignments. AAPS has raised several arguments why ObamaCare constitutes an illegal tax, including violation of the constitutions Origination Clause.”

This new executive order disregards the constitution’s “Origination Clause” to try to stop physicians from not participating in Medicare

Only the AAPS had the guts to speech out against this executive branch breech of its power and defend patients and physicians rights as granted by the constitution.

Hooray for the AAPS.

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



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Why Not Avoid The Financial Problems?

 Stanley Feld M.D.,FACP,MACE

It is very clear to me that neither the Obama administration nor the senate wants to solve the root causes of the federal deficit problem.

The sequestration debates are not getting to the root causes of the deficit. Eighty five billion dollars will not make a dent in America’s 16 trillion dollar budget deficit.

President Obama is running around the country scaring everyone with the notion that vital services must be cut or else the country will be paralyzed.

Recently the congress and the President appropriated $60.2 billion dollars for aid to Sandy victims. This is almost as much as the sequestration is going to eliminate.

“The Senate voted Monday to provide $50.5 billion in aid for victims of Superstorm Sandy. The vote means Congress has approved a total of $60.2 billion in aid for Sandy victims”.

America’s big deficit problem is created by out of control entitlement programs. Obamacare is adding to entitlement spending. It will only increase the deficit.  

Our politicians’ should be working hard to figure out a solution to increasing entitlement spending. Yet the Obama administration has refused to consider entitlement reform.

America’s two largest entitlements are Medicare and Social Security. Food stamps, and unemployment insurance, among others has some impact on the deficit.

Simple reforms and a decrease in waste could solve the problem.

The following two articles summarize the illusion of the existence of Social Security and Medicare Trust Funds.

In reality the money goes into these trust funds from payroll withholdings. The government then borrows the money to pay general expenses. It provides an IOU to the trust funds. In essence the trust funds are broke and the IOUs are an unfunded liability of the federal government..

“And since the federal government borrows the surplus from both funds (Social Security and Medicare) to pay other expenses, the only thing in those trust funds own special, non-negotiable, interest-bearing IOUs.”

 http://articles.washingtonpost.com/2012-10-18/opinions/35502037_1_trust-fund-medicare-trustees-health-care

http://www.forbes.com/sites/merrillmatthews/2012/08/21/think-social-securitys-trust-fund-is-a-scam-medicare-has-one-too/

In order to pay Social Security and Medicare obligations the government shifts revenue of current accounts into the trust fund accounts.

Citizens paying into Social Security and Medicare all those years thought they were paying for a retirement annuity. The assumption was the money would grow with wise government investments and those funds would be able to pay their promised liability to seniors.

Those payments were really a disguised tax. As baby boomers become eligible for Medicare and Social Security the obligation is increasing.

America is reaching the point where more people are receiving these entitlement benefits than the younger people who are funding them.

The logical result is the premium price for Medicare coverage is scheduled to double in 2014. The deductibles for services are scheduled to increase. The age requirement for eligibility is about to rise.  Access to care is decreasing as physicians refuse to take Medicare. Rationing of care is increasing as hospitals are being forced to assume risk. No one wants to assume the risk of taking care of sick people. Especially when they are not very good at evaluating the risk.

Everyone knows all of this. Nevertheless they turn away as the government either borrows more or prints more money.

Americans have been told by multiple administrations that citizens could not handle their own Social Security or Medicare annuity very well. Therefore the government must do it for them.

The government has done an awful job managing our retirement annuities.

Social Security and Medicare Trust Funds must become real trust funds that grow in value in the future or the government should hand control over to the people.

The Obama administration refuses to believe the significance of defensive medicine. Defensive medicine’s cost to the healthcare system is somewhere between 300 to 700 billion dollars a year.

The Obama administration’s estimate is it costs 3 billion dollars a year. They are wrong. Ask any physician.

Why should physicians or hospital systems assume the risk of missing a diagnosis by not doing a test?

The emotional and financial consequences of a frivolous lawsuit can be devastating.

Simple and fair tort reform will save the healthcare system around 500 billion dollars a year.  The 500 billion dollars is more than 5 times the cost of the 85 billion dollar sequestration. The administration is wasting 500 million dollars to protect the business of malpractice trial lawyers.

The administration claims its overhead for Medicare is only 2 ½ %. This represents the cost to pick an insurance company to adjudicate insurance claims. The true cost is not clear. However, it is somewhere between 40-60% of every Medicare dollar spent.

The insurance company is permitted by the government to pack many expenses into the direct patient care column and avoid going over the 15% medical loss ratio allowed.

The ten hidden taxes written into Obamacare are now starting to be felt. The Obamacare taxes are going to increase the cost of medical care not decrease the cost as the affordable care act promises. 

Patients are directly responsible for many of their own medical outcomes.  If patients had skin in the game and financial incentives they would pay attention to their self -care and their physicians’ recommendations. 

There are no incentives in Obamacare for patients to manage their care effectively. Financial gain would get their attention.

These are just a few of the solutions to the real problems in healthcare. There is much more waste in federal spending than $85 billion dollars a year.

All you have to do is look at the list of extraordinary waste that Senator Tom Coburn has compiled.

Rand Paul did a clever thing. He sent $600,000 of his senate office budget back to the U.S. Treasury after carefully trying to save money. The 49 other senators and over 400 congressperson ought to do the same. It would set an example for all of the bureaucracy to do the same. In fact President Obama ought to demand it.

“The Kentucky Republican returned $600,000 in funds he saved from his Senate office budget in the last year, the Louisville Courier-Journal reported.

“It’s the only budget I control,” Paul said at a news conference in Louisville. “It’s not enough, but it’s a start.”

If every congressperson saved 600,000 a year as Rand Paul did the deficit would be reduced by $321 million dollars more a year. If all the cabinet positions and their agencies tried to save money and were rewarded for saving money we would start to make some progress in decreasing the deficit.

The Simpson Bowles Report commissioned by President Obama would be helpful in eliminating unnecessary agencies and duplication. Their report has been ignored by the Obama administration.

Why has President Obama refused to listen to people who have exposed the many areas of government waste? It is incomprehensible.  

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



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What Is The Insurance Value Of Medicare?

Stanley Feld M.D.,FACP,MACE

 

Healthcare insurance is great if you do not need it.

The wonderful thing about Medicare is private insurance is not available to seniors.  

Healthcare insurance companies are not interested in covering consumers with health risks or preexisting illnesses.

In fact private individual healthcare insurance policies are not available to an unemployed 55 year old person with mild obesity and hypertension.

If you are employed and over 65 years old with mild obesity and hypertension the healthcare insurance industry is required to insure you under your employer healthcare plan.

The employed person receives healthcare coverage with pre-tax dollars.

 A person who might be eligible to purchase individual healthcare insurance must pay with after-tax dollars.

This is unfair but easily corrected.

The pre-tax/post tax issue could be solved if the state insurance boards required the healthcare insurance companies, wanting to sell private insurance in that state, cover everyone applying for insurance. The insurance company should be required to set the premiums based on community rating.

Everyone should pay premiums with pre-tax dollars.

Medicare, through government inefficiency, has become very expensive. If it were efficient insurance it would be less expensive to both consumers and the government.

Most working people have no idea of Medicare’s cost to them during their working years.

Medicare’s yearly tax withholding is 1.45% of salary. A worker earning $100,000 a year pays $1450 yearly to the Medicare Trust Fund. In 40 years that person would pay $58,000 into the Trust Fund.

When they became eligible for;

 Medicare Part B the yearly premium in 2012 was means tested.

 

If your yearly income in 2010 was		You pay (in 2012)
File individual tax return	File joint tax return
$85,000 or less	$170,000 or less	$99.90
above $85,000 up to $107,000	above $170,000 up to $214,000	$139.90
above $107,000 up to $160,000	above $214,000 up to $320,000	$199.80
above $160,000 up to $214,000	above $320,000 up to $428,000	$259.70

 

In 2013 the Medicare Part B premiums are going to increase.
If your yearly income in 2011 was				You pay (in 2013)
File individual tax return	File joint tax return
$85,000 or less	$170,000 or less			$104.90
above $85,000 up to $107,000	above $170,000 up to $214,000			$146.90
above $107,000 up to $160,000	above $214,000 up to $320,000			$209.80
above $160,000 up to $214,000	above $320,000 up to $428,000			$272.70
above $214,000	above $428,000			$335.70

 

Income is defined as income from all sources such as capital gains, interest, pension annuities, social security and all earned income.

Further premium increases have been announced for 2014 but have not been published.

Medicare premiums are taken out of each Social Security check.

The Medicare Part B insurance has deductible and co-pay rules. Medicare Part B deductibles apply for each hospital stay, ER visits and physician office visits.

For each benefit period you pay:

• A total of $1,156 for each hospital admission of 1-60 days.
• $289 per day for days 61-90 of a hospital stay.
• $578 per day for days 91-150 of a hospital stay (Lifetime Reserve Days).
• All costs for each day beyond 150 days.
•  

Skilled Nursing Facility Coinsurance

• $144.50 per day for days 21 through 100 each benefit period. Days 1-20 are free.
•  

Part B: (covers Medicare eligible physician services, outpatient hospital services, certain home health services, durable medical equipment)

• $140.00 per year. (Note: You pay 20% of the Medicare-approved amount for services after you meet the $140.00 deductible.)

 

The deductible for the first $140 dollars worth of services plus 20% of any physicians and hospital bill can add up as one gets older. It becomes unaffordable for many seniors.

 

Medicare Part B’s deductibles and copays’ costs makes Medicare gap coverage   essential.

Premiums For Medicare Part F   

Policy Summary

Monthly Premium:
$84 - $302  depending on age and benefits

Estimated Annual Cost: $6,050.00

Benefits

• Basic Benefits Medigap Basic Benefits definition[?] - Opens in a new window
• Skilled Nursing Facilities Skilled Nursing Facility definition[?] - Opens in a new window

• Part A Deductible Part A (Hospital Insurance) definition[?] - Opens in a new window
• Part B Deductible Part B (Medical Insurance) definition[?] - Opens in a new window
• Part B Excess Charges (100%)

• Foreign Travel Emergency
• Preventive Services

 Medicare Part D is the drug benefit plan. Medicare Part D helps reduce the cost of medications.

Medicare Part D is also means tested. There are multiple plans to pick. Some include complete payment for brand named drugs and some cover the donut. The price can range from $40 to $120 per month per senior depending on the coverage a senior picks. The additional means tested fees are below.

The brand named drugs are expensive. Most drug chains have followed Wal-Mart’s lead and charge $4.00 for generic drugs. This forces seniors to purchase generic drugs

Medicare Part D is expensive and unfair for seniors needing brand named drugs.

The Means Testing Formula For Medicare Part D 2012

 If your yearly income in 2010 was

		You pay
File individual tax return	File joint tax return
$85,000 or less	$170,000 or less	Your plan premium
above $85,000 up to $107,000	above $170,000 up to $214,000	$11.60 + your plan premium
above $107,000 up to $160,000	above $214,000 up to $320,000	$29.90 + your plan premium
above $160,000 up to $214,000	above $320,000 up to $428,000	$48.10+ your plan premium
above $214,000	above $428,000	$66.40 + your plan premium

 http://www.medicare.gov/your-medicare-costs/costs-at-a-glance/costs-at-glance.html

 Medigap fees and Medicare Part D fees are paid with post tax dollars.

