Stanley Feld M.D.,FACP,MACE

A huge problem in the healthcare system is mistrust between all the stakeholders. Medicare Part D is one example of abuse to consumers by the healthcare insurance industry and the government.

Physicians mistrust the government and healthcare insurance industry because of delayed Medicare reimbursements. The government outsources administrative services for Medicare claims to the healthcare insurance industry. The government pays these companies for claims processing.

The government states that Medicare overhead is only 2%. The healthcare insurance industry has published an overhead of 15%. Does this mean the healthcare insurance industry overhead without a surcharge is passed on to Medicare? In that case Medicare’s total overhead would be 17%. My guess is Medicare’s total overhead is closer to 20% including an added surcharge.

The vendor for Medicare (the healthcare insurance industry)  in California, Nevada and Hawaii is holding back physician reimbursement. In the late 1980 physicians were promised they would be reimbursed within 10 days by Medicare if they electronically billed. The billing software was provided free of charge and installed by the vendor. Now in California, Nevada and Hawaii there is an unpaid claims backlog of up to nine months.

“Doctors across California and in two other Western states are owed millions of dollars in backlogged Medicare reimbursements, leading some physicians to turn away elderly patients and pushing others to the brink of bankruptcy.”

How did this happen? The problem has resulted in a California Medical Association law suit. Law suits only add to the cost of medical care as well as an increase in mistrust.

California is not the only state in which this has happened. It has happened to many physicians in Texas also. I suspect the delay in reimbursement is happening in many other states as the administrative service providers (vendors) try to hold on to the float of the cash as long as possible.

“In the most extreme cases, doctors have not been paid since February. Others are owed hundreds of thousands of dollars. Doctors who serve high numbers of Medicare patients say they are defaulting on rent, laying off staff and begging drug suppliers not to stop shipments. One cardiologist said she’s even resorted to doing the office laundry to cut costs.

“Economic stress leads to mistrust.” This should not be happening as everyone should be working together to repair the healthcare system

“Medicare owes Dr. Tim Ganey and his Bay Area practice of oncologists $750,000 in outstanding claims. He sought grace periods from vendors for his drug payments, but now he’s running out of time. He won’t be able to order more chemotherapy treatments unless he pays his bill.
“The things that we’re dealing with, they’re not elective things,” Ganey said. “They’re pertinent to people either fighting their cancer or being cured of their cancer.”

Physicians are always given excuses when Medicare or Private insurance misdeeds are highlighted. There are two excuses published in this case of delayed reimbursement.

“The holdup is twofold. By May, doctors were supposed to be using a new universal identification number assigned by the Centers for Medicare and Medicaid Services. Without the new number, which is like a Social Security number, doctors can’t get reimbursed. Scores of doctors still waited for those numbers.”

Most physicians are using the new physician identifier (NPI). There was a long delay by the government in setting a deadline for its use because of delays in physicians applying for it . Now most states will not renew physicians’ medical licenses without an NPI. A NPI can be obtained instantly on a government web site. I suspect this point is an excuse.

The second excused presented;

“In September the federal agency switched to a new claim processor for its 90,000 California providers. The move to Palmetto GBA in South Carolina, part of a national effort to reform Medicare contractors, compounded the billing issues and left even doctors who had their universal identification numbers waiting months for reimbursement.”

This does not make sense. If the government was moving to a better administrative service organization (healthcare insurance company DBA ASO) why is this ASO worse than the old one?

“This is just a complete disaster,” said Dr. Dev Gnanadev, medical director and chairman of the Department of Surgery at Arrowhead Regional Medical Center in Colton and president of the California Medical Assn.”

“Rep. Henry Waxman (D-Beverly Hills), whose office was contacted by at least two dozen doctors, called the transition to the new contractor “marred by missteps.””

Nevada has the fastest-growing Medicare population in the nation and physicians there are having the same problem with Palmetto.

“If we’re still dealing with this in January or February, Medicare patients are going to have serious access problems,” said Larry Mathies, executive director of the Nevada State Medical Assn.”

I am sorry. Excuses do not work any more. If the previous vendor was insufficient, why hire a vendor that almost paralyzes the medical profession’s ability to deliver care.

President elect Obama, beware of what your goal is with your national insurance exchange and your plan to expand Medicare Part C in its present form. The healthcare insurance industry is going to be your administrative service provider and the costs of healthcare will continue to escalate. They will control consumers healthcare dollars that the government will be providing and abuse your physician workforce.

It is much wiser to let consumers administer the first $6,000 of the healthcare dollar needed for a family of four and provide real healthcare insurance with the second $6,000 while creating incentives and education in order for consumers to be wise and fugal consumers. Any government subsidies for healthcare system with this design will be money well spent and reduce the cost of healthcare.

