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Dr. Feld. Why Only Pick On The Healthcare Insurance Industry?: Part 2

Stanley Feld M.D.,FACP,MACE

This post continues my reply to Matt Modleski’s comment. If one views the dysfunction in the healthcare system as a gradually evolving process is it clear that all the stakeholders have contributed to its dysfunction. As each stakeholder adjusted to the changes, the healthcare system became more dysfunctional.

“ The number of scans, tests and procedures that are done each year unnecessarily because the facilities that are built (many Physician owned) are put to use is also a big part of the problem. This has been documented in study after study (some of them conducted by physicians).”

In the studies Matt refers to patients going to these testing clinics could be getting better care than the non physician owned clinics? Remember quality of care has not been clearly defined by policy makers or the healthcare insurance industry.

Physicians in academic medicine have not precisely defined quality medical care. However, everyone talks about it. I do not believe you can assume physicians are doing the test simply to make a profit.

I do think there are a lot of unnecessary procedures done in many hospital outpatient facilities and physician owned facilities. Many of the procedures are done because physicians are forced to practice defensive medicine. There are many law suits in the pipeline presently because of missed diagnosis.

Patients with vague symptoms at the time of physician visits need to be tested to detect possible disease. Almost everyone experiencing automobile accidents with the slightest head trauma automatically undergoes a CAT scan to rule out a cerebral bleed. President Reagan did not get an automatic MRI or CAT scan when he had his subdural hematoma.

Diagnoses that would not otherwise be made are made early through testing using new technology. Clinical judgment has lost its place in the defense of malpractice suits. The costs of using new technologies has an enormous impact on the cost of medical care. Yet no one has precisely defined quality medical care . Nonetheless, physicians have been accused of over testing when they control their intellectual property.

A significant number of malpractice suits would disappear if the government changed some liability rules. The rule change would make malpractice claims less attractive to malpractice attorneys. Malpractice attorneys receive one third to one half of any settlement. A change in the contingency rule would decrease lawyers’ incentives and frivolous malpractice claims. The government has to put limits on damages for certain claims and change the adjudication process. Plaintiffs attorneys’ have resisted these changes.

The state of Texas has made these changes. there has been a marked reduction in malpractice claims as well as malpractice premiums.

The reasons for the overuse of the healthcare system have not been publicized in the media or by organized medicine. Overuse of the healthcare system makes a sensational story for the media and it is easy to blame physicians. I am not interested in defending physicians. However, one should give physicians the benefit of the doubt since you trust them to deliver the best medical care possible. If you do not like what they suggest pick another physician. I would not rely on a healthcare insurance company’s employee looking at the computer screen to make a medical treatment judgment about my health.

There are also lots of unnecessary tests done because of increasing patient demand. Patients learn from the media and online what needs to be tested. Cholesterol testing and bone density testing are increasing. When the compliance rate is analyzed only 30%- 50% of people who should be tested are tested. When they were tested only 30-50% treated stayed on the medication after 1 year. Think about it. If everyone was tested and treated appropriately the cost of testing and treatment would increase while the cost of the complications of these chronic diseases would fall precipitously. The greatest cost is the cost of treating the complications of chronic diseases.

Matt complains about physicians owning the facilities to test patients. Why should physicians give their intellectual property away to hospitals when they can do the test more conveniently and cheaper in their office?

Physicians detect, treat and teach patients how to become professor of their chronic disease so patients can be knowledgeable in managing their disease. This is the definition of cognitive therapy. Cognitive therapy is not reward by the government or the healthcare insurance industry. Isn’t this a perverse circumstance since 90% of the healthcare dollar is spent of the complications of chronic disease?

“The system is broken and commoditized reimbursement, regardless of the quality of care, is a key component, but so is the overtreatment of patients by financially driven providers. Every now and then you hint as much, but you would be helping everyone by giving it equal airtime with your perspective on the woes created by the insurance companies.

Physicians’ intellectual property has been discredited and devalued. Physicians are intelligent people who have accepted the fact that their credibility is challenged. They are trying to figure out way to make a living taking caring for patients in the best possible way. They also want to figure out how to protect their intellectual property. They try not to react to a healthcare system that has challenged their skills and integrity.

Patients are at fault by believing medical care is a right. Obesity is an epidemic and generates chronic disease and the complication of chronic disease. The adherence to hypertension therapy is less than 50% leading to strokes and myocardial infarction. The adherence to diabetes treatment is less than 40%. Shouldn’t society be putting energy and money into solving this problem?

The question is where did the dysfunctional behavior start? It started when the healthcare insurance industry started gaming and controlling the healthcare system for profit after the government instituted price controls.

My solution is my ideal medical savings account putting the patient in control under the appropriate set of rules. The consumer is the only stakeholder that can force the government to make the correct rules!

"Keep doing what you do, I read your stuff every day".



Matt, thanks for your comment.

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

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Dr. Feld, Why Only Pick On The Healthcare Insurance Industry?: Part 1

Stanley Feld M.D.,FACP,MACE

Matt Modleski of Stovall Grainger Inc a company that “ maximizes people's potential through the application of strategy in sales, leadership and life" wrote the following comment.

