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All items for March, 2010


Unintended Consequences Are Rolling In


Stanley Feld M.D.,FACP,MACE


Over the years congress has made many deals with the secondary stakeholders. The new rules were made to correct previous rules. They did not work and made the healthcare system worse.

Americans are information junkies. Information is important to decision making. The wrong information leads to making wrong decisions

The traditional media is usually fed the wrong information by vested interests. It, in turn, feeds the public a short version of the wrong information. The result is faulty decisions.

President Obama’s healthcare bill was finalized last Thursday. On Friday AT&T and several other corporations took required tax write downs as a result of the bill’s passage

The returns for the healthcare reform bill are already rolling in. AT&T announced that it will be forced to make a $1 billion tax write down due solely to the health bill, in what has become a wave of such corporate losses.”

The tax write downs have been announced by Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, $20 million.

Other write downs have not been announced in the media. Corporations must declare the increase in healthcare related tax liabilities to the SEC immediately.

President Obama has used every tax trick in the book to make the new healthcare entitlement look affordable and deficit neutral.

An Increased tax liability to these corporations occurred when congress placed the new rule on top of the rule providing a tax subsidy.

The government provides a 28% subsidy to corporate America for continuing the drug benefit for their retirees as incentive to continue retirees’ drug coverage plans.

The twist of the tax law permitted these companies to deduct 100% of its drug benefit expense. In effect corporations were getting 28% free money while retaining the ability to deduct the 28% as an expense.

This is called double counting. It is difficult to follow the tax accounting. It represents a large tax benefit. The tax rule saved AT&T $100 billion dollars a year. It also saved most corporations large amounts of money. The savings went directly to its bottom line.

With the passage of the healthcare reform bill, corporations will not be allowed to deduct the subsidy.

“Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality?”

It appears Henry Waxman and other House Democrats were unaware of this unintended consequence. If they were, the healthcare reform bill is more sinister than it looks.

“ Mr .Waxman announced his committee will call for a hearing demanding these companies explain their action because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."

Media coverage and analysis of these write downs have been minimal. Why?

I do not think the media understands the consequences.

President Obama has said repeatedly, “if you like your insurance you can keep it. If you like your doctor you can stay with him.”

Nancy Pelosi said; “After the bill is passed we will understand it.”

You bet we will.

This rule will precipitate several consequences. Corporations have been trying to eliminate healthcare benefits for employees and retirees for years.

The new rule provides an excuse to drop the healthcare insurance benefits. The government will also eliminate the pretax benefit of private healthcare insurance.

If corporations eliminate the healthcare insurance benefit for employees, employees will be forced to buy individual insurance policies. The individual healthcare insurance plans will be unaffordable.

The government public option will be affordable because the government will subsidize the premiums. The healthcare insurance mandate will increase an entitlement burden to the states who presently have deficits. It means increased state taxes.

Corporations will be happy to pay the penalty for not insuring employees. The penalty is less than the insurance premium.

If a corporation chooses not to eliminate the healthcare benefit it will increase prices. The result is inflation. Corporations will also decrease its work force resulting in increased unemployment.

The public option as a sole source of healthcare insurance is only a matter of time. Then the government will fully control the healthcare system.

Regulations such as these will be President Obama’s back door approach to government control of the healthcare system.

However, President Obama overlooked the increase in unemployment and a decrease in people insured. Few people would be able to keep their own doctor, individual insurance premiums will be unaffordable and the deficit will escalate.

A prominent physician, who understands all this, sent me a copy of a letter he wrote to the President of the AMA opposing the AMA’s position on President Obama’s healthcare reform bill. He said;

“Surely, you didn’t arrive on a load of turnips yesterday.

Doc, the congress is the same wonderful group that gave us Medicare and Medicaid in the first place and then endlessly tinkered with it for nearly 50 years, and also gave us the SGF, and a host of other ill-considered acronyms that did our patients and the physicians (not the providers) of our country no good at all.”

He then wrote;

“It is a sad situation, not just for the docs but for their patients.

So, now what?  Until cast of characters in the congress, assorted criminals, tax dodgers, and others of ill repute, is changed, I am afraid we are all screwed.  That includes the patients, more is the pity.

My own suggestion is that the AMA seize the moral high ground and take on the role of being the advocate for the patient (not the consumer) and view any effort to reform the reform  through the lens of what is best for all of our patients.

If the AMA were to do that, physicians would find that they will come out well, I am certain. While we are it, it would be a good thing to advocate for a reasonable and sane system of pricing so that what is done for people is simply costed at acquisition plus a reasonable margin of profit and the retail price is then the same for all patients.” 

This physician has said it all. Consumers owning their healthcare dollar and driving the healthcare system is the only way to accomplish affordable universal care with the government subsidizing or paying for the uninsured with the ideal medical savings account.  It will be less costly and give consumer incentive to be responsible for their health and healthcare dollars.

Both physicians and patients must wake up
and protest this folly
at the polls and to their congresspersons immediately during the Easter recess.

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

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Unintended Consequences – Coming Soon

Stanley Feld M.D.,FACP,MACE

Physicians in practice work hard and have little time for political and legal trickery. They assume their leadership will look out for their interests while they take care of patients.

The problem is physicians do not have effective leadership explaining the difficulties practicing physicians have every day with the healthcare insurance industry, hospital administrators, the government and the threat of liability. Most physicians are caring professionals who are not looking to rip off anyone.

Physicians do expect reasonable compensation commensurate with their training, level of expertise and level of responsibility.

I recently presented a physician income survey to a group of corporate executives. The executives were astonished by the level of physician income relative to their level of responsibility.

The unanimous reaction of these corporate executives was the average physician’s income was that of a low mid level manager. It is true some practice specialties earn more but the average income of practicing physicians is not commensurate with their knowledge and responsibility.

