Repairing the Healthcare System

Socrates Is A Man

Stanley Feld M.D.,FACP,MACE

 

All Men Are Mortal

Socrates Is A Man

Socrates Is Mortal

This is the classical syllogism. Syllogisms are a form of decisive logic that leads to a certain conclusion.

“A syllogism (Greek: συλλογισμός – syllogismos – "conclusion," "inference") is a kind of logical argument in which one proposition (the conclusion) is inferred from two or more others (the premises) of a specific form. “

In my last blog I reported the 3.5% tax the Obama administration is levying on the healthcare insurance industry for ever healthcare insurance policy it sells through Obamacare’s health insurance exchanges. 

In 2014 the healthcare insurance industry is going to be required to sell healthcare insurance policies through the health insurance exchanges.

The healthcare insurance industry will also be required to sell plans that comply with the rules and regulations of the Obama administration.

The 3.5% tax “users fee” was published on a Friday afternoon at the end of November. The tax received little media attention. I said the healthcare insurance industry would pass this “users fee” on to the consumer.

At the end of December the healthcare insurance industry did better than that. It increased healthcare insurance premium rates by double digits.

“Health insurance companies across the country are seeking and winning double-digit increases in premiums for some customers, even though one of the biggest objectives of the Obama administration’s health care law was to stem the rapid rise in insurance costs for consumers.”

The consumers most affected by the higher rates are small businesses and consumer who must purchase insurance on their own.  

"In California, Aetna is proposing rate increases of as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of California 20 percent for some of those policy holders.

The rate requests are in addition to the 39% increase in rates last year.

In other states, like Florida and Ohio, insurers have been able to raise rates by at least 20 percent for some policy holders. The rate increases can amount to several hundred dollars a month.

 In 2010 the increase in healthcare insurance premiums increases provided springboard for public opinion sympathy of the Affordable Care Act (Obamacare).

Obamacare will go into full effect in 2014. 

Why would a business (the healthcare insurance industry) facing loss of its customers because of high premiums increase premiums even further?

Why, if the traditional media has published articles stating that the cost of healthcare has been decreasing would a premium increase be justified?

 “A report issued by the Department of Health and Human Services today includes findings that might surprise some people.

“During the fiscal year that ended Sept. 30, 2012, the amount Medicare spent per beneficiary rose by just 0.4 percent. That's three percentage points less than the economy, as measured by gross domestic product, grew during that same period.”

 If Medicare spending has risen only .4% why would Medicare premiums increase by at least 33% while private healthcare insurance premiums are increasing by 10-30%?

Annually physicians’ reimbursement continues to decrease.

Why do consumers’ deductibles continue to increase each year?

It is illogical. The numbers do not make sense. The actions do not follow the syllogistic logic.

How can Medicare be losing money? Medicare premiums are means tested and represent a redistribution of wealth.

 The average premium for Medicare with after tax dollars for a couple with a reasonable pension fund is $15,000 dollars.

The average direct cost of care per Medicare patient is $6,600 dollars.

In 2014 Medicare premiums are scheduled to increase to more than $20,000 for full Medicare insurance coverage.

Seniors have paid for Medicare insurance in payroll taxes continuously for the last 47 years.

There is something wrong with the numbers. They do not add up. Where is the extra money going?

Consumers must start becoming aware of these facts.

Only consumer protest will bring out the truth about these illogical numbers.

 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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Medicaid Patients And Physicians

Stanley Feld M.D.,FACP, MACE

Obamacare becomes more complicated and expensive by the week. President Obama has intentionally made the real costs of Medicaid more difficult to follow.

He originally fudged the information to the CBO in order to obtain favorable scoring. The first scoring created a deficit decrease of 108 billion dollars over 10 years. He used this CBO scoring to convince the Democrats in both the House and the Senate to vote for the bill.

Then the states that paid most of the Medicaid bill complained.  They had budget deficits that would increase.  States are obligated by law to balance their budgets. The people could not afford a raise in taxes.

President Obama said he would pay 90% of the Medicaid bill for two years.

This would increase federal expenditures for Medicaid. The increase was not calculated into the original CBO scoring.

Now a study shows that 33% of physicians will not accept Medicaid patients because the reimbursement is too low.

This study is probably not accurate. There will be less than 66% of physicians accepting Medicaid patient. Physicians’ reimbursement has fallen below physicians’ operating expenses. In 2014 Medicaid enrollment will explode. Under Obamacare an additional 16 million people will be eligible for Medicaid. 

I wonder what is to become of the other 16 million uninsured when the promise was to insure 32 million people?

Avik Roy pointed out that states with Democratic governors tend to have lower physician reimbursement rates for Medicaid. Those Democratic governors have the highest budget deficits.

It is easier to cut physicians’ reimbursement rates than reduce the already minimal services. Entitled patients have been more vocal than physicians.

A higher percentage of physicians will quit Medicaid. They cannot pay their office expenses with the present level of reimbursement.

They will say, “I quit.”

If this happens and enough physicians quit, these states will tell their licensed physicians that they will not be able to renew their license to practice medicine unless they accept Medicaid patients.

I predict they will quit anyway.

“This could prove true in a state like California, where 1.8 million residents are expected to gain coverage - but fewer than 60 percent of providers presently accept new patients in the program.”

 President Obama anticipated this in the Obamacare bill. The law increases Medicaid reimbursements for primary care doctors to match those of Medicare providers.

The goal is to entice primary care physicians to participate in the program.

There are several things wrong with this thinking,

1. The increases are short term. The Federal government will only increase payment for two years. Clearly if the increase in reimbursement is successful it will have to be extended to maintain the increase in participation. Some interest groups already have their eyes on an extension.
2. The increases do not include specialists so few specialists will participate at the onset, paralyzing the Medicaid system. If President Obama increases payment to specialists the Obamacare deficit will increase even further. 
3. Medicare reimbursement is decreasing and may end up being lower than present Medicaid reimbursement. Therefore this entire exercise is another Obama trick play.
4.  “As long as a doctor or hospital isn't losing money, they will probably accept new patients.” 

 The key then, is Medicaid reimbursement. Federal dollars will only last two years. It means states will have an additional hundreds of thousands of Medicaid recipients for which they will be on the hook for either keeping the higher level of reimbursement once the money from Washington dries up, or cut reimbursement rates and watch doctors bail out.

It is obvious the “fix” is in, but without specialists included it will not work. Obamacare will have to subsidize the increase. This will increase the federal deficit even more. In fact it will bankrupt the country.

“This was apparently the plan all along. The two year funding was put in to reduce the initial 10 year costs and fool the public into thinking Obamacare costs less than it actually will”. 

This is only one of the trick plays that President Obama included in Obamacare to deceive Congress and the people. Remember Nancy Pelosi’s famous statement, “We will not know what is in the bill until after we pass it.”

Obamacare contains hundreds of deficit increasing tricks claimed to be deficit reducing. 

He spent money without attention to consequences.

The only sane thing to do is to repeal it and start over again unless the goal is to bankrupt the country.

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

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 http://youtu.be/zgKYuEYo5PA

 

"Here You Go Again"

 

Stanley Feld M.D.,FACP,MACE

In recent days President Obama and his team have ramped up a coordinated effort to depict Paul Ryan as a candidate that will destroy Medicare with vouchers. His team is doing this to scare seniors into voting for President Obama.

President Obama has been disingenuous throughout this campaign. He has had little success in fixing the economy despite his promise to do so.

American are less better off in 2012 than they were is 2008. I believe President Obama has weakened institutions that have strengthened American democracy and the freedoms its citizens enjoy.

With executive orders and the bully pulpit he has weakened the balance of power between the executive branch, the legislative branch and the judicial branch. He has ignored many of the principle tenets of the U.S. Constitution.

He has trampled States Rights in favor of his notion of central government control. In turn, Americans are feeling the freedoms they have enjoyed are being taken away by central government executive orders.  

President Obama does not have a record of achievement to sell to the American people. The only option he has is to destroy the character and credibility of  his opponents. He character assassination tactics have been disingenuous and irrelevant.

The traditional media have been our surrogates in the past for news and information. However the traditional media have been biased and have supported President Obama’s tactics. The traditional media have ignore the real issues of the day. 

What could Governor Romney’s perfect reaction be to President Obama’s now hollow promises for America’s future?

The perfect response could be Governor Reagan’s reaction to President Jimmy Carter during the 1980 Presidential Debate.

President Carter’s unsuccessful policies were not congruent with America’s desires for economic prosperity and freedom. During the debate Reagan’s response to a Carter soliloquy on what he wanted to achieve was simple.    

  

 

  http://youtu.be/px7aRIhUkHY

One big issue is the escalating deficit. A principle cause of the increasing deficits is President Obama’s excessive spending on failed entitlement programs. Medicare is a failing program. Obamacare is adding 30 million more people to a failing program and increasing its complexity. This new entitlement program is increasing the deficits and will bankrupt the U.S. quicker.

None of the “improvements” have been proven or shown to be executable. This certainly will lead to increased central government control of the distribution of medical care.

“Former vice presidential candidate Sen. Joe Lieberman said last year, "We can't save Medicare as we know it. We can only save Medicare if we change it."

President Obama isn’t taking the deficit crisis seriously. He has caused in excess of 1 trillion dollars in deficits yearly for a total of 4 trillion dollars during he term as President.

He has no regard for fiscal responsibility. He has ignored the recommendations of his own Bowles Simpson commission on deficit reduction.

Through a disingenuous marketing campaign he ridicules Paul Ryan’s  comprehensive alternative.

Erskine Bowles, President Clinton's former chief of staff and the co-chairman of the Bowles-Simpson commission, described the Ryan budget that passed the House in March as "sensible, straightforward, honest, [and] serious."

About President's Obama's budget, which failed in the Senate in May by a vote of 97 to zero, Mr. Bowles said, "I don't think anybody (including President Obama)  took that budget very seriously."

Since President Obama doesn’t take the deficit crisis seriously, the traditional media has not taken the deficit crisis seriously. The traditional media are President Obama fans.

How can we expect the public to understand the seriousness of the deficit crisis?

It is hard to imagine the meaning of a 16 trillion dollar deficit much less the significance of an increase of 1 trillion dollars a year. It is difficult to understand the deficit reduction compromise the congress has come to with respect to the deficit as these numbers are thrown around.

It is difficult to visualize the breadth of the deficit when speaking in trillions of dollars.

Last week a reader sent me an easy to understand explanation.  Everyone needs to understand the scope of the deficit. President Obama should not take us to be fools. 

