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Moises And Medicaid

Stanley Feld M.D.,FACP,MACE

We have all experienced absurd government regulations. The actual government policy might be praiseworthy. The execution of the policy hardly ever reflects the purpose of the policy.

The story of Moises and Medicaid illustrates an absurd execution of a policy designed to help the needy. The consequences are potentially grave to Moises and his family. The policy not only has health and economic consequences for the patients, but it has the potential for serious impact on everyone’s taxes.

The government has stated that we must provide healthcare insurance for all children as well as healthcare coverage for poor citizens. It says its goal is a morally just healthcare system.

I am telling this story not to incite anger but to underline the absurd and intimidating bureaucracy of the Medicaid system. Medicaid not only insures few people its physician reimbursement schedule is terrible. Medicaid has difficulty getting physicians to participate in the care of its insured.

In recent months there has been a lot of media frenzy concerning S-CHIP to insure poor children. President Bush has vetoed the bill twice because of his perceived defects in the program. Only students of the bill could understand the perceived defects because media coverage has been so poor. In our sound bite society the actual issues are constantly misrepresented. Everyone feels children ought to have healthcare insurance. Therefore everyone is against President Bush because it seems he is uninterested in the concept.

Policy makers debate the actual number of people uninsured. They argue that many patients are uninsured because they do not exercise their right to obtain Medicaid insurance.

It is true that many Hispanic US citizens do not apply for Medicaid. There are two important questions. How many do not apply? Why don’t they apply? One of the reasons is the Medicaid application is complicated. Most of these citizens are laborers with meager education. The impression given by the media is these citizens increase the number of uninsured through no fault of the government’s Medicaid program. The Hispanic citizens are at fault.

Case Report

The actual names in this story have been changed. The story is a true story.

Moises is a 44 year old Hispanic male married with 2 children (4 and 6). He has been a U.S. citizen for 11 years. His is an honest and hard working citizen. He had Medicaid insurance coverage when his children were born. He tells me his coverage somehow disappeared. He could not find the reason why no matter how hard he tried.

His income in 2006 was $22,000. His income stream is unsteady. It is dependent on individual jobs and the weather.

I implored him to apply for Medicaid. If he or anyone in his family got sick he could not afford medical care. Some hospital day charges are more than his yearly income of $22,000. He would be liable for that retail price for hospital care with post tax dollars. Medicare pays between 35-45% of the hospital’s retail fees. Medicaid pays a lower percentage.

Moises was hesitant to apply for Medicaid. He was afraid he could not complete the long and complicated application. He was afraid he would get into trouble if he applied. This is an emotion many immigrants have. I volunteered to fill out the application for him. It was not an easy application to complete. I could understand the fear a foreign born person would have in filling out the application.

He completed the application and had it notarized on October 22, 2007. On November 3rd, 2007 he received a note from the Medicaid office in Austin. He was notified of a telephone interview scheduled for between 2 and 2.30 pm. December 3, 2007.

I could not understand why it took so long to have an interview. It was almost six weeks since the Medicaid office received the application.

The Medicaid office in Austin Texas was scheduled to call him on his cell phone on December 3, 2007 between 2-2.30 pm. He was afraid he might need help with some interview questions, he asked if I could be available to help him.

The Medicaid office did not call between 2pm and 2.30 pm. At 3 p.m. I told him to call the Medicaid office. The number given to call was 211. The telephone number was answered by what sounded like an outsourced answering service. The outsourced service connected him to somewhere at the Medicaid office. After several transfer connections and 30 minutes on hold he got some one live in the correct Medicaid office. They told him their computers were down. He did not understand what that meant. He handed me the phone. The Medicaid lady was not allowed to explain anything to me because I was not the applicant. After my long explanation she finally told me the computers were down. She said I should have Moises call back in an hour. He called back in one hour. It now took 20 minutes on hold to get someone that could help. This person tried to get on the computer system but failed.

She asked him to call back in the morning. He called back in the morning. This time he waited five hours on hold. When he finally got someone who could help, his cell phone ran out of power and disconnected. He decided to go to the local Medicaid office. He hoped they could help or at least tell him what he should do. Their advice was he needed to call back and reschedule his appointment.

When he told me of the advice I told him it was ridiculous. He waited six weeks for the appointment, and their computers were down. It should be their responsibility to speak to you before you have to wait another six weeks for a decision. Moises did not want to make trouble. He was hesitant to call again. He was resigned to wait for another appointment.

I convinced him that he would not get in trouble if he insisted on some one servicing his application now. He realized he must persist. He also got smart and brought his phone charger so he would not run down his cell phone battery. After three more days and six more hours of being on hold he finally got to someone who would look at his application.