Stanley Feld M.D.,FACP,MACE

In my first letter I said repairing the healthcare system was simple. I pointed out the problems in our industrialized food system and its impact on the environment, our energy dependence and our healthcare systems’ costs. The industrial food industry contributes at least 300 billion dollars in increased cost to the healthcare system.

A healthcare cost saving of at least $150 billion dollars could occur if the complications of chronic disease could be decreased by 50%. The practices of chronic disease management using prevention of disease and evidence based medicine makes this promise possible.

The problems in the healthcare system are great. The initial question is who is at fault. All the stakeholders are at fault. The stakeholders are the healthcare insurance industry, the government, the hospital systems, the physicians and most importantly, the patients.

The primary stakeholders are patients with physicians a close second. Without patients or physicians we would not have a healthcare system. Healthcare insurance companies, the government, and hospitals are secondary stakeholders.

The healthcare insurance industry has turned out to be the biggest villain. It has taken advantage of the dysfunction of the government and weakness of patients and physicians as lobbying groups. The control of power in healthcare is in the hands of the healthcare insurance industry. The rules and regulations must be changed so that patients gain control of the healthcare system.

The healthcare insurance industry has abused this power. It has manipulated congress and the administration to serve its own vested interest.

The result is grotesque salaries for executives and excess administrative fees. Our healthcare system is supposed to be for the benefit of the consumers (patients), not for the benefit of the healthcare insurance industry.

The healthcare industry has restricted access to care and has made interpretation of payment for care impossible. It has decreased physicians’ reimbursement and withheld payments for services rendered without explanation or justification.

The government outsources the administration of Medicare and Medicaid to the healthcare insurance industry. The government calls them vendors. There are many examples of healthcare insurance industry abuse of the healthcare system. Medicare Part D fees for 2009 have just been published with the consent of the government. These new fees are abusive to seniors. It is difficult to understand the government regulators reasoning.

Seniors on fixed incomes need a reliable drug coverage plan. The healthcare insurance industry worked for four years to figure out a system that would be to its advantage and not the seniors’ advantage.

The government subsidizes Medicare Part D. Yet the government does not have the right to negotiate drug prices. I have exposed the abuses of Medicare Part D in detail. The abuses stem from the high deductibles and a doughnut hole that does not cover drug costs after a certain amount is spent by seniors for drugs.

Humana and United Healthcare rushed to insure for Part D because they visualized the money making opportunity quicker than most. Both companies also realized that as healthcare insurance premiums increased in the private sector there would be more uninsured consumers. The less lives covered the lower its profit. Therefore a drug plan leveraged in their favor sponsored by the government would cover the decrease in profit in the private sector.

United Healthcare paid AARP over 4 billion dollars to be their exclusive carrier for AARP senior members. There is no shortage of complaining from AARP’s seniors. The payment for sponsorship has not been fully disclosed nor it’s ethics been investigated.

UnitedHealthcare made a profit of $4.7 billion dollars last year from Medicare Part D at patients’ and the government expense. Despite this profit the monthly fee has increased over the last three years from $15 to $27 and in 2009 to $38 a month with the government’s permission.

UnitedHealthcare convinced government regulators they needed a premium increase in order to cover a shortfall. UnitedHealthcare compromised by changing the drug benefit before hitting the doughnut from $2300 to $2700 and lowering the amount you have to spend getting out of the doughnut from $5200 to $4700.

A careful analysis of the math is in favor of the healthcare insurance companies. Seniors have flocked to Wal-Mart and others to buy $4.00 per month generics paying cash and not using Medicare Part D “insurance”. They are paying cash for rather than putting their prescriptions on their Medicare Part D plan. If they put the prescription on Medicare Part D their co-pay would be $6.00 for a month’s supply of medication rather than $4.00 to Wal-Mart. The prescription could be charged between $20 and $50 toward the doughnut even though the healthcare insurance company probably only paid Wal-Mart $4.00. None of these prices are transparent.

President-elect Obama, the problems with Medicare Part D would be a good place to start to understand the abuse of this non transparent system. Similar abuses occur with government outsourcing Medicare Part A and B and probably government employee benefit Part C.

This is a tremendous waste of government and consumer resources for the benefit of the healthcare insurance industry. Real price transparency is essential if you are going to make any progress in reducing the cost of the healthcare system.

Real price transparency in this case means: What is the cost of the drug to the pharmacy? What is the cost of the drug to the healthcare insurance company? How is the price of the drug calculated toward the doughnut? How does the government subsidize the healthcare insurance companies for administration of the program? What would be a reasonable profit for the healthcare insurance industry?

I suggest before your administration gets busy penalizing patients with decreased access to care and physicians with decreased reimbursement, your healthcare advisors should dig deeply into the abuses of the real villain in the healthcare system, the healthcare insurance industry.