It is easy to become agitated by these numbers.

 U.S. 2011 Financial Statement

 

U.S. Revenue                 $ 2,170,000,000,000   or        $2.17 trillion dollars

 

Federal Money Spent     $ 3.820,000,000,000   or         $3.82 trillion dollars

 

New Debt                        $ 1,650,000,000,000   or        $1.65 trillion dollars

 

National Debt                    $14,271,000,000,000          $ 14.271 trillion dollars

 

Recent Budget cuts             $  35,500,000,000           $ 35.5 billion dollars

 

Congress and President Obama have agreed to $35.5 billion dollars of recent budget cuts. It sounds like a lot of money. There has been a lot of tradition media babble and coverage on this insignificant reduction.

It makes us think the President and congress are doing something significant to reduce the deficit. Everyone understands the waste inherent in government spending on government programs.

If we pretend these financial figures are a family budget, we can see that the budget cuts are ludicrous. 

Let us remove all the zero’s from the trillion dollar numbers to arrive at understandable amounts. Then let us pretend it represents a family financial statement.

Family 2011 Financial Statement 

Annual Family Income is  $ 21,700 dollars in the year.

 

The family spends $ 38,200 dollars that year.

 

New credit card interest bearing debt increases by $16,500.

 

Outstanding Balance on the credit card increases to $142,710 dollars.

The reaction of most people is this is crazy. He will never repay the family debt.         

The head of the family promises the credit card company he is going to decrease

spending.

He cuts family spending by $35.50 a year after he promises the credit card company he would decrease his debt by 50% in 4 years.

The head of the family has three choices. He can increase revenue somehow but his boss does not want to raise his salary. He can raise the debt ceiling. His lender does not want to raise his debt ceiling because he is a bad risk. Raising the debt ceiling means he has to manufacture more money with credit card borrowing. The lender said enough is a enough.

His last choice is to decrease his family’s unnecessary spending.

President Obama’s decrease in spending is a joke and an insult to a lender.  

President Obama is not serious about lowing the deficit. Paul Ryan is. He has presented a sensible way to save Medicare.

Whom do you think the creditors of the United States would trust more?

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

The article in the Dallas Morning News on Sunday, July 29,2012 entitled “Your Doctor’s Big Fat Paycheck” by Eli Lehrer is misleading. The article ignores the real cause of the rising costs in the healthcare system.

Physicians are the easiest stakeholder to criticize because they are the least organized and least represented. This makes them the easiest and most vulnerable target.

The subtitle is “High wages in the medical sector are the underlying cause of ballooning healthcare costs.”

Eli Lehrer does a disservice to the medical profession as well as to patients. It does not represent the truth-value added effect of a physician's services to patients.

Mr. Lehrer article devalues physicians’ services. He has a lack of understanding of the costs of medical care vs. healthcare.

He quotes the Bureau of Labor statistics saying that primary care physicians earned just over $200,000 a year while specialists earned $355,000 per years in 2010.  The Bureau of Labor Statistics used Medical Group Management Association (MGAMA) data for this estimate.

Those numbers are pretty close to the numbers reported by MGMA physician Compensation and Production Survey for 2011.

The number needs some correction but it is unnecessary to quibble.

The MGMA has a group of consultants that teach physicians how to make more money from the healthcare system.

Physician Compensation

Median compensation levels for primary and specialty care physicians Source: MGMA Physician Compensation and Production Survey: 2012 Report Based on 2011 Data

http://www.mgma.com/physcomp/

http://www.bls.gov/oco/ocos074.htm#earnings

Anesthesiology   $407,292

General surgery  $343,958

Obstetrics/gynecology   $281,190

Internal medicine   $205,379

Psychiatry   $200,694

Pediatrics/adolescent medicine   $192,148

Family practice (without obstetrics) $189,402

 

Quick Facts: Physicians and Surgeons
2010 Median Pay	This wage is equal to or greater than $166,400 per year or $80.00 per hour.
Entry-Level Education	Doctoral or professional degree
Work Experience in a Related Occupation	None
On-the-job Training	Internship/residency
Number of Jobs, 2010	691,000
Job Outlook, 2010-20	24% (Faster than average)
Employment Change, 2010-20	168,300

The MGMA summarize physicians scope of work layman’s terms on its web site.

What Physicians and Surgeons Do

"Physicians and surgeons diagnose and treat injuries and illnesses in patients. Physicians examine patients, take medical histories, prescribe medications, and order, perform, and interpret diagnostic tests. Surgeons operate on patients to treat injuries, such as broken bones; diseases, such as cancerous tumors; and deformities, such as cleft palates.

Work Environment

Many physicians work in private offices or clinics, often helped by a small staff of nurses and other administrative workers. Surgeons and anesthesiologists usually work in sterile environments while performing surgery and may stand for long periods.

How to Become a Physician or Surgeon

Almost all physicians complete at least 4 years of undergraduate school, 4 years of medical school, and 3 to 8 years of internship and residency, depending on their specialty.

Pay

Wages of physicians and surgeons are among the highest of all occupations. According to the Medical Group Management Association, physicians practicing primary care received total median annual compensation of $202,392, and physicians practicing in medical specialties received total median annual compensation of $356,885 in 2010."

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2011/11/where-is-the-healthcare-money-going.html

 

I am temped to answer Mr. Lehrer’s article point by point. There is so much misinformation and disinformation in this article that it makes Yellow Journalism look tame.

 The more important issues are how much does the healthcare system cost and where is the money going?

 Then, and only then, can we begin to know the underlying cause of the ballooning healthcare cost.

 There are 691,000 practicing physicians in the U.S. Let us assume that the average salary is $250,000 dollars. This is probably a high average number.

The healthcare system costs America approximately $2.5 trillion dollars ($2,500,000,000,000) a year.

691,000 physicians averaging $250,000 equals $172,750,000,000 ($172 billion 750 million dollars).

$172,750,000,000 billion divided by $2,500,000,000,000 trillion equal 6.91% of the healthcare dollars spent for physicians’ salaries.

Let us assume that each practicing physician’s overhead is 50%. This is also a high average. Therefore, physicians’ overhead and salaries are 13.8% of the total healthcare dollars spent.

There real issue in the raising cost of healthcare is where is the 86.2% of the U.S. healthcare costs going?

Mr. Lehrer ignores this issue.

The money is wasted on administrative bureaucracy, healthcare insurance executives’ salaries, hospital administrator salaries and an exorbitantly complex  and expensive pharmaceutical bureaucracy.

Over 20 WellPoint executives make more than 10 million dollars a year with these numbers being stratified upward to over 25 million dollars a year plus bonus and stock options.

Some healthcare insurance executives receive over a billion dollars a year in bonuses and stock options.

Many levels of hospital administrative executive make over one million dollars a year with chief executives making over $15 million dollars a year.

I have been told “it is hard to get good help.”

With these sobering numbers on board the critical question is how much is a physician worth that has the education and ability to save lives?

This is the main reason Mr. Lehrer’s article in the Dallas Morning News is worse that Yellow Journalism.

The editors of the Dallas Morning News should be embarrassed by their publication of this article.

 

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

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President Obama Is Faking Out Seniors For Their Vote.

 Stanley Feld M.D.,FACP,MACE

I have never been a fan of the Medicare Advantage Program because it rips off taxpayers and senior citizens.

I wrote a blog on July 13, 2008 exposing the Medicare Advantage as a scam to enrich the healthcare insurance industry. The title was “Politicians Are Hard To Trust. ”

Seniors initially think it is great because their premium is cheaper than traditional Medicare.

If seniors are not sick they would think they have great insurance because it is cheaper than traditional Medicare insurance. If those seniors would get sick they would realizes the insurance coverage is not as great as their healthcare insurer chooses the physicians and hospitals. Neither might be the “best in town.”

 The healthcare insurance companies wine and dine seniors to get them to sign up with their company.

 The profit the insurer receives from Medicare Advantage is estimated to be $8 billion dollars a year.

“United Healthcare and Humana are betting on the lucrative Medicare Advantage part of their business. The Medicare Advantage program develops doctor networks that are managed by the insurers in contrast to regular Medicare in which members can choose virtually any doctor, who is paid directly by the government.

“One in five of the nation’s 43 million Medicare enrollees are now in the Medicare Advantage program, which the Bush administration says has brought more choices and better benefits to the federal health system.”

My question is, “who can you trust?” Is President Bush really protecting seniors and the U.S. federal treasury or the healthcare insurance industry?”

“ Medicare Advantage has become a political target, because — whatever its vaunted enhancements — it costs the federal government 12 percent more for each enrollee, on average, than the regular Medicare system.” “The Congressional critics see the policies as an extravagance whose main beneficiaries are insurers like Humana and UnitedHealth.”

Wake up America! Physicians only receive 10% of the Medicare dollar. Physicians are the people providing medical care, not the healthcare insurance companies.

None-the-less many seniors are happy with the lower Medicare Advantage premiums. They would be very unhappy if President Obama eliminated Medicare Advantage before the presidential election.

The decrease in Medicare Advantage’s availability was snuck into Obamacare without debate. Few in congress absorbed every detail of Obamacare.

 

 The reductions were supposed to take effect on October 15,2012.

 

This Medicare Advantage elimination date is part of the $500 billion dollar reduction in Medicare expenditures.   

On May 6, 2012 I reported President Obama’s impending trick was pulled not to upset seniors and loss their vote for his reelection.

 

“President Obama’s politics are a dirty business. Manipulating the traditional media and American public’s thinking rather than presenting the truth seems to be President Obama’s goal.

The traditional media has omitted the fact that President Obama is going to make major disruptive changes to Medicare on his own. He is going to decrease Medicare funding by $500 billion dollars.

In fact, the decrease funding was to take effect before the election.

He conveniently delayed the scheduled reduction until after the election in order to not upset seniors and lose the senior vote.”

“ President Obama has been planning to get rid of Medicare Advantage with his Medicare funding reductions. Seniors will then be in an uproar.” 

President Obama’s plan to delay the implementation of the cut I Medicare Advantage is a trick that is costing the American Taxpayers $8 billion dollars. The cost of the additional study will not prove anything.

http://my.brainshark.com/The-President-s-8-Billion-Coincidence-356086344

PLEASE CLICK ON THE ABOVE LINK TO SEE THIS VIDEO.

It is just another trick play to deceive voters to vote for him.

It will not work. I hope President Obama’s disinformation and manipulation of the traditional media are wearing thin on everyone.