She said they needed his income tax return and his children’s’ birth certificates. He had already sent them. The previously sent copies were discarded because they were not asked for on the application. He faxed his income tax return for 2006 and children’s certificates to the Medicaid office in Austin. The fax number was the only number he had to penetrate the Medicaid bureaucracy.

He waited another five days. The Medicaid office called him at a random time. The case officer said his children qualify for S-Chip. Neither he nor his wife qualifies for Medicaid. He asked why he and his wife did not qualify. The answer was that he makes too much money to qualify. She told him he can not make more than $800 a month to qualify for Medicaid in Texas.

Moises hung up without asking when he would receive official notification. He did not have a case number or a contact person. Two weeks have passed since he received the phone call and he has not received official notification.

It has been two months since the application was filed. He has no evidence of acceptance except someone’s word. He does not have a case number or contact person.

Imagine the frustration he is feeling.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
Stanley Feld M.d.,FACP,MACE

  • Lisa Emrich

    Thank you for sharing this story. Everytime I hear someone flippantly state that “if you are truly poor, there are programs to help” I just want to slap them. Moises’ family of 4 income at $22,000 is only 106.5% of the federal poverty level. An income of $9600 (800/month) represents only 46.5% of the federal poverty level for a famly of four.
    While politicians argue over who deserves help and who doesn’t, those that need the help simply have no choice but to move on with their lives and hope for the best.

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The Invisible Hand Influencing Destructive Policies

Stanley Feld M.D.,FACP,MACE

My son, Brad, had an interesting item in his blog of December 23, 2007.

And – if you need more for your inner cynic, how about the article in today’s Rocky Mountain News titled Clouds hover in ethanol sky. E85 (assuming you can find it) apparently costs 78% less than regular unleaded gas but gets 71% less per gallon. Since its 85% ethanol, it presumably is less polluting (assuming that the total ethanol lifecycle consumes less energy than gasoline) but doesn’t save the consumer any short term money.”

I believe there is an invisible but real hand manipulating the corn for fuel debate. Each of the powerful stakeholders is simply pursuing its vested interest. The government “sovereign” of Adam Smith should make appropriate rules for the common good. Then the sovereign should get out of the way and let the stakeholders pursue its vested interests.

Several things are clear. Americans are becoming more obese each year. As Americans become more obese they develop more chronic diseases such as heart disease and diabetes mellitus. The increase in these diseases result in an increase in these diseases complications. These complications consume 80 to 90 percent of our healthcare dollar. We do little to nothing to support the prevention of these diseases or complications. The infrastructure of healthcare is on the verge of collapse. It is threatening America’s economic viability.

A large contributor to obesity and diseases resulting from obesity is the ubiquitous processed food. Processed food depends heavily on corn, corn oil and corn syrup. America’s dependence on foreign fossil fuel (oil and gasoline) is also threatening the sustainability of our economy. If we could shed ourselves of this fuel dependence and use renewable fuel sources our economy could remain viable.

A few weeks ago I suggested that our government ban the use of corn products in our food stuff. America should restrict is use for renewable energy only. This rule could solve our obesity problem and energy problem at the same time.

The food industry was bothered by this suggestion because the profit margin on processed foods, though difficult to calculate because costs are so opaque, is tremendous compared to the profit margin for producing fuel from corn. The farm industry could even genetically engineer corn to be 6 feet tall and generate more fuel per seed without adverse public opinion.

If the food industry produces corn for fuel plus foodstuff, they have an excuse to mark up food even higher than they have in the past year.

The fuel industry claims that the amount of fossil fuel to produce corn fuel (ethanol) results in a net increase in the cost of ethanol. Has the fuel industry never heard of solar and wind power to produce electricity to power the production of ethanol? One hundred years ago America used water power mills to generate electricity to manufacture all sorts of products. Water power represents another free electricity generating power source.

The point of the Rocky Mountain News article is that ethanol contains less energy than fossil fuel. Therefore the cost of the fuel is a wash. The cost of producing ethanol would be less if we used renewable sources such as wind and solar power to produce the ethanol. The government would have to make the appropriate rules and provide subsides for renewable sources. However, we would not run out of it or be dependent on others for it.

Recently, the automobile industry fought the government’s requirement for auto fuel efficiency.

I suspect it would be very easy to make ethanol fuel efficient cars. Toyota will show us how to do it. I would bet that our automotive industry could produce engines that would increase the energy output of fuel ethanol by simply modifying the fuel injectors. (Popular Mechanics 2007)

The point is none of the powerful stakeholders want to do any of the above. The government and politicians dependent on backing from these powerful stakeholders will not step forward and make these innovative changes.

We have not heard one presidential candidate from either side make any of these points. Americans are very good at spinning a story to manipulate public opinion and marginalize the value of these innovations to protect its vested interest.

