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All items for October, 2007


The Price Transparency Movement: A False Start?

Stanley Feld M.D.,FACP,MACE

Texas is not the only state realizing that price transparency is an essential ingredient in the Repair of the Healthcare System.

Price transparency initiatives to make healthcare fees more available to consumers and easier to understand is also being undertaken at the national level.

U.S. Health and Human Services Secretary Michael Leavitt said in a speech last spring, “people need to know–they have a right to know–the cost of their care and the quality of the care.” Competition and transparency will make the system better,” he says.

“Change will begin to occur when those who pay for health care in each market area insist that their insurers, and their providers, commit to transparent measurement of quality and price,” Leavitt concluded.

I agree with most of what Secretary Leavitt says except it will not work unless the patient has control of his healthcare dollar. All the politicians seem to ignore this important point. If the patient owned his healthcare dollar he would have an interest in getting the highest quality care for the best price. Now, the insurance industry and government fight for the best price. The problem is they do not pass the saving on to the patients. It simply increases the healthcare insurance industry’s profit. UnitedHealthcare’s profits increase an additional 15% in the last quarter.

“The price transparency trend seems to be picking up steam. According to the U.S. Department of Health and Human Services, Arizona, California, Indiana, Massachusetts, Minnesota, and Wisconsin have all established price transparency pilot programs, and several others are considering similar legislation.”

This is wishful thinking. Pilot programs usually fail. Many are poorly designed. They are not mandates and usually have little impact. The working definition of price transparency is wrong and any pilot is doomed to fail. After they fail to produce the expected outcome the political conclusion will be that price transparency is not a good idea.

The pilot programs also offer an opportunity for the insurance industry. They immediately jumped in to help with the measurement of cost and quality. In effect they become the judge of physicians’ and hospital systems’ pricing. It is clear that the insurance companies’ power has to be limited, not expanded.

“Insurance companies are also establishing online cost-comparison tools. Aetna, Blue Cross and Blue Shield, and UnitedHealthCare offer customers cost and quality information regarding their health care.”

“According to the Kaiser Family Foundation, most health care dollars in the United States are spent on hospitals and physicians–more than 30 percent is spent on hospital care, and nearly 22 percent on physicians’ and clinical services. That means half of all the health care dollars spent nationally go to entities affected by price transparency legislation.”

The Kaiser Family Foundation is helping me make my point. Fifty two percent of the cost of care is spent on overpriced cost of delivery of healthcare. Therefore the other 48% is retained by the insurance industry.

The healthcare insurance industry controls the healthcare dollar. It controls both the premium charged and the payments made to the physicians and hospital systems. In order to have any reduction in the cost of healthcare, At least two changes have to occur to have any success in Repairing the Healthcare System. The two most important changes are real price transparency along with consumer ownership of the healthcare dollar. Patients have to have incentives to control the cost of healthcare.

Price transparency should be designed to empower the consumer, not the insurance industry.

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Texas Legislates Medical Price Transparency

Stanley Feld M.D.,FACP,MACE

State legislators are beginning to understand their role in Repairing the Healthcare System. The individual states have the power to license the hospital systems, the physicians and the insurance companies to practice in their state. The states have not used their power wisely to date. It could be they view this as the federal government’s responsibility.

“Texas passed legislation in June that will require health care providers to give consumers statewide greater access to price information for medical services and billing procedures.”

President Bush called for price transparency in his State of the Union address. The reason is accurately described below.

Many consumers take advantage of comparison-shopping when they are in the market for a new car, electronics, and everyday items, and the purpose of the new law is to allow them to do the same with their health care. It is not uncommon to go to a doctor’s office and be confused by the co-pays, deductibles, out-of-pocket expenses, and other intricate aspects of health care plans.”

Price transparency is an essential ingredient in the Repair of the Healthcare System. The State of Texas is on the right track. The difference between the car, electronics and everyday item purchases and healthcare purchases is for the former the consumer is spending his own money. When the consumer is spending his own money for healthcare, comparison shopping will occur but not before that because the patient is spending other peoples money.

State Sen. Robert Duncan (R-Lubbock) authored Senate Bill 1731, which took effect September 1. The new law includes multiple methods of creating transparency in health care prices.

“Having witnessed the recent years’ incredible growth in the cost of health care, it’s become clear we need more transparency for Texans considering their medical needs,” Duncan said. “This new law will move the Texas health care industry toward becoming a more market-driven entity, which will ultimately benefit consumers and practitioners.”

There is no explanation how price transparency will benefit the consumer or the practitioner.

“Three key players are affected when price transparency legislation is considered: physicians, insurers, and facilities such as hospitals and clinics.”

“Under the new law, billing requirements statewide are now standardized for all three groups. Also, doctors and hospitals must disclose their billing policies and standardize their billing procedures. Care providers must give estimates of expected charges and itemized statements of services to patients who request such information.”

The immediate problem with the legislation is that each stakeholder has multiple prices. Each stakeholder has retail prices and several discounted prices. In order for each stakeholder to comply with the law they need only to publish their retail prices. This methodology has no relevance. It does not motivate the consumer to comparison shop. If the patients were motivated to save money and taught to be smart about purchasing healthcare they would comparison shop. If the facilitator stakeholders saw this happening they would start posting lower prices on the web than their competition in order to attract customers. Only then would a competitive marketplace be developed.

“ Consumers will now be able to shop online for doctors’ services and estimated costs for procedures. Since physicians are not necessarily equipped to assist patients with complicated insurance information, consumers are better served by a central site where they can collect it themselves, the law’s supporters say.”

“The legislation requires the Texas Board of Medical Examiners to provide on its Web site a Consumer Guide to Health Care that will give patients information on physicians’ billing practices. Patients will be able to access physician billing information and find average charges for procedures.”

