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Medical Care Must Not Be A Commodity

Stanley Feld M.D.,FACP,MACE

President Obama is creating a new bureaucratic agency. It is called the Independent Payment Advisory Board. The Independent Payment Advisory Board will not be measuring clinical judgment or patient compliance when judging the effectiveness of treatment. Its measurement will be physician compliance with evidence based medicine. President Obama, please reexamine your premises.


I am in favor of clinical practice guidelines and evidence based medicine. However, both should be used as an educational tool for physicians and not as a punitive tool to judge payment.

The USPHTF will determine the evidence based medicine to be used. I have pointed out the deficiencies in the USPHTF in the past.

This bureaucracy is an attempt by the government to commoditize medical care. Once medical care is commoditized the cost for medical care is suppose to decrease.

Intensive control of the blood sugar for Type 2 Diabetes Mellitus can be expensive in the short run. If intensive control decreases the complications of Type 2 Diabetes Mellitus it can decrease costs in the long term.

The conclusion of the ACCORD study was intensive control was not worth the cost of medical care in the short term or long term. After the data was reexamined it turned out that the ACCORD conclusions were incorrect.

“It was not hypoglycemia from intensive control or intensive control itself that caused the increased deaths in the ACCORD study.”

Unfortunately, this information was not being reported on every TV station as the original study results were. The original study results set back universal use of intensive control of Type 2 Diabetes at least a decade.

“ It was important to say that in the intensive group it really was not the people with lower A1c who had problems, it actually was those who had the higher A1c who, despite intense efforts, we couldn’t get under control."

This means patients did not comply with their responsibility to intensively control their chronic disease or their physicians did not teach them to control their blood sugar adequately.

"This reexamination gives a stronger momentum to the idea that we need to be thinking that one size doesn’t fit all, we need to have different targets for different groups of people and perhaps different treatment strategies to reach those different targets as well. That’s troubling both clinically and to the trialist.”

"This is something of a new idea, because previously there has been a strong impetus to having standardized guidelines for doctors and people with diabetes, but it’s probably not the right thing to do.”

The reader can sense the discomfort of the academic physicians. They are realizing they cannot commoditize medical treatment. Ask any experienced practicing physician about their patients. Patients have different attitudes about their disease and treatment.

Each patient has to be related to differently. This is clinical judgment. Physicians communicating with their patients is called the physician patient relationships. Patients should be responsible for their outcomes along with physicians. This is the art of medicine. Neither patient nor physician can be treated as a commodity.

President Obama, I hope you are listening. Medical care is difficult to commoditize.

The ACCORD study originally suggested that the goal to normalize the HbA1c resulted in an increase in cardiovascular deaths. It turned out not to be true.

On the other hand an observational study was just published concluding that the lower the HbA1c the lower the complication risk.

The Atherosclerosis Risk in Communities (ARIC) study is a community-based assessment of 11,092 middle-aged adults in four US communities with normal HbA1c were followed for up to 15 years (4 visits at about 3-year intervals) for onset of new diabetes, new CVD, stroke, and all-cause mortality.”

The higher the HbA1c the higher the average blood sugar and the greater the risk for chronic complications of Type 2 Diabetes Mellitus. HbA1c is a measure of the average blood sugar over the previous three months.

Table. HbA1c Levels and Corresponding Multivariate Hazard Ratios

HbA1c Level

Multivariate-Adjusted Hazard Ratio

< 5%

0.52 (0.40-0.69)

5% to < 5.5%

1.00 (reference)

5.5% to < 6%

1.86 (1.67-2.08)

6% to < 6.5%

4.48 (3.92-5.13)

≥ 6.5%

16.47 (14.22-19.08)

HbA1c = hemoglobin A1c

“The hazard ratios for stroke were similar, but for all-cause mortality, HbA1c displayed a J-shaped association curve. All associations remained significant after adjustment for the baseline FPG.”

The study found HbA1c values predicted Cardiovascular Disease (CVD) or death, whereas fasting plasma glucose (FPG) levels were not significant after adjustment for other risk factors.