At the time President Obama’s healthcare reform bill was in trouble, the President courted physician leadership (AMA). Medicare reimbursement is sometimes below the cost of service. Physicians do not realize it because most are poor business people. Most physicians accept the low reimbursement because they view it as their duty to take care of these patients.

A noted physician executive wrote to me and stated that physicians are being treated like indentured servants by the government and the healthcare insurance industry. I had the same perception.

I told a CEO of a large healthcare insurance consolidator that physician apathy to their treatment is a sleeping tiger. The tiger is going to awaken if the healthcare insurance industry, the government and the plaintiff attorneys keep kicking them.

His reply was they are betting physicians will not react and remain passive. Physicians keep accepting price cuts because they love taking care of patients. I believe physicians will wake up and realize who is ripping off the healthcare system. They will react soon. I believe patients will side with physicians and aid in the physician protest. The time is getting close.

The President of the AMA and the AMA ‘s board of trustees have supported President Obama’s healthcare reform bill all along. I was shocked because it is a terrible bill for the improvement of the healthcare system.

President Obama promised the AMA he would repair the defective Growth Rate formula (SGR aka as the Doctor Fix). Physicians knew as soon as Congress created the Sustainable Growth rate (SGR) formula that it would not work. The physician belief has been proven every year for nearly a decade.

The AMA’s support of President Obama’s healthcare reform bill has infuriated many practicing physicians. They have quit the AMA.

H.R. 3962 is not the perfect bill, and we will continue to advocate for changes," AMA President J. James Rohack, MD, said, "but it goes a long way toward expanding access to high-quality affordable health coverage for all Americans, and it would make the system better for patients and physicians.

I could not believe the AMA would trust congress or President Obama’s promise to postpone the 21.3% reimbursement cut.

President Obama has stated that the cuts will not go into effect and there will be a fix for physician reimbursement. The government needs to decrease its entitlement exposure.

The U.S. House of Representatives passed a separate bill H.R. 4851 and delayed the cut until October 1st. This was before President Obama’s healthcare reform bill was passed by both houses of Congress.

The suspension of the doctor fix had been removed from the healthcare reform bill so as not to be included in the CBO evaluation of the healthcare reform bill’s impact on the budget deficit. This represents another of President Obama’s tricks. What is going to happen to entitlement costs or physician reimbursement when Medicare and Medicaid expand?

Dr. Rohack (AMA President) again applauded President Obama for his great leadership when the bill passed. Three days later the Senate rejected the House of Representative’s “Doctor Fix.” The cut are now scheduled to go into effect on April 1.

Congress failed to act yet again, and as a result, the 21.3 percent Medicare physician payment cut will take effect on April 1. Congress will adjourn for its two-week spring recess without taking action to stop these programs from expiring.”

Now that the bill has passed the games start all over again. Sen. Tom Coburn, R-Okla., said the “Doctor Fix” should not be considered emergency spending. Emergency spending would exempt the Doctor Fix from budgetary offsets. The “Doctor Fix” should not be a budgetary offset. It must be included in the cost of President Obama’s healthcare reform bill because it will increase the budget deficit.

This repeated game of brinksmanship is wreaking havoc with physician practices and is causing both physicians and patients to lose confidence in the Medicare program. It illustrates in stark terms why medicine can no longer support short-term “fixes” to a formula that we knew would not work at the time Congress created it.

If congress keeps kicking those tigers they are going to wake up. The government and the healthcare insurance industry will lose its work force. Patients will be forced to carry the burden of the cost of care. President Obama’s healthcare reform bill will not have provided affordable healthcare. It will get the government off the hook.

Congress must stop playing games with physicians and patients and do what they know must be done: Repeal the SGR formula once and for all.

President Obama is not stupid. He must decrease the increasing cost of government entitlements. He must do it while looking good and being the defender of the people.

His problem is as soon as everyone (consumers, employers, physicians and patients) wake up and become aware of what he is doing his game will be over.

Organized medicine, consumer groups, or employer groups are not defending their constituents.

The primary stakeholders in the healthcare system (consumers and physicians) will wake up to the unintended consequences. Only then will we see a dramatic fall in President Obama’s approval rating and repeal of this terrible bill.

It is a terrible because it does not attack the systemic problems in the healthcare system. The bill increases the systemic problems.

The primary stakeholders (physicians and consumers) must demand sensible effective change.

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

  • Joseph E. Gutierrez, M.D., F.A.C.S.

    Very good analysis ! Thank you very much !

  • John H.

    One of the issues that most people overlook is that many physician’s insurance contracts are tied into the Medicare fee schedule. For example, a doctor gets a contract with Big Medical Co. and the reimbursement is set at 100% of Medicare. This could potentially lead to nearly 20% cut in that physician’s practice across the board. For most solo or small groups (who provide much of the medical care in the US), this would effectively shut down their business and severely limit access to care across much of the US.
    Could they increase volume? Doctors are already busy and they themselves are the rate limiting step in a practice – one can only see so many patients an hour.
    Could they cut costs? Many physician practices have already made substantial cuts and are operating with minimal staff.
    And if you have doctors shutting down their practices who is going to take care of the 34M soon to insured? Which smart college student is going to spend 10+years in training only to graduate with $300K in debt and pay $20K in malpractice per year?
    We have a near perfect storm for a true medical crisis in the making – more insured, fewer and under qualified physicians, long wait times and bad outcomes.

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What Healthcare Reform Will Mean For You?

Stanley Feld M.D.,FACP,MACE

Democrats are cheerful on this beautiful spring morning. They are happy because congress finally passed this partisan healthcare reform bill. Many are going to try to represent the vote to the traditional media as a great duty to the American people. I also believe they have no idea of the unintended consequence of President Obama’s healthcare reform bill.