It will take counter spin by the public to force the politicians to make policies that are for the public good. Now is not the time to complain and be cynical. It is time to act. America has the infrastructure to act in the internet and blogosphere. If social networking gets serious the power will return to the people.

Citizens have to create an environment where we are no longer a sound bite society. We must understand the details, and create the paradigm shift through public opinion for the public good. We have seen this happen rapidly. It is time to stop being manipulated by the invisible hand that uses media spin to manipulate us.

America can and must solve its healthcare problem and fuel crisis. We can do it with innovative thinking and appropriate rules.

The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
Stanley Feld M.D.,FACP,MACE


The Romney Bipartisan Universal Healthcare Plan Is Being Revised Already! Massachusetts panel approves changes to subsidized residents health plan

Stanley Feld M.D.,FACP,MACE

It is worth spending some more time on the ill conceived bipartisan mandatory universal healthcare plan of former Governor Romney.

As I pointed out, I believe the original bill was well intended. It was supposed to be universal insurance coverage without a single party payer. The market was supposed to self regulate premiums while giving patients choice. The defect in the plan was clear to many. It catered the wrong stakeholders’ vested interests without reforming the healthcare system. One can not expect real improvement by patching the present healthcare system in favor of the healthcare insurance industry. I suspect Governor Romney pushed this plan to gain national visibility in his planned run for the presidency.

Today the Massachusetts legislature started changing the provisions of the original universal coverage bill. The changes represent another complicated mistake that is destined to fail.

“Striving to hold down costs to taxpayers, a state panel yesterday approved a range of changes for next year for the rapidly growing subsidized health insurance program. The changes will probably cut payments to doctors and hospitals, reduce choices for patients, and possibly increase how much patients have to pay.”

Please note who the victims of the payment cuts are; the physicians and the patients. The healthcare insurance industry is challenged by the state to simply reduce their planned increases from 14% to 9-11% next year.

“The goal “is to make this great healthcare reform effort sustainable,” said Leslie Kirwan, secretary of administration and finance and chairwoman of the Commonwealth Health Insurance Connector Authority, which is overseeing the insurance initiative.”

Leslie Kirwan seems to be the purveyor of political babble for the state of Massachusetts as you can read in my previous discussion of the Romney Plan.

“For the subsidized plan, called Commonwealth Care, the authority’s staff has suggested that costs per member could rise as much as 14 percent next year, if there were no changes.”
“The bid specifications will direct the four insurers that administer Commonwealth Care to cut payments to healthcare providers by 3 to 5 percent.”

Without real price transparency by the healthcare insurance companies effective reductions in premiums will not occur. Competition among insurance companies to become more efficient is not stimulated.

All the stakeholders must participate in real price transparency if we are going to have a chance to repair the healthcare system.

“There’s no justification to be paying more than Medicaid rates,” said Patrick Holland, the authority’s chief financial officer.”

Patrick Holland ignores the fact that the federal government is having problems forcing physicians to see Medicaid patients. Medicaid reimbursement is below physicians’ costs. They can not afford to take care of Medicaid patients at the present level of reimbursement and their present level of inefficiency. The reduction in reimbursement below the cost of production of services without incentives will not solve anything. Real healthcare reform along with decrease in healthcare cost will occur when then is a full court press on preventing complications of chronic disease.

Examples of ineffective chronic disease management appear monthly in the medical literature. All stakeholders are to blame. The incentives for chronic disease management do not exist. A most recent example appeared in the December 2007 issue of the Archives of Internal Medicine. The article is entitled “Inadequate Control of Hypertension in US Adults with Cardiovascular Disease Co morbidities in 2003-2004.” Only 49.3% of patients were within 20 mm Hg of the goal of therapy. Only 69% of patients received any treatment. Patient compliance as well as the ineffective practice of evidence medicine is always at the root of the problem. The lack of reimbursement needed for physicians to develop the necessary systems of care is usually the cause of ineffective care.

“In addition, the board voted to eliminate one part of the program that has been the most expensive per member. That program had allowed patients to pay a higher monthly premium in order to incur lower fees each time they sought care. But the option drew the sickest and oldest patients and was twice as expensive for the state as a plan with lower premiums. The approximately 3,500 patients in that plan will have to shift into an option under which they pay more of the cost per visit.”

By shifting the burden of payment to the patients creating higher deductibles for less coverage will result is forcing patients not to buy insurance. They simply can not afford to buy insurance. The state would be making criminals out of sick patients because the Massachusetts law makes it mandatory to have insurance.
The way to avoid this imbalance and problem is with a subsided Ideal Medical Savings Account.