"Dear Dr. Feld,

I believe many of your points are right on the mark, but your credibility is undermined when you speak so infrequently about the “supply side” of healthcare delivery as if the insurance companies were always wrong."

I will divide my comments into two articles. I assume Matt means the patients, physicians and hospitals on the supply side. You may recall that I have blamed all of the stakeholders for the dysfunction of the healthcare system. The physicians, hospitals, the government, the healthcare insurance industry, pharmaceutical companies, malpractice attorneys and patients are all at fault. The questions are who started this dysfunction?, who made it worse?, and who can fix it?

The answers to the questions are the government started it; the healthcare insurance industry made it worse. and continues to make it worse. The only stakeholder that can fix it are consumers.

The government initiated the dysfunction of the healthcare system in the early 1980’s. It imposed price controls to combat rising costs. The rising costs were the result of increased technological advances leading to procedure based diagnoses. Some hospitals, physicians and patients took advantage of this diagnostic procedure based shift in medical care.

Historically, price controls never work. They usually create stakeholder incentives to develop innovative methods to get around the price controls. This leads to increased dysfunction and greater costs to the system.

The dynamics between hospitals and the healthcare insurance industry became perverse. The more spent for medical care the more the healthcare insurance industry could charge employers. The result was increased hospital and healthcare insurance industry profit at the expense of the employers and patients.

Employers started providing healthcare insurance to their employees after WWII as an employment benefit. This led to post war healthcare price inflation. In 1965, Medicare healthcare coverage for all seniors over 65 increased healthcare price inflation.

When the government decreased Medicare reimbursement in the early 1980’s increased prices (price shifting) for employer provided healthcare was rampant. Price shifting led to the healthcare insurance industry increasing healthcare premiums to employers.

In the late 1980’s employers said they could not afford to pay healthcare premiums costing 18% of their gross revenue. The insurance industry asked what they could afford. The answer was 12%. The insurance industry said no problem. Managed care and all of the managed care problems were born.

Managed care is managing costs. It is a form of price controls. Managed care introduced another form of stress into the healthcare system. Patients experienced limitations on access to care. Physicians experienced increased paper work, bureaucratic interaction with a defective care approval system, and decreasing reimbursement. Physicians’ frustration increased as non medical related time and overhead increased and reimbursement decreased. The managed care system interfered with effective care. It also led to increase mistrust for the administrators of the healthcare system.

Hospitals experienced the same pressures. Hospital administrator figured out how to creatively adjust to the new system.

The healthcare insurance industry changed some rules in order to manage costs. It started paying for out-patient procedures rather than paying exclusively for in-patient procedures and hospital bed days. The bed day cost at that time was $100-$200 a day (as opposed to $1,000 to $10,000 today). In-patient procedures were two to three times the cost of outpatient procedures done in a physician’s office. Managed care companies wanted to take advantage of this savings in order to manage costs.

In the early 1980’s with surgical and technological advances, the legal profession saw an economic opportunity to make quick money. There were no limits on liability. Malpractice suits and malpractice insurance premiums escalated for both hospitals and physicians. These costs were passed on to the consumer. Malpractice suits also led to an increase the practice of defensive medicine. CAT scans, MRI’s and other expensive tests were ordered by physicians to protect themselves from malpractice suits. The cost of medical care further increased.

Hospitals captured most of this increase in revenue production at an inflated price. Some physicians were unhappy they were giving away their intellectual property and not sharing in the revenue production. Additionally, they could do most procedures at half the hospital charges thereby saving money for their patients and the healthcare system. They started opening their own clinics, and testing facilities in order to capture the revenue from the new technology. The hospitals and the giant national laboratories were upset because their revenue production was threatened. They accused physicians of over testing in a well executed public relation campaign. Some physicians did abuse the system. However, the percentage of physicians’ abuse was small. I believe the reality of the situation is physicians did the procedures and testing more carefully and more conveniently for patients than hospitals or the national testing laboratories.

Physicians’ use of increased testing became necessary in order to protect themselves from malpractice suits. Physicians’ testing facilities charged substantially less than the hospital facilities. The healthcare insurance industry encouraged physician owned clinics because it was able to save money. The healthcare insurance industry then abruptly cut them off.

The Stark Laws slowed the proliferation of these facilities but only as applied to Medicare. Pete Stark created a restriction that most figured out how to get around. The price of procedures increased. The dysfunction in the healthcare system increase by Pete Starks own admission of the failure of his legislation

Matt, you might have thought the answer to your comment was simple and physicians are at fault. Unfortunately, the sound bite is usually not the answer. The stakeholder that has intensified the dysfunction is the healthcare insurance industry.

I will continue to answer your comment in Dr. Feld. Why Only Pick On The Healthcare Insurance Industry?: Part 2.

