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Healthcare Insurers Get The Upper Hand



Stanley Feld M.D.,FACP,MACE

The healthcare debate is becoming more confusing daily. President Obama has promised change. Fifty-three percent of Americans voted for change. We are not going to get change. It turns out President Obama represents status quo except at a greater expense to the taxpayer.

The healthcare insurance industry controls the healthcare dollars across all insurance lines. These insurance lines are private insurance for small companies, corporations that are self insured, Medicare, Medicaid and self insured local and state governments.

This broad control of the health care dollar comes about because all these healthcare insurance providers outsource their administrative services to the healthcare insurance industry. The major healthcare insurance companies disguise this control by creating differently named subsidiaries that “win the administrative services contracts.”

Fifteen to twenty percent (15-20%) of the healthcare dollar goes to administrative services fees. This is a very high fee. Medicare claims it only pays 2.5% for administrative services. This is probably true for its in-house administrative services but not for outsourced administrative services.

The healthcare industry has also had a stranglehold on all providers of healthcare insurance by increasing premiums and decreasing reimbursement to physicians and hospitals while maintaining its outrageous administrative services fees.

All the stakeholders are captives of the healthcare insurance industry. This stranglehold has caused an increase in the uninsured and destroyed the ill conceived Massachusetts universal healthcare plan.

President Obama’s healthcare reform plan is not focused on eliminating this stranglehold. The Obama healthcare reform plan will still outsource the administrative services to the healthcare insurance industry while increasing the government’s bureaucracy to try contain costs.

When are our politicians going to figure out the only way to repair the healthcare system is to eliminate the middlemen and let the transactions be between patients and physicians?

“This year alone, the healthcare industry has spent over $34 million to hire 923 lobbyists to influence Congress, according to the Center for Responsive Politics.”

Why? Because the healthcare insurance industry has positioned itself so it cannot lose no matter which modified healthcare reform plan is adopted.

Some insurance company leaders continue to profess concern about the unpredictable course of President Obama’s massive healthcare initiative. I believe this is an act. Do not let it fool you. Patient welfare is not the healthcare insurance industry’s concern.

“The half-dozen leading overhaul proposals circulating in Congress would require all citizens to have health insurance, which would guarantee insurers tens of millions of new customers — many of whom would get government subsidies to help pay the companies’ premiums.”

"It’s a bonanza," said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc”.

The healthcare insurance industry hired the Lewin Group, a health policy consulting firm that is owned by UnitedHealth Group to do a study opposing the “public option”. The healthcare insurance companies contended that a government-run plan would put the healthcare insurance companies out of business.

I believe this is a diversion. The healthcare industry will make out like a bandit either with or without a public option. The consumer will not be so fortunate. .

Laszewski said the industry’s reaction to early negotiations boiled down to a single word: "Hallelujah!"

"The insurers are going to do quite well," said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. "They are going to have this very stable pool, they’re going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide — plus their administrative costs."

Tom Daschle has emerged, according to the mainstream press, as Obama’s key go-to guy. It is as though he never left. He has the ear of the President as well as the healthcare insurance industry and the pharmaceutical.

“He still speaks frequently to the president, who met with him as recently as Friday morning in the Oval Office.”

Tom Daschle declared after meeting with President Obama that the President is becoming impatient with the debate and might force his healthcare reform bill through the Senate with a 51 vote majority.

“He remains a highly paid policy adviser to hospital, drug, pharmaceutical and other health care industry clients of Alston & Bird, the law and lobbying firm.”

It seemed strange that UnitedHealth and other healthcare insurers would hire Alston and Bird to represent them by a “liberal” Democrat (Tom Daschle) until it became clear that with or without a public option the healthcare industry would experience a bonaza.

“UnitedHealth spent the most, $2.5 million in the first half of 2009, and hired some of Washington’s most prominent political players, including Tom Daschle.”

With the public now opposed to a public option the White House and Senate Democratic leaders have introduced the concept of a on nonprofit insurance cooperatives.

“Mr. Daschle began promoting a cooperative two months ago as a politically feasible alternative to a more muscular government-run insurance plan. It is an idea that happens to dovetail with the interests of many Alston & Bird clients, like the insurance giant UnitedHealth and the Tennessee Hospital Association.”

Liberal democrats are opposed to the nonprofit insurance cooperatives. They fear it will take longer to evolve into a single party payer system than the public option would. Liberal Democrats believe the only way to repair the healthcare system is to have total government control over the healthcare system.

They do not realize that as long as the healthcare insurance industry controls the healthcare dollar the healthcare system will not be repaired. As long as consumers do not have financial incentives to control their health and their healthcare dollar the healthcare system will not be repaired

The healthcare insurance industry does not want the healthcare system repaired. They want the healthcare system to generate more income for them rather than better health for consumers.

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

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A Call To Action : Take Back Your Healthcare: Part 2


Stanley Feld M.D.,FACP,MACE

Massachusetts is in a financial bind. Most other states are in the same financial bind. No state has a ticket to a brighter future because politicians in the state spend the taxpayer dollars with little regard to adding value to taxpayers.