Bill 1731 requires price transparency for all the stakeholders. However the focus of the execution of the legislation so far has been on the individual physician and his fees. Physicians are politically the weakest and least organized of the stakeholders. I predict the requirements for compliance will be much slower in coming for the hospital systems and insurance companies. The hospital systems and the insurance companies have the most opaque price policies. A consumer simply cannot get the information from a hospital system in advance or adequate price information from an insurance company.

When the hospital systems and insurance industry publishes their prices the consumer will only see the retail prices. The solution is to require everyone to print all their prices as the automotive web sites Edmunds and the Kelley Blue Book do. At these web sites you can get the manufactures average retail price, the average sales price in your area and the invoice price.

Only when this happens and consumers have ownership of their healthcare dollar will a competitive market driven healthcare system occur.

  • Mona Lori

    We are now at a point with our health care system that as consumers, we need to step up to make a difference and start changing our behavior. Consumers have the power to control some of the health care costs by becoming more cost-conscious when purchasing health care services, determining the best value (price and quality) before we even visit a provider, eliminating wasteful spending on unnecessary procedures/overpriced services, and educating ourselves about recommended tests and alternative treatments.
    It is impossible for consumers to comparison shop to find the best value simply because of the lack of meaningful price transparency data (tools) for even the most routine health care services. Instead of waiting for legislation to pass, complicated reforms to be initiated, expensive applications to be developed, or the government to decide how to reform our current health care system, consumers should collaborate to share true health care prices from actual patient visits. A platform has already been created for collecting and sharing price information to help consumers find the best value for routine health care services in their area. Until the government requires collection, auditing and dissemination of claim data, consumers can encourage more competition and more consumer-choices by collaborating to share true prices. In fact, if enough consumers and share prices – consumers will have collectively created a very powerful directory to help make informed health care purchasing decisions. The website is called and I invite you to check it out. I welcome all comments and feedback on this grassroots initiative.
    Mona Lori

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Birth Of An Entrepreneur: Brad Feld

Stanley Feld M.D.,FACP,MACE

My son had his Bar Mitzvah in 1978. Many boys receive presents of cash when they celebrate their Bar Mitzvah. Gold coins were hot in 1978. Many Bar Mitzvah boys exchanged their new found fortune for two gold Krugerands. Gold was being predicted to increase to $1400 an ounce in the coming year.

Not Brad. His cash gifts totaled $1300. He wanted an Apple II Computer. The Apple computer company released the Apple II computer in 1977. I was delighted that he wanted to invest his Bar Mitzvah money in himself and not gold. At age 13, he was certain that he could learn to program the Apple II computer. I asked him how much it would cost. He said about $1300.

The following Saturday, after his soccer game, we went to the computer store to buy his Apple II computer. Brad convinced me during the preceding week that “we” needed an Apple II. After spending $3100 for the Apple II computer and all the necessary peripherals, “we” walked out of the store with all the pieces “we” needed to “create the future”.

As we were walking to the car I had an “aha” moment. Brad’s willingness to spend all his Bar Mitzvah money on his future convinced me to spend an additional $1800. I was sure he had all the characteristics of an entrepreneur. He told me the future was in personal computing. “We have to spend the money on the future”. This was a pretty profound statement for a 13 year old boy in 1978,

He was right. Not only did he learn how to program the Apple II himself, he started a business. He taught boys and girls in the neighborhood how to program in basic for a fee.

In 1982 he was tiring of the Apple II. I needed a program to print out laboratory reports generated in my chemistry laboratory. Brad volunteered to write the program, design the pretty printout and sell me the Apple II computer and all the peripherals for $1600. The laboratory program was a bargain to me. Brad monetized his asset for a profit. He added value to me while he leveraged his acquired talent.

The moral to the story is many of our children are very perceptive. We should listen to them. We have to create the environment for them to want to learn and be excited to learn. We have to make them responsible for their actions. They have to them put “skin” in the game. Our country’s greatness was built on entrepreneurship. It is parents’ responsibility to help promote the tradition of entrepreneurship. I am convinced that by creating an environment in which my sons can be creative and innovative, I have learned more from them, than I have taught them.

  • Zach Coelius

    Very True… My parents did similar things for me and I give thanks everyday. Giving kids the chance to make a go of it on their own is one of the greatest gifts you can give.

  • Kare Anderson

    Reminds me of my Dad, seeing his kids as so different yet encouraging us to cultivate our strengths.
    I would become a journalist, one brother an entrepreneur, and my baby brother an international aide worker. But we all needed the entrepreneurial traits of resourcefulness, critical thinking, perseverance and ability to work well with people extremely unlike us. Brad exemplifies these traits.
    What a timely post for me to share with my Dad before the weekend.
    Thank you Stanley. You have touched many of us.
    In a civilization when love is
    gone we turn to justice and when
    justice is gone we turn to power
    and when power is gone we
    turn to violence.
    Opportunity is often inconvenient.
    Remember the many
    compartments of the heart,
    the seed of what is
    possible. So much of who
    we are is defined by
    the places we hold for each
    other. For it is not our ingenuity
    that sets us apart, but our
    capacity for love, the
    possibility our way will
    be lit by grace. Our hearts
    prisms, chiseling out the
    colors of pure light.
    – Kare

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Another Piece Of The Puzzle To Repair The Healthcare System

Stanley Feld M.D.,FACP,MACP

The government could solve the uninsured problem with a few effective consumer driven incentives. Previously, I have made the point that all of the incentives need to be initiated at the same time. They have to be made simple and clear without loopholes.

Mitt Romney plan in Massachusetts and Arnold Schwarzenegger’s in California plans fall short. They promote universal coverage in a market environment. Universal Health coverage is important but should be optional to the consumer. Both plans are complex. Both plans have several problems in common. Both are contaminated by politics and facilitator stakeholders’ vested interests. The more complex a system is, the more opportunity for abuse by savvy facilitator stakeholders. Neither plan creates a true market economy. If the plans were attached to the ideal medical savings account plus tax equalization for a group and an individual, along with true price transparency, they would have a chance to be effective. The plans would create a pure consumer driven healthcare environment. The consumers would own their healthcare dollar and force competition. In the plans proposed the consumer does not have any increased power.