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

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John McCain Describes His Health Plan; In Reality A Non Health Plan

Stanley Feld M.D., FACP,MACE

Politicians give me a headache. John McCain revealed his healthcare plan last week. His healthcare plan is just as poor as Hillary Clinton’s and Barach Obama’s. He goes further than President Bush in shifting the healthcare premium payment from the employer to the employee. This action is just what the large corporations want and the employees don’t want.

“Mr. McCain’s health care plan would shift the emphasis from insurance provided by employers to insurance bought by individuals, to foster competition and drive down prices. To do so he is calling for eliminating the tax breaks that currently encourage employers to provide health insurance for their workers, and replacing them with $5,000 tax credits for families to buy their own insurance.”

Five thousand dollars in tax credits will not help people who can not afford the average $12,000 healthcare insurance premiums for a family of four.

Businesses have been trying for years to relieve itself of the obligation to provide healthcare insurance to employees. The defects in the HSA are clear from my last blog entry. HSA’s will do little to Repair The Healthcare System. The healthcare insurance industry still controls and captures the healthcare dollars. It still sets the premiums for healthcare coverage.

Mr. McCain seems to have no idea of the problems in the healthcare system. The government should create new rules to change the incentives of the stakeholders. The rules must create incentives for the consumers and physicians and not be punitive. One hundred and fifty million people presently have some form of healthcare insurance provided by their employers. Nonetheless, those insured employees can not afford the deductible they are required to pay while receiving less coverage at higher costs.

“Mr. McCain had previously described aspects of his health care plan but on Tuesday offered new details on how to cover people with existing health problems, in a nod to the growing concerns about the difficulties that many sick, older and low-income people have getting insurance. ”

Political expediency is the name of the game. It does not matter what the facts are or if the plan will be effective. However, if the facts of any problem are ignored, problems can not be solved. Neither the Democrats nor the Republicans have a clue regarding the problems in the healthcare system. Neither has presented any viable solutions.

“Elizabeth Edwards, the wife of former Senator John Edwards, recently pointed out that both she and Mr. McCain could be left uncovered by Mr. McCain’s plan because she has cancer and he has had melanoma. Stung by such criticism, Mr. McCain is trying to develop a way to cover people with health problems while still taking a generally market-based approach to solving the health care crisis.”

John McCain has the advantage of ignoring the pre-existing illness problem. As a Senator, he is entitled to participate in both Medicare Part C and Medicare Part B without premium penalty for his pre-existing illnesses. Both plans mandate that people with pre-existing illness must be covered at the universal rate.

“I’ll work tirelessly to address the problem,” Mr. McCain said in a speech here at the H. Lee Moffitt Cancer Center & Research Institute. “But I won’t create another entitlement program that Washington will let get out of control. I won’t do it. Nor will I saddle states with another unfunded mandate.”

McCain is pandering to conservatives who see red at the word entitlement. He is also pandering to the healthcare insurance industry and its executives’ multimillion dollar salaries. His plan will preserve the healthcare insurance industry’s dominance over its $150 billion dollar waste.

“For people who currently get health insurance through their jobs, Mr. McCain’s plan would give them a tax credit that they could put toward buying a different, and potentially less expensive, health insurance plan tailored to their needs — and allow them to keep that health plan, and their doctors, even if they switch or lose their jobs.’

These words have no meaning. Presently people with insurance do not have adequate and affordable insurance coverage. Out of pocket expenses increase yearly. People without insurance can not afford the restrictions on the policies they could buy if they were eligible.

“ Mr. McCain’s speech here implicitly acknowledged some of the shortcomings of his free-market approach. But rather than force insurers to stop cherry-picking the healthiest — and least expensive — patients, Mr. McCain proposed that the federal government work with states to cover those who cannot find insurance on the open market. With federal financial assistance, his plan would encourage states to create high-risk pools that would contract with insurers to cover consumers who have been rejected on the open market."

Mr. McCain does not seem to know that high risk pools have been created and are failing. He might have a between the lines agenda in opposition to consumers needs

“Mr. McCain was vague Tuesday about just how his safety net would be structured, and did not specify how much it might cost, leaving the details to negotiations with Congress and the states.”

This is an interesting admission. The reality is he does not have a healthcare plan that will solve any of the healthcare system’s problems.

"Some health care experts question whether those tax credits would offer enough money to pay for new health insurance plans. The average cost of an employer-funded insurance plan is $12,106 for a family, according to the Kaiser Family Foundation, a health policy group. Paul B. Ginsburg, the president of the Center for Studying Health System Change."

Enough said about the McCain healthcare plan. It is a non healthcare plan to the advantage of the secondary stakeholders and to the detriment of patients.

It is clear to me that we can not depend on our presidential candidates for help. We are going to have to organize and demand the necessary reform essential to eliminate the dysfunction in the healthcare system.

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

  • Patrick

    Coming up with a good healthcare system is not brain surgery. For starters, we could just copy Singapore’s system exactly ( ) They have a longer life expectancy at 1/3 the per person cost.
    The real question is not how to fix healthcare. The real question is to figure out why our political systems gives us systematically poor results, and then fix the political system.

  • Scott Dalferes

    Right on. Thanks for the well thought out post.