It is very difficult for the average taxpayer to understand the charade. In the future, due to blogging and social networking it is going to be a little more difficult for politicians to get away with what they been getting away with.

My reader, who wishes to be anonymous, continues to explain what politicians in Massachusetts are doing now that the universal coverage experiment has failed. Universal coverage is vitally important. The strategy used to achieve universal care by politicians is faulty and leads to failure.

Now they are creating a:

“Monopoly on top of a monopoly.

Big Hospitals and Big Insurers.

Your Doctor as Corporate Man?

Doctors, nurses, and allied health practitioners would all now be forced to work for Big Hospitals, which effectively work for Insurance Companies, and not the patient. “

This has been happening for many years all over the nation resulting in increased premiums, increases in taxes, and decrease in access to care. The goal is to manage the cost of care to the advantage of the healthcare insurance industry and the hospital systems, not to the advantage of the consumers (taxpayers)

“Any chance that real market forces might be brought to bear would be outlawed.

Apparently, Massachusetts only wants to control cost for Insurance Companies.”

Please note the terms used: “control the cost for Insurance Companies” and not “control the costs of the insurance companies.”

“As the Commission’s proposal stands, this is no ticket to a brighter future for Massachusetts.

Stubbornly blind to the enormous cost that Blue Cross layers on top of the actual cost of health CARE, this can come to be known as "pulling a Massachusetts "

If it wants to pull itself out of this hot water, Massachusetts needs to actually reduce cost and increase quality – and reverse Massachusetts’ loss of doctors, citizens, and tax base.

Its politicians will have to forget about installing Insurers and Accountable Care Organizations as a chokepoint to get to a doctor – forget about engineering a situation that requires middlemen – forget about hard coding them into the law.

Market forces work famously well on cottage industries, and medical practice is nothing if not a cottage industry. The large number of independently practicing doctors offers freedom of choice, complete access to CARE – for both employers and individuals, and universally available care that is affordable.

Consumers benefit, if Consumers’ access to the market for medical practitioners is kept truly free and unobstructed by any third party.

Otherwise, only the choke-holding middlemen benefit.

How much real estate does Blue Cross own?

How many shopping centers? How many office buildings?

How much did it and does it spend on its real estate?

On management salaries?

On commissions to their insurance sales agents / brokers / consultants?

How much of insurers’ real profit are they funneling out the back door in management salaries and asset acquisitions, and how much are they assigning to other categories – like Reserves?

How much do insurance companies really make in profit? (If they don’t call themselves “non-profits”, that is)

How much do they charge us in premiums, on top of the blizzard of expensive-to-manage paperwork they create?

Where would all the trillions of dollars go that Washington wants to borrow and put on our tax bill?

Exactly what is all that money going to buy?

We can’t know, because that information is locked inside insurers’ and the government’s black boxes.

We can’t audit their books. We can’t know the accounting rules by which money is assigned to one category or another.

We can’t know how many sets of books they keep – one for PR purposes, another for investors?

Apparently, Massachusetts’ Reform Commission has a blind spot, and Blue Cross is standing in it, doing what the insurance industry always does – pointing the finger in every direction but at itself…

"Oh, it’s the doctors / its technology / …"

Installing a middleman is a set-up – drawing a curtain against the sunshine, destroying any chance of freedom from being ensnared in an insurer’s or the government’s web.

In fact, it glues us all in place. Have you ever seen ‘The Fly”?

Deal Direct

When nothing and no one comes between each Consumer and each Practitioner, when complication and insurance / government middlemen are stripped away, there is perfect transparency.

There is no dark place in which to pile on cost or engage in price fixing.
There is nowhere to hide.

And here’s another benefit…

When Consumers deal directly with their Doctors, no one can ration anyone out of their care.

Thank goodness! That saves us all a lot of money on “comparative effectiveness research”.”

Let the consumer beware and protest to the politicians. After all we elect them.

Can we trust a government takeover of healthcare?

Government bureaucracy adds costs and complexity.

Outsourcing administrative services to the healthcare insurance industry involves bureaucracy.

Outsourcing administrative services provides another opportunity for waste.

All the complexity is said to be for the benefit of patient care.

However, money for direct patient care between the physician and patient is continually being reduced as bureaucracy is increasing.

The time has come for the consumer to put his foot down and stop the politicians.

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

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A Call To Action : Take Back Your Healthcare: Part 1

Stanley Feld M.D.,FACP,MACE

Consumers and physicians are starting to fighting to stop President Obama’s misguided healthcare plan as witnessed by the protests throughout the country. Once the American public became aware of the implications of the public option and the costs of the plan they began to distrust President Obama.

On Friday afternoon August 22nd at 4 p.m. on a hot summer afternoon when everyone was heading for the beach the administration announced the budget deficit was going to be greater than previously predicted.

It is easy to cook the books by making the wrong assumptions for your calculations. Massachusetts cooked the books with its universal healthcare plan and it has failed. President Obama’s healthcare plan is destined to fail just as Massachusetts’ plan.