Hillary Clinton’s program is not the answer. It is designed to fail. When it fails the Democrats will call for a government controlled single party payer in a price controlled environment. This will create a larger mess than we have now. Her plan will also create another unaffordable entitlement. Our government cannot afford another entitlement program.

We have seen in an effort to control prices (price controls) the government has made irrational decisions. One such decision severely decreases the reimbursement for DEXA (bone density) to the point of discouraging medical practices from developing disease management programs for this chronic disease (Osteoporosis). The result will be to undermine the ultimate goal of creating a focused factories for the treatment of osteoporosis. These focused factories would increase the quality of care delivered for osteoporosis and avoid the complications of this chronic disease.

It is much better to create an environment which lets the patients determine the efficacy of a treatment if they are given the appropriate information to decide on the purchase of a medical therapy.

It is my opinion that community rated healthcare premiums should be included among the changes I have outlined to repair the healthcare system. Everyone in a city or region should have his premium rated by the health experience in his community. The premium cost is based on the $6,000 deductible. The $6,000 premium will obviously be lower than the first dollar premium coverage.

The argument against community rating among many healthcare policy wonks is that young people are subsidizing the sicker citizens. Therefore the healthy people will be unwilling to pay the premium and will not participate in a community rated system. I believe this is a porous argument if we look at what is happening today with corporations that are self-insured.

We need to look at some of the principles of pricing life insurance and auto insurance. People at risk pay a higher premium than people with little risk for death or auto accident . This principle should be applied to healthcare insurance in the ideal medical savings account model. We need to convert the healthcare insurance model to a true insurance model.

In reality, community rating is the way large corporations are charged by healthcare insurance companies to administer their self insurance plans. The corporations are charged according to the healthcare insurance experience. If the healthcare experience was $1 million dollars last year the corporation deposits $1,100,000 in a healthcare trust fund the following year. If the employees spend more than $1,100,000 during that year, the corporation either adjudicates the trust fund for the insurance carrier’s administration at the end of the year or that difference is added to the next year’s trust fund payment. General Motors was self insured. It was screaming about their healthcare cost. With their new contract they have now dumped the insurance relationship off to the automotive unions. This move is not that bad for either side. It gets ownership of the healthcare dollar closer to consumers, the autoworkers. However it is less than perfect.

Human Resource officers are experiencing how their self insurance trust is priced by the third party administrator, the healthcare insurance company, and are unhappy. They are realizing the healthier their company is the lower the premium cost will be. They are beginning to set up contests among employees to lose weight, control their blood sugar if they are diabetic, and control their blood pressure if they are hypertensive, to avoid the complications of those diseases.
The reality is that large and small businesses’ healthcare insurance premiums are determined by that businesses community healthcare experience. Large and small businesses try to get rid of their sick people. However, there is great liability to this maneuver. I sense most corporations have walked away from trying to fire these people.

The issue of healthcare insurance has not been the concern of young healthy people when the corporations were paying for their healthcare insurance. Healthcare insurance coverage has become expensive. The argument is more young healthy people will elect to be uninsured if they were required to buy their own healthcare coverage. However, more and more employers are limiting benefits. Many young people are finding out that they have inadequate insurance if they get sick. Additionally, many employers are dropping their healthcare insurance coverage for all employees.

If we think it out in the ideal medical savings account, the corporation provides $12,000 to the employee. $6.000 is put in the medical saving account and the next six thousand pays for first dollar coverage above $6,000. If the employee does not spend the $6,000 that employee keeps that money in a trust fund for his retirement. The young employee would actually have incentive to purchase healthcare insurance and try to protect the health of his family.

If the healthcare system converted the present corporate community rating formula to a city wide or regional community rating system the risk would be spread to the entire area covered. It could result in a lower premium cost. If the individual communities or regions encouraged the creation of systems to encourage good health, community pressure would be put on the citizens to lose weight, control blood sugar and blood pressure similar to procedures currently being used by corporations. The communities would be encouraged to decrease local environmental hazards including restaurants, in order, to decrease the community healthcare costs and risks.

Local regions could encourage our restaurants not to serve 3,500 calorie meals. We have to support the efforts of TGI Friday. We need to have community pressure on us because we are responsible for our healthcare dollar and indirectly responsible for our community’s healthcare dollar.

Everyone should have the ability to buy a community rated ideal medical savings account with pre tax dollars. They should also have the right to buy any other healthcare insurance policy with pre tax dollars. This policy would increase competition among healthcare insurance policies even more. Some might have noticed that this quarter UnitedHealthcare’s profit went from very grotesque to extremely grotesque. It increased 15% taking advantage of their control of the healthcare premium and provider payments while increasing premiums for the employer.

If someone chooses to be uninsured he would have to negotiate the payment on his own and not enjoy the tax benefits of the ideal medical savings account. At the same time the government through regulation, would require the healthcare insurance industry, hospitals and physicians to have complete and accurate price transparency based on cost. If the facilitator stakeholders did not participate they would lose the privilege of insuring and serving the public in that state. If the government supplemented the insurance premium of people who could not afford the ideal medical saving account healthcare insurance policy the government would save money and enable the patient to have incentive to control their healthcare costs. It would inspire a new paradigm of competitive healthcare insurance and medical care. The consumer would control his healthcare dollar, have incentive to control his healthcare spending and demand a competitive environment necessary for a true market economy.