These costs are in addition to seniors having contributed $58,000 to the Medicare Trust Fund during their working years.

“The reason we have health insurance at all is not that health care is expensive, but rather that there is great uncertainty about who will need very expensive and potentially lifesaving care and when they will need it. Medicare should give beneficiaries not just access to medical care, but also protection from the risk of catastrophic spending.” 

Medicare coverage is not cheap. President Obama’s Obamacare is going to make it more expensive with less access to care.

 Why is Medicare Part B,F,D  so expensive when the average person on Medicare spends only $6,600 dollar per year?

This is the major question. The government should focus on the answer. It should not be spending time and money on a system that is punitive to patients and physicians and has little chance of being successful.

The money creating the Medicare deficit is going somewhere. Where?

The cost to Medicare beneficiaries is high. The protection against economic ruin is limited. The basic benefit lacks a cap on out-of-pocket spending, so beneficiaries are exposed to the risk of open-ended cost sharing that can generate substantial financial strain (or deplete assets for surviving spouses).1 

Moreover, the odds of facing a catastrophic expense mount over time. Almost 50% of beneficiaries are hospitalized at least once over a 4-year period.2 

If we are going protect our seniors from financial strain or ruin Medicare must reassess it premises and reduce its administrative waste. It must be completely transparent. If the government did it correctly it would provide an affordable healthcare insurance plan for seniors.

“Everyone knows the dice is loaded.” Leonard Cohen.

  

http://youtu.be/GUfS8LyeUyM

 

At the moment seniors do not have another choice. It is the only game in town.

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

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It Is All About Trust

Stanley Feld M.D.,FACP,MACE

I voted for President Obama in 2008 because he promised us hope and change. I knew little of his past or present ideology. He was an attractive candidate and promised hope.  The New York Times never went into depth about his past, past interests or past performances.

Americans trusted him and voted for him. He looked like and acted like the candidate of hope. I trusted him to lead America on the right path.

President Obama has done so many things wrong in the last 4 years that it is amazing to me that anyone trusts him today.

Yet he even said in one of his stump speeches “you know me and you know you can trust me.”

Immediately after his inauguration America was confronted with an $800 billion dollar stimulus package that promised to produce millions of shovel ready jobs. 

There weren’t many shovel ready jobs. He baled out some companies and not others. All the bale outs were at taxpayer expense.

This stimulus package provided lots of money to increase the size of government. In fact, President Obama used a sizable about of this money to build a government bureaucracy for a healthcare bill that was yet to be written.

A few things developed that made me suspicious of President Obama’s ideology.  President Obama is dedicated to big government and big spending even though it is inefficient and not directed toward its original goal.

I have not been a fan of John Maynard Keynes since I read Fredrick Hayek ‘s “Road to Serfdom.” 

FDR did not spend his way out of the depression. World War II got us out of the depression.

Keynesian economic has not worked. President Obama was clearly putting us on a “Road to Serfdom” with his out of control spending and increased national debt by over $4 trillion dollars.

President Obama has made many annoying moves in the last four years to fake out the American public.

Common denominators have been a lack of transparency, a disregard for the legislative branch of government and an overuse of executive orders.

Recent lack of transparency is illustrated by Fast and Furious and the tragic Benghazi tragedy.

The mainstream media’s coverage has been disgraceful.  http://query.nytimes.com/search/sitesearch/#/Bengasi%2C+Libya+consulate/

Other annoying actions have been the transfer of power from the congress to the executive branch and the intimidation of the Supreme Court.

It seems that he either ignores the constitution or gets around its meaning in some way. The notion that the constitution is an antiquated document is offensive and appalling.

The media as been manipulated by the way events and facts are presented.  November 2nd unemployment results are an outstanding example.

Americans have been conditioned over the years to get their news from sound bites and not detailed facts. Whichever sound bite is present the most times becomes the fact.

The economy is not doing well. It is growing at a very slow pace. Job growth is slow. The presentation of the monthly data is confusing.

The November 2 unemployment headline was; “Latest Jobs Report Shows Persistent Economic Growth.”

 The first sentence was there were 171,000 new jobs in October. The economy needs 500,000 new jobs per month for a normal recovery.

Consumers still cannot get jobs, credit or loans from banks.

The last sentence in the press release stated that unemployment rate rose from 7.8% to 7.9%. No one remembers the last sentence

Since the media is the message and 171,000 new jobs sounds like a big number that is better than expected. It gives the illusion that the economy is improving on President Obama’s watch.

Americans are not stupid. The New York Times is trying much too hard to get President Obama re-elected.

President Obama has generated mistrust by Americans for the promises he made about Medicare and Obamacare. The amount of money spent, so far, by the President Obama on Obamacare is not available to the public.

The analysis of the increase in middle class taxes already in place as a result of Obamacare are not discussed by the main stream media nor by President Obama.  

There are 10 hidden taxes on citizens making less than $250,000 a year i.e. the Medicare payroll tax. This tax is going up from 2.9 percent to 3.8 percent. There is an additional 3.8 percent Medicare tax added to investment income. Together, this will cost taxpayers $318 billion from 2013 to 2022. These taxes were not obvious to the great majority.

The impact of future Obamacare taxes on the middle class is going to be overwhelming. The new taxes were written into Obamacare but not presented to the public. This serves to increase the mistrust for President Obama and his promise for transparency.

The one thing I learned from Hayek is that you cannot manipulate the economy by edict or force without limiting freedom. In a “free” society “ the unintended consequences and costs are certain to get out of control.

Costs can be controlled in a level playing field competitive free market. The consumer driven market is non-existent. Consumers must start to understand their power in society.

Government should make rules that level the paying field for all and then get out of the way. No spinning the facts and no non-transparent activities. No favoritism to lobbyists, associations or unions.

Rules should be made for the benefit of the people in a competitive environment.

Medicare premiums and deductible expenses for senior will raise not decrease as promised by President Obama. Out of pocket expenses will rise.

Seniors’ standard Medicare Part B monthly premiums will jump from $99.90 to $128.20 at the low end of the means testing while their Part B deductibles will rise from $140 to $180. Seniors’ Medicare hospital deductible on admission will increase from $1,156 to $1,336, while their daily hospital coinsurance will climb from $289 to $334 in out of pocket expenses.

I have pointed out that Obama care’s main feature, ACO’s, will be impossible to execute and will subsequently fail. This will lead to greater distortions of the healthcare system.

The result will be a decrease in choice, a decrease in the freedom to choose your physicians or recommended care, a decrease in access to care and rationing of care once the government has total control.

This does not included increases in costs to seniors and the middle class that has been scheduled by Obamacare.   

All the stakeholders have taken advantage of the healthcare system in its present form. The stakeholders are the healthcare insurance industry, the hospital systems, the government, the patients and the physicians.

The healthcare system needs a new business model in order to survive. President Obama’s business model is not the one. The public does not trust it.

The actions of the stakeholders are natural as these stakeholders try to survive.

 It is government’s job to make the rules so these dysfunctional survival methods cannot flourish.  

President Obama cannot be an effective leader in the future. The public does not trust him any more.

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

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The Ryan Medicare Plan And President Obama's Criticism

Stanley Feld M.D.,FACP,MACE

President Obama has said over and over again that Paul Ryan’s budget is going to end Medicare coverage as WE KNOW IT and leave seniors without healthcare coverage. The first part is TRUE and the second part is FALSE.

President Obama’s spin miesters (David Axelrod et al)  have a knack for distorting facts with lies.  The Obama team couples the distortions of the truth together with powerful visual distortions in the media. If the visual distortion is seen enough times it is interpreted as the truth no matter what the facts are.

As an example, President Obama’s grandma ad has appeared over and over again. The grandma ad is totally false. However “the media is the message. ” 

This false message has become part of the American psyche.

Who needs facts or the truth when the media presents such a vivid image?

  

http://youtu.be/OGnE83A1Z4U

Paul Ryan’s plan will change Medicare as we know it.  The simple truth is Medicare is going broke. If nothing is done the Medicare program will be bankrupt and disappear.  Then seniors will not have any healthcare insurance coverage.

Paul Ryan’s Medicare change is the way to save the Medicare insurance coverage for senior of future generations.

IT WILL NOT CHANGE MEDICARE COVERAGE FOR ANYONE PRESENTLY 55 YEARS OLD OR OLDER.

Obamacare will hasten the bankruptcy of Medicare and balloon our debt and deficit. Medicare coverage will be forced to disappear.

In order to convince the American public that he is going to reduce spending President Obama played an accounting trick play on the American public.

It goes by the name of "double counting."

It is clear to me that neither Democrats nor some Republicans understand President Obama’s double counting. Double counting will hasten the demise of Medicare.

Paul Ryan is trying to explain double counting once more to seniors. He is calling out President Obama and David Axelrod as they try to obfuscate the truth about double counting and the Paul Ryan’s plan to save Medicare.

American seniors are starting to catch on slowly but surely. The public is getting tired of the Obama/Axelrod false hope, half-truths and outright lies.

“In short, the Medicare scoring convention is not widely understood and thus obscures the double-counting.”

Putting the Medicare payroll tax hikes and spending constraints on the "pay-as-you-go" ledger was instrumental in getting the health law through Congress, because doing so fostered a widespread misperception that the law would reduce future deficits.

“No such prohibition exists in the budget process against committing Medicare savings simultaneously to Medicare and to pay for a new federal program (Obamacare).”

“It's this budget loophole, unique to Medicare, that gives the health law's spending constraints and payroll tax hikes the appearance of reducing federal deficits.

But it is appearance, not reality. If you have only $1 of income and are obliged to pay a dollar each to two different recipients, then you will have to borrow another $1. This is effectively what the health law does. It authorizes far more in spending than it creates in savings.

It is one of President Obama’s many trick plays on the American public.

The cartoon presents a simple explanation of double counting. Paul Ryan should use this simple explanation of double counting.

  

http://youtu.be/q8x20P4RpgQ

It is important to listen carefully with our eyes wide open and hear President Obama’s lies about Medicare spending and Obamacare in the next two months.

Now President Obama says he is going to reduce fraud and abuse in Medicare by $731 billion dollars.

Who is he kidding?

His plan is to reduce payment to physicians and hospitals. He will be forced to play favorates with certain hospital systems.

A reduction in Medicare cost will not will not happen as long as President Obama permits the healthcare insurance industry to do the administrative services for Medicare and not address the issue of Tort Reform.

The Accountable Care Organizations and its payment changes will not save money. In fact it might cost more if ACOs can be organized at all.

Medicare’s administrative services have been outsourced to the healthcare insurance industry since 1965. Medicare has never had a chance of being fiscally viable and sustainable. The healthcare insurance industry takes 40-60% of every healthcare dollar spent of the top.

Obamacare does not change this procedure one bit.

President Obama continues to say that Mitt Romney and Paul Ryan allegedly are going to end Medicare and leave seniors without coverage. 

The exact opposite is true. However, Romney and Ryan have not explained this simply enough to be understood by all. They must explain in detail and sound bites why President Obama’s assertion is false.

In fact, Obamacare is going to change Medicare as we now know it. Actually it already is causing the rationing of cancer drugs and a de facto rationing of care.