The high level goals of the healthcare reform bill are commendable. The bill’s solutions will end in disaster for taxpayers, the government, and patients who need medical care.

I received a comment from a lawyer this morning.

I can’t imagine what is going to happen with this new healthcare bill.  Decrease payment to doctors, increase number of patients… hmmm.

Also, can you imagine how happy you are if you are a plaintiff’s lawyer?  Less time per patient means more chances of mistake. And just more folks in the system filing bogus claims, too. Total win for the lawyers.

It is also a big win for the healthcare insurance industry, and big pharma . I predict their stock prices will increase in the next weeks.

President Obama’s healthcare reform bill is a big loss for taxpayers and people who are ill and people who are not ill.

The details of the bill are a killer of innovation, jobs creation, and freedom of choice. The bill will increase taxes and decrease quality of medical care. Many of the bill’s benefits will not start until 2014. The increase in taxes will start this year,2010.

President Obama has said: Any one making under $200,000 per year will not pay a penny in increased taxes.

The Joint Committee on Taxation analysis contradicts President Obama’s assertion. Either the congress or the President does not believe the Joint Committee on Taxation or has chosen to ignore it.


The healthcare reform bill will increase Medicaid roles. This will increase burdens on State budgets. Most States have budget deficits. They are required to have balanced budgets.

The Medicaid expansion might be meaningless because of the level of income required for coverage.

If you’re low-income: The law significantly expands Medicaid, the federal-state health program for the poor, making it available to an estimated 16 million more people with incomes up to 133% of the federal poverty level.”

The poverty level was defined in 1955. In Texas poverty is defined as earning less than $950 per month or $11,400 per year. The increase will raise the level to $15,162 per year. How can a person making $20,000 dollars a year afford a $15,000 dollar healthcare policy even if the government subsides 50% of it? A tax credit is meaningless because they do not pay taxes.

This is an example of one of the many non starters in the healthcare reform bill. On the increased taxes side I believe the healthcare reform bill will inhibit investment and economic growth.

A new 3.8% Medicare tax will be levied on investment income including interest, dividends and capital gains that exceed those thresholds.

President Obama’s strategy is to increase taxes. Americans might notice the increased tax burden shortly. The increased taxes could be significant to a moderate earner’s lifestyle and standard of living.

  • If you itemize deductions for income tax: Starting in 2013, medical expenses have to reach 10% of your adjusted gross income to qualify for a tax deduction, as opposed to today’s 7.5% standard. But seniors age 65 and older would be able to claim an itemized deduction at 7.5% of income through 2016.

There is much talk about the Cadillac tax. There is little understanding of the rules. If the average healthcare insurance policy for an individual is going to rise as the healthcare insurance industry predicts, how is anyone going to be able to afford the insurance much less the excise tax?

This will precipitate the Public Option. What effect will the Public Option have on the bogus deficit reduction calculations?

Willie Sutton’s advice is to go where the money is. President Obama is not going where the money is.

The money is in:

1. Creating a system that puts consumers in control of their healthcare dollars and their health.

2. Rewarding consumers for good health.

3. Promoting self-responsibility for their health and healthcare dollars.

4. Creating a system that decreases defensive medicine.

5. Instituting effective and significant Tort Reform to decrease the need for defensive medicine

6. Creating a system that decreases the cost of adopting functional electronic medical records. An ideal medical record should be available to all at minimal monthly cost based on utilization.

7. Providing effective patient educational tutorials using the internet that is a physician approved extension of his care. Patients with chronic diseases must become professors of their disease. If they do not the complications of the chronic disease will occur and consume 80% of the healthcare dollars.

8. Creating systems of care that will prevent and reduce complications of chronic disease.

President Obama’s healthcare reform bill does not deal with any of these cost saving ideas effectively.

Americans love their country. We also know our government has done some stupid things in the past. The healthcare reform bill’s mistakes have been driven by politics, by ideology, by the influence of vested interests, and by the desire for power and fame .

President Obama’s healthcare reform bill is a stupid bill. America will suffer economically from the unintended consequences in the years to come.

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

  • patient treatment

    One of the major benefits of this new health reform bill is that the young adults will be able to stay on their parent’s coverage up until 26 years of age.

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What Are The Real Costs Of Obamacare?


Stanley Feld M.D.,FACP,MACE


The traditional media is not discussing the economic consequences of President Obama’s healthcare reform program.

In these final days the traditional media is describing the horse race to the finish line for a deemed vote (“Slaughter rule”) vs. a partisan up and down vote on the Senate bill. The horse race is a distraction to avoid discussing the unintended consequences of the bill.

Congressman Paul Ryan is the Ranking Member of the House Budget Committee and senior member of the House Ways and Means Committee. His focus has been to bring fiscal discipline to federal spending. The House Ways and Means committee’s jurisdiction is tax policy, Social Security and healthcare. He has been addressing America’s long-term fiscal crisis and the dangers of explosive entitlement spending.

He has accused President Obama of being dishonest to the American public about the costs of his healthcare bill.

I can understand the emotional appeal of President Obama’s healthcare reform plan. His solution will not repair the healthcare system. It will increase the price of care, decrease access to care and decrease many freedoms.

President Obama has said repeatedly, “I will not sign a plan that adds one dime to our deficits either now or in the future.”

If passed by this phony congressional “Slaughter maneuver” it will simply make the healthcare reform bill’s failure to solve our healthcare system’s problems even more grotesque. I predict the bill will cripple Americans’ ability to maintain their present standard of living.

I am sure Paul Ryan is frustrated that his remarks to President Obama at President Obama’s Healthcare Summit would be thought of as disrespectful by Democrats.

No one has refuted Paul Ryan’s accusations.

President Obama continues to recite his unsound sound bites about his healthcare plan. He claims it will save Medicare, provide coverage for 30 million more Americans and reduce the deficit.