Now, Massachusetts is discontinuing its universal healthcare plan. It is creating another plan that will bankrupt the state even further. Massachusetts has already received an $8 billion dollar bailout from the federal government.

Another failure is coming up at taxpayers’ expense. I am publishing the follow essay from a reader who would prefer to remain anonymous.

It is a call to action. The first two parts will be educational.

                            Consumers: Take Back Your Health CARE.

It’s too important to be trusted to either insurance companies or the government

The BOGUS Schemes proposed by Washington & Massachusetts EXPOSED


Health insurance is not health CARE.

Health CARE is what your Doctor does for you.

Health insurance is nothing more than an Insurer’s promise (however slippery) to pay someone else (a doctor / nurse / PT, etc.) to give you CARE.

Yet Congress ignores this fact. Congress is trying to force more insurance on people, when it is CARE everyone really wants to buy.

Insurers have very successfully driven down payment to Doctors, year after year throughout the past twenty years, taking advantage of the fact that Doctors’ practices are small businesses. Many Doctors practice by themselves. This is smaller than small. Practicing medicine is a cottage industry.

No Doctor’s practice meets the definition of a monopoly – no Doctor has 40% or more of Consumers as his / her patients.

Today, Health CARE is not expensive.

But Health Insurance is.

Various Insurers do have a monopoly in many markets throughout the US, and they have used their monopoly power to crush many medical practices.

Yet Insurers have never passed their savings through to Consumers, and state governments have been their accomplices.

States have allowed and in some cases encouraged Insurers to become monopolies. Therein is the root of the out-of-control health insurance cost problem.

Now, some in Massachusetts want to make even more monopoly the law.

After feeding Insurers for years, by requiring every citizen of Massachusetts to become a customer of a health insurance company, Massachusetts finally acknowledged that requiring everyone to buy insurance has done nothing to control cost.

So one month ago, Massachusetts repealed its Universal Healthcare law and turned its attention to the matter of cost control.

Enter Massachusetts’s Health Care Reform Commission, which has proposed that Massachusetts make it illegal for its citizens to deal directly with their doctors and illegal for their doctors to be paid except by Accountable Care Organizations (hospital systems / co-operatives that will assume all financial risk for all care, including physicians, hospital charges and prescription drugs). The Reform Commission wants Massachusetts to effectively outlaw the private practice of Medicine and herd everyone into massive institutions such as the health care co-operatives currently under consideration in Washington.

The Reform Commission wants Massachusetts to pass a law requiring all doctors to become employees of huge hospital systems and be paid an Insurer-dictated “global payment” (capitation).

Doctors, nurses, and allied health practitioners would all now be forced to work for Big Hospitals, which effectively work for Insurance Companies, and not the patient.

Remember the Health Maintenance Organizations of the 1980’s and 1990’s? The healthcare insurance industry profited greatly. Patients experience decrease in access to care and physicians suffered from restrictions to provide adequate care.

Patients and physicians are the weakest link in the healthcare chain even though they are the primary stakeholders.

All politicians have to do is create a complicated plan to “help” the poor, spin a tail about it being the solution, pass a bill and you have created a money making machine for the healthcare insurance industry at the expense of patients.

This is exactly what is happening in Massachusetts all over again.

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

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Public Option vs. Ideal Medical Savings Account: Part 2

Stanley Feld M.D.,FACP,MACE

The Public Option is a misnomer. It will not be an option. It will become the only choice.

The intent of the Public Option is exactly as Barney Frank described in his off the cuff interview. It is a critical step to a single party payer system government. Representative Anthony Weiner has confirmed the intent of the Public Option. President Obama has been saying it in code all along.

The Public Option is a critical step on the way to a single party payer since the Democrats do not have the votes for a single party payer at this time. A single party payer system would work if it would not be paralyzed by a bureaucracy, did not run out of money, did not engage in rationing of care and permits patients to make their own medical decisions.

Medicare is running out of money and Social Security and Medicare has 107 trillion dollars of unfunded liabilities.  Medicare deductibles are constantly being increased. Physician reimbursement is constantly reduced. A 300 billion dollar reduction in physician reimbursements is scheduled for 2010.

Investor’s Business Daily revealed President Obama’s goal on Wednesday, July 15th one day after HR3200 was published.

“Right there on Page 16 is a provision making individual private medical insurance illegal.”

The Investor’s Business Daily was not sure its interpretation was correct so they checked with the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:


IN GENERAL.—Individual health insurance

coverage that is not grandfathered health insurance

coverage under subsection (a) may only be offered

on or after the first day of Y1 as an Exchange-participating health benefits plan.”

President Obama has promised we could keep our present healthcare insurance if we like it. It will be grandfathered in. Otherwise, we will have to buy insurance from Healthcare Exchange-participating health benefits plans.

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

“Drawn by a public option that will be 30% to 40% cheaper than their current premiums because taxpayers will be funding it, employers will gladly scrap their private plans and go with Washington’s coverage.”