When are politicians going to see the obvious? Constructive change will occur only when the consumer knows what to demand and how to demand it. Consumers will get results when politicians’ political future is threatened. Only then will the politicians refuse to be influenced by corporate vested interest.

  • KGilbert

    “That program had allowed patients to pay a higher monthly premium in order to incur lower fees each time they sought care.”
    Even more insidious is that now those patients have a disincentive to seek the short-term preventive care that may save them from future expensive hospital time. This is the same problem that HSA’s run into – it is too easy to forego preventive care when there is a high deductible.

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Former Chief Will Forfeit $418 Million: Media Misses The Point

Stanley Feld M.D.,FACP,MACE

The media publishes sensational stories of abuse in the healthcare system. The goal is to sell newspapers. More valuable would be an analysis of the significance of the abuse. Additionally the media should stimulate discussion about remedies for the abuse.

The New York Times lead article about William McGuire’s excess pay from United Healthcare reached a settlement with the S.E.C. on December 8, 2007

“In one of the largest corporate pay give-backs ever, William W. McGuire, the former chief executive of UnitedHealth Group, has agreed to forfeit at least $418 million to settle claims related to back-dated stock options. William W. McGuire built UnitedHealth into a giant.”

Mr. McGuire had previously returned $198 million dollars. The total amount of the excess payment was $1.6 billion.”

“As part of the settlement with the S.E.C., Mr. McGuire will pay a $7 million fine and will be barred from serving as a director of a public company for 10 years. He will, however, be allowed to keep stock options valued at more than $800 million, including many that have been sharply criticized.”

The retention of eight hundred million dollars is not a small change. The value of the $800 million in stock options could double in the next year.

Federal regulators are the protectors of the public and stockholders’ interest. They have claimed victory over corporate management abuse of the public and stockholders. They are stemming the abuse of the over use of backdate stock options. The regulators are presently investigating 120 companies.

“The developments are the most significant to date since federal regulators started looking into the backdating of stock options. More than 120 companies have come under scrutiny for granting options to executives on dates when the company’s share price was low, a tactic that guaranteed the maximum profit when the options were exercised.”

“The settlement comes a year after the furor over compensation forced Mr. McGuire’s resignation from UnitedHealth, the nation’s largest health insurer.”

“In a statement yesterday, Mr. McGuire said that he was pleased to put the controversy behind him.
“The last 18 months have been an extraordinarily challenging period for my family, and I am pleased to have reached a resolution,” he said.

I bet Mr. McGuire is happy to have this behind him. His liability for this abuse is over. He still owns $800 million dollars in backdated stock options that have a chance to appreciate further.

“UnitedHealth remains embroiled in the scandal over improperly granted options. The S.E.C. said its inquiry at UnitedHealth is continuing. So far, the company has restated its earnings by $1.5 billion and announced a $55 million settlement with the Internal Revenue Service.”

Let us think about this settlement of $55 million for a minute. Fifty five million dollars sounds like a lot of money. At the maximum corporate tax rate of 38% the corporate tax for $1.5 billion in profit would be $570 million. I would say United Healthcare received excellent settlement terms. The IRS only collected a little more than ten cents on the dollar. The settlement seems to be a pretty good way of avoiding corporate taxes. The $55 million settlement does not seem to me to be a deterrent to future corporate tax evasion.

What happens to the $515 million dollars United Healthcare saved by the settlement? I assume it is applied to United Healthcare bottom line and be subject to a future corporate tax payment. Nevertheless United Healthcare keeps increasing healthcare insurance premiums on large and small businesses. The premiums increase by up to 15% a year. The premium increases are justified by increasing costs and decreasing profits. The premium increases are putting healthcare insurance out of the range of most small companies and inaccessible to a single individual.

Shouldn’t there be some restraint on profit? The government has given United Healthcare a bye on their tax liability. Their executives have been judged to do illegal things. Has United Healthcare suffered? No! The consumer has suffered. Should consumers put this behavior out of business? An immediate question is how?

The simple answer to the consumer is; do not buy United Healthcare insurance. Additionally, every state has the ability to restrict the sale of insurance in their state by the issuance of licenses for insurance companies to sell insurance. This would be a deterrent to other healthcare insurance companies and regulate obscene profits and premium increases. The state governments have been hesitant to do this for some reason. Unfortunately it is going to take consumer pressure to force state government agencies to do their job and protect the consumer from this kind of abuse.

Citizens have been ripped off by the healthcare insurance industry long enough. The answer is not a single party payer because the same abuse would exist. The administration of Medicare is outsourced to the healthcare insurance industry.

The real point the media should be discussing is how we can correct the abuse. We have to make it clear that we are not interested in the abuse being a sensational spectator sport. We must have a serious debate on where the most significant abuses are and how are we as a nation can change the healthcare insurance industry’s behavior?