I believe that anyone who votes for this terrible bill should not be reelected. They are doing a disservice to Americans.

Congressman Paul Ryan of Wisconsin made the following points before President Obama at the Healthcare Summit.

  1. Medicare, right now, has a $38 trillion unfunded liability. That’s $38 trillion in empty promises to my parents’ generation, our generation, our kids’ generation
  2. Medicaid’s growing at 21 percent each year. It’s suffocating states’ budgets. It’s adding trillions in obligations that we have no means to pay for . . .

He then went on to say that the Congressional Budget Office scores bills with the premises and assumptions it is given. If the premises and assumptions are incorrect the score will be incorrect.

  1. “And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors.”

He continued by saying;

“And if you take a look at the CBO analysis—analysis from your chief actuary—I think it’s very revealing.”

  1. “ This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health-care entitlement at a time when we have no idea how to pay for the entitlements we already have.”

The CBO letter to Harry Reid on March 11, 2010 states the bill will not decrease the deficit as President Obama claims, but it increases the deficit even as it increases costs.

“March 11, 2010

Honorable Harry Reid

Majority Leader

United States Senate

Washington, DC 20510

Dear Mr. Leader:

The Congressional Budget Office (CBO) and the staff of the Joint Committee onTaxation (JCT) have estimated the direct spending and revenue.

“Under the legislation, federal outlays for health care would increase during the

2010–2019 period, as would the federal budgetary commitment to health care.6

CBO now estimates that the federal commitment would increase by about

$210 billion over that period, rather than by $200 billion as previously estimated.”

If anyone is concerned about our budget increased deficit and increasing taxes for a bill that will not repair the healthcare system, understanding the numbers is important.

Paul Ryan dug into the details at the Healthcare Summitt;

  1. “The bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.”

“Therefore the true 10-year cost of this bill in 10 years? That’s $2.3 trillion.”

  1. “It takes $52 billion in higher Social Security tax revenues and counts them as offsets. But that’s really reserved for Social Security. So either we’re double-counting them or we don’t intend on paying those Social Security benefits.”
  2. “It takes $72 billion and claims money from the CLASS Act. That’s the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets.”

Kent Conrad (D) Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.

Five hundred million dollars is taken out of Medicare to fund the healthcare reform bill. This is not shoring up Medicare solvency. It is paying to expand the program.

Paul Ryan did not stop there. He kept pounding away at the smoke and mirrors that the traditional media is not even analyzing much less mentioning.

  1. “You can’t say that you’re using this money to either extend Medicare solvency and also offset the cost of this new program. That’s double counting.”
  2. “According to the chief actuary of Medicare as much as 20 percent of Medicare’s providers will either go out of business or will have to stop seeing Medicare beneficiaries”.
  3. “When you strip out the double-counting and what I would call these gimmicks, the full 10-year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.”
  4. “Probably the most cynical gimmick in this bill is something that we all probably agree on. We don’t think we should cut doctors [annual federal reimbursements] 21 percent this year and next. We’ve stopped those cuts from occurring every year for the last seven years”.

The “doctor fix” was supposed to go into effect January 1st. It was delayed until March 1st. Now it is delayed until October 1st. It was taken out of the Healthcare Reform Bill and
placed in a separate bill because it added $371 billion dollars to the healthcare reform bill’s deficit.

President Obama’s Healthcare Reform Bill ignores and in actually hides these costs. Hiding these costs does not take the costs off the backs of taxpayers, the deficit, or future tax payers.

12.” I’ll finish with the cost curve. Are we bending the cost curve down or are we bending the cost curve up?”

“If you look at your own chief actuary at Medicare, we’re bending it up. He’s claiming that we’re going up $222 billion, adding more to the unsustainable fiscal situation we have.

13. “We don’t think the government should control our healthcare system. We want people to be in control. And that, at the end of the day, is the big difference.”

14. I’ve got to tell you, the American people are engaged. And if you think they want a government takeover of health care, I would respectfully submit you’re not listening to them.”

President Obama ignored Paul Ryan’s comments. He is ignoring the will of Americans. He is ignoring the fiscal consequences of a bill he is ramming through congress at the expense of the American people for something that will not work.

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



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Here They Go Again!

Stanley Feld M.D.,FACP,MACE

The healthcare insurance industry is blaming physicians for the industry’s need to raise insurance premiums. Aetna has been assigned to replace Wellpoint as the bad guy this week.

All of the stakeholders are to be blamed for our dysfunctional healthcare system. However, the healthcare insurance industry is the biggest villain.

Why is Aetna attacking physicians?

Physicians are easy to attack. They are the least organized and least effectively represented. They are also primary stakeholders along with patients. If secondary stakeholders can successfully attack primary stakeholders they think they enhance their value to the healthcare system. They are really decreasing the effectiveness of the patient physician relationship thereby decreasing the quality of care. The result is an increase in the cost of care.

“How much do you think doctors charge for a routine colonoscopy in the San Francisco Bay Area? Anywhere from $1,250 to $7,300, a range of more than $6,000, according to Mark Bertolini, president of health-insurance giant Aetna.”

This is a bogus. Aetna’s President knows it does not matter what physicians charge. Physicians only receive the allowable fee. Aetna’s CEO is setting up the public to defend the healthcare insurance industry’s unjustified premium increases. He is also developing the case for healthcare insurance mandates.

It is clear that the healthcare insurance industry a has well coordinated strategy.

“Most people don’t know how variable health-care costs are across the country and how that plays into the problems plaguing the system”, he said in a wide-ranging interview Monday, the same day President Obama turned up the heat on insurers in a bid to push his year-long quest for comprehensive health reform across the finish line.”

Physicians behave like indentured servants. They are treated as they behave. Some physicians believe the behavior is in their vested interest.