  • The Happy Hospitalist

    What are your thoughts about a system where in one could buy and sell their HSA money in an open market voucher system, much like EBay’s auction system. If you are young and healthy and don’t want to send your $4000/year in premiums to an insurance company. Instead you buy a really high deductable HSA, to the tune of $20,000 or more, to really get the essence of catastrophic insurance.
    I envisioned a corporate healthcare voucher system where in a set amount of health care dollars would be given to employees, in voucher form, to be used for health care costs in any way they choose. The employer would not provide insurance, they would provide vouchers. Say $4000/year. These vouchers would carry a 5 year life span, at which point they would expire.
    In this system, I imagine the buying and selling of these vouchers in the open market, an ebay type system. If my unused vouchers will expire, and I have $10,000 built up, I can put them up for auction to the highest bidder. Of course, they will go dimes on the dollar. Instead of my $20,000 in premiums over 5 years going to an insurance company, it would be paid to me by my employer as a voucher. I can then choose to use it or sell it at auction.
    It would be up to the patient/ employee to buy their own HD insurance plan. It could potentially cheapen the cost of insurance and remove a massive amount of first dollar health care from the insurance companies coffers, and into actual health care service.
    Just some thoughts.

  • Jeff C

    You are on the right track as a physician who is speaking out about the broken state of American health care. But I am puzzled by your apparent statist solutions. Government, whether local, state or federal is not the answer and I would submit are 1/2 of the problem of American health care. The answer is to restore the physician/patient relationship directly. Consumers should pay physicians directly for their services just as clients pay attorneys directly for their services. For catastrophic illness or emergency care, a catastrophic policy could be maintained much like a term-life insurance policy. 3rd-party payers should be eliminated as should Medicare. One group which has some experience regarding my post is the AAPS – American Association of Physicians and Surgeons.

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A Medicare Contradiction! Osteoporosis and Chronic Disease Management

Stanley Feld M.D.,FACP,MACE

I have stressed the need for encouraging and developing systems of care for chronic diseases since the treatment of the complications of chronic disease consumes 90% of the healthcare dollar. Physicians are working very hard to teach other physicians systems of care for the prevention and treatment of osteoporosis.

We are in an era where medical care lives and dies by evidence based medicine. We are in the process of eliminating clinical judgment and the patient physician relationship, both of which are important to the therapeutic effect. I have point out the defects in reporting statistical significance for evidence based medicine studies. The two studies have been referenced. The Women’s Health Initiative and the recent rosiglitizone meta-analysis of the incidence of heart disease by Nissen.

The government has decreased the funding of clinical research. Therefore, most clinical research is driven by pharmaceutical interests. This has the potential to distort the integrity of evidence based medicine studies even further. Recently the FDA was criticized for not monitoring clinical studies more effectively.

The government has realized that 90% of the cost of medical care is due to the complications of chronic disease. In order to decrease the complications of chronic disease physicians have to recognize and treat all people with the chronic disease. Most studies show physicians can decrease the complication rate of osteoporosis by 50% if it is recognized and treated effectively.

NCQA is the National Committee for Quality Assurance. The organization tries to define quality medical care. In its 2007 report on osteoporosis, it found that osteoporosis was only evaluated in 21.7% of patients at risk using the NCQA accepted guidelines for the evaluation and treatment of osteoporosis.

The National Osteoporosis Association, the American Association of Clinical Endocrinologists and the International Society for Clinical Bone Densitometry have all published guidelines for the evaluation and treatment of osteoporosis which are more inclusive and I feel more accurate than the NCQA accepted guidelines.

Medicare, despite its recognition that preventing the complications of osteoporosis is important to lower the cost of care has acted to discourage physician from evaluating patients at risk.

The general physician performance for evaluation and treatment of osteoporosis was reported by NCQA to be only 21.7%. Physician performance in evaluating and treating osteoporosis should be increased to 100% in the patients at risk. Osteoporosis does not occur overnight. It takes at least thirty years to develop significant bone loss. During those 30 years the patient is losing bone mass. It would seem logical to detect significant decreases in bone mass early, before the patient suffered a fracture. Fracture that could be prevented is patients at risk are evaluated and treated appropriately.

Many healthcare insurance companies will not pay for bone density studies in women under sixty years old with risk factors for fracture because USPHTF said the evidence is not good enough. Unfortunately, they did not review and evaluate all the studies before reaching that conclusion. The private healthcare insurance companies figure a patient 65 years or older is the governments problem and not its problem anymore.

I should think osteoporotic fractures are the patients’ problem. I should think preventing osteoporotic fractures should be the patients’ goal. It should also be the government’s goal.

Medicare spends 21 billion dollars a year to treat the complications of osteoporosis. In an effort to reduce cost of diagnostic testing with CAT scans,MRI scans and Ultrasound scan the government has past the DRA (Deficit Reduction Act). In error DXA testing (bone mineral densitometry) was included on the list in the DRA. Medicare regulators elected to reduce the reimbursement to physicians for bone densitometry from $140 in 2006 to $82 in 2007 and as low as $34 by 2010. This reimbursement is far below the average cost of doing the DEXA scan. A recent study by the Lewin group showed that the average cost of doing a DEXA scan is $134. Many clinics had been forced to discontinue doing DEXA scans. The physicians taking care of osteoporosis can not afford to continue to do scans for less reimbursement that it cost.

There is no motivation on the part of family practitioners to do bone densitometry in his office with the extreme reimbursement cuts and the excessive overhead. It is logical not do anything that will result in a loss of income. There is less desire to subject the patient to the hassle of making an appointment in 3 weeks and going to the radiology department of a hospital for a bone density and then making a return office visit. The new ruling has created a disincentive for primary care physicians to learn systems of care for the prevention of the complications of osteoporosis. The result is just the opposite of Medicare’s goal.

If we did DXA on all women over 65 years old, 50% would have either vertebral fractures or bone densities low enough to treat by the guidelines of the major medical organizations involved in the treatment of osteoporosis. If all patients over 65 years old were evaluated and treated if necessary the Lewin group calculated that it would create a net saving to Medicare of $1.14 billion dollars a year. Women would also be healthier also.