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The Health Insurance Mafia

Stanley Feld M.D.,FACP,MACE

Jonathan Kellerman is an M.D.. He is telling it like it is even though no one asked. His story is clear. I believe many physicians understand the problems in the healthcare system more clearly than most of our politicians. I also believe it is our obligation to describe to consumers the real problems and dismiss political babble.

However, when physicians are in positions that represent many physicians they themselves become politicians and abandon the purpose of the medical care system which is to put patient care first. For some reason physicians do not articulate the problems of every day medical practice.

“Most discussions about the rising cost of health care emphasize the need to get more people insured. The assumption seems to be that insurance – rather than the service delivered by doctor to patient – is the important commodity.”

The healthcare insurance industry has kept the discussion focused on insurance and not on the patient physician relationships and services delivered by physicians to their patients, namely cognitive services. It also does not focus on the patients adherence to the recommended treatment and the exploding obesity epidemic.

“You don’t need to be an economist to understand that any middleman interposed between seller and buyer raises the price of a given service or product. Some intermediaries justify this by providing benefits, such as salesmanship, advertising or transport. Others offer physical facilities, such as warehouses. A third group, organized crime, utilizes fear and intimidation to muscle its way into the provider-consumer chain, raking in hefty profits and bloating cost, without providing any benefit at all.”

The healthcare insurance industry is the middleman that controls the healthcare system. The government through Medicare depends on the healthcare insurance industry to be the third party administrator for Medicare. The healthcare insurance industry sets the prices and the benefits using a unscientific social science called actuarial science.

“The health insurance model is closest to the parasitic relationship imposed by the Mafia and the like. Insurance companies provide nothing other than an ambiguous, shifty notion of “protection.

In order to control the healthcare system the healthcare insurance industry has managed to control the process of authorized treatment and reimbursement.”

“ But even the Mafia doesn’t stick its nose into the process; once the monthly skim is set, Don Whoever stays out of the picture, but for occasional “cost of doing business” increases. When insurance companies insinuate themselves into the system, their first step is figuring out how to increase the skim by harming the people they are allegedly protecting through reduced service.”

Insurance is all about betting against negative consequences; the insurance business model is unique in that profits depend upon goods and services not being provided. Using actuarial tables, insurers place their bets. However actuarial science is not an exact science. Therefore, to be safe a percentage is added to the potential pricing error guaranteeing an increase in profit.

“Health insurers have taken steps to avoid that level of surprise: Once they affix themselves to the host – in this case dual hosts, both doctor and patient – they systematically suck the lifeblood out of the supply chain with obstructive strategies. For that reason, the consequences of any insurance-based health-care model, be it privately run, or a government entitlement, are painfully easy to predict.”

Jonathan Kellerman nailed it. It is not about the patient, society’s health or the value of physicians’ intellectual property, it is about the healthcare insurance industry’s profit.

” There will be progressively draconian rationing using denial of authorization and steadily rising co-payments on the patient end; massive paperwork and other bureaucratic hurdles, and steadily diminishing fee-recovery on the doctor end.”

The result is obviously more profit for the healthcare insurance industry and more out of pocket expenses for patients.

In the olden days: “ The doctor had to look you in the eye – and didn’t need to share a rising chunk of his profits with an insurer – the cost was likely to be reasonable. The same went for hospitals: no $20 aspirins due to insurance-company delay tactics and other shenanigans. Few physicians became millionaires, but they lived comfortably, took responsibility for their own business model, and enjoyed their work more.”

The idea is to get the dollar out of the hands of the healthcare insurance industry and let the patient manage his own money and keep the money he does not spend in a trust.

Healthcare insurance must be converted to true insurance that is needed for expensive procedures.

Both physicians and patients need to be active in liberating themselves from the notion that insurance will pay. The healthcare insurance industry has figured out how to control the premiums and the reimbursement. They have now figured out how to neutralize the innovative concept of patient control of the healthcare dollars with Medical Savings Account and converted them to Health Savings Accounts with healthcare insurance industry control.

“Physicians and other providers need to liberate themselves from the Faustian bargain they’ve cut with the Mephistophelian suits whom now run their professional lives. Because many doctors are loath to talk about money, they allowed themselves to perpetuate the fantasy that “insurance is paying.” It isn’t. There is no free lunch and no free physical exam.”

One solution is for physicians and patients to abandon the traditional healthcare insurance grip.

Government (local,state or national) or employer associations (third party payers) set up their own healthcare insurance companies. They set rules in favor of the patient with the patient having control over their first six thousand dollars. The patient does not contribute the first 6,000 dollars. One of the third party payers contributes the insurance premium. Self employed people would contribute their own money with pre-tax dollars. If they could not afford the premium, they would be subsidized by the government. This is not an entitlement. This is pure insurance with motivation to save money.

I wonder how many politicians would be willing to past legislation to permit this to happen. It could easily be done on a state level. Consumer would then be able to control the system. We would be able to get rid of what Dr. Kellerman calls the Healthcare Insurance Mafia.