Where is the physicians’ or consumers’ leadership? Who is pointing out the game the healthcare insurance industry is playing with the healthcare system in order to increase its profit?

No one is challenging the healthcare industry’s return on investment of over 20% a year. President Obama is accepting the published profit of 2% per year and permits the industry to raise premiums.

Who is challenging the healthcare industry’s faulty accounting regulations that permit these premium increases? No one! Neither President Obama, Congress, nor state insurance regulators.

The healthcare insurance industry does not allow consumers to purchase healthcare insurance across state lines for two reasons.

In many states one or two companies have control of 90% of the market. In some states the healthcare insurance industry has complete control of the State Insurance Boards. They raise healthcare insurance premiums at will. The healthcare insurance industry dominates State Insurance Boards.

I am not in favor of federal control over the healthcare insurance industry. Lobbyist control the federal government’s regulations and decision making. Consumers have a better chance of putting pressure on the State Insurance Boards than a Federal Insurance Board.

I am also opposed to abrogation of states’ rights in favor of federal control.

President Obama must change accounting regulations to reflect the true medical loss ratio. If this was done the healthcare insurance industry would be required to lower premiums immediately.

Instead the administration makes this weak appeal to healthcare insurance executives.

At the March 10, 2010 Health and Human Services Secretary Kathleen Sebelius, at a health insurance industry meeting on Wednesday, pressed insurers to "give up some short-term profits" for the good of the country and assist congressional Democrats struggling to move toward votes on a health care overhaul measure.”

Can you believe that? Remember the good cop, bad cop routine I have outlined. President Obama and the healthcare insurance industry are playing a trick on us. Rather than getting to the root of the healthcare’s system problems the changes will increase costs and decrease access to care.

“Sebelius, President Obama and other administration officials seeking to build public support for the overhaul have repeatedly attacked the health insurance industry for proposed double-digit premium increases in the individual market, such as a 39 percent hike proposed by Anthem Blue Cross Blue Shield for its California customers.”

This is the ploy.

Insurers defend the premium increases as the product of skyrocketing medical costs they can’t control, and they’ve strongly objected to what they contend is a vilification of their business. “

The healthcare insurance industry wants a mandate. President Obama wants a mandate. This is the goal.

“I think the individual mandate as currently structured is incredibly weak,” Bertolini said. “The result is it’s going to exacerbate the current problems in the individual and micro-group markets,” he said, referring to coverage for groups with fewer than 10 people in them.

Much is riding on how much latitude the federal government gives states to enforce such a mandate, he said. “That could put this whole bill in the balance as to whether it will be successful.”

Kathleen Sebelius pleaded with the healthcare insurance industry executives at their March 10th meeting.

"So there’s a choice on the table. You continue the opposition to reform," said Sebelius. "If you do and reform fails . . . by next March, when you’re meeting again, premiums will take even a bigger bite out of Americans’ wages, your market will shrink even further, more Americans will lose their employer-sponsored insurance and we will have a situation where the market is unsustainable."

The people do not want a mandate. They want fair healthcare coverage. They want leadership that makes sense.

Effective healthcare reform would be instituting an ideal medical savings account. Consumers must own their healthcare dollar in order to decrease the cost of healthcare. The result would be lower healthcare costs and a simple self regulating system.


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

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President Obama Fakes Out Congress and The Public


Stanley Feld M.D.,FACP,MACE

Several curious coincidences occurred in the last two weeks as President Obama plans to ram his healthcare bill into law through reconciliation.

The substance of the bill has not been discussed. The chief benefactor of the bill has not been named. President Obama keeps saying we need this bill to protect the American people from the evil healthcare insurance industry.

I agree that the healthcare insurance industry has been increasing premiums, limiting access to care and not reimbursing providers adequately and appropriately.

President Obama’s healthcare reform plan is not going to protect the American people from the evil insurance industry. The healthcare reform plan is going to enhance the healthcare insurance industry’s profit by increasing the healthcare insurance industry’s customer pool.

President Obama’s healthcare bill should fail because the provisions in the bill will increase taxes, increase the federal deficit, decrease access to care, ration care and not provide universal care.

It is a terrible bill for all the reasons I outlined previously.

How are Americans being set up?

The initial step was Wellpoint saying it is going to raise rates in California. Other States followed. The states and the federal government protested. Congressional hearings and meetings at the White House accomplished nothing. The President and the healthcare insurance industry wants the public to be more angry at the healthcare insurance industry. It will make it easier for President Obama to pass this terrible healthcare reform bill.



Just as the Democrats are afraid to take on the trial lawyers as Howard Dean explained they are just as afraid to take on the healthcare insurance industry. The government is dependent on the healthcare insurance industry to provide administrative services for the government insurance plans.

In order to control the healthcare industry all the government would have to do is change the industry’s accounting rules.

This would eliminate all the non value added expenses included in the industry’s calculation to justify its increase in premiums.

This will not happen because many elected officials are funded by the healthcare insurance industry. Additionally, without the healthcare insurance industry providing administrative services the government could not run Medicare or Medicaid.

Ann Braly CEO of Wellpoint said it clearly in her Wall Street Journal article.

"We’ve been a heavily regulated industry for as long as I’ve been part of health care," she continues. Frankly, health care and politics are "inextricably intertwined." Mrs. Braly notes, too, that the government on its own is largely incapable of "navigating through the health-care system, coordinating the very uncoordinated parts of the health-care system." “In fact, Medicare hired WellPoint to run some $97 billion in traditional fee-for-service benefits in 2008, or more than a fifth of the program’s total budget that year.”

President Obama is running around the country to garner support for reconciliation. He is telling everyone his healthcare reform bill is the only way to control the premiums of the healthcare insurance industry.


President Obama’s plan will create healthcare insurance exchanges. The government will subsidize the healthcare insurance industry’s premium.

Who pays?