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

Stanley Feld M.D.,FACP,MACE

Our healthcare system is a mess. Medicare and social security in its present form will result in a 100 trillion dollar a year deficit in 75 years. The solution to Repairing the Healthcare System is relatively simple. The key to the solution is social responsibility by all stakeholders involved in the healthcare system and individual responsibility by the consumers and potential consumers of healthcare.

Unfortunately, stakeholders will not voluntarily be socially responsible and the consumer will assume responsibility only with significant education and incentives. The goal of remaining healthy is subverted advertising of the food industry. The food industry’s advertising has to be redirected to consumer education and not consumer self destruction.

Over the past 2^1/2 years I have analyzed the problems in the healthcare system and presented the solutions to the problems in my blog “Repairing the Healthcare System”. I will review highlights of the problems and the solutions. I have provided links for you to study.

You have promised you will govern for the benefit of people with input from the people and not special interests. I hope this is true.

You will not be able to make the appropriate decisions without appropriate input. I hope my review will come before you. I am asking my readers to help get it before you.

Unfortunately no one asked for the opinion of practicing physicians. The focus of all healthcare policy “experts” is economics.

The problems with the healthcare system are broader than economics. The problems are problems that results from the interrelationship of other societal problems.

Eighty per cent of the healthcare dollars are spent on the complications of chronic diseases. The eighty percent cost to the healthcare system is one trillion six hundred million dollars a year.

You are correct when you say you want to prevent chronic diseases. This is harder than it sounds because chronic disease management is not done as an extension of a physician’s care.

Several chronic diseases such as diabetes mellitus and heart disease are mostly a direct result of obesity. The obesity epidemic is interconnected with our energy policy and energy subsidies, farm policies and subsidies, environmental policy and conditioned attitudes toward fast food.

Obesity leads to Type 2 Diabetes Mellitus. Walk into any Coronary Care Unit in the nation and 80% of the patients with myocardial infarctions are obese and have diabetes mellitus. The complications of Diabetes Mellitus cost the healthcare system 160 billion dollars a year. Eliminating obesity will reduce that incidence of diabetes mellitus by at least 50%. Cheap manufactured food subsided by the government consumes 19% of the fossil fuel we use and results in more that 75% of the obesity in this country.

Michael Pollan points out the problem with or entire food supply system and the impact it has on healthcare, the environment and energy.

“Which brings me to the deeper reason you will need not simply to address food prices but to make the reform of the entire food system one of the highest priorities of your administration: unless you do, you will not be able to make significant progress on the health care crisis, energy independence or climate change.”

The three problems your presidency has inherited are tightly connected. The repair of each problem has to must be done in a creative way that aligns all the stakeholders incentive with consumers and their health and wellness being the major stakeholder.

Pollen goes on to say “Unlike food, these are issues you did campaign on — but as you try to address them you will quickly discover that the way we currently grow, process and eat food in America goes to the heart of all three problems and will have to change if we hope to solve them.

Mr. Pollan’s point is the way we grow food and manufacture food stuff is a major reason for obesity and pollution leading to the complications of chronic disease. This results in a 1.6 trillion dollar cost to the healthcare system. It is also major reason for our energy dependence and climate change. All America needs is the will to change. The science is available.

It is going to require a lot of public and congressional education. Congress will be harder to educate than the public because congress is driven by vested interest lobbying. You must help the public create a greater voice than the special interests. The public will then lobby the congress.

Michael Pollan says “the 20th-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food. Put another way, when we eat from the industrial-food system, we are eating oil and spewing greenhouse gases. “

Michael Pollan's is a brilliant interpreter of farm policy. He should have significant input in your administration. He should perhaps be nominated for Secretary of Agriculture.

Thomas Friedman should be read carefully. He could provide input into determining the resources need to create the paradigm shift necessary to cure the underlying problems of our environment.

America’s coal resource is abundant and cheap. America’s energy companies would love to expand coal burning plants. Beware of the promise of clean coal burning plants. Dirty coal burning plants result in environmental pollution with soot, sulfur dioxide, mercury and nitrous oxides. The carbon dioxide footprint is currently not required to be measured. The Environmental Protection Agency does not have a CO₂ emission restriction policy in place. Without counting the harmful long term effects of CO₂ emissions on climate change, coal burning plants presently result in the chronic disease complications of asthma and chronic obstructive lung disease. These diseases result in a one hundred billion dollar a year cost to the healthcare system. These diseases and their complications can be reduced by at least 50% with an effective clean air policy.

My review letter to you is longer than I anticipated. You have very hard decisions to make but if your intent is to be transformational these decisions will be necessary.

The reformatting of the payment system for physicians is not going to accomplish anything but dispirit the medical profession and diminish the effectiveness of a necessary workforce. Physicians are not the villain. I will review who the real villain/villains are.

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