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

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ObamaCare Is Not A Cost Savings Act

Stanley Feld M.D., FACP,MACE

The evidence is mounting that President Obama’s healthcare reform act will not make healthcare more efficient or more affordable.

I have pointed out that Obamacare will create a healthcare system that will limit innovation, lead to healthcare rationing, and lower the quality of care.  All this is coming our way.

The theoretical cost savings proposed and confirmed by the CBO on data given to it by President Obama has not worked out as promised.

It couldn’t work out as I predicted with the creation of a massive bureaucracy and its generation of massive rules and regulations to enable the government to control the healthcare system.

I would have loved to see President Obama create a system of affordable healthcare that is accessible to everyone. President Obama’s did not. He has created a financial and healthcare delivery mess.

He has the wrong business model.

He was able to pass his healthcare reform act by faking out the congress and the CBO using unrealistic numbers about cost saving.

President Obama repeatedly claimed that the annual healthcare premium per family would decrease by $2,500 per year before the end of his first term. We are almost at the end of his first term and the average cost of a yearly premium has increased $2,200 according to a Kaiser Family Foundation report.

President Obama claims seniors enjoy their Medicare coverage. I believe it is great to provide guaranteed insurance for seniors despite pre-existing illness.

However, the costs of Medicare premiums and Medicare’s initial deductibles have increased since 2009 while the covered services have decreased.  

President Obama has also told seniors that their Medicare Part D benefits have improved under his watch. However, the cost of Part D, the deductibles and the costs of the different tier drugs have all increased.

“The CBO's initial estimate in March 2010 of ObamaCare's budget impact showed it saving money, reducing the federal deficit by $143 billion in the first 10 years. But that positive estimate was largely the product of gimmicks inserted into the bill by Democratic leaders to hide the law's true cost.”

Last month President Obama’s proposed fiscal 2013 budget included $111 billion in additional spending for the premium subsidies in the health law's insurance exchanges. Many states are refusing to sign up for health Insurance exchanges even though President Obama said he would pay 90% of the cost of these exchange in the first couple of years.

The states are broke and in the red. They have a constitutional obligation to have a balance budget.

The healthcare insurance exchanges are a President Obama ploy to get states to sell insurance to the uninsured increasing the state’s deficit. President Obama and congressional leaders said it would only affect one million Americans who would lose their employer-sponsored healthcare coverage.

This did not seem like an accurate number to me. The healthcare insurance premiums were $13,000 per family. If the employer did not provide healthcare coverage the penalty to an employer would be $2,000 per employee per year.  The numbers given to the CBO clearly was a misrepresentation.

According to the CBO, 154 million Americans are covered under employer-sponsored plans. The cost to taxpayers would be huge and further increase the deficit if 50% of those individuals lost their coverage and became eligible for the $10,000 per year subsidy.

A McKinsey & Co. study in June 2011 showed that 30%-50% of employers plan to stop offering health insurance to their employees once the health law is implemented in 2014.

Employers dropping employer sponsored healthcare coverage will expose their employees to large financial risk even with the proposed government subsidy.

Employers would be making most employees eligible for huge subsidies in the new health-care exchanges. The government paid subsidy would be up to $10,000 for a household income of $64,000 per year.

This was another trick play by President Obama to get everyone into a public option and government run socialized medicine.

 “In recent testimony before the Senate Appropriations Committee, Health and Human Services Secretary Kathleen Sebelius told me that America's health insurance system is in a "death spiral." She failed to acknowledge that implementation of ObamaCare will be the cause of that death spiral, and American taxpayers will be left to pick up the tab.”

We have also learned that President Obama gave 1400 corporations exemptions from Obamacare. These corporations provided “Minimed healthcare insurance” to their low wage earning employees. Minimed healthcare insurance provides little coverage to low wage earning employees. Hundreds of thousands of these people are essentially uninsured.

On the data given to the CBO, the premiums collected by the Community Living Assistance Services and Support Act (CLASS Act) were estimated to reduce the budget deficit by $70 billion dollars per year.

The new CLASS Act program is voluntary. Premiums are estimated to be $123 per month for workers who choose to participate. It covers home care for those who become disabled at any age, not just those over age 65.

This is a pretty low premium. It seemed too cheap to be true. Congress had to impose a secret tax on all taxpayers to cover the cost of CLASS.

 

“All taxpayers will all be taxed $150-$250 PER MONTH beginning in 2011 for the NEW Community Living Assistance Services and Support Act (CLASS Act) that was added to the Reconciliation Bill on Friday night, Mar 19, 2010, before Congress voted on Sunday, Mar. 21, 2010. It will help pay for long-term home-care for the elderly. Isn’t that nice?”

 

These are only a few examples of President Obama’s disinformation provided to the American taxpayer before and after his healthcare reform act was passed.

If the American taxpayer only listened and knew these facts and unintended consequences beforehand this bill would have never passed. If the Democrats in congress studied the bill beforehand they would have never passed it.

America had President Obama’s healthcare pulled over its eyes. This is the reason Vice President Biden said on an open mike, “This is a big f-----g deal”

  

 

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

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Healthcare Insurance Industry’s’ New Business Model Is Wrong.

Stanley Feld M.D.,FACP,MACE

One percent of the people spend 25% of the healthcare dollars. Twenty percent of the people spend 80% of the healthcare dollars.

It would be important to know why this is true. Then figure out what could be done about it Stakeholders need to agree on a course of action.

It would be a good idea to understand what physicians think should be done. 

“One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.”

The 1% and the 20% are suffering from complications of a chronic disease.

The incidence of chronic diseases is on the rise in the United States. A major precipitating factor for this is obesity.

The incidence of Type 2 Diabetes Mellitus is increasing in both adults and young children, as the incidence of obesity is increasing.

The incidence of complications of Diabetes Mellitus will increase in the future. The result will be an increase in the cost of medical care.

President Obama’s healthcare reform act will expand healthcare coverage to 32 million uninsured in 2014. Obamacare is forcing the healthcare insurance industry to change its business model in order in order to remain profitable.

Premiums are out of the reach of most businesses and individuals. Premium increases are not an option.

High-risk individuals are denied healthcare insurance coverage. High-risk patients automatically get coverage in corporate healthcare plans. The healthcare insurance industry simply raises premiums on corporate groups in order to maintain its profits.

Something must be done to decrease the increase in chronic disease and its complications. 

The government cannot afford to insure its present patient obligations much less the 32 million uninsured.

“As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.”

Twenty percent of the population not 1% should be getting the attention of the healthcare insurance industry.

“Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill.

An analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance that are under 65.

About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.”

Most of these people were obese.

The healthcare insurance industry cannot avoid these patients after 2014.

“Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent.”

The healthcare insurance industry realizes it must fundamentally change its business model.

The healthcare insurance industry has a problem developing a new business model that would work. The industry does not want to lose control over patients, their physicians and the monies paid into the healthcare system.

The healthcare industry does not have a clue about how to actually repair the healthcare system. It is focused on its own bottom line rather than looking at business models that will be beneficial to everyone and align all the stakeholders’ incentives.

The healthcare insurance industry is planning on instituting programs that will tinker with the edges. It will not fix the problems.

The new business models will increase the percentage of money the insurance industry receives for direct patient care maintaining a Medical-Loss ratio of 15%. There is no interest in providing patients with financial incentives and a choice.

The net result will be higher costs and system failure. The weird thing is most of the healthcare insurance industry executives know it.

“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” said Dr. Lonny Reisman, the chief medical officer for Aetna.

The reality is that the system must be consumer driven with consumers in charge of their healthcare and their healthcare dollars.

At the moment patients have no incentive to decrease the cost of care. Hundreds of patients have told me that they go to the doctor to fix their illness. Medicare or their insurance pays. The patients have no idea of the costs they incur nor do they care. They have no interest in controlling their disease.

My ideal medical saving accounts would give the patients incentive to learn about their disease. They would be interested in self-managing their disease with the physician and his medical care team being the coach.

“The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health.” 

Physicians have figured out what services get paid by the healthcare insurance industry. They do not get paid for educating patients about their disease.

The healthcare insurance industry and the government have developed a punitive bureaucracy.   

An attempt is being made to penalize or reward physicians for medical outcomes. Pay for Performance (P4P) is a punitive payment system. It will fail. 

Patients are responsible in large part for the onset of their medical problems and in controlling their medical outcomes. Physicians cannot be responsible for patients’ outcomes. It is the responsibility of the patient.

“Insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.”

Patient outcomes have nothing to do with human nature. It has everything to do with financial incentive and effective education.

Spokes 5 and 6 of my future state business model has everything to do with patients’ responsibility for caring for their disease and the physicians’ responsibility to the patients. It has nothing to do with physicians’ and patients’ responsibility to the healthcare insurance industry or government.

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

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It Is All About Patients and Physicians

Stanley Feld M.D.,FACP, MACE

Society is in the midst of an electronic revolution. Innovations in hardware and software have created greater shifts in our economy than the assembly line, mass transportation and electricity. We ain’t seen nothing yet.

The potential for economic growth as of result of this revolution is unimaginable.

Current business models have crumbled and have been replaced by software driven companies. Software driven companies are cheaper to run and have created innovative and easy to use products and services for consumers.

Marc Andreessen, founder of Netscape, has a tremendous handle on this revolutionary change. So does my son, Brad, and his good friend Fred Wilson.

Marc Andreessen wrote an excellent article in the WSJ on August 20th, 2011 entitled, ” Why Software Is Eating The World.”

“More and more major businesses and industries are being run on software and delivered as online services.”

Almost all industries have been affected. The hardware and software revolution have overturned many industry’s business models. 

Brad Feld wrote a perceptive blog today defining some of the changes to be expected in the near future. He also warned of incumbent and political abuses to the technological advances that are being made by entrepreneurs.

Even the freedom of the Internet is being threatened by a congress that does not understand its potential and is driven by vested interests, not the preservation of freedom, creativity and innovation.

My hope is Congress will be unsuccessful in restricting these freedoms. There will be many more industries that will be disrupted by innovative software in the coming decade.

“Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago.”

Marc Andreessen expects, “at least five billion people worldwide own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.

Amazon.com is a dramatic example of a company that has used innovative software to transform an industry. Twelve years ago Borders was the king of stick and brick booksellers. Borders had an effective software book distribution system for its increasing number of bookstores.

Amazon, with software that distributed books directly to the customers ate Borders’ lunch. Borders thought on-line book sales was non strategic. “People like to touch books before they buy them.”

How wrong can one be? Using the same software Amazon now sells everything at a lower price than most retail stores and on-line companies. Its software decreases overhead and in turn consumer prices.