The taxpayer pays and the healthcare insurance industry keep the profit.

It reminds me of a comment sent to me by a reader about the cash for clunkers program. President Obama said we had to do it because it would decrease greenhouse gases.

Three billion dollars is not a large amount of money in the greater scheme of things. Neither party nor the traditional press were agitated. The cash for clunkers bill passed easily.

President Obama declared a spectacular victory. It took a blogger to do the math and calculate how tax payers were ripped off.

Oilfield Math:

Working in the oilfield with others such as myself and a wealth of combined experience we understand the accuracy of the following:
A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year.
A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year.
So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year.
They claim 700,000 vehicles so that’s 224 million gallons saved per year.
That equates to a bit over 5 million barrels of oil.
5 million barrels is about 5 hours worth of US consumption.
More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars. So, the government paid $3 billion of our tax dollars to save $350 million.

We spent $8.57 for every dollar we saved.

I’m pretty sure they will do a great job with our health care, though

This cash for clunkers arithmetic is similar to the arithmetic used by President Obama for healthcare reform. The difference is healthcare reform will cost much more and add more significantly to the deficit.

The American taxpayer is being set up to pay more taxes. The deficit will not be reduced. Access to medical care will be decreased. Out of pocket expenses will be increased. Rationing of care will be increased. State deficits and state taxes will be increased. America will not have achieved affordable universal coverage.

I believe the healthcare reform bill will create an additional $2 trillion dollars deficit by 2020 rather than reduce the deficit by $135 billion dollars. It all depends on the assumptions made in doing the math.

Americans are being faked out by President Obama and the healthcare insurance industry.

Consumers, you must be in charge of your healthcare dollars. Not the government.

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

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Father and Son #4

Stanley Feld M.D.,FACP, MACE

The responses to the father and son articles have been tremendous. I thank you all.

One of the comments reminded me of an article I wrote about Brad’s and my relationship in October 25, 2007 entitled the Birth of an Entrepreneur.

Kare Anderson a well known communicator wrote a great comment about that article and followed it with a poem that should be a reminder about how to live in this chaotic world. I have been trying to find a spot to reproduce her comment for years.

She wrote;

Reminds me of my Dad, seeing his kids as so different yet encouraging us to cultivate our strengths.

I would become a journalist, one brother an entrepreneur, and my baby brother an international aide worker. But we all needed the entrepreneurial traits of resourcefulness, critical thinking, perseverance and ability to work well with people extremely unlike us.

Brad exemplifies these traits.

What a timely post for me to share with my Dad before the weekend.

Thank you Stanley. You have touched many of us.

The poem followed her comment.

In a civilization when love is
gone we turn to justice and when
justice is gone we turn to power
and when power is gone we
turn to violence.

Opportunity is often inconvenient.

Remember the many
compartments of the heart,
the seed of what is
possible. So much of who
we are is defined by
the places we hold for each
other. For it is not our ingenuity
that sets us apart, but our
capacity for love, the
possibility our way will
be lit by grace. Our hearts
prisms, chiseling out the
colors of pure light.

– Kare

Posted by: Kare Anderson | October 26, 2007 at 10:02 AM

I am gratified that these articles under the category of Life Experiences have influenced so many of you. The key is to find love in relationships and not hatred and adversity. I have always focused on this principle in relationships with family, friends and my patients.

Many of you can recall negative influences in your life. I suggest you re-examine them and try to turn those sour lemons into lemonade.

When Brad was fifteen one of the patients in my practice entered our life. Mr. X was 75 years old. He was one of the giants of the computer industry in the 1950’s and 60’s. He had Diabetes Mellitus and hypertension. Both could be controlled easily if it were not for his alcoholism. His depression was his most debilitating illness. He perseverated about his past accomplishments.

In spite of his illness, I recognized a path to help him find friendship and provide an intellectual experience for Brad and me. I set up a meeting outside the clinic for us to have a cup of coffee. The meeting lasted for 3 hours. Mr. X discovered two people who would listen and befriend him. We too, found a friend.

Mr. X enjoyed the effect he was having on us. I was pleased that his depression was lifting.

He became Brad’s mentor. He recognized Brad’s talent and wanted to help develop it. He got Brad his first job in the computer industry. It was with a husband and wife that Mr. X mentored previously.

The couple was hard working and smart. Brad had a fabulous experience learning about the petroleum software business. He also experienced the grind of the corporate world.

When Brad was 15 ½, I asked Mr. X if he knew anyone in the software business in England. I thought Brad would love the experience of living and working in England over a summer.

Brad was all for it. I did not appreciate the true potential of this experience. Mr. X connected Brad with another former student of his (Mr. Y), who was an executive in a printer manufacturing firm in London. The firm built and programmed Daisy Wheel printers. The software in those days was just as important as the hardware.

I could not get a work permit for Brad in London. Mr. Y promised Brad one of their expensive printers as salary at the end of the summer. I would have sent him without “salary.”

We sent Brad to London on Freddie Laker Airways.  Freddie Laker Airways was a no frill low cost airline that flew direct from Dallas to London. He arrived in London safe and sound.

Mr. X arranged room and board by contacting another friend. The subway stop was Ealing Common. The office was in Knightsbridge several stops down the line.

Brad had some major problems. He turned each lemon into lemonade. The man who owned the house was a pensioner. He had no desire to work and every desire to be pessimistic about the future. He also had this young kid that he thought he could contaminate with his thinking. It did not work. Brad almost converted him to an optimist.

The second problem was London’s subway workers went on strike. When Brad called I told him to look for a used bicycle and ride to work. Brad found a bicycle for fifteen dollars and did just that for a few weeks until the strike ended.

There are many stories Brad can tell about his experiences that summer.

The final problem with the summer was getting home. Freddie Laker was on the verge of bankruptcy. I think he got the last flight out of London. Freddie flew to Philadelphia and landed at 6.30 pm.