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

  • QuoteFL

    First of all, I love your mafia take as it is dead on! I am in favor of deductable assistance, or government subsidies for high risk individuals that need it the most. Another thing to point out is that unfortuntely in the US, insurance (especially health & life) is considered a luxury and many young people and working middle class with a choice of where to spend there money are opting for toys and entertainment rather than planning ahead. Hopefully that will change in the future. Great post and resource links…I’m your newest fan. Bookmarked!

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The Insured Are Feeling The Strain of Health Costs : Part 2

Stanley Feld M.D.,FACP,MACE

I could never understand why my understanding of the original Medical Savings Accounts presented by John Goodman in 1994 slowly got changed to a Health Savings Accountsounding the same but using a different formula for payment and savings.

Many consulting firms worked hard to change the structure of the original Medical Savings Account to the structure of the Health Savings Account. They also convinced congress to pass a bill permitting the structure of the HSA instead of the MSA.

To my amazement, Mr. Nussbaum Director, Group and Healthcare, North America, Watson Wyatt Worldwide explained the reason for the change clearly, saying it is unlikely that significant numbers of employers will simply drop coverage for their workers.

The weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits. Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses.” 04insure.html?_r=3&th&emc=th&oref=slogin&oref=slogin&oref=slogin

Mr. Nussbaum dismisses Health Savings Accounts out of hand as a way that forces consumers to pay for their healthcare insurance.
I believe the consulting firms figured out a way for the healthcare insurance industry to remain in control of the healthcare system and relieve the employer of the responsibility of paying for the healthcare insurance needs of their employees.

“And while these plans often allow employees to put pre-tax savings into special health care accounts, they typically end up forcing the worker to assume a bigger share of overall medical costs. About six million people are now enrolled in these medical plans.”

The director of a major health benefits organization (Watson-Wyatt) revealed the subtext purpose of the Health Savings Accounts. These plans seem to be evolving into plans that take the burden of payment out of the employers’ hands and into the employees’ hands with the control of the money remaining in the healthcare insurance industry’s hands. That was a neat trick. It will probably do little to Repair the Healthcare System.

The Consumer Driven Healthcare movement is an exciting movement to me because it promises to put consumers in control of their healthcare dollar and not the healthcare insurance industry.

Politics and powerful stakeholders’ agenda always seem to contaminate solutions to problems in order to protect its vested interest. The healthcare insurance industry has done and is doing just that to the consumer driven healthcare movement. I believe its goal is to destroy the consumer driven healthcare movement. The healthcare insurance industry has not been pushing HSA’s . because, I suspect because the net profit is less than traditional plans.

Health Savings Accounts do not motivate patients to save money. The healthcare insurance industry still controls the premium rates, and designs the patients’ deductibles and co-pays. The healthcare insurance industry can manipulate deductibles and deplete the HSA. If there is less money in the HSA out of pocket expenses will be higher.

The original concept of consumer driven health care was to provide the consumer with the purchasing power to control the costs of healthcare. Most other consumer driven purchases such as automobiles, computers, houses, and food control the costs using purchasing power and forcing providers to compete.

Wal-Mart and Target are really consumer extenders that drive down the costs to consumers utilizing their companies’ purchasing power. The purchase remains the consumers’ choice.

The original Medical Saving Account and my Ideal Medical Saving Account
accomplish the same using Patient Power. in a consumer driven healthcare model.

In the process it eliminates much of the non transparent 150 billion dollar skimming off the top of the healthcare insurance industry for “expenses”.. It also eliminates the control the healthcare insurance industry has on the consumer. The consumer has control over the first $6,000 and pays the first $6,000 of services. Anything he does not spend goes into his retirement fund. The money is out of play for the insurance company of other vendors.

If the consumer spends the $6,000 appropriately he gets first dollar coverage without deductibles. The consumer is by true insurance for risk. If he has a chronic disease and it is determined that certain amount of money would have to be spent to avoid complications of that disease he should be eligible for a bonus since he has saved the system a great deal of money. This is an example of the incentive I have described previously. As an example a Type 2 Diabetic should spend $4500 a year to prevent complications of his disease. If he does he keeps the remaining $1500 and gets a $2250 reward totaling $3750. This is the financial reward for losing weight, exercising, maintaining a normal blood sugar and functioning in the work place at a high level.

Healthcare insurance should be available to everyone regardless of pre-existing illness. It should be paid with pre-tax dollars regardless of the payer. It should be community rated and not individually rated.
Who pays for the premium? It could employer, the government with subsides, or the patient himself. All would pay with pre-tax dollars. All consumers would be automatically eligible without penalty. Monies not spent or monies for performance would accrue in a tax free retirement account until withdrawn.
Medicare and Medicaid entitlement programs would be eliminated. The government could get out of the way after making the rules and providing effective subsidy programs. The government would guarantee and enforce the requirements for real price transparency from insurance carriers, hospitals, physicians and drug companies.

The New York Times article simply confuses the issue. It does not clarifying anything. It presents war stories that we have no way to cure.

Let us stop complaining. Let us start demanding positive constructive action from our local, state, and national government.