  • forHealth

    I agree. Candidates from both parties are presenting plans that only satisfy one interest group – the insurance companies. Truth is that when you only offer more of the same – that is all that you will get in return. The end result is companies who don’t live up to their promises and consumers who are more accurately described as victims.

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Stanley Feld M.D.,FACP,MACE

Newt Gingrich and John Kerry have written a bipartisan article on the way to modernize the healthcare system.

“In the age of the Internet, is it any less inexcusable that we have yet to modernize and transform our health care system?”

Who is to blame for this shortcoming? My answer is all the stakeholders are to blame. There has been increasing mistrust among stakeholders. Physicians have been the weakest political action group along with patients. Physicians are the most vulnerable to attack.

“We have talked long enough about using technology to cut costs and improve the quality of care. Now is the time to act–and the place to start is preventable medication errors.”

I totally agree. Accurate electronic prescribing information would decrease prescription filling errors.

“According to the Institute of Medicine, Americans average one medication mistake for every day spent in a hospital, accounting for more than 1.5 million injuries each year. Medication errors will kill at least seven thousand Americans this year. Of the more than three billion prescriptions written each year, doctors report nearly one billion require a follow-up between providers and pharmacies for clarification. The cost to our health care system is in the billions.”

“One reason for this mess is that 95 percent of prescriptions are transmitted using five-thousand-year-old technology: pen and paper.”

“That is unacceptable. The deaths and inefficiencies of paper prescriptions can be nearly eliminated if we use the same technology that we use in other aspects of our lives. Electronic prescriptions can replace handwritten, misread, and mismatched prescriptions with online, automated, and expert technology.”

I agree with Gingrich and Kerry. However, they do not examine the barriers that have prevented electronic prescription writing. One barrier is physicians must have computer equipment and appropriate software to send an electronic prescription to a pharmacy. Another barrier is the pharmacy must have the ability and willingness to accept and fill the electronically signed prescription. The pharmacy might not have software compatible with the physicians’ software.

“A new study by the Department of Health and Human Services estimates that if 18 percent of doctors in Medicare adopt e-prescribing, the government will save $4 billion and nearly three million adverse drug events can be prevented over five years.”

I believe e-prescriptions are essential and should have been implemented years ago. Let us extend the Department of Health and Human Services estimates. If 100% of physicians would use e-prescriptions and 100% of pharmacies would fill the electronically signed prescriptions Medicare would save $22.5 billion and nearly 16.5 million adverse drug events can be prevented over 5 years.

Gingrich and Kerry put the burden on physicians and suggest penalty for non compliance.

“The problem is that very few doctors use the technology. Of those four hundred physicians polled, only 7 percent actually transmit prescriptions electronically. And 63 percent say implementing the technology is not a priority. Why? It is not always in their immediate financial interest to do so.”

I can sympathize with the physicians who do not want to implement the technology. Many physicians are struggling to make a living even though their retail prices for services seem high. The retail fee is never the fee physicians collect from the third party payers. If a patient is uninsured many physicians will accept the steeply discounted fee Medicare allows.

Let us think about it. Gingrich and Kerry are demanding that physicians who do not have the technology and software spend money to save Medicare $22.5 billion over the next five years. If physicians were willing to spend the money there is no guarantee the pharmacy have compatible software.

“That must change. The federal government can lead by requiring that doctors who do business with Medicare convert to e-prescribing. If a majority of doctors do not e-prescribe a few years down the road, the government should require all doctors to adopt e-prescribing or face financial penalties. E-prescribing should become a condition of doing business with Medicare.”

With Medicare reimbursement declining and start-up costs for computer equipment and programming increasing, many physicians can not afford an isolated system for e-prescriptions. Many clinics have invested heavily in installed legacy systems that do not permit a universal interface with the pharmacies’ equipment. Many physicians are reluctant to spend money on systems that are quickly obsolete and have little payback.

Another issue is the potential abuse of the e-prescribing system by unauthorized persons using the physicians prescribing privileges. Ignored are the costs of installing adequate security and the service contracts.

A simple solution to the problem is to provide the physicians and the pharmacies with free downloadable stand alone compatible programs that can be used for electronic prescription use by licensed physicians and registered pharmacists. These programs could be downloaded from the internet with the appropriate security.

If this were done we would see how quickly the transformation to e-prescribing would occur. An added incentive to the physician could be patient driven. After the government has provided the universal software it could penalize patients if they try to fill a paper prescription by putting a surcharge on the prescription. Those patients should then be given an explanation of the surcharge and instruction on how their physician could remedy the surcharge by a simple internet download. Taking this approach would align the patients’, the physicians’, and the pharmacies’ incentives rather than setting up an expensive bureaucratic system to enhance suspicion and mistrust between stakeholders.