There are no studies or guidelines for men. However, 1 in 5 men over 70 years old have significant reduction in bone density or a vertebral fracture. Where is the regulators common sense and empathy in their effort to reduce the deficit? They should be concentrating of fixing the broken healthcare system and saving the patients’ health as well as the governments money.

If you go to any Wal-Mart at 10 am on any week day you would see many retired people. Of those over 65 years old you could diagnose osteoporosis in at least 50% of the women and 35% of the men just by asking them their height at age 20 and then accurately measuring them. They all know how tall they where at age 20. If they lost one and one half inches in height they have had a painless vertebrae fracture. Only 35% of vertebral fractures are painful.

There are no large evidence based medicine studies in men. Therefore neither private insurance nor the Medicare pays for bone densitometry in men.

My question is again, who should buy your shoes, clothing, or food? The answer is obvious. We should. Who should buy our medical care? To me the answer is equally obvious. We should. The only way we are going to be able to do it is if the system is changed to a consumer driven model where we own our healthcare dollar. The Ideal Medical Savings Account provides the correct incentives for all the stakeholders.

P.S. If you are as bothered and concerned about this issue as I am please go to put in your zip code and send a letter to your congressperson urging him/her to co-sponsor Congresswoman Shelley Berkley’s bill “Fracture Prevention and Osteoporosis Testing Act of 2007”.

Thank you
Stanley Feld M.D.,FACP,MACE

  • Michael Samuels

    Note that both AARP and The American Cancer Society are devoting their annual advertising budgets to reforming healthcare due to the fact that preventive medicine is leading to a leveling off of the drop off in both chronic disease and cancer rates. It’s a subject addressed in a video running on YouTube.

  • Fausto Intilla

    Science Daily — Researchers have discovered that the structure of human bones is vastly different than previously believed — findings which will have implications for how some debilitating bone disorders are treated.
    Researchers from the University of Cambridge, the Animal Health Trust in Newmarket, and the BAM Federal Institute of Materials Research and Testing, Berlin, have discovered that the characteristic toughness and stiffness of bone is predominantly due to the presence of specialized sugars, not proteins, as had been previous believed. Their findings could have sweeping impacts on treatments for osteoporosis and other bone disorders.
    Scientists have long held the view that collagen and other proteins were the key molecules responsible for stabilizing normal bone structure. That belief has been the basis for some existing medications for bone disorders and bone replacement materials. At the same time, researchers paid little attention to the roles of sugars (carbohydrates) in the complex process of bone growth.
    For this research, funded by the Biotechnology and Biological Sciences Research Council (BBSRC), the UK and Berlin teams studied mineralization in horse bones using an analysis tool called nuclear magnetic resonance (NMR). They found that sugars, particularly proteoglycans (PGs) and glycosaminoglycans (GAGs), appear to play a role which is as important as proteins in controlling bone mineralization – the process by which newly-formed bone is hardened with minerals such as calcium phosphate.
    Osteoporosis is a chronic and widespread disease in which mineral formation is disturbed, leading to brittle bones, pain, and increased fractures. Osteoarthritis, a hallmark of which is joint cartilage and GAG depletion, is also accompanied by abnormal bone mineralization.
    Both of these diseases can be debilitating, often crippling, to older people — a problem which will only intensify as our population ages. Among the young, especially sportsmen and women, bone and joint injuries prove the most intractable and are also the ones most likely to develop into afflictions (such as osteoarthritis) later in life.
    Dr David Reid, from the Duer Group, Department of Chemistry,at the University of Cambridge, who played a significant part in the research, said, “We believe our findings will alter some fundamental preconceptions of bone biology. On a practical level they unveil novel targets for drug discovery for bone and joint diseases, new biomarkers for diagnosis, and new strategies for developing synthetic materials that could be used in orthopaedics.
    “They may also strengthen the rationale for the current popularity of over-the-counter joint and bone pain remedies such as glucosamine and chondroitin, which are based on GAG sugar molecules.”
    Note: This story has been adapted from material provided by University of Cambridge.
    Fausto Intilla

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How Many People Are Uninsured? Part 2

Stanley Feld M.D.,FACP,MACE

The three examples of the involuntary uninsured have been described in my previous post. They are real and must be addressed. The actual number of uninsured does not matter. Whether the number of uninsured is 47 million or 18 million is irrelevant. Either number is a national disgrace if the people understand they need healthcare insurance and cannot get it for one or more reasons. Both sides of the debate present the number of uninsured. They do not present the causes or the solutions to cure the problem. One side lumps all the causes of lack of insurance and gets a big number (47.5 million). The other side divides the causes into small numbers without the defining the subsets for the cause.

Everyone should have the opportunity to purchase affordable healthcare insurance. This presupposes that the inefficiencies of the healthcare insurance companies, hospital systems and physician practicesthat we have discussed be eliminated. It also presupposes that preventative medicine be supported, and that efficient systems of care be promoted to decrease the complications of chronic disease. This also presupposes that the patient is motivated to actively participate in preventing the complications of chronic disease. It also presupposes that the patient can afford to adhere to the medication and drug therapy prescribed.

It is important to remember that 90% of the Medicare healthcare dollar and 80% of the private insurance dollar is spent on the complications of chronic disease. The complications of chronic disease cannot be handled by an inefficient healthcare system that penalizes prevention and the care of chronic disease.

Please notice that very few of the articles in the media concentrate on solution. The media conce
ntrates on the problems.

With the encouragement and support of the development and execution of systems of care for chronic disease we could decrease the complication rate by at least 50% and decrease the total cost to the healthcare system by 45% for Medicare and 40% for private insurance. This savings should certainly be passed on to the consumer by the government and the healthcare insurance companies in the form of affordable premiums.

Citizens should have the right to choose to be uninsured in a society where affordable insurance is readily available. However, they should bare the responsibility and burden of being uninsured. The burden of their cost of care is currently being paid for by local tax money. A motivational deterrent against lack of insurance can be constructed.