Consumers are not stupid. They want the best product at the lowest price. Amazon produced and consumers responded.

 Big box stick and brick retail stores that took over the local mom and pop businesses will fail unless they became hybrids.

The old business model bankrupted Borders.

Amazon didn’t stop there. Its Kindle digitized books and delivered them instantly at half the price to consumers with a greater margin for Amazon.

This demonstrates the genius of innovation. The creative uses of innovative software are staring us in the face daily.  Most industries  have a Blind Spot.

The existence of those people who want to touch the pages of books is fading fast. Jeff Bezo saw this Blind Spot.

Netflix copied Amazon with DVD movies. It destroyed Blockbuster.  Netflix then switched from physically delivering DVDs by mail to both delivering DVDs and on-line downloads.

It would have worked if they put the consumer first. Netflix infuriated  consumers with its pricing. It almost immolated itself. I do not think Netflix will recover unless consumers perceive that they are first.

Amazon, using a more sensible model, is going to take over the on-line movie business. Blockbuster, now owned by Dish network, doesn’t have a clue about the needs of consumers. 

Dish, Direct TV and Cable are trying to adjust to the rapid pace of software innovation. I do not think they can because they are bogged down in bureaucracy.

They are simply not entrepreneurial.

This brings us to Apple, Steve Jobs and the entrepreneurial spirit. Steve Jobs turned the music industry on its ear with ITunes, the smart phone industry on its ear with the IPhone and the computer industry on its ear with the IPad and the Mac Book Air.

His method was to use innovative software that made the appliance work for the consumer. He does not make the consumer suffer as Microsoft does with constant software freezes.

He kept his eye on the consumers. He put the consumer first. It served his vested interest well.

Before is died he made a statement in which he said he finally figured out television.

Google is a close second to Apple but Google is hampered by a growing bureaucracy.

“The great incumbent software companies like Oracle and Microsoft are increasingly threatened with irrelevance by new software offerings like Salesforce.com and Android (especially in a world where Google now owns a major handset maker).”

I could mention many more companies that have served as disinter mediators of incumbent businesses by software innovation. These innovations have resulted in vast improvements in value to consumers, decreased costs and economic growth.

 Why hasn’t healthcare in the U.S. been the beneficiary of this software revolution?

The reasons are clear to me having practiced Clinical Endocrinology for 30 years.

Healthcare is an industry with a gigantic Blind Spot. There is a good reason for healthcare’s Blind Spot.

Software developers in the medical space do not know who their customers are. Their customers are patients and physicians and the patient/physician relationship. The customer is not the government, the healthcare insurance industry or hospitals.

Once this is understood the software revolution in medicine will begin.  

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

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Pharmacy Monopolies

Stanley Feld M.D.,FACP, MACE

 Pharmaceutical companies have been merging for years. Pharmacies have also been merging for years. The excuse for mergers has been efficient production, distribution and sale of drugs.

“Senior executives say the merger will significantly reduce the nation’s health care costs and deliver drugs in a safer, more efficient fashion. “

If any one believes this I have a bridge to sell you.

The real reason is to form a monopoly. President Obama and his Federal Trade Commission (FTC) have allowed pharmacies to get away with it.  

 “The Federal Trade Commission (FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the elimination and prevention of what regulators perceive to be harmfully anti-competitive business practices, such as coercive monopoly.”

The commission has not done a very good job in protecting consumers of healthcare for years.

The next wave of monopolies which will hurt consumers is the merging of pharmacy benefit management companies.  Their executives are using the same excuse to both the FTC and the congress.

“Senior executives say the merger will significantly reduce the nation’s health care costs and deliver drugs in a safer, more efficient fashion. “

 I have finally figured it out.

First, I must explain this attempt to create another healthcare monopoly that will result in increased cost to the healthcare system.

If past behavior is a predictor of future behavior, whoever is paying for the drugs will pay more.

 Express Scripts’ has offered to pay $29 billion for the acquisition of Medco Health Solutions. Both pharmacy benefit manager are among the biggest in the business.  

 Combined they will handle prescription drug benefits for more than 115 million people. The two companies now control 33% of the prescriptions filled in the United States. Their combined revenue is $110 billion dollars a year and growing.

 The Federal Trade Commission wants more details before it approves the merger. The antitrust subcommittee of the Senate Judiciary Committee wants to examine the antitrust implications of the merger.

 It is pretty obvious that the merger will decrease competition leaving only two major pharmacy benefit managers Express Scripts/Medco and CVS Caremark. 

  A Morgan Stanley Research indicated that the 50 largest companies in the United States rely heavily on the services of Medco, Express Scripts and the third major benefit manager, CVS Caremark.

"Dan Gustafson, an antitrust lawyer who recently helped write a letter to the F.T.C. objecting to the merger on behalf of the American Antitrust Institute, a Washington organization. “These are customers who require a broad spectrum of services on a national level,” he said."

The smaller pharmacy benefit managers (40) typically do not have the geographic reach, bargaining power or data-handling capabilities of Express Scripts, Medco and CVS Caremark.

“When benefit managers steer health plans to their own pharmacy fulfillment services, employers may have little choice but to agree, said Edward A. Kaplan, a benefits consultant at Segal, which advises employers and others about health insurance. “They have very little leverage,” he said.

The Senate subcommittee and FTC regulators want to study the implications of the merger on the individuals, large companies that provide drug insurance to their employees, the mail order pharmacy and specialty drug markets.

The merged company would control a third of the specialty drug market. This market produces a high net profit. By controlling the market Express Scripts/Medco would not only increase the price it would increase their net profit.

Robert Seidman, a former pharmacy executive at WellPoint who is now a health care consultant in Los Angeles said,

“We’re not talking pennies here,” he said. “We’re talking thousands” per drug.

  Express Scripts/Medco retort is pretty lame. It asserts there is plenty of competition including companies like UnitedHealth Group, the powerful insurance company. The obvious reply should be that there is not enough competition.

 A number of consumer groups including Consumers Union, along with associations representing community pharmacists, chain drugstores and supermarkets, have sent letters to regulators and legislators arguing that the combined company would create a drug benefit giant with unrivaled power.

 The fear is Express Scripts/Medco would have the power to steer patients to its own mail order and specialty pharmacy businesses.

 “Our concern is that a mega P.B.M. would have tremendous power and control over what prescription drugs Americans can get, where they get them, and how much the drugs cost,” said Don Bell, senior vice president and general counsel at the National Association of Chain Drug Stores.

DeAnn Friedholm, the director for health care reform at Consumers Union, said her group was particularly concerned that the merger could reduce consumer choice.  

“We like the idea of having good choices for consumers that meet their needs, not just the need of these huge P.B.M.’s,” Ms. Friedholm said.

Just as President Obama and previous administrations has encouraged hospital systems to become monopolies in the name of efficiency, President Obama is going to believe Express Scripts/Medco’s promise of efficiency and lower costs and have the FTC push through the merger.

I would guess President Obama thinks he can control Express Scripts/Medco or he is playing favorites again or he wants the healthcare system to implode.

This is one more step toward the implosion of the healthcare system.

 

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

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Our Sound Bite Society. Cain vs. Gingrich Debate

 

Stanley Feld M.D.,FACP,MACE

 I missed the Cain vs. Gingrich debate on November 5^th because it was not well publicized by the traditional media. I watched the debate on the Internet on November 9^th. 

All I have heard from President Obama’s special joint session of congress speech is you must pass this jobs bill right away. I did not hear any solutions to America’s complicated structural problems.

  

There is little mention that his American Jobs Act is a $450 billion dollar stimulus package adding to the previous one trillion dollar stimulus package that did not work. President Obama also said it will not cost the American public a dime.

 On the other hand, Herman Cain and Newt Gingrich had a riveting 81 minutes debate discussing in detail what should be done about Medicare, Social Security, Medicaid, and jobs.

 It was a truly remarkable debate. The three minutes response limitation on the candidates was suspended in the first three minutes.

Clear, concise and detailed explanations of each candidate’s positions were given. Both candidates were entertaining and serious. They treated Americans as intelligent humans who can make decisions for themselves once they understand the issues.

 Their goal was to educate the people.

This Internet video is very worthwhile watching. It explains, why in their opinion, central government solutions have not worked. They explain what has worked in the past and what needs to be done to solve America’s problems.

  

All the traditional media said about the debate in the press is Gingrich won. There was no discussion of the details of the debate.

There was not one “got ya” question or response during the debate.

  In my opinion neither candidate won the debate. The viewing American public won. Please watch this debate. It will not be a waste of time.

 Our nation needs more of these frank discussions to educate the public about the problems we have and potential solutions to the problems.

 

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

 

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.

 

 

 

 

 

 

 

 

“It Is De Ja Vue All Over Again.” Yogi Berra

Stanley Feld M.D.,FACP,MACE

 Economic downturns and upswings occur over and over again. Economists believe both downturns and upswings can be managed. However, economists continue to make the same policy mistakes. The mistakes result in an increase in depth and frequency of the economic swings.

Businesses both large and small and consumers are frustrated and angry about the present economic downturn and its prolonged continuation.

President Obama thinks his ideology is correct. However, his philosophy is flaming the fires of racial and economic divisions and unrest. His ideology is prolonging and increasing the depth of this economic downturn.

Before I present a systemized solution to the dysfunction of the healthcare system, I feel compelled to put the economic, political and social crisis in into a systems error perspective.

The national deficit is exploding because of excessive government spending. None of President Obama’s economic stimuli have worked.

The healthcare system and the medical care system are about to implode. There is a serious healthcare system crisis in America.

Economic uncertainty is increasing as a result of the unintended consequences created by the thousands of new regulations produced by the Obama administration’s bureaucracies. The regulations are written at the discretion of  non-elected government officials.

American businesses and the American people mistrust government more and more. Powerful vested interests influence government policy to their advantage.

 Congress and the President were elected “by the people for the people.” The government has gotten too large.  The government does not seem to be working in the interest of the people who voted for them.

The lunacy of government described by Ayn Rand’s in Atlas Shrugged seems to be occurring today.

In 1957 Ayn Rand having experienced a totalitarian government in her native Russia was upset by the trend in America. This resulted in her writing Atlas Shrugged.

 Right now President Obama’s ever-increasing bureaucracy and government control over every aspect of our lives is reminiscent of “Atlas Shrugged.”

Stephen Moore senior economic writer for the Wall Street Journal put together a summary PowerPoint presentation outlining the similarities of today with by President Obama and the lunacy that occurred in Atlas Shrugged.