“It is ObamaCare that was specifically designed to destroy Medicare, and to herd seniors into a one-size-fits-all plan where care to them can be rationed with impunity.”

“ And even Dr. Donald Berwick, President Obama's personal choice to run Medicare and Medicaid, admitted that this rationing is one of ObamaCare's ultimate aims, as did Dr. Ezekiel Emanuel, one of the president's chief health care advisers.”

Under Obamacare, Medicare has already changed as we know it. In 2014 it will change drastically.

In view of this fact for President Obama to say that the Ryan plan will change Medicare as we know it is arrogant and disingenuios.

There are many differences in both plans. I will try to explain the differences in simple terms in future blogs.

The huge difference is Obamacare is an entitlement that promotes dependence on the central government where the Ryan plan promotes self-responsibility and independence from government and government controls over our freedoms of choice and decision-making.

President Obama is taking a dangerous chance with his criticisms of the Ryan plan.

Hopefully the Romney/Ryan ticket will be able to explain away President Obama’s criticisms in simple, understandable terms.

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

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Obamacare Tax Increases That Have Been Forgotten

Stanley Feld M.D.,FACP,MACE

Americans have forgotten the increase in taxes written into President Obama’s Healthcare Reform Act. There are 20 hidden taxes in the law that effect citizens making 250,000 dollars a year or less. These taxes contradicts President Obama’s promise.

Grover Norquist wrote an excellent summary of those new taxes for the public to review. President Obama’s hypocrisy toward the American people is obvious.

These taxes and Mr. Norquist’s summary is ignored by the traditional media.

Since the recent Supreme Court decision has managed to keep Obamacare alive, it is vital that voters in all income brackets understand the new taxes imbedded in the law.

President Obama was not telling the truth when he said citizens earning under $250,000 would not pay one single dime more in taxes.

  

http://youtu.be/56c1fSdTAWI

Grover Norquist is president of Americans for Tax Reform, a coalition of taxpayer groups, individuals, and businesses opposed to higher taxes at the federal, state, and local levels. The coalition organizes the Taxpayer Protection Pledge, which asks all candidates for federal and state office to commit themselves in writing to oppose all tax increases.

In my last blog “ The Supreme Court And Obamacare” I said Obamacare is the largest tax increase in American history. As things go sour for Obamacare the government is going to have to raise taxes even further.

Taxpayers earning under $250,000 will experience the burden of the $500 billion dollar increase in taxes.

 “Obamacare contains 20 new or higher taxes on American families and small businesses. 

Arranged by their respective effective dates, below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:

Taxes that took effect in 2010:

1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971.

2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113.

3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105.

4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980.

5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004.

6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399.

Taxes that took effect in 2011:

7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959.

8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959.

Taxes that took effect in 2012:

9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957.

Taxes that take effect in 2013:

10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93.

	Capital Gains	Dividends	Other*
2012	15%	15%	35%
2013+	23.8%	43.4%	43.4%

*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.

11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:

	First $200,000 ($250,000 Married) Employer/Employee	All Remaining Wages Employer/Employee
Current Law	1.45%/1.45% 2.9% self-employed	1.45%/1.45% 2.9% self-employed
Obamacare Tax Hike	1.45%/1.45% 2.9% self-employed	1.45%/2.35% 3.8% self-employed

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014:

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following

	1 Adult	2 Adults	3+ Adults
2014	1% AGI/$95	1% AGI/$190	1% AGI/$285
2015	2% AGI/$325	2% AGI/$650	2% AGI/$975
2016 +	2.5% AGI/$695	2.5% AGI/$1390	2.5% AGI/$2085

Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).Bill: PPACA; Page: 317-337

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).Bill: PPACA; Page: 345-346

Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

Taxes that take effect in 2018:

20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

Mr. Norquist left out the worse tax of all. This “tax” is under everyone’s radar. It has never  been mentioned in the traditional mainstream media. It is the tax on Seniors who are on Medicare.

"The per person Medicare Insurance Premium will increase from the present
Monthly Fee of $96.40, rising to:

$104.20 in 2012

$120.20 in 2013

And

$247.00 in 2014."

 

All seniors are means tested. This means the greater your income from any source including work income, pension income, capital gains and interest or dividend income the higher the baseline premiums become.

This “tax” had been decided by a Democratic controlled congress that had not read the bill or understood all of its consequences.

These are provisions incorporated in the Obamacare legislation, purposely

delayed so as not to anger seniors during President Obama’s 2012 Re-Election Campaign.

Please send this blog to all the seniors you know and their children. It is important for them to know that President Obama is throwing seniors under the bus.  Obamacare must be repealed.

Everyone must stay focused. President Obama is going to try to change the conversation.

Some of these taxes have already gone into effect. If the Republicans win the House and the Senate as well as the Presidency, Obamacare must be repealed.   

Everyone interested in America’s economic future must tell a friend. President Obama has deceived Americans.  

It is time for everyone to get angry and vote him out of office in November.

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

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A Genius Wrote

Stanley Feld M.D.,FACP,MACE

Todd Siler is a famous artist and scientist. He is much more that. He is a genius. He has written many books about visualizing and solving problems. The most famous is “Thinks Like A Genius”.

For many years he created “Truizms” for the Rocky Mountain News. These Truizms deserve a publication of their own. His Truizms’ are insightful and inspiring. Todd sent me some Truizms to help me illustrate the points I am trying to make.

It is an honor to have Todd become a great friend. He is extremely perceptive and a phenomenal teacher, in addition to being a wonderful human being.

Todd wrote a great response to my last blog “Lets (Not) Do Physicals.”    

Stanley, the frustrating situation you've accurately described here invokes Joseph Heller's classic novel Catch-22:

"There was only one catch and that was Catch-22, which specified that a concern for one's safety in the face of dangers that were real and immediate was the process of a rational mind. Orr was crazy and could be grounded. All he had to do was ask; and as soon as he did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly more missions and sane if he didn't, but if he were sane he had to fly them. If he flew them he was crazy and didn't have to; but if he didn't want to he was sane and had to. Yossarian was moved very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle. (p. 56, ch. 5)...."Catch-22 says they have a right to do anything we can't stop them from doing." 

Quoting my blog , Todd wrote,

“It is not enough for the Obama administration to say it is interested in prevention of disease when it restricts access to prevention measures.

It is not right to restrict access to steps needed to prevent the debilitating or deadly complications of hip fracture.   

“The USPSTF concludes that, for men, evidence of the benefits of screening for osteoporosis is lacking and the balance of benefits and harms cannot be determined.” 

To me the trend to reduce physical examinations and lab screening is a ridiculous trend. The present spending on physicals probably should be modified some but not discontinued.” 

I agree!

Todd

One of Todd’s insightful Truisms’’ follws

Our bureaucratic society with its multiple and conflicting rules does not permit us to honestly do the right thing for Americans, especially when money is involved.

President Obama says the right things, but he does not do the right things.

The Healthcare System’s policies should let consumers decide on what is logical for them after listening to the advice of their physicians.

Consumers should control their healthcare dollars with financial incentives  provided for them to stay healthy, become educated about their diseases,  and control their chronic diseases.  

The evidence medicine debate should be between the medical community and the USPTF without creating a media circus.

Healthcare insurance should be a high deductible first dollar coverage plan that would cover everyone.

I covered how this would work in my blog “The Ideal Medical Saving Account is Democratic.

America’s healthcare system is at the home in a “Catch 22”.

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

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A Real Marketplace For Healthcare.

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Reform Act is all about government control of 19% of the U.S. economy.

The media has publicized ridiculously high charges for cardiac bypass and other complicated procedures. It ought to find out what the actual contracted reimbursement fee is.

All the stakeholders are at fault for the lack of transparency, misinformation, administrative waste, misuse of taxpayers’ dollars and the manipulation of the media.

It is important for the government and the healthcare industry to continue to blame physicians for being the villain in our dysfunctional healthcare system.

Remember physician receive only 10% of the healthcare dollars spent in our healthcare system. Who receives the other 90%? What value do the other recipient add to medical care?

The medias quoted prices are a scare tactic to keep government’s control of the healthcare system advancing.

What is going to happen after Obamacare is repealed?

There will still be millions uninsured.

There will still be millions who cannot buy insurance because of pre-existing conditions.

There will still be millions who choose not to purchase coverage.

There will still be inefficiency and waste in the healthcare system.

Stakeholders are adjusting to the potential restrictions of Obamacare. They are finding new ways to game the healthcare system.

Healthcare costs will rise and inefficiency in the healthcare system will increase whether we have Obamacare or not.

President Obama is trying to set rules and create regulations to eliminate potential solutions to our healthcare system’s problems.

He is trying to regulate and eliminate high deductible insurance plans and Health Savings Accounts. Under Obamacare it will be much cheaper for employers to pay the penalty than provide healthcare insurance for their employees.

Employees will be forced to buy insurance from President Obama’s health insurance exchange (Public Option). There will be no other options. At that point the government has full control of healthcare.

It wouldn’t be a bad thing if the government could afford another potentially inefficient entitlement program. President Obama is clearly trying to squeeze complete government control of healthcare through the back door.

It will not work!

What should be done?

The government must create a real marketplace for healthcare insurance. A marketplace constructed for the benefit of consumers and not secondary stakeholders’ vested interests. Stakeholders would adjust because of their competitive compulsion to get customers. They will compete for consumer business by lowering healthcare costs.

The mindset must change to a consumer driven system not a government driven system.

My Ideal Medical Saving Account would be an excellent way to provide full first dollar healthcare insurance coverage for unplanned medical expenses. It would also provide financial incentive for consumers to be responsible for their health and healthcare dollars.

These are some of the rules that government should have.

1. Healthcare insurance policies should be “guaranteed renewable.”

2. Healthcare policies should include a right to purchase insurance in the future regardless of pre-existing illness.

3. Healthcare insurance policies should follow you from job to job regardless of a move across state lines.

4. Individual healthcare insurance policies should have the same tax-deductible status as employer provided healthcare insurance policies.

The government could form a successful individual insurance market place with these simple rules or regulations.

 “Most pathologies in the current system are creatures of previous laws and regulations.”

“ Solicitor General Donald Verrilli explained as much in his opening statement to the Supreme Court: “The individual market does not provide affordable health insurance,” he noted, “because the multibillion dollar subsidies that are available” for the “employer market are not available in the individual market.”

My Ideal Medical Savings Account could apply to Medicare and Medicaid. It provides incentives and real healthcare insurance coverage. It allows the consumer to choose. It encourages consumers to be knowledgeable shoppers for healthcare. 

The main argument for a mandate before the Supreme Court was that people of modest means can fail to buy insurance, and then rely on charity care in emergency rooms, shifting the cost to the rest of us.

The government is spending that money already. The mandate will not stop the emergency room use.

 A consumer driven healthcare system using My Ideal Medical Saving Accounts would provide incentives for the indigent or those of modest means to try to save money for them by taking care of their health. The government provides those educational resources already. This might encourage its use.

The emergency room treatment expenses for indigent and uninsured are not the central reason for rising healthcare costs. Costs are rising because people, who do have insurance, and their doctors, overuse health services and don’t shop on price.