“The recent ADVANCE [Action in Diabetes and Vascular Disease: Preterax and Diamicron MR Controlled Evaluation], ACCORD [Action to Control Cardiovascular Risk in Diabetes], and VADT [Veterans Affairs Diabetes Trial] trials left us wondering about the value of tight glycemic control in reducing CVD risk.

“One of the many shortcoming of each of these trials was that most participants had had diabetes for many years, and the designs could not account for the long-term accumulation of glycemic burden.”

The authors claim that the vascular damage from high HbA1c may have already occurred. Tight control during the trials might have had relatively little effect. This is probably not true.

There is evidence that normalizing the blood glucose can lead to regression of the vascular lesions that cause the complications of Diabetes.

The current ARIC analysis demonstrates that higher HbA1c levels, even in the normal range, increase CVD risk.

These results are not conclusive because it is an observational study as opposed to a double blind placebo controlled study. The USPHTF and President Obama’s Independent Payment Advisory Board would not give this study as much credit as the ACCORD study.

The ACCORD study was a p
lacebo controlled double blind study. Its conclusions have more power than an observational study (ARIC). The problem is ACCORD measured the wrong endpoint. ACCORD has resulted in a great disservice to the standard of medical care of diabetes.

The results of The Atherosclerosis Risk in Communities (ARIC) study suggest that maintaining a HbA1c as near normal as possible even before the onset of diabetes may help prevent CVD.

As President Obama tries to quantify the standard of care he could be picking the wrong standard of care in order to reduce the cost of medical care. All medicine is local. Standards of care are always evolving. The standard of medical care should be determined by local medical leaders respected as teachers by local practitioners. It can also be enforced by local peer review with no monetary interest in the outcome.

President Obama’s effort to improve medical care at a reduced price will not succeed if it is interpreted as a punitive measure by a national bureaucra

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

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Father Son Weekend


Stanley Feld M.D.,FACP,MACE

In 2006 Brad suggested I write a blog since I had so many ideas about Repairing the Healthcare System.

In the course of writing the blog Brad and I decided to write about each other occasionally. We have done a Father and Son Weekend for a number of years.

Brad in NYT

This year we spent our Father Son Weekend in San Diego. We have no goal. We simply hang out. Every year I come home invigorated.

We went to Coronado because Coronado is the “World Headquarters” of Howard Lindzon’s

Last year Cecelia and I meet Howard in Phoenix two years. Brad has invested in a few of Howard’s companies. Howard is a guy who has an idea a minute. He is a vibrant personality. He never stops churning. His vibrancy can be seen on  video feeds. Stockwits tag line is Real Investors, Real Ideas, Real Time.

This year is the year of Howard’s first annual LindzonPaloza. He invited 45 venture capitalist, investors, and entrepreneurs from all over the country and me to the LindzonPaloza. Forty four people showed up.

I was invited because I am Brad Feld’s Dad.

What is a LindzonPaloza? It is a Meet and Greet sponsored by Social Leverage one of Howard’s companies. “Social Leverage’s” tagline is Invest, Syndicate. And Grow.

I was hanging out with some of the brightest people in the world. All were under the age of 45. I learned about their views of the world, their attitudes and impressions of the future.

Brad vigulucii 2010

Let me tell you folks, their view is a very optimistic view of the world.

Everyone had at least two smart phones. During lunch on Friday part of the discussion was which was the best smart phone. Brad had just been on a couple of panels at the I/O Google conference. Google sent him a Droid with an Android OS 2.1 before the conference and gave him an EVO Android 2.1 at the conference. One guy had Incredible Android 2.1. Everyone had an IPhone.

I concluded from the smart phone discussions that Apple had better watch out. Steve Jobs’ party is almost over. He will not be able to play catch up. It had Sprint since 1982. I quit Sprint 2 years ago because they did not have an adequate smart phone.

I think I am going back to Sprint as soon as the EVO with Android 2.2 is released. This is just one of the many things I learned over the weekend.