If an individual changes healthcare insurance carrier he cannot buy private insurance from another company except through the certified healthcare insurance exchange.

Those who currently have private individual coverage won’t be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private unregulated carriers.

“What wasn’t known until now is that the bill itself will kill the market for private individual coverage by not letting any new policies be written after the public option becomes law.”

On average, consumers change insurance carriers every eighteen months. The Healthcare Insurance Exchange will regulate the kind of healthcare insurance available.

The healthcare insurance industry has abused all the stakeholders. The consumer should be protected from abuse.

However, the healthcare insurance industry will continue to abuse the government and taxpayers. It charges the government a 15% administrative service fee to process claims.

Consumers will be forced into the government subsidized public plan. Employers will be happy to pay the 8% of their gross revenue. Employers are currently paying 18% of their gross revenue to the healthcare insurance industry. The healthcare insurance industry will not compete with the government. It will withdraw from selling healthcare insurance.

By default America will have a single party system, with an enormous bureaucracy and an enormous deficit.

Another downside is individuals will be paying public option healthcare premiums with after tax dollars. Premiums will be determined by means testing. Healthcare costs could become higher than today’s healthcare insurance premiums between tax rates increasing and the surtax for healthcare.

The cost will go down only by decreasing physicians’ and hospitals’ reimbursement. Six hundred billion dollars are scheduled to be removed from Medicare payments as the number of seniors covered increases. The result will inevitably be a further rationing of medical care for seniors.

HR 3200 is going to outlaw health savings accounts (HSAs) Health Savings Accounts are not as good as Medical Savings Accounts. HSAs do not provide enough incentives to patients to control their health and healthcare dollars. It keeps the healthcare insurance industry in control of the healthcare dollars.

Eliminating alternative forms of healthcare insurance has been a goal of Democrats for years. They want to crush any creative alternative.

“With HSAs out of the way, a key obstacle to the left’s expansion of the welfare state will be removed.”

Washington shouldn’t be killing business opportunities, or limiting choices, or legislating major changes in Americans’ lives. It should be making rules to eliminate abuse of systems, and providing incentives for individuals to be innovative and efficient.

The public option won’t be an option for many, but rather a mandate for buying government care. A free people should be outraged at this advance of soft tyranny.

Healthcare reform is not about better healthcare for Americans. It is about the government controlling our lives and decreasing our freedom to choose.

I would suggest the following note.

“We do not want the government to control our lives and increase our taxes. We want affordable, universal healthcare coverage that does not limit access to care. We want control over our healthcare dollars.

You can reach you Congressional Representative with the links below.

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


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Public Option vs. Ideal Medical Savings Account: Part 1


Stanley Feld M.D.,FACP,MACE

In response to my last post I received this note.


This is interesting.  You may like this but it is very obvious that it is just another stall tactic.  If the current bill, with reconciliation, passes, we still have to address these points.  So where are this fellow’s solutions?”

I watched President Obama’s town hall meeting in Grand Junction on Saturday evening. He is a compelling and seductive speaker. If I thought his plan would work and at the same time be budget neutral I might be seduced.

It will not work for the consumer and it will not be budget neutral. He needs a better plan.

What is missing?

President Obama’s generalities are correct. The country needs a system that provides universal care at an affordable cost and an increase in quality. I believe his strategy is wrong. His strategy is reflected in his healthcare reform bill.

He is correct in pointing out that the healthcare insurance industry controls the healthcare dollar. His prescription to destroy the healthcare insurance industry is wrong because it will penalize patients. President Obama’s healthcare reform bill is not doing anything to limit the healthcare insurance industry 20% gross administrative fee whether we have a single party payer or a private insurance system.

He promises to get rid of the waste in the system. He claims eliminating the waste will pay for two thirds of the 1.1 trillion dollars his healthcare billion will cost in the next ten years. The remainder will be paid for by taxing people making over $250,000 a year. He needs to redo the math.

President Obama’s system sounds pretty simple. However, it seems the government hardly ever does anything efficiently. The costs are always underestimated. There are always uncontrolled abuses or unintended consequences.

President Obama is ready to create a massive new bureaucracy and employ approximately 110,000 new employees. Bureaucracy is always a prescription for inefficiency.

President Obama is ignoring the waste created by defensive medicine. The total cost of unnecessary testing is about $750 billion dollars a year. Nonetheless, tort reform is off the table. Defensive medicine is blamed on physicians wanting to generate more money for themselves. I think defensive medicine came first, and then physicians figured out how to generate more income in response to decreasing reimbursements for their services and an increase in malpractice lawsuits. Placing a cap on malpractice awards destroyed the malpractice business in Texas and California.

Where is the role of patients’ responsibility for their own health and healthcare. Patients with adequate healthcare insurance are satisfied. The healthcare inflation problem is the result of medical care costing little for the patient with insurance except for the deductibles.

Our healthcare system is a fix the sick system. The healthcare system is not geared to prevent an illness. The administration’s healthcare reform plan speaks of prevention but does not provide incentives to patients or physicians to prevent illness or even deal with the obesity epidemic..

Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. But ill-advised reforms can make things much worse.”

The public has no great love for the healthcare insurance industry. Their protests about the healthcare reform bill are not to protect the healthcare insurance industry. It is to protect their freedom of choice. The public does not trust the government to make choices for them.

Both political parties have extremely low approval ratings. President Obama’s approval rating is sinking because of the perception of his half truths and a mounting distrust by independent voters.

“An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs.”

President Obama’s public option and increase in bureaucratic decision making is not going to solve our healthcare systems problems. He is not focusing on repairing the perverse incentives that are presently in the dysfunctional healthcare system.

Consumers must solve the healthcare system problems just like they solved the auto industries problems. Government role should be to provide the appropriate regulations to level the playing field.

“The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase.”

The solution is not a public option or a single party payer system. Consumer driven healthcare is the solution through the use of the ideal medical savings account.

“To pay for the subsidy that the administration and Congress propose, revenues have to come from somewhere. The Obama team has come to the conclusion that we should tax small businesses, large employers and the rich.”

President Obama’s plan will not work because the health-care recipients will lose their jobs as businesses can no longer afford their employees. The economy will get worse and the wealthy will flee to tax havens.

General anxiety will increase, patients will get sicker and the healthcare system will be overused creating more debt and more taxes.

A few economic self evident truths are:

  1. A free marketplace with appropriate rules encourages innovation and productivity.
  2. In the United States profitability is a strong market driver. If inappropriate rules are set up entities will try to figure out how to benefit from the rules to the disadvantage of others.
  3. The higher the taxes the lower the productivity. The lower the taxes the higher the productivity.
  4. The greater the bureaucracy the lower the added value productivity.
  5. Consumers will try to maximize their purchasing power.

“According to research I performed for the Texas Public Policy Foundation, a $1 trillion increase in federal government health subsidies will accelerate health-care inflation, lead to continued growth in health-care expenditures, and diminish our economic growth even further. Despite these costs, some 30 million people will remain uninsured.”

Rather than expanding the role of government in the health-care market, Congress should implement a consumer driven approach to health-care reform. A consumer driven approach focuses on the consumers being the policemen for their own healthcare dollar. If would focus on the doctor relationship and empower the patients and their physicians to make effective and economical choices.

The patients would be proactive rather
than passive. The result will be an increase in efficiency in the healthcare system rather than a further decrease.

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


Why America is So Mad!

Stanley Feld M.D.,FACP,MACE


I have not had many guest writers. However, I received this essay from a long time reader of my blog, Matt Modleski. Matt is a strategy consultant in healthcare. He has hit the nail on the head. His essay is a worthwhile read.

Somehow the new media (Blogs, You tube, Twitter and Facebook) got America to wake up. Once this happened independent citizens are outraged. They have been expressing their outrage to the dismay of President Obama’s administration.

President Obama’s administration is trying to suppress the outrage by calling ordinary citizens right wing extremists. I would hardly call former New York City Mayor Ed Koch a right wing extremist. He wrote a brilliant commentary on August 10, 2009 about his recent cardiac bypass surgery. It is called:   “ Falling Out of Love With Barack Obama.”

Now that America’s have finally woken up to President Obama’s strategy and true goals, I hope he cannot intimidate or seduce the public to sleep again. 


 As a former Air Force Fighter Pilot and strategist, the political race leading up to the election of President Obama was great fodder for teaching the art and application of strategy. David Axelrod and the Obama strategists are very bright minds; so let’s look at what the overall objective is in reforming healthcare and then look at their strategy for getting there. America is right to be nervous about the proposed legislation because for the most part they don’t want more Government intervention in their lives and clearly that is the strategy behind this legislation.

First of all let’s use the Presidential campaign as our template for understanding strategy. The political climate at the time of the 2008 election cycle was mounting frustration with the status quo of politics and specifically the George Bush presidency in the final 2-3 years. We were engaged in two wars, one elective, the other forced upon us, the economy was crumbling; and we had been duped by the banking system (and the government agencies charged with regulating it). The clear objective for the Obama strategists in Specific, Measurable, Actionable, Realistic and Time-bound (SMART) terms was to get elected as President on November 4th 2008.

Looking at the competition, the strategy of “hope and change” seemed to resonate with most voters across party lines and no-one could tactically out execute then Senator Obama when he stood before America to deliver his message. Life was good for the Obama team. (As an aside, the vulnerability of any competitor lies in their strategy for if you defeat it, you defeat them, Sun Tzu. The Clinton’s are [or hire] brilliant strategists but by the time they figured out how to defeat Obama’s strategy, and they had, they ran out of states and time to accomplish their objective).

Let’s take that template and move on to the healthcare discussion. The state of the union on healthcare is that it is broken. Most people are unaware of how broken it is (we kill between 4000 and 8000 people per month due to mistakes and errors and we waste billions if not trillions each year for a wide variety of reasons). By 2075 if we do nothing and leave Medicare in its current form, it will consume 90% of ALL FEDERAL REVENUE. Those who look at Medicare as the model to copy simply ignore that we aren’t paying for the model they want to copy. That’s a fact that’s typically left off the table.