Brad called us not knowing what to do. Our advice was to stay cool and fight his way on to an American Airlines flight. With a lot of talking, a little help from Freddie and a tremendous about of perseverance Brad got on the 9.30 pm flight from Philadelphia.

I picked him up at DFW at 1 am, gave him a big huge and told him how proud I was of him.

Cecelia, Daniel and I stayed up most of the night hearing stories of his London experience. If it wasn’t for Mr. X and my perception he needed a friend, Brad and our family would not have had this wonderful experience.

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

  • kare anderson

    I am deeply honored to be a part of your “family” here at your blog. You always give me fodder for thought and you tend to bring out our better side. My friend Eileen R. Growald is writing a book about Family Matters and you and Brad are inspiring examples

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A Tale Of Two States


Stanley Feld M.D., FACP,MACE

The tale of two States demonstrates the difference between doing healthcare reform incorrectly and correctly.

Obamacare is fashioned after the Massachusetts healthcare reform plan. It leaves the administrative services in the hands of the healthcare insurance industry.

Indiana empowers consumers to control their healthcare dollars.

Therein lies the difference between ineffective and effective healthcare reform.


President Obama has even given the State of Massachusetts $8 billion dollars in bailout money to support the failed healthcare reform plan.

“MASSACHUSETTS HAS been lauded for its healthcare reform, but the program is a failure. Created solely to achieve universal insurance coverage, the plan does not even begin to address the other essential components of a successful healthcare system.”

President Obama’s healthcare reform plans goals mimic the goals of the Institute of Medicine. His goals are coverage should be universal, not tied to a job, affordable for individuals and families, affordable for society, and it should provide access to high-quality care for everyone.

No one would disagree with these goals. Massachusetts’ healthcare reform plan had these goals

“The state’s plan flunks on all counts.”

“First, it has not achieved universal healthcare, although the reform has been a boon to the private insurance industry. The state has more than 200,000 without coverage, and the count can only go up with rising unemployment.

Second, the reform does not address the problem of insurance being connected to jobs. For individuals, this means their insurance is not continuous if they change or lose jobs. For employers, especially small businesses, health insurance is an expense they can ill afford.

Third, the program is not affordable for many individuals and families. For middle-income people not qualifying for state-subsidized health insurance, costs are too high for even skimpy coverage. For an individual earning $31,213, the cheapest plan can cost $9,872 in premiums and out-of-pocket payments. Low-income residents, previously eligible for free care, have insurance policies requiring unaffordable copayments for office visits and medications.

Fourth, the costs of the reform for the state have been formidable. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009, which is not sustainable.

Fifth, reform does not assure access to care.”

The Governor of Massachusetts in now threatening to institute price controls. Price controls never work.

There is little hope it will work now. Former Governor Mitt Romney sold this plan as a way to control spending. The new entitlement has failed to control costs. For fiscal 2010 the cost over budget is $47 million and in fiscal 2011 the cost is estimated at $913 million. The original estimated cost was two thirds less.

The plan could never work because the health insurance industry had control over the healthcare dollars and kept raising premium prices.

Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved."

The Massachusetts healthcare reform plan is not beyond price controls.

On the other hand the State of Indiana has conducted a different experiment. They have instituted a system using Healthcare Savings Accounts (HSA). It has been very successful.

The healthcare reform was set up as a healthcare insurance option for State s. In the first year only 4 percent of State employees signed up for the HSA option.

In the second year over 70 percent of Indiana’s 30,000 state workers chose the HSA option.

The HSA option has proven highly popular, says Mitch Daniels, Indiana’s governor, by far the highest in public-sector America.”

This is how it works;

  • In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee. The employee pays all his health bills controlling his first healthcare dollars. The State of Indiana pays the premium for the plan.
  • The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.
  • It turned out that a very small number of employees (about 6 percent last year) used their entire $2,750 account balance.
  • The unused funds in the account (to date some $30 million or about $2,000 per employee) are the State employee’s permanent property.
  • The State shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

The State found that individually owned and directed health-care coverage has a startlingly positive effect on costs for both employees and the state.” State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative.

Mitch Daniels says the state is saving, too.

In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of high HSA enrollment.”

“Mercer, a healthcare consultant calculates the state’s total costs are being reduced by 11 percent due solely to the HSA option.” 

The contrasts between the financial results of the two states are obvious. Obamacare is similar to the Massachusetts plan with added infringements on freedom to choose. It will fail.

The Indiana healthcare reform plan can be improved upon using the ideal Medical Savings Account.

There is no reason not to try a plan similar to the Indiana plan in most States. States are required to have a balanced budget. The Senate bill has marginalized health savings accounts. President Obama has refused to understand the merits of giving consumers the freedom to be responsible for their healthcare dollars.

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

  • Dave Wilson

    HSA’s are the obvious solution. To add insult to injury, it looks like the new health care reform is changing HSA benefits rather than expanding them! It’s going in the wrong direction

  • Stanley Feld M.D.,FACP,MACE

    You got it Dave.
    President Obama’s goal is to limit choice and force everyone into the public option and socialize medicine.
    corporations will pay the penalty rather than provide healthcare insurance.
    Stanley Feld M.D.,FACP,MACE

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President Obama’s Healthcare Summit Demonstrates A Lack Of Understanding

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Summit demonstrated a lack of understanding of the important problems that need to be fixed in the healthcare system.

The critical problem is rising costs. The government cannot afford Medicare or Medicaid in its present form. Corporations cannot afford to provide healthcare insurance for its employees. Individuals cannot afford to buy healthcare insurance.

President Obama’s goal is to “provide? (offer?)” affordable healthcare insurance to all (universal care) and to increase the quality of care. His goals are admirable. His route will fail. He cannot expanded entitlements. He must motivate and increase consumer responsibility for their health and healthcare.