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

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The Insured Are Feeling The Strain of Health Costs : Part 1

Stanley Feld M.D.,FACP,MACE

The United States economy is slowing down. Many employers provide healthcare coverage to their employees. As healthcare premiums rise employers are providing less coverage than previously in order to reduce their costs for providing the healthcare coverage. Employees are beginning to realize their healthcare insurance is not very inclusive and their out of pocket costs are high. In fact, many the out of pocket expenses are unaffordable. The result is a tendency to not seek necessary medical care. The avoidance of medical care leads to more serious and costly illness.

I have warned my readers about this problem earlier. I have received comments such as “The cost of healthcare does not concern me. I have a very good healthcare insurance policy through my employer. The inability to obtain healthcare insurance is the other guys’ problem and not mine.”

The other guys’ problem eventually becomes your problem either through higher taxes or other burdens on society. Individuals with healthcare insurance can not assume they have adequate coverage. The inadequate healthcare coverage is discovered when they become ill.

A basic economic fact is consumer spending defines the market place. Consumer spending also defines the economic well being of our society. An informed consumer can make or break a business. In Dallas, the new concept restaurant capital of the world, we see this market phenomenon daily. This week’s hot restaurant is next week’s dud because the consumer does not show up.

The economic slowdown has swelled the ranks of people without health insurance. But now it is also threatening millions of people who have insurance but find that the coverage is too limited or that they cannot afford their own share of medical costs.”

Many of the 158 million people covered by employer health insurance are struggling to meet medical expenses that are much higher than they used to be — often because of some combination of higher premiums, less extensive coverage, and bigger out-of-pocket deductibles and co-payments.
Our presidential candidates provide sound bite babble in the “so called” healthcare debate. The “debate” has nothing to do with the solution to our healthcare problems. Some politicians claim people are too dumb to take care of themselves. They claim the government needs to provide single party payer system for citizens healthcare needs.

The government is having a difficult time providing insurance for our senior citizens through Medicare. In fact Medicare is scheduled to be bankrupt before 2020. I cannot imagine how the government will insure the entire population.

The government should be figuring out rules that level the playing field for all stakeholders. All the stakeholders vest interests must be aligned. The basic principle should be the patient is first.

REED ABELSON and MILT FREUDENHEIM of the New York Times listed examples of the increased burden to consumers as healthcare premiums increase. The article does not present solutions. It simply confuses the consumer and intensifies the consumer feelings of impotence toward fixing the healthcare system.

Alan Shimel’s blog makes the problem clear from a consumer’s and executive decision maker’s point of view.

“My wife had minor surgery in September. It was ambulatory surgery where she went in the morning and went home that afternoon/evening. Even though we have full PPO coverage and it was participating doctors, hospital, etc. my out-of-pocket costs after insurance were almost $3000! The surgeon received a whopping $472 from the insurance company for the operation and the hospital billed like 17k! When I called the hospital they said they did not expect to get paid that much, but had to bill it so they could get as much as they could. I than had to negotiate what I would pay out of pocket beyond that. I also had to pay the anesthesia, the prescriptions, etc”.

The main issue in the healthcare debate is perfectly described in Alan Shimel’s next paragraph.

Here at StillSecure we had to switch providers again this year because United Health Care wanted another 15 to 20% raise in premiums. In fact that is about normal for health insurance, way above the cost of living and inflation. We pay a good chunk of our employees’ insurance premiums, but even so the 20% or so that we have the employee pick up gets bigger and bigger. Plus the insurance company covers less and less. This squeeze is frankly baffling. How can you pay more and get less.”

The problem is understood easily. The healthcare insurance industry is determining the premium as well as the access to care. The higher the premiums and the greater the restrictions on medical services the higher the healthcare insurance industry’s profit.

In the last few years employers have tried to get out of the business of providing healthcare to employees.
To my amazement, Mr. Nussbaum Director, Group and Healthcare, North America, Watson Wyatt Worldwide and other consultants say it is unlikely that significant numbers of employers will simply drop coverage for their workers.

“The weak economy could prompt more of them to push for so-called consumer-driven plans. Such plans tend to offset lower premiums with higher annual deductibles. And when a weak economy undermines job security, he said, workers may simply have to accept reduced benefits. Even so, more companies may see themselves as having little choice but to require employees to pay even more of their health expenses.”

Mr. Nussbaum dismisses Health Savings Accounts out of hand as a way to force the consumer to pay for their healthcare insurance.

It now becomes clear why many healthcare policy consultants for the healthcare insurance industry have bastardized the original Medical Savings Account and morphed it into the Health Savings Account. It looks like another example of telling the consumer you are providing something good but perhaps in reality providing an advantage to the healthcare insurance industry and the employers but providing something bad for the consumer.

I will discuss this point in greater detail next time.

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

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Is The Healthcare System Too Complicated To Fix? My Answer Is No!!

Stanley Feld M.D.,FACP,MACE

Many feel the healthcare system is so complex and dysfunctional that it is going to be impossible to repair. I have faith in the American system and the American people. I believe people are going to stand up soon and say enough is enough. We are going to force the government to help us help ourselves.