  

 

Milton Freidman pointed out that Keynsian economics does not work. All the World’s societies run on greed. The trick is to harness greed for the common good.

  

 Big government generates large bureaucratic structures. Large bureaucratic structures do not fix anything. They make systems more complex and more difficult to manage.

 This is what is happening with the bureaucratic structures being formed by Obamacare. More departments are created. People running these departments have independent power. Multiple independent departments lead to multiple contradictions. The contradictions lead to greater costs to the system and added dysfunction.

 The Department of Human Services and CMS is such a system. It has become a  monster bureaucracy with the enactment of Obamacare.

 

 

Look at the names of some of the agencies created. They are right out of "Atlas Shrugged."

I recall President Reagan’s famous statement, “I am from the government and I am here to help.” 

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

Paul Ryan on Medicare

 

 Stanley Feld M.D.,FACP,MACE

 Paul Ryan and the Republican House passed the 2012 budget that has been ignored by Harry Reid and the Senate.  Harry Reid gets his orders from President Obama. He chose not to consider the Republican House budget. Instead Democrat chose to demonize Paul Ryan.

 President Obama seems to be ignoring America’s debt and deficit spending crisis. The Senate has not produced a budget in over 900 days. President Obama has presented numbers to the CBO that would result in decreasing the budget deficit. The numbers presented to the CBO are phony. The Healthcare Reform Act will result in a huge increase in our deficit. It will result in higher taxes.

The traditional media has been very effective in demonizing Paul Ryan’s budget proposal.. The TV ad implying that Paul Ryan is pushing grandma off the cliff is a total lie. The media should fact check before accepting an inaccurate advertisement .

If anything, President Obama’s Healthcare Reform Act will push grandma off the cliff.

Paul Ryan’s explanation of our debt crisis and deficit spending is clear. His budget proposal is also clear.

  

 

Paul Ryan questions the reasons President Obama and the Democratic Senate are ignoring the coming disaster.

  

The healthcare system is inundated with waste, fraud, abuse, a lack of competition and well-directed incentives for the healthcare system to function efficiently.

 President Obama’s healthcare reform law is awash with penalties, punishment and rationing as well as waste in the form of more bureaucracy, committees, studies and pilots. Medicare is unsustainable.

  

The healthcare insurance industry has figured out how to profit from the proposed ACO (Accountable Care Organizations). It means more bureaucracy resulting in higher fees to charge the government for providing administrative services. The result will be higher unsustainable costs for both the government and seniors.

  

 

 

  

 

Hospital systems know are not prepared for ACOs. ACO’s are too costly to set up. Most hospital systems information systems are not good enough to provide the data the government wants to evaluation the care given. Administrators managing hospital systems intuitively know that the government will make decisions that will be counter to hospital systems’ vested interests.

  

 

Physicians know that hospital systems are going to try to capture as much of their intellectual property as possible and restrict their freedom to make medical judgments. It will be very difficult to create physician hospital alignment under an ACO.

  

This is a must watch You Tube

Patients know ACO’s are going to restrict access to care, increase their out of pocket expenses, ration care and result in higher taxes and higher deductible. Partial implementation of President Obama’s healthcare act already has resulted in all of the above.

Hospital systems and physicians have not signed up for ACO’s. That resulted in Dr. Don Berwick and CMS revising their ACO final rules. Dr. Berwick is trying to entice hospital systems and physician groups to sign up and form ACO’s.

Dr. Berwick says he is for patients, hospital systems and physicians delivering better care to patients. I believe him. However, he is doing it the wrong way.

 The only thing the new rules accomplish is to make forming an ACO more affordable at the front end. Medicare ACO’s continue to be a government controlled system with penalties and punishments to providers. 

Patients’ treatments will be determined by a non-elected committee and not their physicians.  The committee might make the wrong decision by examining the wrong data.

The most recent example was the United States Preventive Services Task Force (USPSTF) on prostatic specific antigen (PSA).  

There was not one urologist on the committee. Another example was the USPSTF task force studying osteoporosis and the use of bone mineral density in men over 70. There was not one Clinical Endocrinologist on the committee.

All anyone has to do is go into any Wal-Mart on a Monday morning.  At least 50% of males over 70 years old look like they have lost several inches of height.  Each of these men has osteoporosis. They are at risk for hip fractures. Hip fractures at the least with decrease quality of life. At most, long hospitalization and death. Hip fractures can be prevented if treated properly.

Medicare will not pay for these men to have a bone density for the diagnosis of osteoporosis.  This leads me to the definition of quality medical care.

  The next step would be to study the number of hip fractures in men over 70 years old and the cost of treatment of these fractures. An evaluation of the quality  of life  after fracture must be evaluated to get an accurate assessment of the cost effectiveness of doing bone mineral density testing.

Medical care systems must be a patient centered and controlled. It must not be a government centered and controlled system. This is the only way to develop a cost efficient system. Dr. Berwick’s way will only increase the cost to the government. He will spend money the government does not have.

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

 

 

 

 

 

President Obama Sneaks In Another Tax Increase: Means Testing for Medicare Part D

 Stanley Feld M.D.,FACP,MACE

 

I must interrupt the development of my theme, “Managing Complexity In Order To Repair The Healthcare System,” to bring you this special announcement.

Starting in 2011, Part D enrollees whose incomes exceed $85,000 (for individual tax returns) or $170,000 (for joint tax returns) will begin paying more for Medicare Part D (Drug Prescription Benefit Plan). These “super rich?” seniors will be paying up to 60% more for Medicare Part D per person.

Some really rich seniors who receive a total income from all sources, including retirement benefit, social security, capital gains and dividend will pay the government up to an additional 500% more than their Medicare part D premium costs.

The government should fix the Medicare Part D program by negotiating the drug costs with drug companies directly as they do in the Veterans Administration. The healthcare insurance companies lobbied hard for this concession.

President Obama has chosen to tax seniors for the outrageously constructed drug benefit rather than putting seniors first.

President Obama slipped the means testing regulation for Part D into last years budget. Means testing went into effect on January 1,2011. I missed the regulation and its implementation completely.

Congress and the mainstream media also missed this rather historic regulation. Some would say the regulation was in plain sight but congress did not bothered to see it.

It was also astonishing to slip this into law when President Obama specifically promised he would not change Medicare benefits for any seniors. 

President Obama cannot be trusted.

It reminds me of President Reagan’s famous line. “I am from the government and I am here to help you.” 

President Obama’s plans to collect more than $8 billion a year from “wealthy seniors” for Medicare Part D drug prescription benefit by “means testing” seniors for all sources of income.

Major Democratic members of the House and Senate have been opposed to means testing for Medicare Part D. President Bush tried to get congress to pass means testing for Part D in 2006. It was quickly rejected by the Democratic controlled congress.

The Democrats arguments were consistent with liberal dogma.

“Social Security and Medicare are participatory programs, designed for all Americans—rich and poor alike. You work hard, kick a portion of your income into these two retirement funds, and are guaranteed a payout in your golden years. This gives these programs broad popular support—they are not welfare for the poor, they are guaranteed retirement benefits for all.”

“Liberals fumed. Means-testing of entitlement programs would send us down a dreaded "slippery slope," they argued. Soon Medicare, and then Social Security, would lose their broad-based popular support, and be merely costly welfare programs! Both Obama and then-Sen. Hillary Clinton voted against a Republican proposal to means-test Part D last year.”

President Obama’s regulation has not gotten very much media attention.  Liberals declare the goal is to preserve Medicare's status. Wealthy seniors (earning retirement income from all sources of over $85,000 per year) did not recognize the increase in 2011. The tax is deducted from their electronically paid Social Security benefit.

This tax was another President Obama trick play.

Pete Stark must be fuming about the means testing. It contradicts his liberal philosophy.

“Requiring some seniors to pay more for Medicare is a red herring from Republicans who want nothing more than to end Medicare as we know it,” said Rep. Pete Stark, ranking Democrat on the Ways and Means Health Subcommittee. “Upper-income seniors paid more into Medicare when they worked. Applying a new surcharge is essentially double taxation and should be rejected.”

Charlie Rangel’s reaction to means testing for Part D was expressed in 2006.

“The beauty of Medicare is that we’re all in it together, whether you are rich or poor, healthy or sick,” commented Rep. Charles B. Rangel, senior Democrat on the Committee on Ways and Means. “Charging certain people more is the first step toward destroying Medicare’s universality and turning it into a welfare program.”

Nancy Pelosi’s take on means testing for Part D in 2006 was harsh.

“It is simply unacceptable that nearly 2 million Medicare premiums will double beginning this January,” House Democratic Leader Nancy Pelosi said. “Seniors, who are already struggling to make ends meet, should not pay the price for failed Republican policies. With further premium increases slated in the future for even more beneficiaries, we must act immediately to protect America’s seniors.”

The Part D premium increases, known as means testing, are based on the same income thresholds as Medicare Part B means testing.

2011 Income thresholds are as follows:

2011 Income Thresholds (single) Joint per person	Less than $85,000 Less than $170,000	$85,000 - $107,000 $170,000 to $214,000	$107,000 - $160,000 $214,00 to $320,000	$160,000 - $214,000 $320,00 to $428,000	$214,000 or more $428,000 or more
2011 Part D Additional Premium (monthly)	$0	$12	$31.10	$50.10	$69.10
2011 Part B Premiums (monthly)	$115.40	$161.50	$230.70	$299.90	$369.10

Part D plan members will continue to pay their regular premium to their Part D plan, but the income-related adjustments shown above will be paid to Medicare. It will be deducted from their monthly Social Security check.

These additional charges are sure to catch some seniors’ off-guard. Some who might be subject to the additional charges are those who own a business, those who are earning farm or investment income, seniors who are taking installments from their 401(k), or those selling a home for a profit.

“This potentially historic change (and others like it) will slide right through, and serve as a model for further means-testing of entitlement programs”.  

What bothers me most is that there was no public discussion or political debate on the issue that I recall. President Obama simply hid the increased senior tax in his budget. He has often promised to make the drug plan more affordable.

President Obama’s means testing regulation is really an assault on the retired middle class seniors of modest retirement income.

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

 

 

Stop The Demagoguery

Stanley Feld M.D.,FACP,MACE

 Patients are first. Patients are the reason for the existence of the healthcare system. Physicians are second. They are trained to understand the pathophysiology of illness and to treat patients for their disease. Everyone else is a secondary stakeholder (provider).