The New York Times covered the issue of the uninsured by lumping everyone together to try to precipitate change.

“The bureau reported a large increase in the number of Americans who lack health insurance, data that ought to send an unmistakable message to Washington: vigorous action is needed to reverse this alarming and intractable trend.”

It is clear that fear leads to political action but not necessarily logical and common sense change.

“Last year, the number of uninsured Americans increased by a daunting 2.2 million, from 44.8 million in 2005 to 47.0 million in 2006. That scotched any hope that the faltering economic recovery would help alleviate the problem.”

If more people lost jobs there would be more uninsured. There are more people coming into the system yearly. If they can not get healthcare insurance an illness could be disastrous to them and our economy.

“The main reason for the upsurge in uninsured Americans is that employment-based coverage continued to deteriorate. Indeed, the number of full-time workers without health insurance rose from 20.8 million in 2005 to 22.0 million in 2006, presumably because either the employers or the workers or both found it too costly.”

This is true. The inefficiencies in the system and the outrageous profit in the healthcare insurance industry has generated unaffordable premiums for an individual who would qualify to buy insurance. Additionally, the individual has to buys insurance with after tax dollars while his employer buy insurance with pretax dollar. This makes the healthcare insurance even more costly.

“The challenge to the White House and Congress seems clear. The upward trend in the number of uninsured needs to be reversed because many studies have shown that people who lack health insurance tend to forgo needed care until they become much sicker and go to expensive emergency rooms for treatment. That harms their health and drives up everyone’s health care costs.”

Again true, true and related. The emergency room fees are also outrageous because of the billing system. The healthcare insurance companies get a deep discount from the retail bill for emergency room care. The uninsured are responsible for the entire retail bill. The above paragraph does not get to the issue about why so many people are uninsured. It simply is a scare tactic to try to precipitate a solution. As pointed out previously, the heathcare insurance industry does not want a solution. They are not the stakeholders in pain. They are the stakeholders in control. The result will be the government will take over and be a single party payer. This is socialized medicine. It will be a disaster as we have seen illustrated over and over again
The other side of the argument has a different number for the actual uninsured. They claimthe increase in the number of uninsured largely due to immigration, population growth and choice.”

Our nation has provided for the immigrants in the form of Medicaid. It is difficult for an English speaking person to negotiate the system. It is even more difficult for a person just learning English. The other two issues seem lame because healthcare insurance is unaffordable.

“Nearly 18 million uninsured Americans live in households with annual
incomes above $50,000, and could likely afford health insurance.”

Many of these people have jobs but their companies have stopped insuring them. Many are uninsurable as individuals. Many could buy insurance with unaffordable deduction and intolerable exclusions using after tax dollars.

“More than 84 percent (250.4 million) of U.S. residents were
privately insured or enrolled in a government health care program,
Such as Medicare, Medicaid or the State Children’s Health Insurance
Program (SCHIP”)

The number seems correct. There are over three hundred million people in this country. Therefore, 47 million uninsured is a probable number.

” In addition, a recent BlueCross BlueShield Association report on the uninsured estimated nearly 14 million adults and children qualified for government programs but did not enroll.”

The story of the 42 year old Hispanic U.S. citizen whose children where dropped from Medicaid happens over and over again. It cannot be dismissed with a slight of hand. If it was simple to obtain Medicaid and keep it, I know this man would have it. It is not simple to negotiate the system. The solution to this problem is to make it simple.

“Although immigrants (including naturalized U.S. citizens) make up slightly less than 12 percent of the population, they make up 27 percent of the uninsured.”

I can believe this number is true. It is difficult for these people to work their way through the bureaucracy, especially when they are afraid that any complaint they have can get them in trouble. The solution is easy. We can make it easier to get the coverage, we as a nation, have committed to provide.

“By this count, nearly 10 percent of uninsured Americans theoretically have access to some form of insurance but have chosen to forgo it.”

The reason this 10% choose to be uninsured must be defined. I would guess it is because the premium is intolerable or the exclusions end up providing little coverage. It sounds like a good argument. However the insurance that they can get is usually worthless. Insurance that is worthless is not insurance. The goal should be to make good healthcare insurance affordable!

“Approximately 75 percent of uninsured spells last one year or less.”

This number could be significant in exaggerating the number of uninsured people.

Both sides of the uninsured argument exaggerate the issue to defend their position. They never answer the essential questions. They do not offer solutions. The articles that exaggerate the high number of uninsured do not break down the reasons for the lack of insurance. They do not study the reasons for those subgroups. They are convinced the solution is a single party payer.

The conservative health policy wonks try to defend the free market economy. The problem is the healthcare system in its present form is not a free market economy because the consumer is not in control creating competition. The insurance industry is in control and is abusing its privileged position. I believe in a true free market healthcare economy with the consumer owning his healthcare dollar and forcing competition among the other stakeholders. This is the only way to solve the problem of the uninsured.

  • Brian Sharp

    Your article is very interesting. However, it continues to miss some major truths.
    First, I am an employer and we carry group insurance from a major commercial carrier. Our individual coverage employees only pay a net of $31 per month for premium. As we sign employees up, no employee is denied based on current medical conditions. When employees give up there cell phones and cable in exchange for paying for healthcar, then I become much more sympathetic. Also, personal HSA accounts are affordable, its just a matter of personal priority.
    I have always disagreed with the number calculated for the uninsured. The methodology for figuring this number is far from perfect. Any of my employees that leave our company would be counted as not having insurance even though they end up with insurance coverage via a different employer. The uninsured are not the same people every year. Lets say the 47 million number is correct for sake of argument. Those 47 million people are not the same people each year. This fact changes the argument greatly in the national debate. Most people believe its the same people every year without insurance and its growing.
    May of the articles you reference are from groups that want government control of healthcare. The debate has not been honest from the traditional print and TV media.
    I don’t want the government (the same peopel that give me my drivers license) to be controlling my healthcare.