Winston Churchill said “You can always count on Americans to do the right thing – after they’ve tried everything else.”

I also believe American public is getting close to the point of demanding our elected officials make the correct rules to let us help ourselves.

Freedom of speech and freedom of the press has helped us solve many problems we have encountered in the history of America. The freedom to be creative and innovative drives us forward despite the complexity of any issue.

In healthcare we have all the technology and infrastructure necessary to do it right. I believe the internet and social networking will create the infrastructure for creating a competitive environment among the various secondary stakeholders.

Stakeholder vested interests naturally try to protect their products and services often to the determent of the general good. I am not criticizing the pursuit of a stakeholders’ vested interest. .

However, I am criticizing our elected officials’ resistance to make rules that will align everyone’s vested interest.

If a product or service is out of touch with the needs of the people it must not be permitted to survive. Obsolete companies have remade themselves with new products in order to survive. Companies not adjusting to the changing consumer demand simply must be permitted to disappear.

The healthcare system has many challenges. Eighteen percent of our gross national product (GNP) is spent in healthcare. Each year this percentage increases. Despite the increase in healthcare expenditures, access to physicians’ services is decreasing. Physician reimbursement is also decreasing.

Where is all of the money going if not to the physicians? Why do patients feel they are not receiving timely and appropriate care? Why is there an ever increasing shortage of primary care physicians while medical schools are producing more physicians yearly?

I have covered the answers to these questions previously. However, the politicians and the stakeholders in the healthcare system have not made any progress toward an answer to these questions or a solution to the problems. The problems of increasing cost, decreased access, affordable care, and avoidance of the complications of chronic disease have not been addressed in any logical way by any of our presidential candidates or candidates running for other offices.

Why? The solution to the Repair of the Healthcare System for each stakeholder varies with the differences in each stakeholder’s vested interest.

The primary stakeholders (patients and physicians) should be in control of the healthcare system. Patients should be responsible for their own care and their own healthcare dollar. Consumers should be subsided if they qualify for subsidy. The criteria for qualifying for subsidy must be clear and realistic.

Consumers with “adequate” healthcare insurance are not motivated to change behavior. Obesity, alcohol intake, and lack of exercise are increasing daily. Obesity is a major risk factor in precipitating chronic disease. The complications of chronic diseases are responsible for the expenditures of 90% of the healthcare dollars spent. This culture must be changed to make progress.

America food industries in pursuit of their vested interest do little to help fight the obesity epidemic. (See War on Obesity Part 1-7) The Fast food industry has not done anything to decrease the incidence of obesity. They have offered not so low calorie “salads” as a loss leader in order to look good in the eyes of the consumer. Cheap fast food containing an abundance of salt and fat contribute to the obesity epidemic and the high incidence of hypertension and diabetes mellitus.

Restaurants at all level serve large high calorie portions in order to raise prices while giving customers their money worth. When a company (TGI Fridays) tries to reduce the size of the portion while decreasing the price their volume of sales decreases.

The media has no interest in a public service campaign to discourage obesity. In having a successful public serviced campaign the media would lose a large share of their advertising revenue. The “open 24 hours” campaigns and the 99 cent meals are large revenue generators for the media. Two for the price of one fast food offers by all companies is endless.

The Supermarket industry is not interested in my War on Obesity because the “taste” of fatty food loaded with salt and sugar “taste” better than the non fat non salt non sugar food. Next time in the Supermarket notice the shelf space for cookies, soda pop, prepared foods and other fattening items.

The prepared foods in Supermarkets are not as healthy as advertised. They are convenient by loaded with fat and calories.

As a society, we have fallen for the organic food hype. The food costs a little more but it is healthy for you. Who said? Much organic food is loaded with calories and salt and promotes obesity.

National physicians’ organizations ( AMA,AAFP,ACP ect) have not helped its physician members’ help their patients stay healthy. Organized medicine has a terrific opportunity to step up and promote good health, fitness, and healthy habits community to community in a serious way. I’ll bet organized medicine could get physician volunteers from every community with a well organized and integrated public relations program. It would have to be sustained and awareness would have to be created at the political level, the social level, the educational level, and the corporate level to create the cultural change needed in society.

The environmental organizations are doing it and are becoming successful. Much of Corporate America wants to be known as a “Green Company” today in order to win the favor of the consumer.

Why hasn’t organized medicine stepped up to the plate? I know it could cite initiatives but how many have been transformational? Physicians want to keep their patients healthy. Organized medicine should help physicians with public service campaigns incorporating the grass roots physicians in order to change the culture of America’s health habits and health.

It would be a wonderful service for patients and physicians. It would also go a long way to reducing the costs of the healthcare system by reducing the incidence of chronic diseases and its complications.

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

  • Jennifer

    Great blog. I really like your perspective. Curious what you think of patient advocacy groups? Are they helpful? Are for-profit groups viable or is it better offered through non-profits?

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Why Bother?