 All the stakeholders create waste in the healthcare system. If an accurate analysis were performed, most of the waste and the resulting profits would be attributed to the secondary stakeholders. Patient and physicians drive this waste and profits into the hands of the secondary stakeholders. Neither patients nor physicians are aware of driving the waste and profit into these stakeholders’ coffers.

The patient-physician relationship should be a one on one transaction. Patients and physicians are frustrated and many have accepted the disappearance of this human-to-human interaction. 

 Healthcare insurance companies and hospital systems think they own the patients and the physicians. This will turnout to be a fatal misperception.

 To many observers of the healthcare system, there are no simple solutions to fixing the dysfunction. One reader wrote:

“ There are so many contending interests, physicians, patients, hospitals, surgeons, labs, health insurance companies, public funding, et al., there will never be an ideal plan simply because of the tensions that exist between the above actors.”

“This is compounded by the population diversity which impacts ability to pay, willingness to practice preventative health or comply with medical recommendations.  Add into the mix the highly influential emotions that cause patients and their family to make inappropriate or unwise decisions.”

 The dysfunction in the healthcare system is so complex that most people look to blame someone for the dysfunction. The easiest targets are physicians.

  I believe there is a simple way to solve the problems. It is by creating a consumer driven system that provides enough financial incentive to consumers to inspire them to prevent the development of chronic disease, teach them to treat their chronic disease with effective systems of care and provide information on finding physicians who will provide care. The solution has to be driven by individuals responsible for their care.

 A case in point is Kris Carr author of Crazy Sexy Cancer

 “Before finding Dr. Demetri at Dana-Farber, she spoke to four other oncologists. One kept her waiting for three hours, gave her 10 years to live and then abruptly left to see another patient. Another off-handedly suggested a triple organ transplant. But something about the wrongness of it all galvanized a previously untapped drive in Carr.

  “I realized,” she says, “that if I was going to make it through this, I needed to become the C.E.O. of my own healing start-up.” Carr called her imaginary company “Save My Ass Technologies Inc.” She began meeting with doctors as if they were applying for a choice job with her.

 Consumers can drive all the waste out of the system. People do not want to believe this because the profit created by the waste is counter to their vested interest. Many health policy experts think consumers are too stupid to find good medical care. It is not that they are too stupid. Consumers feel powerless in the present system.

 Right now the solutions are finger-pointing solutions based on hunches and little evidence.

A physician wrote an editorial in the Bangor Daily News.

 I think my profession collectively has failed miserably to lead on most hot issues of health care reform. It has not, for example, led efforts to get all Americans health insurance, to reduce medical errors, or to reduce waste in health care in order to help make it affordable for us all.

 

 The statement is meaningless to me. It is grandstanding. The problem is if you tell a lie enough times it becomes the truth. The big question is which testing and which procedures are appropriate to improve well-being.

"Which road will physicians choose when it comes to reducing the number of wasteful procedures they perform and for which they get paid? We do countless colonoscopies, heart catheterizations, MRI scans, joint scopings, office visits and much more that waste billions of dollars and cannot be eliminated without physician leadership of a “whack out the waste campaign.”

 A reader of my blog replied to the statement made in the article in the Bangor Daily News.

I'd like to know who are the docs that are doing all this overutilizing that we keep getting accused of by others, and even by members of our own bunch.  I haven't practiced that way, and I don't know docs who do.  Where are all those miscreants?  I'm wondering if that may be another example of a false statement being repeated so often that it eventually acquires a ring of truth."

In another departure from conventional thinking by the traditional media the same reader continues:

"And, while I'm thinking about it, what can we do with the percentage that healthcare expenditures form of the GDP when the GDP is going into the tank, and healthcare is not?  Doesn't that make the percent for healthcare seem a whole lot larger than it otherwise would be?  Maybe we should be railing away at the people who have allowed our GDP to get to the miserable level it now forms.  Instead of it all being Bush's fault, maybe it is the fault of the unions whose greed drove all those jobs overseas, not to mention the excessive government regulations and taxation of corporations that make disincentives to GDP growth in our country?  Maybe our view of things is narrower than it ought to be.  D"

We should not be satisfied with conventional thinking. Finger pointing doesn’t solve the problem of dysfunction in the healthcare system. What does is recognizing patterns and changing approaches to the healthcare system that serve to align incentives of all the stakeholders without totally disrupting the structure that exists.

The most important stakeholders in the healthcare system are patients. They should control the healthcare system. Consumers should make all the other stakeholders compete for their business. There is too much waste, too many middlemen, too many markups and too much abuse by all the stakeholders.

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

 

 

 

 

 

The Healthcare Insurance Industry Continues To Game The Healthcare System

Stanley Feld M.D.,FACP,MACE

I have described how the healthcare insurance industry loads its expenses into direct patient care expenses to increase their profits. 

The Medical-Loss Ratio calculation of is not reported by the traditional media. The healthcare insurance industry spends less healthcare dollars on direct patient care after it is permitted by federal and local agencies to load its expenses into the direct patient care column.

Simply put, the healthcare insurance industry cooks the books to increase its net profit.

Another way to increase profits is to shortchange physicians on medical claims. In fact, 20% of medical claims payments are inaccurate according to the American Medical Association’s (AMA) fourth annual National Health Insurer Report Card. Claims-processing errors by health insurance companies waste billions of dollars and frustrate patients and physicians.

This is one of the reasons the RAND report about physicians controlling waste is so absurd to me.  The healthcare insurance industry creates waste in order to increase net profit.

 The AMA released its annual report card on insurers saying, "Eliminating mistakes would save doctors and insurers $17 billion a year." 

The AMA said, “Commercial health insurance companies have an error rate of 19.3 percent, up two percentage points from last year's report.”

The healthcare insurance industry’s computer systems become better each year. At the same time, the healthcare industry has a higher error rate each year.

 The healthcare insurance industry’s explanation of benefits becomes less comprehensible to patients and physicians every year.

 When physicians discover insurers’ mistakes in reimbursement they fight the healthcare insurer for their patients or themselves. It is costly to fight and it distracts physicians from their job of diagnosing and treating patients. 

I think the error rate in reimbursement is even higher than reported. A significant percentage of physicians or their billing services do not pick up many of the errors.

The 2011 report card is based on a random sampling of about 2.4 million electronic claims for approximately four million medical services submitted in February and March 2011 to Aetna, Anthem Blue Cross Blue Shield, Cigna, Health Care Service Corp., Humana, the Regence Group, UnitedHealthcare and, for comparison, Medicare, according to the AMA.

 The claims were gathered from more than 400 physician practice groups in 80 medical specialties in 42 states.

It must be recognized that the random sample is a small percentage of the total number of claims processed. The results can have a large margin of error and result in a higher percentage of mistakes.

“The increase in overall inaccuracy represents an extra 3.6 million in erroneous claims payments compared to last year, and added an estimated $1.5 billion in unnecessary administrative costs to the health system.”

The additional administrative costs have an insurance industry’s profit component added on to reprocessing the errors.

 Why hasn’t President Obama recognized this and gone after this abuse of the healthcare system?

 "Robert Zirkelbach, spokesman for America's Health Insurance Plans, said in an e-mailed response that insurers and providers share the responsibility of improving claims payment accuracy and efficiency." 

The response is lame. The response gets worse.

 "CIGNA maintained its industry leading low denial rate of 68 percent." Notably, "lack of patient eligibility for medical services continues to be the most frequent reason for denials." 

UnitedHealthcare was the only commercial health insurer included in this year’s report card to demonstrate an improvement in claims-processing accuracy.

UnitedHealthcare came out on top of seven leading commercial health insurers with a accuracy rating of 90.23 percent. Anthem Blue Cross Blue Shield had scored the worst of those measured with an accuracy rating of 61.05 percent.  

Insurer Non-payment. 

 Physicians’ total non-payment rate for claims submitted to all commercial healthcare insurer was almost 23%. There is no reason insurance claims should not be adjudicated at the point of service. 

The insurance industry uses non-payment to hold onto the float. It results in hassling physicians and patients. Physicians are starting to demand full payment for services at the point of service from patients. This leaves adjudication of claims to the insurance company and patients. It can represent a hardship to patients. 

Denials

 Aetna, Anthem Blue Cross Blue Shield, Health Care Service Corporation and UnitedHealthcare cut denial rates in half in one year to 1.05 percent as a result of last year’s AMA report card. 

Administrative Requirements. 

There is an increase in the rate of claims requiring prior authorization. Physicians have to ask permission before performing services or treatments. 

This increased requirement has many effects. It undermines the physician patient relationship and the patient’s confidence in the physician. It delays or interrupts medical services to patients. It consumes a significant amount of the physician’s time. It complicates medical decisions. It should be patients who question their physician’s decisions and have their physician justify the treatment to them. 

Accuracy

The healthcare insurance industry agrees to contracted reimbursement fees. The fees vary depending on how much the healthcare insurance company needs particular physicians in its network. Healthcare insurers have been notorious about not processing claims accuracy.  

It seems to me that with the state of the art of information technology being what it is, contracted fee reimbursement should be automatic and accurate. Most insurers have gotten better over the last year.

“The exception was Anthem Blue Cross Blue Shield, which scored 14 percent lower on this measure than it did four years ago.”

This is inexcusable. It might be purposeful in communities where Anthem Blue Cross Blue Shield is the dominant insurer.

Timeliness.

The AMA report card has been effective in exposing response time for adjudication of claims by physicians to the healthcare insurance company. CIGNA and Humana have cut their median claims response time in half in the last four years.

 Response times varied for commercial health insurers from six to 15 median days.

The resulting waste in the healthcare system from all of these tactics is enormous. Total healthcare insurance industry administrative waste (unnecessary expenses) is about $150 billion dollars a year.

If President Obama really wanted the present system of employer sponsored insurance to survive, he would be putting resources toward solving these problems.

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

 

 

 

 

 

 

 

 

The Role of Physicians in Controlling Medical Care Costs and Reducing Waste

Stanley Feld M.D.,FACP,MACE

The Role of Physicians in Controlling Medical Care Costs and Reducing Waste by the RAND Corporation and David Geffen, University of California Los Angeles School of Medicine, Santa Monica was just published in the Journal of the America Medical Association (JAMA).  I do not think the JAMA should have published this article.

1.Why would the JAMA publish such an article?

2. Why are physicians blamed for all the waste in the system?

3. Why is it the physicians’ responsibility to eliminate waste when they are not the cause of the greatest percentage of the waste?

“The amount of money spent on medical care is increasing faster than the gross domestic product (GDP), and the federal deficit is increasing.”