The Ideal Medical Savings Accounts should be fully tax deductible to both individual and groups.  The healthcare system would then become consumer driven. Consumers would become price sensitive because of financial incentives. A competitive healthcare market would then be created. The result would be a decrease in the cost of healthcare. It certainly would be cheaper than the artificial, bizarre, government controlled healthcare market for we have today.

Enlarging government control would make the healthcare market more expensive and less efficient than the unsustainable government controlled healthcare system that exists.

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

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Pay For Performance (P4P) Pilot Project Fails

Stanley Feld M.D.,FACP,MACE

The CBO announced that the P4P pilot project did not reduce the cost of providing healthcare nor yielded long-term gains in mortality.

"Tying financial incentives to performance, often referred to as pay for performance, has gained broad acceptance as an approach to improving the quality of health care.1-4 

The Centers for Medicare and Medicaid Services (CMS) recently completed a 6-year demonstration of pay for performance for hospitals through the Premier Hospital Quality Incentive Demonstration (HQID), and the Affordable Care Act calls for CMS to expand this program to nearly all U.S. hospitals in 2012. 

P4P sounds good theoretically. The government paying more money for better outcomes sounds logical from the payer’s point of view.  It is not logical from the payees’ (physicians’) point of view.

The emphasis of P4P is on physicians and hospitals practice process to improve quality through the use of evidence based medicine.

The evidence based medicine guidelines are determined by the Independent Physician Advisory Board (IPAB). The evidence based medicine should improve quality and lead to better patient outcomes and decrease healthcare costs..

This pilot project showed that P4P does not produce the desired result. The hope was to inspire poor performing centers to improve and good performing centers to perform better in order to receive incentive pay for performance as a bonus.

"In summary, we found little evidence that participation in the Premier HQID program led to lower 30-day mortality rates, suggesting that we still have not identified the right mix of incentives and targets to ensure that pay for performance will drive improvements in patient outcomes.

  Even though Congress has required that the CMS adopt pay for performance for hospitals, expectations with regard to programs modeled after Premier HQID should remain modest."

This last sentence is great advice.

Congress and President Obama should reexamine their premise.

Patients’ performance is left out of the P4P program. Patients’ attitude toward their disease, adherence to taking medicine prescribed, compliance with prescribed therapy and patients ability to make rapid therapeutic adjustment of medications depends on patients and not physicians or physicians’ practice process.  

There is no question that the process of care is important. There is no question that processes based on evidence must be learned by all physicians. There is also no question that processes based on evidence rapidly change and must be swiftly adjusted.

The most important determinant in patients’ outcome depends on patients. Physicians’ practices should not be judged disregarding patients’ behavior.  

It is the physicians’ responsibility to teach patients how to be “Professors Of Their Diseases.”

Just imagine how many re-hospitalizations could be avoided for congestive heart failure if patients were motivated and educated to detect the onset of congestive heart failure and how to increase the dosage of medication to abort the episode.

Think of all the heart disease that could be prevented if obesity was prevented.

Think of all the acute asthma attacks and uncontrolled diabetes whose hospitalizations could be prevented.

Think about all the complications of diseases could be prevented if patients were incentivized to lead a healthy lifestyle.

At present the administration is trying to change incentives. It will not work.

The reason is simple.

I have written several blogs on why P4P will fail. 

When will someone listen?

I clearly explained the reasons for predicting P4P’s failure in a blog written in April 2007.

 Pay for Performance(P4P): Another Complicated Mistake.

 

April 15,2007

Stanley Feld M.D.FACP,MACE

The intuitive meaning of Pay for Performance (P4P) is the better you perform the more you get paid. This is true in many industries. The concept is well advertised in the well publicized salaries of professional athletes. Recently we have heard of grotesques salaries of fired CEO that get hundreds of millions of dollars in termination salaries for doing a bad job. They are getting paid well for poor job performance.

The underlying assumption is that with P4P, physicians should be responsible and accountable for medical outcomes. The physicians will be reimbursed for medical outcomes. The reimbursements made to the physicians are under the control of the government or insurance industry. These entities are interpreting the criteria for the quality of medical outcomes.

We have seen what happened to Dr. Petak even though his treatment is correct and saves money for the health care system. Many physicians feel P4P is simply code for reducing physician reimbursement. In an environment of existing mistrust between all the stakeholders, the potential is great for generating more mistrust. The growth of the mistrust will result in more dysfunction in the healthcare system and increased cost.

The definition of quality medical care has not been made clear by the secondary facilitators while proposing the P4P rollout. Organized medicine has not been outraged by the proposal. No one has analyzed it with all the potential for unforeseen consequence. Can P4P prevent the onset of disease or decrease complication rate for chronic disease? Who are the responsible stakeholders for increasing quality? The stakeholders responsible for medical quality care are the physician and the patient. If the patients do not adhere to the medical regime prescribed, the quality of care will not improve. Many studies have shown that compliance rates are as low as 30% for certain treatments. Patients will not have improved medical outcomes if they do not follow a treatment plan. Why should the physician be penalized? Why doesn’t the government and the insurance industry declare that patients are equally responsible for both good and bad medical outcomes? The structures of bureaucratic systems would not permit it because not only would it be judged to be insensitive it would be socially incorrect and result in a public outrage.

Patients have to be educated and become professor of their disease, be responsible for their health behaviors such as filling their prescriptions, exercising , decreasing obesity, not smoking or drinking. All preventive measures must be promoted. Patient need to be responsible their behavior and adherence to therapy. The physicians should not experience all of the brunt of poor outcomes or the credit for good outcomes. The P4P movement is misguided.

They are misguided when they think this is the fix. P4P represents another false hope and complicated mistake that in my opinion will lead to great cost to the healthcare system without improvement in medical outcomes.

I have defined quality medical care in a measurable way. None of these criteria are individual indicators of quality medical care. The system of quality of care should be the quality measure of prevention of medical complications and not the measurement of the parts on the path toward quality medical care. The patients’ activity is at least half of the quality equation to reduce the complications of chronic disease.

However, the secondary stakeholders are making a mistake with P4P. They have developed artificial quality indicators that do not measure quality medical care accurately. They want to force physicians to follow their indicators rather than use their medical skill and medical judgment. The way to improve quality is not to be punitive to the physicians. They are only one half of the quality equation to reduce medical care cost. The way to do it is to set up a competitive environment.

Lasik surgery is a perfect example. It stated with all ophthalmologic doing Lasik for $3000 an eye. Insurance did not pay for Lasik surgery. Some ophthalmologists’ developed focus factories that did just Lasik surgery. They developed economies of scale and expertise that enabled them to reduce the price. Patients chose these focused factories on the bases of price, and outcomes rather than the local opthalmologists. The price in some cities is now $250 an eye. Remember patients are not stupid. However, they are the 50% of the quality care equation. They will spend their money wisely and drive quality, if they own their healthcare dollar. It is our job to teach patients how to make the correct decisions. It is not the insurance industry or the government to restrict access to care and judge what is best. I believe the market place can do it.

In diabetes the healthcare system sends 15% of the healthcare dollar on 5% of the population and rising. Ninety percent of those dollars is spent on the complications of diabetes. If patients with diabetes were given control of their healthcare dollar and were rewarded for avoiding complications of diabetes we would be on our way to a competitive environment for the treatment of diabetes. The patients would search for physicians that had economies of scale and expertise to help them improve their quality of medical care. They would drive the creation of focus factories in diabetes as well as any other chronic disease. The system would then be stimulating competition and improving quality medical care not punishing physicians and patients. A negative and faulty penalty system (P4P) will not solve any of our problems. I predict it will only make it worse for the patient and the physician and more profitable for the insurance industry and hospitals. The physician and patient community ought to be outraged. They are not because we are a sound byte society and do not pay attention to the details of issues.

The P4P fad is simply another reason why patients need to be in control of their healthcare dollar. They should be rewarded if they avoid complications and improve their health. Physicians should compete to develop focus factories in order to generate economies of scale and improved medical outcomes. All of this has to be done in a price transparent environment.

 

April 15, 2007 in Medicine: Healthcare System | Permalink

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

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Hospital System Monopolies And ACOs

Stanley Feld M.D.,FACP,MACE

I have been a constant critic of Accountable Care Organizations. I have said they cannot work to the benefit of patients and physicians because of the difficulty of organizing them and the subsequent unintended consequences. ACOs will increase the costs to the government and healthcare insurance industry to provide the administrative services.

Government has proven over and over again its ability to make complicated mistakes. These mistakes result from bloated bureaucracies and conflicting bureaucratic missions.

Additionally the government outsources administrative services to the healthcare insurance industry. Administrative services fees are constantly increasing because of waste, inefficiency, and mark-ups.

Hospital systems have been merging for 15 years. In the process they are attempting to buy physicians practice and provide a salary for physicians.

 Hospitals are brick and mortar structures. They are not the future of medical care. Hospitals, now hospital systems, had to change their business plan because more and more patients are being treated out of the hospital.

Outpatient clinics, diagnostic imaging centers, chemistry laboratories and ambulatory surgical centers have shifted income from hospitals to physician owned outpatient clinics.

Hospital systems goal has been to buy physicians’ practices and ancillary care facilities. Hospital systems’ consultants have concluded that they would be in a better position to negotiate price if they owned the physicians infrastructure regardless of the cost and pay physicians a salary.

The published reason given for this action is to provide better and integrated medical care within their hospital system. The real reason is to capture the revenue lost to outpatient facilities and profit from physicians’ productivity. Physicians are realizing they are being taken advantage of and are demanding their fair share of their own productivity.

 The Federal Trade Commission is supposed to have the authority to challenge monopolistic hospital mergers to protect consumers.

 

In 1996, the FTC amended its policies on health care mergers. The new policy encouraged hospital systems to merge by providing safe harbor to competing hospital systems when the hospital system could prove their hospital could achieve sufficient clinical integration.

 

The definition of sufficient integration was very loose and ill defined. The government thought it could save money by having all the fees under one roof. The FTC encouraged healthcare system monopolies in order to achieve more efficient and integrated care. It did not realize it would bite them in the leg someday.

It has always been a mystery to me how the government came to this conclusion. Suddenly the government has realized that the monopolies have turned on it and are in a position to demand more reimbursement. 

J. Frank Rosch the FTC Commissioner said,

 “I thought that the 1996 amendments…were the biggest loophole in the antitrust laws I had seen,”

 “Subsequent Advisory Opinions issued by Commission staff…were about as clear as mud.” 

Dr. Donald Berwick and President Obama claim that Accountable Care Organizations are the cure to our rising healthcare costs. A gigantic and expensive bureaucratic system has been constructed by CMS to regulate these new ACOs.  ACO’s promote further consolidation and mergers of physicians and hospital systems.

“The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”

Remember the government outsources all of the administrative services to the healthcare insurance industry. I have shown how the healthcare insurance industry has taken 30 to 50% of every Medicare healthcare dollar to the disadvantage of the taxpayer and seniors. 

Large merged hospital systems have in turn taken advantage of their size to take advantage of the healthcare insurance industry.

The healthcare insurance industry has taken advantage of the government in pricing administrative services.

Finally, the government has taken advantage of seniors by increasing Medicare premiums, increasing deductibles and decreasing benefits..

“ The final ACO guidelines, says Rosch, are “extraordinarily generous to providers,” and will constrain the FTC’s ability to block exploitative provider mergers.”