The bottom line is this, everyone knows the system is broken, but few people know how broken it is and if we delve into all the pieces that are broken, a short term fix becomes impossible. So, rather than put all the broken pieces on the table and explain through the evolution of healthcare how we arrived here, the Obama team has the objective of “reducing the consumption of healthcare” in the US and a strategy to achieve it. I actually believe that is the right objective but I disagree with their strategy and tactics.

In order to meaningfully control the consumption of healthcare, we need to reform the demand side as well as the supply side of healthcare. For ease of discussing this, let’s simply say that talking about both sides of healthcare consumption and how we arrived where we are today puts some politically unpopular topics on the table. Issues such as personal accountability for your health, end of life spending, tort reform, reimbursement reform, insurance reform, care delivery model reform (the list goes on and on) all must be discussed. It’s not one issue, it’s all of the issues intertwined. If we begin talking about all of those issues that plague our current system, imagine how messy that gets politically. Eugene Robinson of the Washington Post articulated this nicely in a nationally syndicated column on August 10, 2009.

So the Obama strategists let the very left leaning Congressional Leadership craft the legislation on their own (which gives President Obama an opportunity to distance himself from the current outrage) and in its totality over time the original legislation would have given the government increasing control of both the demand and supply sides of healthcare consumption. So “government control” is the strategy to meet the objective of reducing healthcare consumption but the tactics required speed in their execution to avoid what’s happened which is America woke up! Fool me once with TARP, but don’t fool me twice with healthcare.

Meaningful reform of healthcare will take a 3-5 year plan, maybe longer, with an educated public and a congress held accountable for making hard choices by their constituents. The care delivery models and reimbursement models alone will take years to overhaul so that care can be delivered more strategically and reimbursement can pay for results not activity. America can handle the truth, but they can’t and won’t tolerate being misled and taken as fools. Our Representatives are learning that the hard way.

Obama’s team miscalculated the fallout and anger of America, but the distancing from the crafting of legislation was not accidental, it was calculated. One of the tenets of being a good aviator is to never let your next decision be your last good option. Obama’s team understands that. This may have been a huge miscalculation or merely a hiccup, either way they will survive; they were all raised in Chicago politics where political survival is an art form and as I have said, they are not dumb.

Here’s the real kicker. Adding access for millions to the current dysfunctional system seems likely as a result of compromise on the current legislation. None of the underlying issues will be meaningfully reformed and we will have huge new costs and the same problems at the core.

America can handle a “big-boy” discussion about the challenges in healthcare and a full-blown discussion of how we arrived in the mess we’re in. They could really handle someone telling them that we will take a long-range strategic approach to fixing the issues and that most of what we like about our system can remain intact. What they appear unwilling to accept is the government running healthcare or someone telling them that we have to reform it in a 3 month span of time when it’s taken 40-50 years to arrive here. America is mad because they’re tired of being misled by their leaders. The 2010 elections may well reflect that anger.”

Matt Modleski


Thank you Matt

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

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Physician Frustration With President Obama’s Healthcare Reform Plan and the AMA Endorsement : Part 2


Stanley Feld M.D.,FACP,MACE

The Texas Medical Association is not buying President Obama’s rhetoric. It has broken ranks with the AMA. It is representing the voice of physicians in Texas.

“The Texas Medical Association — the nation’s largest state medical society — is among more than a dozen state associations breaking ranks with the American Medical Association’s endorsement of the healthcare overhaul proposal in the U.S. House.”

TMA President Dr. William Fleming said:

"There are about 17 state societies that have backed off, who have not jumped on the bandwagon with the AMA.”

The TMA saw through President Obama’s charade very quickly. Nothing in the bill will Repair the Healthcare System. It will result in an increase in taxes for all including middle class and lower class Americans while decreasing access to care. None of the major problems with the healthcare system are addressed in HR 3200. The delivery of medical care will become less efficient, more expensive and require further increase in taxes.

Dr. William Fleming goes on to say

“Among the problems with the healthcare reform bill are failure to fix Medicare funding formulas, the "long-term consequences" of the government’s plan to offer a public insurance option and a prohibition on physician ownership of healthcare facilities. His note about the bill also cites a failure to include caps for medical liability, which the Texas Legislature approved in 2003.”

I am proud of the TMA and the 17 other state associations which had task forces that actually read and studied the bill. I think the AMA read the government published summary of the bill. Its summary sounds pretty good but has little to do with what is contained in the details and implications of the actual HR 3200.


TMA believes that the public option included in the House bill "would do more harm than good," and that members remain "gravely concerned" that the option would eventually dominate the system.”

I plan to discuss the folly of the public option shortly and present a viable and less costly alternative. HR 3200 is in reality an attempt to provide the politicians and the government with more control over our lives and our freedoms.

President Obama’s healthcare plan is not focused on the correct reforms. His plan is also creating more distrust of politicians and politics among independent voters who hoped he would be centrist and create the necessary reform to maintain freedom of choice and eliminate non value added services.