We should learn a lesson from the airlines. The airlines have made us prosumers. The airlines provided the software and education, and got us to do their work. We produce the e-ticket with our own paper and consume the e-ticket with our credit card payment at little cost to the airline. We do the work for the airlines.

I am surprised at Mr. Gingrich and Mr. Kerry advocating a penalty system that could be costly to administer when the solution can be so simple and utilizes the physicians’ patients to enforce a necessary system. You can be sure they did not discuss their idea of penalty with physicians before they wrote their article.

  • rx card

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    Hopefully this e-prescriptions thing works out.

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Retirement Center’s Partnership With Insurer Eases Healthcare Concerns

Stanley Feld M.D.,FACP,MACE

It is my belief that innovative entrepreneurs are going to develop systems that will provide consumers with control over their healthcare dollar. These systems will provide the infrastructure to help patients prevent the complications of chronic disease and also result in decrease in cost to the healthcare system.

If patients have control of their healthcare dollar the decrease in cost will be an extra dividend to patients. Other innovations will be stimulated by a consumer driven system. We are starting to see some good ideas.

Here is an example of a good idea: Dallas retirees J.T. and Phyllis Dunkin, both 78 years old, are paying more for their health insurance (MediGap insurance) but enjoying life more. They live in a retirement community in North Dallas. Like many seniors, the Dunkins have supplemented their basic Medicare coverage by purchasing a Medigap insurance policy. Medigap reduces their sizable potential out-of-pocket health care expenses not covered by Medicare. Mr. and Mrs. Dunkin pay $250 per month each in premiums for the added coverage. Medicare has deductibles and co-pays that can be a great burden. I will provide more details on these deductibles and co-pays in the future. The Dunkins pay about $90 a month more than the typical Plan F Medigap insurance but the added benefits of chronic disease management more than compensate for the increased price.

“ Dr. Mary Norman, Highland Springs’ medical director is instantly available to patients in the retirement community for acute medical illness. “

“When Mr. Dunkin underwent bypass surgery in March, the health plan provided transportation to the hospital, sent a nurse to his bedside to check on his care and then, when he was about to be discharged, arranged for a home health aide.”

“Afterward, Mrs. Dunkin didn’t have to make sense of the bills by herself or spend hours on the phone with a customer service representative. Instead, she sat down with the health plan’s benefits counselor, who answered her questions right then and there. “

Interpreting bills and figuring out liability on the ocean of hospitals’ and physicians’ charges is a stress that many elderly patients cannot handle. The stress often leads to depression.

“Best of all, the couple live just a three-minute walk down the hall from their doctor’s clinic in the Highland Springs senior-living community”

“When we tell our friends, they don’t believe us,” Mrs. Dunkin said. “Medicare isn’t supposed to be this easy.”

It is common knowledge among seniors that Medicare is an extremely confusing system.

“Medicare is usually not so easy. The Dunkins, who are in their 70s, are part of a pilot project in which their senior-living company has teamed up with a health insurance company, with Medicare’s approval, to provide supplemental coverage.”

Their supplemental insurance is not the garden variety supplemental insurance.(Medigap) The goal of their supplemental insurance is to teach patients how to manage their chronic disease. It also provides instant physician availability. The idea is that they will avoid costly hospitalization. Ninety percent of the Medicare costs for seniors are spent on the complications of chronic disease. With this goal in mind this entrepreneurial system is already working to decrease complications of chronic disease.

Experts say the project may become a national model for improving the care of chronically ill Medicare beneficiaries while holding down costs. Early cost savings have been promising.

It is obvious to me that one of the keys to the Repair of the Healthcare System is to effectively teach patients how to manage their chronic disease. The result will be a decrease in the complications of chronic disease and a decrease the cost of care enabling the seniors to live a happier and healthier life.

This innovation can easily be incorporated into my ideal medical savings account plan. The cost savings must be shared with the patient to make them even happier and stimulate further compliance with treatment

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The Opportunity for Innovative Thinking: Medicare Part D.

Stanley Feld M.D.,FACP,MACE

I said there was plenty of room for improvement of the healthcare system and innovation.

The Medicare Part D doughnut hole (coverage gap) is punishing to the over 65 year old. Pricing of drugs bought with Medicare Part D are inflated. The price of drugs is so high that when patients reach their coverage gap (doughnut hole) of $2510 to $5250 they can not afford to pay the inflated retail price for the medication. Therefore they do not take the medication and develop the complications of their chronic disease. The complications of chronic disease increase the cost of healthcare.

Medicare Part D recipients are driving an evolving innovative change in purchasing prescription medication. Since payment in the doughnut hole (coverage gap) is money out of the seniors pocket they are looking for ways to save money and still be able to afford their medication. They are demanding that their physicians write prescriptions for generic substitutes. Physicians want to help their patients. When they can, they are prescribing generics substitutes.