At the onset of his Healthcare Summit he refused to drop the House and Senate bills and start all over again.

I have written several articles outlining why the House and Senate bills are terrible bills. These bills will not solve the healthcare systems problems. They will increase the deficit and decrease access to care for seniors and non seniors. Both seniors and not seniors will experience much greater out of pocket expenses with decreased access to care.

During the Healthcare Reform Summit, President Obama demonstrated his lack of understanding of the Malpractice Reform issue. Howard Dean told us a few months ago the Democrats do not want Tort Reform because they did not want to take on the trial lawyers. Shortly after that Howard Dean disappeared from the national scene.

The evidence for trial lawyers influence appeared in a Washington Examiner editorial on December 21,2009. The Examiner published the following chart.


Senator Dick Durbinclip_image002 of Illinois, formally a plaintiff’s attorney, explained the trial attorneys’ position below.




I have always told my students to beware of the man with one case. His speech was delivered as plaintiff’s attorney.

The value of a life or an injury is priceless. The point is our society cannot afford the present malpractice system’s structure and the structures effect on the healthcare system’s costs and the behavior of the labor force (physicians).

President Obama’s summarized his view on malpractice reform in his concluding remarks at the Healthcare Summit starting at five minutes and fifteen seconds of this clip.



I think President Obama should check his facts.

The only good study estimating cost of the malpractice system that I am aware of is the Massachusetts Medical Society study.

Cost is in Billions Per Year:  Sethi and Aseltine estimated the costs of the tests to be $281 million for the eight specialties surveyed, based on Medicare reimbursements rates in Massachusetts for 2005-2006. In addition, the cost of unnecessary hospital admissions was estimated to be $1.1 billion, for a combined total estimate of nearly $1.4 billion. The authors said the dollar estimates do not include tests and diagnostic procedures ordered by physicians in other specialties, observation admissions to hospitals, specialty referrals and consultations, or unnecessary prescriptions. The eight specialties represented in the survey account for only 46 percent of the physicians in the state.

If you add the additional 54% of Massachusetts physicians the total cost estimate for Massachusetts would be $3.04 billion dollars per year spent on defensive medicine. If you assume Massachusetts is an average state and multiply by the remaining 49 states the estimate for defensive medicine is $149 billion dollars a year.

“Physicians practice defensive medicine because they don’t trust the medical liability system. This survey should provide a strong impetus for legislative, business, and health care industry initiatives promoting fundamental liability reform. Reducing defensive medicine in Massachusetts could dramatically reduce costs and at the same time improve patient safety, access to care, and quality of care.” 

This estimate does not include the cost of the cost litigation, malpractice judgments or the wear and tear on patients and physicians. It does not include the loss of physician practice time.

During the Healthcare Summit the Democrats and Preside
nt Obama quoted the CBO publishing a cost of $24 billion a year spent on malpractice
. The CBO reported that it only cost 2% of the total healthcare costs. The CBO’s article was published in January 2004 and uses earlier data. He said that cost was less than 1% of our $2 trillion dollar healthcare system. He feels it is an insignificant cost and should be ignored.

This article only reflected the cost of malpractice judgments. It does not reflect the cost of defensive medicine.


“Savings of that magnitude would not have a significant impact on total health care costs, however. Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending.(12) Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.(13)

This year the CBO report revised its 2008 estimate of defensive medicine from $5.6 billion dollars a year to $54 billion dollars.

“The CBO estimate of tort reform’s potential to reduce the deficit is roughly 10 times greater than what it projected last December (a reduction of $54 billion instead of $5.6 billion). At that time, the agency said that evidence about the extent of defensive medicine — and how tort reform could reduce it — was murky. However, more recent research suggests that "lowering the cost of medical malpractice tends to reduce the use of health care services," according to the latest CBO report.”

It does not seem to be an exact estimate by the CBO by its own admission. Why doesn’t President Obama advocate significant Tort Reform over the next few years and see if it works rather than piddling with pilot studies?

Although the CBO now believes that tort reform would significantly curb defensive medicine and its cost, the agency’s numbers are still far short of the savings claimed by some advocates for tort reform. For example, a 2007 study by the National Center for Policy Analysis, a conservative think tank, put the annual cost of defensive medicine in 2005 between $100 billion and $178 billion. In contrast, the CBO priced defensive medicine in 2009 at $6.6 billion.”

If the Massachusetts Medical Society and the National Center for Policy Analysis studies are correct the cost of healthcare would be significantly reduced.

Small poorly designed pilot studies will produce variable results and take many years. Evaluating the studies by combining them for meta-analysis will not demonstrate the true impact of tort reform even if it is positive.

President Obama, please understand the real issue involved in Tort Reform and ignore the vested interests.

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

  • Jon Bellantoni, MD Susquehanna Ob-Gyn

    Dr. Feld:
    Many thanks for your ongoing column. Senator Durbin’s sanctimonious diatribe was exactly what you said it was – a closing argument to a jury. Neither the Senator nor the President recognize the intrinsic dysfunction of medical tort. As succintly described in a 2004 NEJM article (NEJM 350;3 283-292), the current medical malpractice system serves neither of its potential societal duties: promoting safe medicine and reimbursing the truly aggrieved. The system of advocacy (and untethered sympathy) that drives medical tort is based on the same entitlement mentality that causes medical cost to sky-rocket.
    The irony is that if the President were to concede this point to the medical community (we are told it would only cost one fifth of one percent of all medical costs to “buy off” the plaintiff’s bar), he would win the the emotional hearts of nearly all the practicing physicians in this country who would probably forgive all of his plan’s other major short-comings.
    If you have not already read it, I would recommend Phil Howard’s “Life Without Lawyers” to your already busy reading list.

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