Independent voters now feel President’s Obama is a spend and tax Democrat who is creating a larger bureaucracy (110,000 new government healthcare administrative jobs) which will impinge on freedom of choice, ration care and create wasteful inefficiency and increase taxes.

"TMA is very concerned that if we don’t get important reforms for our patients on the front end, then things are going to happen so fast they’re never going to happen."

I am totally in favor of universal coverage. It can be done more efficiently and with less government expenditure than what is proposed. The increase in government expenditure will lead to much higher taxation to support an inefficient government system.

"The physicians of the Texas Medical Association believe our health care system is broken and needs reform," Fleming said in a statement. "However, we cannot support the current House proposal. While it addresses some of health care’s ailments, it leaves gaping wounds and does not serve Texas patients well."

No one wants a system with less access to medical care while being subject to higher taxation for everyone including people making less than $250,000 a year.

Mr. Obama promised never to raise taxes on anyone making less than $250,000 a year to avoid being labeled a tax-and-spend liberal.

However, he has raised taxes indirectly on people making less than $250,000 already.

On Feb. 4, Mr. Obama signed a $33 billion cigarette tax increase, which fell disproportionately on lower- and middle-income individuals.

“The “cap and trade” energy bill, approved by the House on June 26, is a tax on anyone who owns a light switch, uses a car key, or has bought anything manufactured, shipped or sold in the U.S.”

The House version of Mr. Obama’s health-care has four taxes that will largely be paid by people making less than $250,000 a year.

“There’s $8.2 billion in taxes for using health savings accounts and other tax-free medical savings vehicles to purchase over-the-counter drugs.”

“There’s an 8% tax on employers who don’t offer insurance: The Congressional Budget Office says workers in those businesses would pay the $163 billion cost via lost wages.”

“There’s a 2.5% “Tax on Individuals Without Acceptable Health Care Coverage” in the House bill that applies to people who either don’t have insurance or whose policies the government deems inadequate.”

“Finally, there’s a $2 billion “Comparative Effectiveness Research Tax” on all private and “public option” insurance policies.”

“If a version of President Obama healthcare reform bill is passed, the President will break his tax pledge even further. He will also be adding trillions to the deficit, dismantling the best elements of our present health-care system and slashing Medicare coverage by hundreds of billions of dollars.”

No one is interested in a system that has obvious unintended consequences and is destined to bankrupt the nation. Everyone must pay attention to what is being proposed. and write to your senators and congressional representatives.

I would suggest the following note.

“We do not want the government to control our lives and increase our taxes. We want affordable, universal healthcare coverage that does not limit access to care. We want control over our healthcare dollars.

You can reach you Congressional Representative with the links below.

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

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Physician Frustration With President Obama’s Healthcare Reform Plan and the AMA Endorsement : Part 1


Stanley Feld M.D,FACP,MACE


Physicians are not opposed to healthcare reform. The present healthcare system is broken. It has functioned poorly for both insured and uninsured patient as well as physicians. It has hindered physicians’ ability to deliver quality care. Neither President Obama nor congress is asking practicing physicians what the real problem are and what the suggested solutions are.

Finally, practicing physicians are realizing there is a way to express their frustrations. Practicing physicians are expressing their frustration through the social network Sermo and their individual blogs.

Most physicians want to do the best job they can for their patients. President Obama is focusing on the wrong issues and ignoring important issues like decreasing bureaucracy, malpractice reform to reduce defensive medicine, and increasing individuals responsibilities for their health and healthcare.

According to the Sermo survey, physicians consider important issues to be limiting insurance company’s and government’s ability to deny care; tort reform and settlement caps, and changing the law to allow doctors to negotiate collectively with insurers.

President Obama is focused on saving money by spending money and taking total control of the healthcare system. The healthcare insurance industry and hospitals are focused on making money. Physicians, in general, are interested in taking care of patients’ medical needs and maintaining the special quality of the patient physician relationship while making a living commensurate with their training, patient care responsibilities and liability.

The difference in focus of the government and other secondary stakeholders is not necessarily in the best interests of patients care. In evaluating HR3200 a Sermo editorial by Eric Novack M.D. begins:

 “The 1018 page bill was just released on Tuesday morning Arizona time— it is simply impossible that the AMA could have read the full bill and the associated statutes that are amended within the bill, AND do the analysis of the impact on the medical profession in the states.”

Having been able to actually read the first 200 pages of the bill so far, it is clear that physician autonomy and patient freedom are the last items on the minds of the Congressional leaders and their staffers that have written the bill.

Eric Novack M.D.”

In the name of politics, the AMA was quick to endorse HR 3200. Its endorsement is incomprehensible to me.

“There’s a perception that the (American Medical Association) doesn’t represent the general consensus of the physician community,” said Sermo CEO Dr. Daniel Palestrant.

I thought I might have been missing something in HR 3200. I have been a member of the AMA since 1965.