The Congressional Budget Office, much to the dismay of Obamacare’s advocates, did not think ACO’s would save much money in ten years.

 The CBO projected that the Medicare ACO initiative would save $5.3 billion over ten years.

 “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”

 This supposed savings amounts to eight-hundredths of one percent of Medicare’s spending over the projected ten years.

People have a tendency not to do the arithmetic when present with what sounds like a big number.              

 “Against the very meager prospects for cost savings,” Rosch concludes, “there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.

Middle-class Americans are already struggling with the burdens of the rising cost of health insurance. The potential ACO policy blunder is not to be taken lightly.

 Obamacare’s failure will skyrocket our federal debt. The lack of consideration of the dysfunctional dynamics of the healthcare system will result in unintended consequences that will create greater dysfunction and higher costs.  

Obamacare and ACOs will end up making health care even less affordable and accessible.

Maybe that is President Obama’s goal.

 

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

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Where Is The Healthcare Money Going?

Stanley Feld M.D.,FACP, MACE

In reviewing Ezekiel Emanuel’s New York Times article I thought of an interesting question. In Dr. Emanuel’s view it is not worth having tort reform or healthcare care insurance reform. He claims these reforms are an insignificant burden to the cost of the healthcare system.

I have demonstrated that the evidence for tort reform and reform of the healthcare insurance industry proves him wrong.

The question then is where is the $2.5 trillion dollars the U.S. healthcare system spends going?

President Obama and Dr. Emanuel think it is going to physicians. President Obama’s idea to control healthcare costs is to reduce physician reimbursement.

Physicians have the weakest expression of its vested interests among all the stakeholders because of lack of effective leadership. 

Simple arithmetic reveals that reducing physician reimbursement will yield an insignificant reduction in healthcare costs.

Never the less on January 1^st Medicare is going to decrease physicians’ reimbursement by 27%. This decrease is the result of the application of the government’s Sustainable Growth Rate (SGR).

The Sustainable Growth Rate (SGR) is a complicated and defective formula intended to contain the overall growth of Medicare spending for physicians’ services.  The intent was to keep physicians’ reimbursement in line with the nation’s ability to pay for that medical care.  The SGR formula uses the gross domestic product per capita in a complicated and inaccurate way. 

In 2008 the Bureau of Labor statistics published a report that there were 661,400 physicians in the United States.

 The report’s findings are summarized in the table below.

 

Projections data from the National Employment Matrix
Occupational Title	SOC Code	Employment, 2008	Projected  Employment, 2018	Change, 2008-18		Detailed Statistics
				Number	Percent
Physicians and surgeons	29-1060	661,400	805,500	144,100	22	[PDF]	[XLS]
NOTE: Data in this table are rounded. See the discussion of the employment projections table in the Handbook introductory chapter onOccupational Information Included in the Handbook.

Let us assume that 161,400 of the 661,400 physicians in the U.S. work in private medical related industries such as the healthcare insurance industry, the pharmaceutical industry, the physician executive industry and government services.  These physicians are not involved in direct patient care and do not generate direct patient costs to the healthcare system.

 The number of non direct patient care physicians is probably higher (185,192 in other non practice positions and 476,208 in direct patient care). My assumption uses 500,000 physicians involved in direct patient care for all types of insurance to inflate physicians’ reimbursement. 

The Bureau of Labor report states,

 Physicians and surgeons held about 661,400 jobs in 2008; approximately 12 percent were self-employed. About 53 percent of wage–and-salary physicians and surgeons worked in offices of physicians, and 19 percent were employed by hospitals.  .

 

Let us also assume that physicians’ overhead is 50% of total collections. Therefore physicians’ take home salary is 50% of collections. Fifty percent is a fairly accurate assessment whether the physicians are self employed or hospital system employed.  

 “According to the Medical Group Management Association's Physician Compensation and Production Survey, median total compensation for physicians varied by their type of practice. In 2008, physicians practicing primary care had total median annual compensation of $186,044, and physicians practicing in specialties earned total median annual compensation of $339,738.”

 If we round off the salaries to $190,000 for Primary Care Physicians and $340,000 for Specialists and round off the number of Primary Care Physicians to 300,000 (actually 375,000) and 200,000 in Specialties (actually 125,000) and do the math, physicians’ salary comprise only 5% of the total $2.5 trillion dollars spent in the healthcare system.

The Math:

 $190,000 per year per primary care physician x 300,000 physicians= $57,000,000,000 ($57 billion dollars for primary care physicians).

 340,000 per year per specialists x 200,000 specialists= $68,000,000,000 ( $68 billions dollars a year for specialists).

 $57 billion + $68 billion= $125 billion per year for the costs of physicians salary for direct patient care.

 $125 billion (125,000,000,000)/ $2.5 ($2,500,000,000,000) trillion per year = 5%

 If you double the physicians’ collections to include physicians’ overhead costs ,  physicians receive 10% of total dollars spent on healthcare system.

Improvements can be achieved in decreasing physicians’ overhead by having more integrated healthcare systems. Presently, most communities do a fair job.

Integrated electronic medical records could achieve a further decrease in the 5% of the total healthcare cost spend by physicians for overhead.

The government is spending billions of dollars on building bureaucracies, creating regulations, developing a IRS physicians fraud squad and creating committees trying to reduce 5% of the healthcare costs.

President Obama is approaching the problem of escalating healthcare system costs using the wrong premises. It will result in increasing healthcare system costs. Obamacare already has increased the costs of the healthcare system even though it is not fully implemented.

 "IF REALITY DOESN'T match your expectations, perhaps it's time to re-examine your premises."

 

Where is the other 90% of the healthcare system costs going?

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

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Class Act (Community Living Assistance Services and Supports) Has Been Shutdown

Stanley Feld M.D.,FACP, MACE

The CLASS Act was another ill-conceived part of President Obama’s healthcare reform act. President Obama and HHS (Health and Human Services) realized that this social entitlement program was going to be another entitlement disaster.  CLASS would have cost the taxpayers an additional $75 billion per year when it was passed on the condition of being budget neutral.

 CLASS was discontinued before it could join other entrenched government entitlement programs that are unsustainable. 

 CLASS quietly became an amendment to President Obama’s healthcare reform act. There was little discussion about CLASS when the Democrats in congress passed President Obama’s healthcare reform act. There was little discussion until Kathleen Sibelius’ announcement to discontinue CLASS.  

 She said;

 “ the administration was shutting down Class. After 19 months of research and consultation, “we have not identified a way to make Class work at this time.”

There has been little discussion about CLASS since her announcement.

CLASS was slipped into Obamacare as a legacy of to Senator Edward M. Kennedy. It establishes the first national system of long-term care insurance.

1. It was voluntary;
2. It was to pay a cash benefit that each recipient could decide how to use.
3. It could not disqualify participants with pre-existing disabilities or charge them more.
4. It had to pay for itself without relying on taxpayer dollars.
5. It was to provide long-term care for the elderly and disabled.
6. The program is not meant to shoulder the whole cost of long-term care, for either the elderly or younger people with disabilities, but it could make a great difference to strapped families.
7. It would typically cover home care, assisted living, adult daycare, nursing home, and Alzheimer’s facilities for those who needed it,
8. There would have been no apparent age or time limits for benefits.
9. No underwriting in the selection of beneficiaries.                                                                                                                                                                                 

CLASS was designed to collect “premiums” during employees’ working years and spend the money immediately.

 When the obligations came due, the program would have been forced to seek a taxpayer bailout. “This is called redistribution of wealth.”

Medicare benefits typically pay for nursing home and home care coverage typically only for relatively short -term recovery (21 days) from an acute illness.

Medicare beneficiaries who need long term care beyond their benefits but don’t have private supplemental long term care insurance must pay out of pocket.

CLASS would pay recipients $50 a day for in-home care assistant to help with cooking, cleaning, and bathing.  This sounds cheap. However it would cost the government over $18,000 a year per person.

There are no signup restrictions and no increased premiums based on overall health and age at the time of signup.

The vast majority of the voluntary participants would be the sickest and most in need of long term care. There is no way that a voluntary program could be budget neutral.  

CLASS like Medicare would have few restrictions on the amount and types of care that beneficiaries receive.

Advocates for “health care is a right” are stuck with the dilemma what to do with a severely demented 99 year old nursing home patient with terminal cancer. Should that patient receive the same life extending care as a 65 year old with no medical problems?

This is a moral and legal dilemma that society must face. Patients and their family should make that decision. 

It is immoral for a group of bureaucrats to decide on treatment for the individual. It is equally questionable to have physicians decide to withhold treatment

It is one of the reasons patients should own their healthcare dollars and be responsible for how they spend them. Patients and their families should have some skin in the game.

The government could provide some of the healthcare dollars for those who qualify.

If those dollars are not spent at the end of the year, patients and their family would keep them. This would provide incentive to make logical decisions about the consumption of medical care.

There is no evidence that nursing home care or home assistance care or assisted living or adult day care increase life expectancy. These services provide comfort for the elderly and their children.

Rather than providing complete medical care for the elderly in the hope of extending life, less expensive ways can be devised to provide comfort other than warehouseing the elderly in nursing homes.

CLASS would have provided minimal financial assistance in providing comfort to the infirmed elderly. With mounting budget deficits America cannot even afford minimal help.

Basically CLASS was an insurance plan without any of the rational limits and restrictions that real insurance companies use to prevent themselves from going bankrupt.                                                                                                                                                                                                                                                   President Obama’s CLASS Act could never work. After the government spent $75 billion dollars a year on a tax neutral plan, he would say “OOPS”. America would enjoy the luxury of another money draining entitlement program.  

The “healthcare insurance” paradigm for providing healthcare to the elderly must be changed. Patients must be motivated to be responsible for their own care.

President Obama has tried to keep the conversation about discontinuing CLASS, another entitlement program, to a minimum.

The realization of the failure of CLASS should be used to think about healthcare coverage from a different perspective rather than letting our politicians making the same mistakes over and over again.    

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

 

 

 

 

 

 

 

 

Obamacare’s Magic Bullet (Accountable Care Organizations) Is Not On Target!

Stanley Feld M.D.,FACP,MACP

 

As we get closer to January 2012, the originally scheduled implementation date for Accountable Care Organizations (ACOs), the time has come to reexamine the showpiece of President Obama’s Patient Protection and Affordable Care Act (PPACA) of 2010. 

 The final rules for ACO’s are now scheduled for release on January 2012. The implementation was originally scheduled for January 2012. As the original rules are being studied and interpreted the program for ACOs implementation became more confusing. Dr. Don Berwick (CMS Director) has refused to discuss the final rules until they have been published in the Federal Register.

 “The ACO program is based on the hubristic assumption that the federal government can design the best organizational structure for the delivery of care, foster its development, and control its operation for the entire country.

 The federal government has big-footed health system reform. Although there is no one right way to organize care, the federal government (Dr. Don Berwick and President Obama) thinks it has found one—and exerts top-down, bureaucratic control through PPACA to implement it.”

 ACOs are supposed to be organizations that improve coordinated care. If an ACO decreases the cost of care the ACO will share the savings with the government with a formula for sharing to be determined by the government. The formula is complicated.

 ACOs will be required to accept responsibility for the cost and quality of care for defined patient populations. The government will define the population not the ACO or the patient. The goal is to prevent the ACOs ability to cherry pick a healthy population.