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How Many People Are Uninsured? Part 1

Stanley Feld M.D.,FACP,MACE

We are overloaded daily by the media with statistics, percentages and facts on many topics. This is especially true for the healthcare system. The important question is which facts are the important ones. Some findings are statistically significant, others are not. The media does not report the statistical significance of most studies. It simply publishes the conclusions. Conclusions are often conflicting because many studies are poorly designed and not statistically significant.

A large issue of concern today is the number of uninsured people in the United States. The actual number of uninsured and the significance of the number are subject to debate. A key question not addressed is what is the reason people do not have healthcare insurance?

The definition of healthcare insurance is “insurance against expenses incurred through illness” Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss.

The important issue is not the number of people who are uninsured. The issue is why are these people uninsured? It seems silly not have health insurance. No one should be uninsured. This is the definition of universal healthcare insurance. Why people choose not to be insured is an important question. Answering this question would focus us more clearly on the solution to the uninsured. If a person chooses to be uninsured and gets sick he will suffer great economic loss in addition to health loss. Everyone is at risk for medical catastrophes. If a person is does not have health insurance that person is liable to be bankrupted by a medical illness. If one is poor or bankrupted, society (everyone) pays for their medical illness indirectly through taxes.

Some might chose to be uninsured because they do not perceive themselves to be at great risk of illness. The purpose of healthcare insurance should be to protect a person against an expensive illness. Young people might think they are at little risk. They might perceive they do not need health insurance. However, when a young person gets sick they usually have a very expensive illness. This is all the more reason they should choose to be insured. The number of young people uninsured and the reason for the lack of insurance should be studied. The uninsured young need to be educated to appreciate the value of healthcare insurance.

Many people are uninsured because they can not afford adequate healthcare insurance. The cost of health insurance is rising at double digit levels each year. The healthcare insurance industry is making unconscionable profits as premium rise. Is there an opportunity for an insurance company to provide affordable insurance at a reasonable profit? I think there is. I also think that selling insurance to the 47 million uninsured at an affordable price would increase the healthcare insurance industry’s profit, increase competition among the healthcare insurers and lower the premiums.

However the healthcare insurance industry does not want to lose control over pricing of insurance policies. The only way keep control over the healthcare system is to maintain the status quo. It would be ridiculous to let common sense get in the way and potentially endanger profits. The healthcare insurance industry does not seem to understand that they are setting themselves up to kill the goose that laid their golden egg. Hillary Clinton along with the other Democratic candidates is carrying the shotgun. I predict the results will be catastrophic to the delivery of medical care in a regulated healthcare system.

Another important question is how many people not in a group insurance plan are uninsured because the healthcare insurance company declares them uninsurable as individuals?

An example is a 55 year old male with obesity, hypertension, and type 2 diabetes. He is an uninsured self employed consultant. He was laid off nineteen months ago by the information technology company he worked for. His COBRA coverage has expired. COBRA coverage was paid for with after tax dollars. When his employer paid the premium for group insurance it was paid for with pre tax dollars. He tries to buy healthcare insurance. He is declared uninsurable by multiple healthcare insurance companies. What can he do? He makes too much money to go on Medicaid. He is not old enough to be on Medicare. He is stuck and on the uninsured rolls and terrified that he will get sick.

Most states have high risk insurance pools. This is required of the healthcare insurance industry by many states. If they do not participate in the high risk pool they can not get a license to sell insurance in those states. All the insurance companies are combined to pick up the high risk pool insurance. Most states omitted rules to require the pooled high risk insurance premium to be affordable. The insurance company determines the actuarial criteria. The patient applying for the pool must pay with after tax dollars. The barriers to entry are also high. The patient might experience exclusions for the illness that is so important to insure against. For example the complications of diabetes might be excluded in a patient with diabetes. The only way this patient can get adequate health insurance is by being in a large group that provides healthcare insurance to its employees. In the group plans the healthcare insurer is required to take all patients at all risks into the plan.

If the patient is approved for the high risk pool the premium is extremely high. The patient usually can not afford the premium using post tax dollars.

Another example is a 42 year old Hispanic male who has been a US citizen for 12 years. He is a handyman and jack of all trades in rural Texas. He makes a living that barely supports his family of four. He has two children age 3 and 8. He is terrified that his children will get sick. He can not afford healthcare insurance. He is qualified for Medicaid. When each child was born he got Medicaid coverage for each of them. However Medicaid dropped them after one year of coverage. He made an extraordinary number of phone calls in an effort to discover the reason for the discontinuation of the Medicaid insurance. He and his wife are also eligible for Medicaid. However their applications have never been approved or disapproved. He has no time to appear in the Medicaid office from 9-5 because he is working for an hourly wage and needs every dollar to feed his family. The inefficiency of the bureaucracy is exposing this hard working man to the disastrous economic effects of a medical illness, the very issue Medicaid is supposed to protect him from. He and his family is one of the forty seven million uninsured.

Unfortunately, many healthcare experts ignore these issues in calculating the number uninsured. The fact is many of these people have no choice but to be uninsured because of price and exclusions, and other barriers to adequate healthcare insurance.

The solution is obvious. It is either a single party payer system or healthcare insurance reform. I believe a single party payer system will be a disaster. Our present healthcare insurance system is a disaster.

The choice is clear to me. It is going to take” People Power” to force a change in our present healthcare insurance system. The Repair of the Healthcare System has to be directed to consumer driven healthcare.

  • charlesclarknovels

    Approximately 16% of the population does not have health insurance. Universal Health Insurance is feasible if reimbursement is discontinured for medically unnecessary procedures, unnecessary diagnostic testing, for preventable complications that occur during hospitalization, for failure to adequately treat diabetes during hospitalization, and for referral by providers to laboratories, imaging centers, and amublatory surgery units in which they own an interest. An in depth survey will show well over 16% costs for unnecessary services–enough to provide care for the uninsured.