“Today, the American Medical Association sent a letter to House leaders supporting H.R. 3200, "America’s Affordable Health Choices Act of 2009."

I believe President Obama had given the AMA the notion that it could negotiate reform with the Obama administration. It was obvious that the Obama administrations mind was made up a long time ago. President Obama was calling for a bill on his desk by August recess.

"The status quo is unacceptable," Dr. Rohack President of the AMA said.

I agree with this.

"We support passage of H.R. 3200, and we look forward to additional constructive dialogue as the long process of passing a health reform bill continues. This is an important step, but one of many steps in the process.”

This is an unbelievable statement in face of the draconian provisions in HR3200 and President Obama ultimate goal of total government control of the healthcare system. President Obama has stated he is for a single party payer system. These are President Obama’s statements on You Tube that are statements that are made in context.

The government controls Medicare. Medicare premiums have increased annually, Medicare deductibles have increased annually as have non allowed services (rationing). Physician reimbursement has decreased annually. A 20% decrease is scheduled for 2010. This decrease would reduce reimbursement to below a physicians costs to provide the service.

Healthcare administrative services are outsourced to the healthcare insurance industry. The healthcare insurance industry charges the government twenty (20) percent for the administrative services it provides. The government claims an overhead of two percent because the government administrative services for outsourcing the administrative services is 2 %. Scandals of delays in physician reimbursement by government outsourced healthcare insurance vendors have occurred from Hawaii to Maine.

The AMA knows all of this. Physicians know past behavior is the predictor of future behavior. Why would the AMA think the Democratic controlled congress and administration change its past behavior in the face of increasing budget deficits?

Its goal is single party payer. I imagine the AMA thinks it can make a deal with the Obama administration and congress because of President Obama’s generalized rhetoric.

All Americans must WAKE UP before it is too late. Write your congressional representatives and go to Town Hall meetings this month to make your opinion known.

I would suggest the following note.

“We do not want the government to control our lives and increase our taxes. We want affordable, universal healthcare coverage that does not limit access to care. We want control over our healthcare dollars.

You can reach you Congressional Representative with the links below.


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

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The AMA vs. Sermo


Stanley Feld M.D.,FACP,MACE

The American Medical Association (AMA), founded in 1847 and incorporated 1897,[1] is the largest association of physicians and medical students in the United States, representing around 20% of practicing physicians . There are approximately 633,000 practicing physicians in the United States. The AMA represent about 130,000 physicians. In recent years the number of physicians in the AMA has been declining yearly. Physicians have not felt the AMA has represented their interests or their patients interests.

Sermo is an online social network of physicians that has grown since it onset in 2005 to over 110,000 practicing physician. Its membership is growning daily.

Sermo means “conversation” in latin. Physicians have conversations on Sermo about their  problem patients. Sermo has clinical rounds where problem cases are discussed. I am one of Sermo’s Clinical Endocrinology consultants.

As important Sermo conducts surveys of practicing physicians’ opinions on various political issues. A Sermo survey recently asked physicians their reaction to President Obama’s healthcare pan and the A.M.A endorsement of the plan. 

The AMA’s endorsement of Obamacare has generated much distress in the practicing medical community. I feel the AMA has been suckered into President Obama’s “Rope A Dope” methodology. The AMA is not represented the practicing physicians position. The AMA goal is to have a “seat at the table.

Sermo conducted a survey of its 110,000 members opinion of the AMA position on HR3200. Sermo has been far more transparent and egalitarian than the AMA. Sermo’s members feel that Sermo is far more representative of their opinions and far less political than the AMA.


Sermo Physicians Respond to AMA Endorsement of Healthcare Bill HR3200

Survey Results: Summary

4 questions.

Results as of August 04, 2009 2:10 PM Refresh

1. Do you endorse the current House Healthcare Bill as it is currently written?

     Single-choice question

Sermo question 1


. Does the AMA speak for you in endorsing the House Healthcare Bill?

     Single-choice question

Sermo Question 2

3. What is the most important issue that must be addressed for you to support a Healthcare Bill? Please add the issue of most importance to you, if it’s not listed here.

     Single-choice question



4. WhicSermo question 3h statement best describes you:

     Single-choice question

Sermo Question 4 

Copyright © Sermo 2009 All Rights Reserved

MeSH data created, maintained and provided by the U.S. National Library of Medicine. MeSH version "2006 MeSH".

Social networks such as Sermo are going to be the organizations that will be the real political action committees of the future rather than present day lobbyist in Washington. Social networks will give people in their individual fields the ability to express their opinions directly to politicians and their individual communities. There is no question what the opinions of the American practicing physician is toward HR3200 from the Sermo Survey.

President Obama’s healthcare reform plan is focusing on the wrong issues in his attempt to Repair the Healthcare System. Sermo has given us physicians an opportunity to express our individual opinions.

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

  • Manju Murthy

    Dr Stanley Feld,
    As always, enjoy reading your blog. I have been following Sermo for a while now. I agree with Sermo being a more democratic voice of physicians, and the role Sermo would be playing in the 21st century.

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