 ACOs will have to meet targets defined by their previous 3 years of Medicare Part A and Part B experience in order to share savings.

 Here is the first “Catch 22.”

 If an organization such as Mayo Clinic did a great job with its integrated system in the past three years it would have to do better in the next year to receive any savings. Let us say it is not possible to do better because they are so great. The only risk benefit reward for Mayo Clinic is a penalty.

If an organization did poorly in the last three years its upside potential is great if it performs well.

 ^​ Qualified ACOs can choose between 2 risk-benefit programs. The first involves upside potential from shared savings in the first 2 years, adding downside risk only in the third year of operation.

 In the second risk-benefit program, ACOs share a greater percentage of the savings with the government but are responsible for downside risk from the onset of the program.

 ACOs’ will be required to conduct quality improvement initiatives, care coordination, measure performance and develop infrastructure to meet government requirements to qualify to continue to be an ACO. The startup costs for a hospital system have been estimated to be $2 million to $12 million dollars.

  Hospitals and physician organizations have had adversarial relationships in the past that have to be overcome. In order for ACOs to have a chance to work, cooperative relationships must be developed between the hospital and physicians. Hospitals will control the money. They must distribute it fairly to physicians. Past behavior is a predictor of future behavior.  Hospitals have not had a successful record in the past of being fair to physicians.

 Systems of continuing quality improvement will have to be developed and implemented. Both physicians and hospitals have not had to deal with these systems in the past. In is not part of the medical care systems’ culture.  They will have to learn to adapt too quickly in Dr. Berwick’s timeline. 

 It will require a fundamental change in the U.S. healthcare system. It is not a bad thing to have systems of continual quality improvement. In my view the medical care system has to grow into it under steady but friendly pressure. The culture cannot be changed overnight. A consumer driven healthcare system can make it happen quickly. A government driven system will not be able to do it.  

 President Obama has stated over and over again that he is all ears for new ideas. Yet he does not listen to new ideas.

 It is an error to try to create a HMO on steroids. HMOs failed once and they will fail again. Many medical outcomes are unpredictable. Physicians and hospitals are not insurance companies. President Obama is trying to shift the risk to physicians and hospitals. Physicians and hospitals are aware of the difficulty. Many are terrified by the potential penalty.

 A recent report listed the 54 worse hospitals in the country as far as readmission rates after discharge in two out of three disease categories. President Obama has recognized some of these worst performing hospitals as having the best-integrated systems.

Among the hospital systems listed are the Cleveland Clinic, Beth Israel Deaconess Medical Center Boston, Barnes Jewish Hospital in St. Louis, MO, Northwestern Memorial in Chicago, University of Massachusetts Memorial Medical Center in Worcester, Henry Ford Hospital in Detroit, Johns Hopkins Bayview Medical Center in Baltimore and the University of Maryland Medical Center in Baltimore.

  President Obama is going to impose a penalty starting at 1% for Medicare DRG discharges and readmissions after Oct. 1, 2012, increasing to 2% after Oct. 1, 2013 and to 3% after Oct. 1, 2014.

President Obama must be reminded that it is difficult to get cooperation from organizations when they are threated by penalty. The development of complicated regulations that cannot be followed and then granting waivers to some and not others intensifies the mistrust and uncertainty felt by the medical community.

Creating new programs must provide adequate incentives not penalties. Penalties do not promote participation by providers.

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

 

 

 

  

 

Nation’s Health Care Bill Predicted To Double By 2020

 Stanley Feld M.D.,FACP,MACE

Massachusetts has experienced a sixty percent increase in healthcare costs since “Romneycare” was enacted in 2006.  The total cost of medical care in 2005 was $350,100,000. In 2009 the total cost of care had risen to $587,900,000. This represents an annual growth rate of 13.7% per year.

The Medicare Office of the Actuary reported it expects healthcare costs to increase from the $2.6 trillion dollars in 2011 to $4.6 trillion dollars by 2020 under President Obama’s Healthcare Reform Act.

“The Medicare Office of the Actuary estimated that health spending will grow by an average of 5.8 percent a year through 2020, compared to 5.7 percent without the health care overhaul. With that growth, the nation is expected to spend $4.6 trillion on health care in 2020, nearly double the $2.6 trillion spent last year.

I believe the Medicare Office of the Actuary growth rate estimate of healthcare costs is low. Obamacare is about expanding healthcare coverage for the uninsured. It is actually about driving the entire population into a “Public Option” which will be subsidized by the federal government. President Obama’s goal is to have total government control over the healthcare system.

The total rate of growth of healthcare costs will be greater than 5.8% per year. President Obama is not going to be able to decrease costs by insuring at least 30 million more people. Obamacare has done nothing to restrain the healthcare industry’s billing policies. The healthcare industry’s profit will escalate even further as the federal deficit escalates.

President Obama declared that Accountable Care Organizations, Pay4Performance and Electronic Medical Records would reign in costs. I believe this is a pipe dream.  These programs are in the developmental stages and have an excellent chance of failing as the entitlement expands.

President Obama has continued to ignore an important healthcare cost generator.  Defensive medicine generates between $300 billion and $700 billion dollars a year in costs. Tort Reform if done correctly could decrease the cost of defensive medicine to the healthcare system markedly.

“The federal health law, which will expand coverage to 30 million currently uninsured Americans, will have little effect on the nation's rising health spending in the next decade, a government report said today.’

I hope the American people do not let President Obama trick them again with his demagogary. Last week he told us he was going to decrease the federal deficit by 4 trillion dollars in ten years. It is not true because he is going to increase the federal debt by 9 trillion dollars or 4 trillion less than he had planned. Deficit spending continues unabated.

 Everyone has to watch closely. He is bankrupting the country.

 White House Deputy Chief of Staff Nancy-Ann DeParle tells us not to worry. "The bottom line from the report is clear: more Americans will get coverage and save money and health expenditure growth will remain virtually the same,"

 

She stated that the new programs that administration officials said they hope to implement would change the way Medicare and Medicaid pay doctors and hospitals. (ACOs, Pay4Peformance and EMRs). Doctor’s and hospitals are only part of the problem. A bigger part of the problem is the administrative service providers (healthcare insurance industry) expenses, the cost of government bureaucracy, and the increase in defensive medicine

“Meredith Rosenthal, a health economist at Harvard School of Public Health, said it is difficult to predict what impact the health law will have on slowing national health spending.  "Many of the components of the law that are intended to control costs are still in draft form,"

The key to President Obama’s deception to the American people is to distract Americans from connecting the dots. Fifty per cent of employers will drop employer sponsored insurance programs and pay the penalty. Employees will buy insurance through the state insurance exchanges. States are refusing to participate in the insurance exchanges. The federal government is picking the ball up for the states and will have total control over the insurance exchanges.

Baby Boomers are joining the Medicare roles in increasing numbers by the minute. The cost of Medicare will escalate. Seniors are not going to be able to find physicians who accept Medicare because President Obama is going to decrease reimbursement by thirty percent January 1, 2012.

President Obama believes physicians are the problem. He refuses to believe the reality of the dysfunctional healthcare system. All the stakeholders are the problem. Some stakeholders donate more to his reelection than others. He has a strong record of playing favoritism to those that support him.

Americans are waking up to his tricks. The healthcare system has to be reformed. He has the wrong approach. I hope the electorate does not fall for his charm again. 

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

 

 

 

 

Pretenses, Pretenses, Pretenses

 

Stanley Feld M.D.,FACP,MACE

During the last few weeks I have discussed the problems with Medicare Part
B, D and F.

The problems are the result of abuse of the healthcare system by the various secondary stakeholders protecting their vested interests. The stakeholders use their resources to influence our elected politicians. The peoples’ votes should be their only influence.

Politicians take the money from these various lobbying groups because they need the money to campaign for re-election. Media advertising is not cheap.

“The media exercises its greatest influence during elections . Candidates who lack an effective media strategy are likely to be destined for failure.”

“Candidates routinely spend 80 percent of their “war chests” on television and radio advertising. In larger states such as California, Texas, and New York, television advertising is the only way for candidates to reach the tens of millions of voters. In 2000, political novice John Corzine spent a mind-numbing $60–80 million of his own money — most of it on television commercials — to win a Senate seat in New Jersey.”

These two outstanding sound bites summarize the issue:

“The media is the message. Marshell McCluen.”

‘If you tell a lie enough times, it becomes the truth. Carl Sandberg.”

I can imagine the number of jobs created in advertising and in the media during the election season. The media are not willing to relinquish jobs and revenue for unbiased reporting.

President Obama has already been funding his reelection campaign on the taxpayers’ dime. His goal is to raise $1 billion dollars. The goal of the $1 billion dollars contributed by donors implies the purchase by these donors of political influence to support their vested interests.

The traditional media has not been criticized this practice. Campaign advertising is a large part of the traditional media’s yearly revenue. The media is cautious about criticizing large donors for fear of losing the campaign advertising revenue.

The voices of American voters are being drowned out by special interest money. Millions of dollars are poured into campaigns each election, and the amount continues to climb. Instead of turning to their constituents, members of Congress look to wealthy individuals and businesses to fund their campaigns.

Public Citizen is working hard to change the current system of campaign finance so that members of Congress are responsible to their voters, not to their contributors.  

President Obama has been beholden to these special interests. He has used trick plays to fulfill his obligations to his donors. He has disguised his intentions by claiming he is doing everything for the interest of the little guy.

I have difficulty believing anything President Obama says anymore. I also have difficulty believing Democrats and most Republicans in congress.

The recent raising of the debt limit tied to deficit reduction is a case in point.

It is a total fake.

Let us assume a person makes $50,000 a year. He spends $150,000 a year. That means he spends $100,000 a year more than he makes. He must go to the bank to borrow the $100,000.

Will any bank lend him $100,000?  No! He would have to prove how he would pay the $100,000 back.

He promises the bank he will reduce his “deficit spending” of $100,000 by 10% a year over the next ten years. That means that next year he will spend $90,000 more than he earns. He will only have to borrow $90,000.  In ten years I would increase his deficit by 680,000 rather that the 1,000,000 if he did not promise to decrease his deficit spending by 10% a year for 10 years. The banker would still say no.

The United States is not decreasing its deficit or balancing the budget with this latest deal. It is increasing the deficit will decreasing the “deficit spending.” The net effect is creating more debt.

 Why the deal is a fake. President Obama and the congress are not interested is being serious about being fiscally responsible. President Obama has faked out the American public once again.

There are many things government can do for the American public.  Everyone would agree that corporate interests, if given a chance, would take advantage of the public’s interest and the government. The government must protect the public from corporate interests and itself.

It can be accomplished by aligning corporate interests with the public’s interests. The use of force and penalties (price controls) always fail.

An example is food inspection and the Cargill turkey scandal. How are the complex food safety regulations enforced? They were not enforced in the turkey scandal. The inefficiencies and possible corruption that exist in government bureaucracy made the regulations impossible to enforce.

Did the government correct the deficiency? I think not. Last year’s hamburger scandal should have created the incentive and opportunity to correct the deficiency.

Would the pharmaceuticals companies step out and not sell the antibiotics to Cargill? They have not.

How does this relate to the dysfunctional healthcare system?