The initial statement assumes that the government deficit is increasing because physicians control government spending for healthcare.

This is only partly correct. The question I have is maybe patients should drive medical costs and not the government.  

The government bureaucracy and the healthcare insurance industry has created this cost monster.

 “Budget experts believe that the deficit cannot be reduced unless medical spending can be controlled. What role will physicians play in controlling health care cost growth? Are physicians even willing to play a role?

The article outlines the steps physicians must take to reduce waste and therefore the budget deficit. The assumption is physicians are the main source of the healthcare system’s waste.

The RAND Corporation does not consider the waste of the government bureaucracy, the healthcare insurance industry’s excessive fees, the hospital systems’ excessive billings, nor the pharmaceutical companies excessive charges for medication. Not considered is the excessive waste that results from the forced practice of defensive medicine because of the lack of tort reform.

If all these issues were addressed, waste and costs would be markedly decreased. There would be no need to try to commoditize physicians’ medical decisions.

I cannot visualize success in trying to commoditize the physician’s decision-making processes.

The healthcare system should be consumer driven with the consumers owning their healthcare dollars and making their own healthcare decisions. The government must help teach consumers to make appropriate medical care decisions with their own money. The government could provide the money. It would eliminate all the bureaucratic waste and secondary stakeholder abuse because it would create a true marketplace driven by consumers and not an artificial marketplace driven by government inefficiency. Consumers must make their own medical care decisions and be responsible for their actions. 

The authors of the article suggest that physicians have three options for participation in controlling healthcare costs. The problem is it assumes the burden for controlling costs are the responsibility of physicians.

     1.     "Physicians can do nothing."

      2.    "Health care can be rationed."

     3.   " Physicians take the lead in identifying and eliminating waste in US health care system."

    4. (We have tried to lead.)

    5. (President Obama has ignored us.)

“Physicians could define waste by assigning all services to 1 of 4 types of care—inappropriate, equivocal, appropriate, or necessary”.

This is subjective busy work that is destined to fail. It will also stifle creativity, thinking, problem solving and innovation.

Physicians try to practice evidence-based medicine. There are defects in determining best practices. In many cases the conclusions drawn from clinical results are inaccurate. It is arbitrary based on the bias of the experts picked to be the judges.

1.Inappropriate care, the potential health benefit to the patient is less than the potential harm caused by the procedure, device, or drug

2. With equivocal care, potential harm and benefit are about equal.

3. With appropriate care, potential benefit to the patient exceeds potential harm.

Necessary care is appropriate, represents the only viable option, and produces a large health benefit.

Who decides appropriate and necessary care?

An excellent example is the difficulty deciding appropriate and necessary care in the use of post-menopausal hormonal replacement therapy. The study design of the Women’s Health Initiative (WHI) was defective, the execution of the study was ineffective and the statistical analysis was inaccurate. The conclusions of the WHI are suspect. Yet the WHI has been heralded as evidence based medicine for best practices. It has changed the course of women’s health forever.

A tool to measure clinical waste across all clinical services does not exist. This is because the definition of “clinical waste” is ever changing. Today’s best practices can be tomorrow’s clinical waste.

Physicians are constantly trying to define best practices. It must be the job of physicians. Physicians are constantly trying to teach other physicians best practices. Physicians are constantly trying to learn to keep current.

The best practices have to be put into context with changing scientific concepts. Potential bias must be evaluated.

The clinical decisions should not be the interpretations of policy wonks or bureaucrats.

None of this is black and white. Policy wonks, economists and bureaucrats have little understanding of the complexity involved in clinical decisions.

Their interest is to somehow try to quantitatively measure physicians’ clinical decisions against an artificially created set of standards defined as waste.

“Physicians prefer the medical definition. But it is not known how much clinical waste is in the system.”

Another excellent clinical example of the controversy is the treatment of choice for Graves Disease (hyperthyroidism). There are cogent arguments for the treatment of choice for Graves Disease with either radioactive iodine or medications such as PTU or Tapazole. There is no unequivocal scientific evidence for an advantage of either treatment.

Attempts have been made to prove an advantage of one treatment over the other. When there is a lack of unequivocal evidence for best practices, patients must be given a choice of therapy.

A defect in the attempts to determine best practice in clinical research is the elimination of patients’ freedom to judge and choose or participate in the best treatment choice for that individual. 

It is physicians’ responsibility to defend and maintain that freedom for their patients. The reasons for waste in the healthcare system should not be determined arbitrarily by bureaucrats.   

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.  

 

 

 

 

RomneyCare: Does It Work?

  Stanley Feld M.D.,FACP,MACE

 In 2010, Massachusetts State Treasurer Timothy P. Cahill, an independent candidate for governor, offered a wide-ranging and scathing criticism of the state’s universal health care law (RomneyCare). “ It is bankrupting Massachusetts and will do the same nationally, if a similar plan is passed in Congress.”

I predicted this result when the RomneyCare was passed in 2006. Mitt Romney can deny the results of his plan all he wants. The results are the results and it is his plan. It was an ill-conceived plan. His plan was the model for Obamacare. The media forgets that the (CMS director) Dr. Don Berwick and his untested “idealism” was the architect of both plans.

“We haven’t done anything about driving down costs,” Cahill said. “We haven’t helped small business. We haven’t changed the way we pay for health care and the way we deliver it.”

“The real problem is the sucking sound of money that has been going in to pay for this health care reform,”

Timothy Cahill pointed out that the Obama administration had subsidized the state Of Massachusetts plan so it looked good. All of RomneyCare’s defects were camouflaged.

“And I would argue that we’re being propped up so that the federal government and the Obama administration can drive its healthcare reform plan through Congress.”

Commonwealth Connector, the independent state agency established to help residents find health insurance, has “totally failed” to create competition and connect people with affordable insurance. Cahill pointed out that 68% percent of the residents RomneyCare serves receives subsidies from the state.

Patients do not have ownership in and responsibility for their illness. The state of Massachusetts does. It is logical that there would be a rise in costs and overuse. Romneycare creates another uncontrolled entitlement.

The state's health care reform law dramatically reduced the number of uninsured individuals.  At the same time federal, local and state funding for safety-net hospitals was dramatically reduced. In Massachusetts, the thinking was the uninsured, now insured, would go to private facilities for their healthcare needs.

There would be less need for safety-net facilities. The state of Massachusetts could then save money by decreasing funding for these facilities.

Massachusetts’s survey data showed the opposite. The survey of data between 2005-009 found:

• The number of patients receiving care at Massachusetts Community Health Clinics (CHC) increased by 31.0%,
• The share of CHC patients who were uninsured fell from 35.5% to 19.9%.
• Nonemergency ambulatory care visits to clinics of safety-net hospitals grew twice as fast as visits to non–safety-net hospitals from 2006 to 2009.
• The number of inpatient admissions was comparable for safety-net and non–safety-net  hospitals.
• Most safety-net patients reported that they used these facilities because they were convenient (79.3%) and affordable (73.8%).
• Only 25.2% reported having had problems getting appointment elsewhere.

 Our findings indicate that, although health care reform substantially increased the number of people with health insurance in Massachusetts, the demand for services from safety-net facilities (CHCs and hospitals) also grew, particularly for ambulatory care. 

“CHCs have become an even more important source of primary care, perhaps because of increasing difficulty obtaining care from other primary care physicians' offices.”

 

Surveys are a tool of social science and are not necessarily scientific proofs. They have a tendency to miss important findings within the data.

 The state and federal governments have subsidized 68% of the uninsured. Private physicians’ offices in Massachusetts are overcrowded. The insured now have first dollar coverage. Patients overuse the system by seeking more medical attention raising the costs of care.

In Massachusetts patients have speculated with physicians’ appointment times. Physician appointment times have been sold on the secondary market.

In Massachusetts some insurance reimbursements are so low that physicians do not accept certain insurance policies. Patients then have to go to the safety-net hospitals.

Special reimbursement deals have been made with certain physician groups and hospital systems. The Boston Globe has published these deals in the past.

 The total money spent by the state has increased beyond affordability. The increase is the result of overuse of the healthcare system. Patients have no skin in the game.

 The losers have been patients, the state and small businesses. The winner is the healthcare insurance industry. 

Americans will see the same results with ObamaCare.

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.

 

 

 

 

 

 

Healthcare Costs: Who Gets The Money?

Stanly Feld M.D., FACP, MACE

The National Institute for Healthcare Management Foundations report also contained data on the amounts of money each provider received for patient care.  There are important take home points in the data.

The data was obtained from newly updated figures of the National Health Expenditure Accounts (NHEA), the official estimator of health care spending in the United States.

During the period from 2005 to 2009 healthcare spending rose, and premiums for private health insurance increased an average of nearly 15 percent per year.

In the last two years private healthcare premiums rose 35%. The 35% increase occurred in anticipation of the healthcare insurance industry being forced by President Obama’s Healthcare Reform Act to provide healthcare insurance to high-risk consumers at the same premium as lower risk consumers.

Physicians have been blamed for increasing fees and over testing. The reality is physicians have experienced decreases in reimbursement for their services.

It is true some physicians over test to defend themselves from lawsuits. Tort reform is essential to decrease the practice of defensive medicine. Texas has reversed this trend with its new tort reform laws. Few other states have followed.

How healthcare dollars are distributed is revealing.

The United States spent $8,086 per person for healthcare in 2009 . Total healthcare spending as a percent of GDP reached 17.6 percent in 2009. It is expected to increase in the coming years.

In 2005, the United States spent $6,827 per person on healthcare.

 

             Who Gets The Money?

 

                   2005/person      %        2009/person      %

Hospital Care                 $ 2071               36         $2471            31

Physicians and Lab        $1417               20         $1646            20

Home Healthcare           $ 869               13          $1066            13

Rx + Medical Devices     $910                 13         $1066             13

Dental and other           $473               7           $548                7

Non Medical Expense    $1109                 16         $1289             16

 

There are many important points to be made about these numbers.  Let us assume these numbers are close to correct.

1. Hospital services include inpatient and hospital-based outpatient, home health care connected to hospitals, nursing home and hospice care connect to hospitals, as well as the services of inpatient pharmacy and resident physicians.

The higher the obesity rates the higher the incidence of chronic disease. The higher the incidence of chronic disease the higher the complication rates from chronic disease. This results in higher utilization of hospital services. 

Each hospital service has an inflated markup. Remember the $45 dollar aspirin.

Hospitals with resident physicians are subsidies. These hospitals receive higher reimbursement than other hospitals. 