Patients then buy the generic without using their Medicare Part D insurance for $4.00 at Wal-Mart. They avoid the $6.00 out of pocket expense plus the additional $50 to $150 dollars charged to their coverage gap. They have also learned to ask their physician to double the dose of the dose generic medication. They then use a pill cutter to cut the pill in half to take the prescribe dose. They save even more money on their prescriptions.

This consumer driven initiative was stimulated by Wal-Mart. It has saved Texans $79 million since September 2007 and patients nationally $613 million.

The pharmaceutical industry has not done a good job influences patients or physicians to insist on brand name medication. Five years ago their influence on physicians was much greater. However, the pharmaceutical industry has killed the goose that provided the golden eggs. They have flood physician offices with account sales representatives. The pharmaceutical sales reps bring lunch, arranged dinners and do everything they can to influence physicians to use brand name drugs. The increase activity by pharmaceutical sales reps has backfired and has annoyed physicians. Most physicians’ offices will not let account reps into their office much less let them bring in lunch.

The pharmaceutical industry has not been innovative or effective in proving their drug is better than the generic substitute. The physicians’ reflex is they have been used. They are the generic drug movement.

It is innovations like Wal-Mart’s creating an opportunity for patient to save their own money that will stimulate more creative innovations for the benefit of the patients in the future. Price transparency for drugs has been exposed by the market place without the need for government regulation. It should be obvious to all that the price of brand name drugs are excessively high.

It must be remembered that without patients and physicians there would not be a healthcare system. Patients have the power to create change to their advantage with a little help from their physicians if they understand the defects in the healthcare system. Previous innovations by facilitator stakeholders have taken advantage of the healthcare system. It is now the primary stakeholders turn to be innovative with the help of innovative entrepreneurs.

  • Ken Welch

    I just read your article “The Opportunity for Innovative Thinking: Medicare Part D” and would agree the splitting pills could save 8 million Lipitor users in the U.S. up to $1,000 per year.
    As I am sure you are aware, Pfizer’s Lipitor is the largest selling prescription drug in the World at $13 Billion per year with U. S. sales exceeding $8 Billion. Lipitor is available in 10mg, 20mg, 40mg or 80mg tablets – all sold at the same price, and costs the average user $1,300 per year. (The 10mg dose is slightly cheaper.)
    Splitting Lipitor tablets in half or quarters results in the following savings every year:
    * Splitting the 80 mg Lipitor tablet into quarters will save $1,001 per year.
    * Splitting the 80 mg Lipitor tablet in half will save $668 per year.
    * Splitting the 40 mg Lipitor tablet in half will save $655 per year.
    * Splitting the 20 mg Lipitor tablet in half will save $328 per year.
    Splitting pills is not a new idea, but many people do not get accurate results with the typical $5 drugstore pillcutter. To address this problem, we have developed the Swiss Pill Cutter for Lipitor which precisely and easily splits the 80mg, 40mg and 20mg tablets in half, and the 80mg tablet into quarters.
    To put this whole pill cutter issue in perspective, one should note that more than eight million people in the U. S. use Lipitor and most of them could significantly reduce their prescription drug costs by the simple act of splitting the tablets in half. The savings would dwarf those offered by the PPA or Canadian pharmacies or many other programs debated in Congress. And, we are only talking about one prescription drug.
    Ken Welch

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Romney’s Universal Healthcare Plan Anticipates Large Cost Overruns

Stanley Feld M.D.,FACP,MACP

Universal Healthcare coverage is an important idea. It is not synonymous with a single party payer as some would like us to believe. When Mitt Romney was governor of Massachusetts he had a bipartisan bill passed for universal healthcare coverage. The coverage was going to be provided by multiple insurance companies. Governor Romney’s goal was to achieve universal healthcare coverage using the private sector. Market forces were supposed to control costs and there would be no need for government single party payer.

I predicted the Romney plan would not work. The reason is simple. The rules of the game were not changed for the insurance industry, the hospital systems and the physicians. The reason this important idea cannot work is because the program was superimposed on the rules of a broken healthcare system.

The patients thought they were going to get a good deal because now they had guaranteed coverage. Mitt Romney was a hero of the people. As soon as the legislation was passed the insurance industry was fighting over the premium price. The premium is expected to rise next year.

“Enrollment in the state’s new subsidized health plan is growing so quickly that the state could face a funding gap as large as $147 million by the end of the fiscal year, according to a state projection.”

“It’s a good problem to have – people are getting insured and hopefully getting care,” said state Senator Richard T. Moore, cochairman of the Legislature’s Health Care Financing Committee. “But any shortfall is a big deal.