Why is Medicare so expensive and healthcare costs rising so fast?

 Physician fees are not rising. Why penalize physicians? Healthcare insurance fees are rising. Bureaucratic infrastructure is increasing, as it is becoming less efficient. As this is happening the waste, fraud and abuse is mounting.

The only way to get out of the healthcare mess is to let consumers own, control and be responsible for their healthcare dollars. Social networking will be the driver of consumers’ demand for independence from government control.

The government bureaucracy’s role must be to create appropriate rules to protect the consumers from abuse.

The conundrum is the government’s bureaucracy is the biggest part of the problem

Government must also create educational programs to help consumers make wise choices.

 Consumers should be given incentives to make wise healthcare decisions.  

Increased government control will only create a bigger government mess.

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

 

Easy Things to Do To Fix Medicare Part D

 

Stanley Feld M.D.,FACP,MACE 

Twenty seven million individuals were enrolled in Medicare Part D as of December 2009. The government spent $51 billion to subsidize Medicare Part D in 2009. The $51 billion dollars spent is in addition to seniors’ premiums and co-pays. The government subsidy was $1,889 per individual subscriber. 

Who is making the money?

 “A provision in the Medicare Modernization Act (MMA), known as the "noninterference" provision, expressly prohibits the Medicare program (the government) from directly negotiating lower prescription drug prices with pharmaceutical manufacturers.”

 This was a gift to the healthcare insurance industry by the government as a result of intense lobbying efforts. 

Over 300 private plans (Medicare Plan D sponsors) enter into negotiations with pharmaceutical manufacturers separately to deliver Medicare Part D benefits.

Medicare Part D eligible seniors are forced to deal with an overwhelming number of private plans with varying formularies, premiums, deductibles, and co-pays in order to receive prescription drug coverage. The differences in prices are available but it is difficult to make comparisons.

The government negotiates directly with the pharmaceutical manufactures for the VA system. The VA system pays 42% less than Medicare plans for prescription drugs. The high volume contracts save money for the government and are lucrative to the pharmaceutical companies.

The various Medicare Part D plans cover about 85% of the most popular 200 drugs on average. The VA’s national formulary covers 59% of the most popular 200 drugs.

If Medicare Part D negotiated the same drug prices as the VA, the government would be able to decrease its subsidy $510 per beneficiary per year or a total of $14 billion per year (2009 prices).

Research by respected economist Dean Baker shows that the federal government and Medicare beneficiaries would save $600 billion between 2006 and 2013 if Medicare were allowed to directly offer a Part D benefit and to negotiate prices with pharmaceutical manufacturers. ⁷Such significant savings could be used to close Part D's donut hole and to lower cost-sharing for Medicare beneficiaries.

There are reasons for the twenty-six percent difference in formulary. Either the government-negotiated prices are too expensive and deemed marginally more effective than the drug ordered or the less expensive drug is determined to be just as effective. 

The judgment is made by the procurement system that negotiates price.

Is the cheaper drug as effective for a particular patient? This decision should be made by the patients’ physicians and patients and not by bureaucrats. It should be the patient’s choice to pay the difference. 

The procurement systems bureaucrats could be wrong.  

If the government negotiated for all the Medicare Part D participants the government’s purchasing power should be greater than the VA system. Its negotiated price would be better. The savings should reduce the government’s Medicare Part D subsidy significantly.

President Obama sort of understood this concept. He included the government’s right to negotiate drug prices in his Healthcare Reform Act. He subsequently removed the provision from his Healthcare Reform Act in exchange for the healthcare insurance industry’s and the pharmaceutical industry’s support of “Obamacare.” Seniors and the Medicare Part D program have lost.

It is obvious that there is much fraud, waste and abuse in Medicare Part D. February 2011; the Government Accounting Office published an example of CMS bureaucratic inefficiency and waste.

The Government Accounting Office (GAO) has designated Medicare as a high-risk program. The size, nature, and complexity of the Part D program make it particularly vulnerable risk to fraud, waste, and abuse. The GAO and the Inspector General of HHS requires all Part D sponsors (healthcare insurance industry) to have programs to safeguard Part D from fraud, waste, and abuse.

 CMS is responsible for managing and overseeing the Part D program. CMS regulations require Part D sponsors to have compliance plans that must include measures that detect, correct, and prevent fraud, waste, and abuse. 

 Congress asked the GAO to examine the extent of CMS's implementation of the oversight of Part D sponsors' (healthcare insurance industry) compliance programs to avoid fraud and abuse.

  CMS bureaucrats have written extensive documents containing many rules and regulations to combat waste, fraud and abuse.  CMS then outsources the Medicare Part D audit to Medicare Drug Integrity Contractors (MEDICs) to support its Medicare Part D audit efforts.

 The 2010 audit was supposed to be finalized in early 2011. It has not been completed as of July 30,2011.

CMS officials reported that they conducted only 33 audits out of 290 Medicare Part D sponsors (Healthcare insurance industry) in 2010.

“The 33 sponsors represented 11 percent of Part D sponsors, 56 percent of plans, and covered 62 percent of enrolled beneficiaries in 2010 according to agency officials. As of February 2011, CMS had not made all audit findings available but had taken formal enforcement actions against several sponsors resulting from the on-site audits according to agency officials.”

 “As of December 2010, officials reported that the agency had issued five marketing and enrollment sanctions and one contract termination action based, in part, on the results of these audit findings noting failure to comply with CMS compliance plan requirements.” 

 It is hard to imagine how many deficiencies exist among the other 257 Medicare Part D sponsors not yet audited. How long should these audits take? How severe will the penalties be? How can seniors know if their Part D plan is sound?

CMS has not been able to audit or enforce its own regulations that are suppose to protect seniors from fraud and abuse efficiently and effectively.

What can possibly go wrong with ‘Obamacare” with 256 new bureaucratic agencies and many thousands of new regulations?

The only healthcare system that could work is a consumer driven healthcare system with alignment of all the stakeholders’ interests.

Unfortunately, that is not going to happen anytime soon. Seniors are starting to take things into their own hands.

“After investigating several Canadian pharmacies, my wife and I paid $624.77 for a three-month supply of drugs at an online Vancouver registered pharmacy. These same drugs cost us $1,208.04 buying at Walgreen's, Target, and Kmart where we shopped for the lowest prices.”

"What's the catch? If Big Pharma had its way, customs and the FDA would be confiscating all imported drugs, crying that the government can't guarantee their safety."

"But that just isn't the case. Your pharmaceuticals come in the same sealed packages you get at your corner drugstore."
 

"Anyway, it would be politically incorrect to arrest grandma for trying to make ends meet. Some members of Congress even encourage the practice by listing Canadian pharmacies on their Web sites."

The Wal-Mart $10 prescription fee for generic drugs also works if your physician accepts generic substitution. 

A reader sent me a link to a website. http://babayoga.drugcutpillsrx.com/?camp=priagiji

 I reviewed the web site. It is based in San Francisco. The site offers large discounts on branded and generic medication. It is much less expensive than Medicare Part D. Senoirs could afford to buy the medication without using up credits toward the donut and use Medicare Part D only when needed.

It is going to take proactive approaches by seniors (consumer driven) to force the government to serve their vested interests and not the vested interests of the healthcare insurance industry and the pharmaceutical industry.

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

 

 

 

 

 

 

Patients and Physicians Must Control Health Care Costs

Stanley Feld M.D.,FACP,MACE

The primary stakeholders in the healthcare system are patients and physicians. The incentives for patients and physicians to save money are non existent. The secondary stakeholders have taken advantage of non existent incentives to create a healthcare system that generates ever increasing costs.

Patients and physicians are the only stakeholders that can control costs. They initiate the use of the healthcare system’s resources. 

Healthcare costs for medical procedures such as an MRI or CT scan have been found to vary by as much as 683% in the same town, depending on which physicians patients choose, according to a study by Change: Healthcare.

The implication is that individual physicians are responsible for the differences. Most physicians do not own MRIs, CAT scanners or PET scanners. Secondary stakeholders own the equipment. They price the procedures and profit from the equipment, not the physicians.

"There's been a barrage of studies that show differences from region to region," said Christopher Parks, founder of Change:healthcare. "That makes sense — California's more expensive than Alabama. But this 683% is within a 20-mile radius in your own town." 

This finding illustrates several dysfunctional issues in the healthcare system.  President Obama’s Healthcare Reform Act is causing these issues to surface as secondary stakeholders are beginning to adjust to the upcoming changes.

For a pelvic CT scan, they found that within one town in the Southwest, a person could pay as little as $230 for the procedure, or as a much as $1,800. For a brain MRI in a town in the Northeast, a person could pay $1,540 — or $3,500. 

The social contract in medicine is between patients and physicians.  Patients should choose physicians and physicians should care for the patients the best they can with integrated healthcare team approaches. Physicians should be the captains of this team approach. 

Patients should be at the center of medical care and be educated to make wise medical decisions.

Physicians should be the coaches and advisors to patients on how to make wise decisions and attain better health.

In the beginning, patients’ employers provided first dollar healthcare insurance coverage. Patients were not at any financial risk. There was no need for patients to care about medical costs. The healthcare costs were their employer’s problem. 

Healthcare insurance companies enjoyed this setup. The more they paid out in benefits the higher they could raise the insurance premiums. Premium increases resulted in higher profits. It worked until employers said stop.

The insurance companies take 40-60 cents out of every healthcare dollar. Medicare and Medicaid outsource administrative services to the healthcare insurance industry. The healthcare insurance industry also takes 40 to 60 cents out of every Medicare and Medicaid dollar.

In anticipation of a reduction in government reimbursement for Medicare and Medicaid, the healthcare insurance industry has raised private insurance premiums, decreased covered illnesses, increased deductibles and increased co-pays.  

The Healthcare insurance industry is also moving toward  "reference-based pricing."

These changes have increased the liability of consumers for out of pocket expenses as opposed to having first dollar coverage. 

Medicare has different allowable fees for procedures in different regions. Medicare pays 80% of the allowable fee after a patient meets his deductible. Providers are only allowed to bill patients 20%.  By law balanced billing is illegal. It does not matter what providers charge for a procedure. Providers cannot bill patients for the balance of beyond the allowable fee. The Medicare fee is the most the provider can receive for a procedure.

“The Medicare Balanced Billing Program works to protect Medicare beneficiaries from being billed by healthcare practitioners for amounts beyond those approved by Medicare. The program investigates and takes action against those practitioner who violate the law.

Many providers are refusing to accept Medicare payment as Medicare reimbursement decreases. These providers can charge patients their fee. It is the patient’s responsibility to know if providers accept Medicare reimbursement. If providers do not accept Medicare, patients should understand their liability for the fee. Patients are liable for the total bill.   

Providers also contract with private healthcare companies. Some providers try to get the highest fee possible for the procedure. Private insurance companies pay different amounts depending on their need to build physician networks. This results in the wide spread in price in the same area. When providers are under contract with private insurers they cannot collect more than the contract price for a procedure. 

"It was eye-opening," said Howard McClure, CEO of Change:healthcare.

McClure said health plans are moving toward "reference-based pricing," in which they look at the average price of a procedure for a region, then say that's all they'll reimburse. But if a patient does not know how much a procedure costs, he or she gets stuck with the remainder of the bill if it goes above that average price.