  • Bruce Gottfred

    The most concise description of the health care insurance dilemma I’ve read is here:
    It argues that government regulations and distorting tax benefits prevent efficient and cost effective coverage. You say insurers make huge profits; well, maybe they wouldn’t be so huge if clients had more choice in providers they can use. Easing interstate restrictions would allow that choice.

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Entrepreneurs Taking Advantage Of The Healthcare System: Part 2

Stanley Feld M.D.,FACP,MACE

Another example of the government trying to improve the healthcare system is Medicare Part D. The Medicare Part D benefit was created to help senior citizens pay for their medication90% of the Medicare healthcare dollar is spent on the complications of chronic diseases.

The goal was to enable the senior patients to buy their necessary medication at affordable prices. If a person has an illness that needs medication that person has to be able to afford the medication. Taking the medication is important to prevent the complications of chronic diseases. It is well established that

I believe the government’s intentions were good. However, after vested interests manipulated the rules and regulations, Medicare Part D has turned out to be less effective and more costly than anticipated.

Medicare Part D was created to enable free market competition to regulate the pharmaceutical sector of the healthcare system. The government could have opted for a single party payer system for drugs for Medicare recipients. The structure of Medicare Part D created opportunities for innovations and entrepreneurship on the part of the healthcare insurance companies and large pharmacy chains. They could have been creative and proven that a free market economy works to the advantage of all. However, they have figured out how to manipulate the system to their advantage and the disadvantage of the consumer.

The government program created specific pricing rules. These companies figured out how to get around the pricing rules. The government has recognized the defects. Yet it has been slow to act to repair them. Slow reparative action is not unusual in a hierarchical bureaucracy.

In the most affordable Medicare Part D policy the premium is Humana basic costing $24 per month. It started at $14 per month. The premium provides coverage until patients reach $2510 in drug costs. After $2510 the patient pays 100% of the drug cost until the drug cost reaches $4050. Thereafter patients pay 5% of the drug costs. The co pays varies depending on the drug and the healthcare carrier. At Humana, generic drugs co pay is $4, branded drugs $25, and non healthcare insurance company’s preferred drugs have a co pay of $54.

The $87 Humana Medicare Part D per month plan only improves the generic drug payments.

The $2510 doughnut hole (coverage gap) had been inserted after much lobbying by the healthcare insurance carriers. This is a loophole. It created a great disadvantage for the patient. The doughnut hole (coverage gap) is to the advantage of the healthcare insurance companies.

Humana had a “My Annual Cost Calculator” posted on their web site at one time. From that calculator you could figure out how much they charged your account for each drug. When I used the calculator it looked as if they were charging the patient’s account the retail price for the generic and brand name drugs. You can be certain that Humana was not paying the pharmacy the retail price. This served to get the patient into the doughnut rapidly. At that point patients pay 100% of the price for the medication. The details of the program are complicated and aggravating.

When faced with a complicated issue the consumer would look for help from a consumer advocate. AARP would be the natural consumer advocate for senior citizens. Mr. Richard Jellicoe’s comment about AARP suggested that AARP was not as dedicated a consumer advocate as we thought. “What amazes me is that AARP endorsed this company when it was time for 2007 Medicare sign up and it was not till many months later that AARP acknowledged that it’s endorsement of UnitedHealth care was a paid endorsement. They offer drugs with co-pay almost twice what you can get the same drug via cash. I guess that is how they can pay it’s fired CEO $5 million in retirement. And AARP is supposed to help the seniors.”

Dennis Kucinich said. “According to published reports, the American Association of Retired Persons (AARP) “will net AARP $4.4 billion over seven years from the insurance giants United Healthcare and Aetna” with whom the organization signed agreements earlier this year. Under the AARP brand name, the organization will promote Aetna insurance policies to its members between the ages of 50 and 64 and United Healthcare policies for Medicare-eligible members”.

Kucinich, the only Democratic candidate proposing a national, not-for-profit health insurance plan that would eliminate for-profit insurers from the health care system (HR 676), was specifically excluded from tomorrow’s forum by AARP.

“It’s clear that they didn’t want me upsetting their multi-billion dollar applecart,” Kucinich said. “The health care plans of the invited candidates preserve and promote the interests of for-profit insurance and pharmaceutical companies at the expense of tens of millions of everyday Americans who either can’t afford coverage or are being over-charged for the inadequate coverage they struggle to afford.”

Kucinich said AARP’s sponsorship of the Presidential forum “is like having Haliburton or Blackwater sponsor a Presidential forum on doing away with no-bid government contracts to private contractors; or an oil company sponsoring a forum on reducing the world’s dependence on oil.”

Kucinich emphasized that he was not taking issue with the 38 million members of AARP. “Millions of trusting AARP members has bought Medicare-supplemental and prescription drug insurance plans from AARP, believing that they were getting a good deal. The ‘AARP name’ was like the ‘Good Housekeeping Seal of Approval.’ It turns out, however, that AARP is taking a $4 billion cut by steering its members to profiteering private insurance companies trying to capitalize on fear and confusion.”

Wal-Mart four dollar pricing of generic drugs promises to put a big hole in the Medicare Part D shame. Physician will be more than willing to co-operate if the generic substitute is equally effective as a brand drug.

If the Medicare Part D healthcare insurance policy was driven by the patients’ vested interest and not the secondary stakeholders’ vested interest, Medicare Part D would be a great thing. It would go a long way to help repair the healthcare system. It would serve to decrease the money spent on the complications of chronic disease. (Medicare part A and Medicare Part B). I would say the healthcare insurance industry was entrepreneurial in its influence over the construction of Medicare Part D. I suspect that both the administration and much of congress had difficulty understanding the complexity and possible defects in the plan. Now the key is to force the administration and congress to fix Medicare Part D.

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