The subsidized program is part of the state’s unprecedented initiative requiring nearly all residents to have health insurance. Even if the gap reaches $147 million, there is no indication it would cripple healthcare reform.

“It’s too early to make any departure from the health reform plan,” said Leslie Kirwan, secretary of administration and finance and chairwoman of the Commonwealth Health Insurance Connector. “We will follow the trends and adjust, if needed.”

This is a lame bureaucratic statement preparing the state of Massachusetts for a tax increase.

“Financial pressures will grow for fiscal 2009, which begins July 1, since insurers who participate in the subsidized program are expected to ask for significantly higher payments from the state. In addition, there is uncertainty about how much the federal government will contribute toward the total cost.

The state budgeted $472 million this fiscal year for the subsidized program, based on enrollment estimates made last winter. The program, called Commonwealth Care, provides comprehensive insurance to people without access to work-based coverage who earns less than 300 percent of the federal poverty level, or about $31,000 for an individual. The state money pays the full premium for the lowest-income residents and subsidizes the rest. Members are responsible for small co-payments.

Outreach has resulted in more than 133,000 people signing up. If enrollment reaches the high estimate of 178,280 by June 30, Holland said, the state cost could hit $619 million.

The enrollment booms “is a sign of success, not failure,” said John McDonough, executive director of the advocacy group Health Care for All. “The sky is not falling. There’s a budget challenge.”

Massachusetts has a lot of “budget” challenges.

“McDonough also said the higher enrollment suggests that there are more uninsured people in Massachusetts than state surveys showed.

Commonwealth Care is one part of the state’s effort to cover the uninsured.
The state has some flexibility built into its $27 billion budget to help fill the likely gap. Kirwan can shift money from the $448 million Health Care Safety Net Trust Fund, which pays for care at hospitals and health centers for uninsured patients.

Long-term funding of healthcare reform depends, in part, on shifting more and more of those funds to insurance subsidies over the next few years.

However, this year’s state budget includes significantly less money than last year’s for the safety net, and spending in that account last year did not go down as much as some had expected, according to preliminary figures.

Hospital officials are concerned about getting stuck with unpaid bills.
Boston Medical Center and Cambridge Health Alliance negotiated a special deal in the health reform law that guaranteed them $287 million a year through 2009 in fees and increased Medicaid rates
“This is one of many warning signs, especially in tandem with the projected state budget deficit and the skyrocketing cost of healthcare in the state,” said Alan Sager, professor of health policy and management at the Boston University School of Public Health. “The [healthcare] law is very shaky on the revenue side.”

Mitt Romney’s plan does not include price transparency on the part of all stakeholders. The plan does not provide consumers with ownership of their healthcare dollar. The plan does not encourage competition. The result of the plan has to be failure with cost overruns using the rules of the present healthcare system.

When the plan fails the healthcare wonks who promote a single party payer system will claim the failure of the Romney plan has proven that universal healthcare has to be regulated by the government as the single party payer

The only thing the Romney plan demonstrates is a governments lack of understanding of the problems in the healthcare system. The plan does not speak to the issue that 80% of the healthcare dollar is spent on the complications of chronic disease. This is where the most saving can be achieved.

It does not face the issue that we have to deal with the obesity problem in the country.

It does not deal with the insurance industry’s abuse of its power or the abuse of all the stakeholders.

It does not deal with patients’ responsibility for their care or their need to own and control their healthcare dollar. A Romney like plan will only succeed when we deal with these defects in the healthcare system.

It deals only with the concept of how much money we are going to put in the system and whom we will penalize. If the plan had been constructed correctly and motivated patients to create a competitive healthcare system, the universal healthcare concept of Romney and Schwarzenegger would have a chance to succeed.

Hillary Clinton’s healthcare proposal is similar in that it is also built for failure. Failure proves the concept does not work. The replacement will be a single party payer.

The consumer is the only one who can force politicians to understand the problems in the healthcare system.

  • forHealth

    It nullifies the usual argument that only through universal health insurance will the costs go down. In reality, Massachusetts has demonstrated just the opposite. Instead of providing affordable options, the insurance providers for that state see a blank check. The Romney plan does not provide any accountability on the part of insurers once they receive their easy premium/tax money.

  • KGilbert

    Good commentary. I agree that the incentives still need to be adjusted. Still, it will be interesting to see what savings do come out of this plan. Having universal coverage should reduce emergency room visits and unpaid bills. Eventually this savings should trickle down to the patients (in an ideal world). The magnitude of savings will not be immediately obvious, but desperately needs to be quantified. No one is going to get this right on the first shot – how kind of the taxpayers in MA (and soon here in CO?) to give us some real data to use to inform future reform plans.

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