Hospitals collected 36% of the $8,086 dollars for patient care. It is obvious that reducing the number of hospitalizations for the complications of chronic disease would reduce the total cost of care.

 2. The physician and clinical services category reflect the care provided by physicians (MDs and DOs) in their offices and freestanding outpatient care settings and services billed independently by freestanding laboratories.   

It is obvious that physicians do not receive 20% of the per capita spending for medical care.

Laboratories that do lab tests, x-ray studies, MRI scans, CAT Scans and Ultrasound share reimbursement for this category. Unless physicians own the laboratories, they do not share in the reimbursement. It would be important to know the percentage of physicians that own those independent laboratories. 

Physicians own a small but growing percentage of laboratories. It is difficult for a physician or group of physicians to make a living from cognitive reimbursements alone. Physicians needs to collect ancillary laboratory fees to stay in business.  

 

Companies owning these laboratories are secondary stakeholders. They feed off the intellectual property of physicians. 

It is fair to say that physician reimbursement is half of the 20% of the dollars spent of medical care in this category. Physicians’ reimbursement for care is 10% or $708 of the $8086.

 3. $1,100 or 13% goes to other secondary stakeholders for care provided by freestanding home health agencies along with other long-term care providers include freestanding nursing homes, rehabilitation facilities and continuing care retirement communities with on-site nursing facilities (assisted living). Other non-traditional settings and providers receiving reimbursement include school, worksite health clinics, residential mental health/substance abuse treatment centers, some ambulance providers, and services provided through Medicaid home and community-based waivers.

 

There are many independent companies involved it the home healthcare business. Medicare patients utilize the majority of these services. The fees charged by the Home Healthcare agencies are high. These Home Healthcare agencies know how to pile on the services in order to receive better reimbursement. These agencies receive much more than the family practitioners who referred the patients.

 4. $1,100 of the $8086 is spent for purchases of prescription drugs, durable medical equipment and other medical products.

Pharmaceutical companies receive a large and growing proportion of the healthcare dollars spent for medical care but not the entire 13%.

How many advertisements do we see on television for electric wheelchairs totally paid for by Medicare? How about home glucose monitors? If it were not a very profitable business, we would not see so much direct to public advertisements.

5. The care given by dentists and other non-physician health care professionals including chiropractors, optometrists, podiatrists, private-duty nurses, and physical, occupational and speech therapists are included in this category.

Dentists and other non-physician healthcare professionals consumed 7% of the healthcare dollars for medical care.

 

The study is inaccurate for this category. It does not capture the actual money spent for dental care. Dental insurance usually provides poor coverage. Most dentists do not accept dental insurance and most people do not have dental insurance.

If we assume most of the cost should be attributed to the other healthcare professionals, these healthcare professionals receive as much or more than physicians.

The difference will become greater because President Obama is going to reduce physician reimbursement 30% on January 1, 2011.

 6. The last group is money allocated as direct patient care but is considered non-medical. This expense totals 16% of the healthcare dollars. It is included as a patient care expense and not overhead used to calculate premiums using the  Medical-Loss ratio formula.   

Healthcare insurers have insisted that typical business expenses to improve patient care should not be calculated into the Medical-Loss Ratio. The industry lobbied President Obama’s healthcare team and achieved its goal. 

President Obama made this deal with the healthcare insurance industry in exchange for its support of his Healthcare Reform Act. 

These non-medical care expenses are included in direct medical care. These expenses are 16% of the $8086 dollars per capita. These expenses are;

a. The cost of verifying the credentials of doctors in its networks.  

b.The cost to ferret out fraud by identifying doctors performing unnecessary operations, procedures, and tests.  

c. The cost for programs (help desks) to try that keep people with chronic diseases such as diabetes out of emergency rooms.

d.The healthcare insurance industry believes it should be entitled to expense sales commissions paid to insurance agents.

e. It wants to expense taxes paid on investments.                                         

 Healthcare insurers insist that typical business expenses should not be considered part of the Medical-Loss Ratio.   

President Obama has insisted that the Medical Loss ratio should be reduced to15% from 20-30 %. This means that the healthcare insurance industry can add an additional 15% above expenses paid for direct patient care when calculating insurance premiums.

The additional 15% is for healthcare insurance companies salaries and other expenses.

The total premium percentage the healthcare insurance industry takes off the top is 31% under present rules. Previously the healthcare insurance industry took between 35% to 45% of the total healthcare dollars paid into the system. 

 

                                    The Take Home Points

1. The healthcare insurance industry receives an excessive percentage of the healthcare dollar.
2. Physicians receive a surprising low percentage of the healthcare dollars.
3. Hospitals receive a large percentage of the healthcare dollars because of pricing standards and the increasing numbers of patients with chronic disease.
4. Ancillary stakeholders receive a greater percentage of the healthcare dollars than physicians.

 

President Obama’s Healthcare Reform Act cures very few of these problems.

 

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

 

 

 

Where Is The Transparency and Accountability In Obamacare?

 

Stanley Feld M.D., FACP,MACE

President Obama where is your promise about transparency and accountability in Obamacare?

A major problem in the healthcare system is the lack of transparency and accountability. It has been unchecked for a very long time.

Both primary and secondary stakeholders act in their self-interest. These stakeholders have had ample opportunity to be non-transparent and non-accountable. All the stakeholders have abused the healthcare system. 

I hit a nerve with my last blog “Patients And Physicians Must Control Costs”. Multiple readers responded with the usual comments:

“Patients are not smart enough to handle their own healthcare dollars.”

“Your basic idea makes sense, but in reality I doubt that a patient knows enough to make intelligent medical/financial decisions, because there are too many unknowns and variables.”

“Physicians over use the fee for service system in order to make more money.”

“If a physician tells a patient that there is only a 1/10,000 chance that an MRI will yield something useful, if the patient doesn’t have to pay for it, the patient wants the MRI. 

 Patients (consumers) must be taught and motivated to manage their own healthcare dollars. Patients’ choice can create competition among physicians and other stakeholders for the consumers’ benefit. Consumers can force the entire healthcare industry to be transparent and accountable with the appropriate government support. 

In 2011 with an ever-evolving consumer oriented Internet few consumers would  buy appliances or electronic gadgets without reviewing the many comparative reviews by experts and consumer peers on the Internet. 

If consumers feel their plumber is ripping them off, they would join Angie's List to find a new plumber. Angie's List has forced transparency and accountability on plumbers in order for them to stay in business. Angie’s List has empowered consumers.  Consumers who do not care about being ripped off can continue to use those non-transparent non-accountable plumbers.

The hotel and restaurant business has experienced the same with consumer driven Internet sites such as Trip Advisor and Open Table. Many other B-C Internet sites have empowered consumers to make choices for their advantage. 

This is called free market forces. It can happen in medicine. It must happen in medicine. It is not wishful thinking.

Americans do not want politicians and bureaucrats to make their healthcare decisions for them. 

President Obama and Dr. Don Berwick are not interested in market forces or in respecting congresses constitutional responsibility. They are interested in dictating healthcare policy by executive order. One such executive order has recently created a political storm in congress.  

“Democrats and Republicans are joining to oppose one of the most important features of President Obama’s new deficit reduction plan, a powerful independent board (independent Physicians Advisory Board) that could make sweeping cuts in the growth of Medicare spending.

"Last week, in his speech on deficit reduction, Mr. Obama said he wanted to beef up the board’s cost-cutting powers in unspecified ways should the growth of Medicare spending exceed certain goals."

President Obama’s goal is to have an unelected commission make healthcare decisions for the electorate without the check and balance of the electorate or congress. 

Representative Allyson Y. Schwartz, a Pennsylvania Democrat prominent on health care issues, said: “It’s our constitutional duty, as members of Congress, to take responsibility for Medicare and not turn decisions over to a board. Abdicating this responsibility, whether to insurance companies or to an unelected commission, undermines our ability to represent our constituents, including seniors and the disabled.”

President Obama doesn’t care. He is going to ignore the protests from both Democrats and Republicans.

Congress has given him the authority to do what he thinks best with its passage of his healthcare reform act.

Britain is turning away from the National Health Service and its Independent Physicians Advisory Board called the National Institute for Clinical Excellence (NICE). It has not saved money.   

Both Democrats and Republican have realized they have given President Obama too much power. 

 Because Britain is an entirely socialized medical system, NICE wields power over the health care options of all residents of Great Britain.  IPAB, initially, will make decisions regarding only the government-administered programs of Medicare and Medicaid. 

Americans have more freedom of choice at the moment. This freedom will disappear if President Obama gets his way.

 NICE is "health cost watchdog" that assesses everything medical, from new technologies to drugs and clinical procedures, and issues guidelines for their use by the NHS. These guidelines include criteria by which certain patients will be made ineligible for both routine and life-saving procedures. The method is known as Comparative Effectiveness Research and Evidence-Based Decision Making. 

“Our insurance companies weigh costs as well, but there is a difference. If your insurance company denies access to a procedure you feel you need, you have recourse through the company's own appeals process and, if need be, the judicial system. Both parties to the dispute have incentive to reach an accord: the patient wants to get well, and the insurance company's wants to avoid subverting its profit motive through legal action, which says nothing of the bruising a lawsuit lays upon its commercial image.

When you are denied a test or procedure in the British system, you get to ask them to reconsider...and then you are invited to go pound sand.” 

To President Obama this advisory board is the first step in his non-transparent quest for complete control of the healthcare system by the executive branch of government.

How many of you ever have reviewed a hospital bill or doctors bill after Medicare or private insurance have paid? How many of you have concluded that the bills are incomprehensible?  

Physicians, just as patients, receive EOB (explanation of benefits). Physicians’ EOBs are equally as incomprehensible.  

Physicians, hospitals, insurance companies, and pharmaceutical companies must be accountable for their charges and treatment recommendations. 

Why should a cancer treatment cost $37,000 per treatment? How much money did Medicare or Aetna pay that provider for that $37,000 treatment? How much did the provider pay to the pharmaceutical company for the medication? What should the true cost of the medication be? How much did the provider mark up the charges to the patient?

It is easy to remember the $45 dollar aspirin charges by hospitals.  What was the mark ups along the way? Are there providers in the area that charge less and get comparable results?

An Independent Physicians Advisory Board could do all the research for consumers (patients). It could help patients decide on the value of the treatment. It could allow for consumer input as does Trip Advisor and others.

All the information should be available to consumer on the Internet by either the   government agency or a private organization. 

There should also be an effective appeals process for the provider. 

 Consumers should make their own choices and not be forced to be dependent on the government for their healthcare choices.

 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.