Stanley Feld M.D.,FACP,MACE

MICHAEL POLLAN wrote an inspiring article about climate change in the April 20, 2008 issue of the New York Times Magazine section.

I have substituted the word healthcare system in my minds eye every time he mentioned climate change. Mr. Pollan is describing exactly what has to be done for the healthcare. His major point is every individual has to get involved. The individual has to be aware of the issues and then act in his self interest and do his small part. The parts will add up to the necessary change.

Why bother? That really is the big question facing us as individuals hoping to do something about climate change, (healthcare) and it’s not an easy one to answer.

Al Gore’s “Inconvenient Truth” is scary, if true. Let us assume global warming is true for this argument. Al Gore’s suggestion to me as an individual seemed bizarre. I am happy to say it was also depressing to Michael Pollan, a person I admire.

“ No, the really dark moment came during the closing credits of Inconvenient Truth, when we are asked to change our light bulbs. That’s when it got really depressing. The immense disproportion between the magnitude of the problem Gore had described and the puniness of what he was asking us to do about it was enough to sink your heart.”

In thinking about it in terms of healthcare and general behavior we as individuals can make a big difference. People are social beings. They need other people. If we can create a trend we can make a difference even if others choose not to follow.

“ But the drop-in-the-bucket issue is not the only problem lurking behind the “why bother” question. Let’s say I do bother, big time. I turn my life upside-down, start biking to work, plant a big garden, turn down the thermostat so low I need sweater, forsake the clothes dryer for a laundry line across the yard, trade in the station wagon for a hybrid, get off the beef, go completely local (with my food purchases).”

If no one else did the same the only impact you would have is for yourself and your self interest. You would save money and improve you wellness. I was terrified to read about tilapia fish farms in Indonesia. How can we allow our government to allow its import? We have no idea of the conditions in Chilean fish farm where “Chilean Sea Bass” comes from. Restaurants make Chilean Bass sound romantic, sexy and expensive. However the details of these fish harvests are chilling.

If we the people change and do little things to improve our health the payback is beyond personal virtue. If everyone does the same the change in society will be enormous.

“ A sense of personal virtue, you might suggest, somewhat sheepishly. But what good is that when virtue itself is quickly becoming a term of derision? There are so many stories we can tell ourselves to justify doing nothing, but perhaps the most insidious is that, whatever we do manage to do, it will be too little too late.”

This is nonsense as science is beginning to show us. Nonetheless, we tell ourselves all kinds of stories to justify our weight, our food intake and our lack of exercise. We can make a difference in our health and healthcare cost if we are determined to change our behavior. Small changes in society’s trend setting can help change behavior for the better.

“ So do you still want to talk about planting your own gardens? I do. Yet it is no less accurate or hardheaded to say that laws and money cannot do enough, either; that it will also take profound changes in the way we live.”

We have seen money and laws cater to vested interests and not societal interests as they should. Individual actions add up. The most profitable center in a hospital is the Bariatric Surgery Center. Hospitals are reformatting themselves to all have Bariatric Centers. They would go out of business if we conquered obesity. This victory can only happen on an individual basis.

“Whatever we can do as individuals to change the way we live at this suddenly very late date does seem utterly inadequate to the challenge.”

So why bother? We should bother because we have a responsibility to ourselves and our children and grandchildren. We have a responsibility to repair the healthcare system before the ability to deliver the greatest healthcare on the planet implodes. We, the people, have to drive the change and make the politicians respond. Politicians are responding to the secondary vested interests.

“ The Big Problem is nothing more or less than the sum total of countless little everyday choices, most of them made by us (consumer spending represents 70 percent of our economy), and most of the rest of them made in the name of our needs and desires and preferences.”

This is the reason we need to own our healthcare dollar. We have to be motivated to drive the change.

“For us to wait for legislation or technology to solve the problem of how we’re living our lives suggests we’re not really serious about changing — something our politicians cannot fail to notice. They will not move until we do. Indeed, to look to leaders and experts, to laws and money and grand schemes, to save us from our predicament represents precisely the sort of thinking — passive, delegated, and dependent for solutions on specialists — that helped get us into this mess in the first place. It’s hard to believe that the same sort of thinking could now get us out of it.”

Michael Pollan hit the nail on the head. Whether it is climate change or healthcare we need to be responsible to ourselves. The inspiration lies in his next example.

“Sometimes you have to act as if acting will make a difference, even when you can’t prove that it will. That, after all, was precisely what happened in Communist Czechoslovakia and Poland, when a handful of individuals like Vaclav Havel and Adam Michnik resolved that they would simply conduct their lives “as if” they lived in a free society. That improbable bet created a tiny space of liberty that, in time, expanded to take in, and then help take down, the whole of the Eastern bloc.”

We have a government for the people by the people. We have tremendous power to influence our government. Our health is our most important asset. It is our responsibility to demand the infrastructure to help us maintain our health.

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

  • Dave Greenstein

    The Dalai Lama relayed a quote to me once that resonated and I’ve lived by ever since “be what you want the world to be”. I’m not even buddhist 😉

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