"It helps the small business," McClure said, "but the consumer's left out in the cold."

Healthcare insurance coverage is changing with “reference-based pricing.”  Consumers are getting stuck with the retail price for procedures. The healthcare industry is using this to keep premiums down for business and compete for employer business.

Only consumers owning their healthcare dollars can stop this. President Obama cannot unless he controls the entire system and dictates prices. It never works because people figure out how to get around restrictions.     

Patients are led to believe that physicians are sending patients to higher priced providers for procedures because physicians will make more money.

Most physicians do not know the prices patients are charged for referred procedures.

Most physicians do not own MRIs, CAT scans or Pet Scanners. It is against the law to receive kickbacks.

It is essential that providers make their fee transparent to all providers and consumers.  Then consumers can choose wisely and create price competition.

Consumers must drive this process to create competitive pricing. Third party payment does not work.

 Consumer driven healthcare using the ideal Medical Saving Account will make it happen. It is the only model that makes economic sense.

 Consumers would start caring about the price of services when making healthcare decisions.

The challenge is to teach consumers to change their mentality toward healthcare costs and force providers through competition to be accountable for these costs.   

This will never happen under President Obama’s administration.  His goal is to empower the government and not consumers. Under President Obama’s administration the healthcare system will become more dysfunctional and further increase the deficit to unsustainable levels.

 

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

 

 

 

 

Obamacare Unraveled

 

Stanley Feld M.D.,FACP,MACE 

It is hard to remember all the defects in President Obama’s Healthcare Reform Act at once.

President Obama’s Healthcare Reform Act is so flawed it cannot possibly work as it was intended. It must be repealed. A serious, thoughtful, practical and common sense way to “Repair The Healthcare System” must be enacted before all the stakeholders have adjusted to President Obama’s coming changes that will create a more dysfunctional system.

A reader sent me a photo of a poster hanging in his local ice cream store. It is a reminder of previous criticisms of President Obama’s Healthcare Reform Act.

 

 

I predicted and discussed all the defects it the Healthcare Reform Act that will come back to haunt President Obama and  America’s consumers.

The last month the cracks in President Obama’s Healthcare Act have started to widen. Some of the cracks are starting to look like the entire Healthcare Reform Act is falling apart.

1.  President Obama’s selected model Clinics for his integrated care “experiment” (ACOs) have turned down applying to this pilot study. The goal of these pilot projects was to demonstrate that Accountable Care Organizations (ACOs) will reduce the cost of medical care and increase the quality of medical care. ACOs are a primary tool in proving that President Obama’ Healthcare Reform Act will be effective in reducing cost and increasing quality of medical care. There are too many impractical and costly regulations. There are too many logistical barriers to creating ideologically effective ACOs.

2. Individual States are refusing to set up federal directed State Health Insurance Exchanges as directed by President Obama’s law. The insurance exchanges’ economic burdens will be shifted to the state at the direction of the federal government. The end result will be to increase state budget deficits and decrease state control over their local healthcare delivery systems. Texas is planning to set up its own Health Insurance Exchange under Texas rules even though Governor Perry believes “Obamacare” will be repealed.

“Governor Perry firmly believes that Texans should be in charge of our health care programs.”

There is great antipathy between Governor Perry and President Obama. Texas officials have concerns that President Obama’s administration in the end will say,

 “You all didn’t bother to make a significant effort with the lead time you had,’ ”

 “I wouldn’t put it past President Obama’s administration not to certify what we come up with.”

President Obama’s advisors at the Urban Institute have told him that he is creating an additional entitlement and increasing hidden taxes with his Health Insurance Exchanges. Once the America people discover that this is President Obama’s intention they will oppose Healthcare Insurance Exchanges. The exchanges are not going to put a muzzle on the healthcare insurance industry’s devouring of the healthcare dollar. One must question why the healthcare insurance industry is in favor of Healthcare Insurance Exchanges. The answer is they will increase their share of the healthcare dollar with Healthcare Insurance Exchanges.

 I suspect few people understand this.

President Obama is once again decreasing states’ rights and limiting personal freedom to choose. President Obama’s exchanges will increase states’ budget deficits. The result will be an increased tax burden for all.

"The exchanges don't just handle health insurance. Rather, they are expected indirectly to operate an entirely new "tax" system that collects another 9 or 10 cents from most insured household for every additional dollar earned and a new "welfare" system that tries to determine in advance and at various later stages households' eligibility for different subsidies."  

3. A discovery of a quirk in the law would allow an additional 3 million who earn over $64,000 to $80,000 a year to enrollee in Medicaid. Medicaid cannot attract enough physicians for its current enrollees. Physicians refuse to participate because its reimbursement is less than physicians’ overhead. Adding 16 million new enrollees plus an additional 3 million is untenable.  

4. The lawsuits by 24 states challenging the constitutionality of President Obama’s Healthcare Reform Act is slowly proceeding to the Supreme Court. The Supreme Court might have tipped its hand as to the direction it is leaning last week by another decision in favor of “States Rights” and “individual rights.”

Justice Kennedy wrote in an opinion,

 "The whole point of separation of powers, the whole point of federalism, is that it inheres to the individual and his or her right to liberty; and if that is infringed by a criminal conviction or in any other way that causes specific injury, why can't it be raised?"   

5.  Last week McKinsey published an in-house survey that showed that at least 30% of corporations would drop employee sponsored healthcare insurance (ESI) and let employees buy the government’s  “affordable and subsidized” healthcare insurance (the Public Option) through government’s Healthcare Insurance  Exchanges in each state.The government criticism of the survey was unjustified. The criticism weakened President Obama’s support even further because it became apparent that he was going to try to intimidate his distractors and not heed reality.

All of these defects in Obamacare are becoming more apparent to all consumers. Public support is decreasing daily. It is going to take the Supreme Court to declare it unconstitutional or a Republican President with a Republican House and Senate.

President Obama remains oblivious to the defects and unpopularity of his Healthcare Reform Act. 

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

 

President Obama Tries To Intimidate Critics

Stanley Feld M.D.,FACP, MACE

Last week McKinsey published an in-house survey that showed that at least 30% of corporations would drop employee sponsored healthcare insurance (ESI) and let employees buy their own “affordable” “government subsidized” healthcare insurance (Public Option”) through the Government’s Healthcare Insurance Exchanges in each state. Adding thirty percent of the corporate work force to Healthcare Insurance Exchanges would place states and the federal government in deeper debt.

The McKinsey survey echoes what Doug Holz-Eakin (economist and former head of the CBO) and John Goodman (a healthcare economist and CEO of NCPA) have said about the impact of President Obama’s Healthcare Reform Act.

“If Mr. Holtz-Eakin is correct that there will be 11 million more people in the exchange, then costs could be nearly 40% higher than the $511 billion price tag. If between 78 million and 117 million people are moved into the exchanges the NCPA predicts the costs could more than triple to $2 trillion dollars more than expected over the first decade.”

“Most of this extra expense would come from workers losing their employer-sponsored insurance.” 

Immediately, President Obama’s administration attacked McKinsey’s honesty. The Obama administration accused McKinsey of patronizing their clients and working for the sponsors of the survey.

The administration had no proof to support any of its accusations against McKinsey. Its aim was to tarnish McKinsey’s reputation as well as intimidate McKinsey and other organizations that might draw negative conclusions about his healthcare law.

Nancy Parmalee, the deputy chief of staff who is running “ObamaCare” from the White House in her Whitehouse blog, launched a ferocious attack on McKinsey.

 “Unfortunately, the study misses some key points and doesn’t provide the complete picture about how the Affordable Care Act will strengthen the health care system and make it easier for employers to offer high quality coverage to their employees. Here are the facts:

She said the McKinsey survey is an outlier. She also accused the survey of being fixed. The results of the McKinsey survey were the opposite of the results of respected independent organizations and the CBO.

She said “McKinsey says they obtained their data after they “educated respondents” about reform and that their survey used proprietary research. We don’t know what respondents were told or whether they had the chance to check with their colleagues or crunch the numbers for their business before responding.”

In Ms. Paralee’s mind McKinsey cooked the survey in favor of a negative result about Obamacare. She then quotes the findings of three independent surveys.

Respected independent organizations have examined whether employers will continue to offer coverage. Here’s what they found:

The Rand Corporation: "The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges."

The Urban Institute: "Some have argued that the Patient Protection and Affordable Care Act would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform. A new study finds that overall ESI coverage under the ACA would not differ significantly from what coverage would be without reform."

Mercer: "In a survey released today by consulting firm Mercer, employers were asked how likely they are to get out of the business of providing health care once state-run insurance exchanges become operational in 2014 and make it easier for individuals to buy coverage. For the great majority, the answer was 'not likely.'" 

 The White House has routinely tried to intimidate its health-care critics. Nancy Parmalee’s facts in the administration’s campaign against McKinsey are wrong. She misread the studies she quoted.

1. The White House sponsored the Urban Institute study cited by Nancy Parmelee. Bowen Garrett who now works for McKinsey wrote it.
2.  Some of the notable work on employers discontinuing to sponsor healthcare insurance and pay the penalty comes from Eugene Steuerle of the Urban Institute. His paper predicts a mass discontinuation of ESI by corporation of all sizes.

 “Even so, droves of employees—potentially tens of millions—are likely to shift out of employer-provided insurance over the next decade or two, especially as newer firms and their employees find it more profitable to get the exchange subsidies than the subsidies for health insurance provided by the employer.”

 Eugene Steuerle of the Urban Institute wants universal coverage run by the government as the single party payer. I could just see President Obama saying, “Don’t worry Gene we will get there.” 

Nancy Parmalee also misstated the Mercer findings.  The graphs show exactly what Mercer reported. It is not dissimilar to McKinsey’s survey.

 

 

David Brooks expressed common sense in a recent New York Times article.

He said,

 "Obamacare incentivizes companies to drop health coverage for their employees. Employers who drop coverage have to pay a fine, but the fine is cheaper than offering health insurance. Employees will be able to buy their insurance on state-based “exchanges,” where they can take advantage of the law’s new subsidies.

(Americans making less than 400 percent of the federal poverty level are eligible for subsidized coverage on the exchanges.) AT&T has calculated that it would save $1.8 billion a year by dumping its workers into the government’s lap.

Other companies are keeping quiet about their plans for now, but make no mistake: If Obamacare remains the law of the land, nearly every corporation in America will do what AT&T has contemplated. So will cash-strapped state governments." 

McKinsey released the entire methods, detail and results of its survey. The survey was non biased, well designed and answered each of President Obama’s administration’s criticism.

1.McKinsey and not clients funded the survey. 

2.Ipsos, a well-established neutral opinion research firm, conducted the survey. 

3.The companies surveyed were representative of corporations and businesses from the broader economy. 

4.Respondents were required to be either the “primary decision maker” or “have some influence in the decision-making process” for employee health benefits. 

5.Respondents were informed of Obamacare’s exchange subsidies in a neutral, factual manner.

6.Employer surveys (McKinsey survey) and economic simulations (CBO’s analysis) are different. CBO analysis has underestimated the result by a factor of five.

The attack on McKinsey was unfounded. Hopefully, McKinsey’s reply will not inhibit others from revealing the truth about President Obama’s policies not only in healthcare but in other areas.

 

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