Most fascinating was the many philosophies of venture capitalist investing. These guys have big ideas. They are all smart and articulate. They are going to revolutionize our existence. The different philosophies were directly related to the differences in personality.

After lunch we wandered over to Howard’s Stockwits Headquarters. Howard interviewed Brad on Stockwits for 30 minutes.

Howard talked us into spending some time     shooting the breeze on the patio at the del Coronado. I stuck close to Brad all weekend learned a lot from him.

Howard continued the Meet Up with hors d’ouerves and wine on the patio. My brother, Charlie Feld, and I were concerned that healthy people between the ages of 40-55 were not interested in President Obama’s healthcare proposals.

I had a chance to pitch my views. Brad and Howard made the introduction about healthcare to get me started. I was pleased that most of these guys were very concerned. .

At 6pm PDT it was either eating with the group or on your own. It was time for the famous Feld Men’s nap. The timing was just right. I was 4 pm Dallas time. A fifteen minute snooze and we were all set for dinner.

Neither Brad nor I remembered that we were scheduled to eat at Vigilucci’s on Saturday night. We had Friday dinner together at Vigilucci’s.

stan in california If you’re in Coronado for dinner go to Vigilucci’s. Brad and I spoke about life, the past and the future for two and a half hours. Love that boy!

At nine o’clock we split to go to our separate rooms. I think I was asleep by nine fifteen. Saturday morning I jogged at 7 am along the bayside. Brad and I were going to meet for breakfast at 9 a.m. It was cold in San Diego. I had a windbreaker and hat on and was shivering. Brad didn’t show up at nine. He was swimming in the pool. He didn’t wake up until 9. I tried to get his attention while he was swimming but he was in a zone.

We finally went to breakfast at 10.30 a.m. Clayton’s Diner was packed. We had at least a 25 minute wait. We decided to have chocolate ice cream at Moo Time Creamery before breakfast. Chocolate ice cream before breakfast is not a bad idea.

We finished breakfast at noon and hurried back to the “del” to meet up with anyone that wanted to go to Iron Man 2 with us. David Cohen  and Micah Baldwin were the only people interested.

The taxi took us somewhere in San Diego. Iron Man 2 is a campy movie. It must be seen with the right attitude. The movie held my attention. I slept only for ten minutes.

LindzonPaloza is a Meet-Up. We went back to the “del” patio to continue discussions after the movies.

Next event was a group dinner at Vigilucci’s. I thought I met and spoke to everyone. I was wrong. I kept meeting additional intelligent, critical thinkers. They were all 25 to 35 years my junior. I think America will be in good hands. They all know what’s going on.

Howard threw a spectacular Meet Up. I thank him for letting me participate. Many people were leaving on Sunday morning. Howard told us to meet him at 9 am in the Coffee Shop on Orange. Neither Brad nor I had the vaguest idea where the Coffee Shop was located but we figured we would be smart enough to find it. We got lost because we were talking so much.

I had a great weekend.

Everyone should spend at least one weekend a year alone with their kid. I guarantee it will be invigorating.

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Is Evidence Based Medicine Based Medicine The Holy Grail?

Stanley Feld M.D.,FACP, MACE

“Reanalysis of an ACCORD study refutes link between intensive therapy, higher death risk from Cardiovascular Disease”

Most of my readers know I am a retired Clinical Endocrinologist. I practiced Clinical Endocrinology for 30 years. I do not have a billfold interest in the healthcare system. My goal is to influence policy makers to develop a healthcare system that will work and decrease costs.

During my practice of Clinical Endocrinology I became involved in Clinical Research. My involvement forced me to understand the nuances of clinical statistics. I gained an appreciation of the defects of statistical analysis in clinical research.

When I was Vice President, President elect and then President of the American Association of Clinical Endocrinologists I was Chairman of AACE’s Diabetes Guidelines. I also co-chaired the guidelines for Thyroid Disease, Thyroid Nodules, and Thyroid Cancer.

The process of writing the guidelines increased my appreciation for both excellent and shabby clinical research.

The AACE Diabetes Guidelines are a “System of Intensive Diabetes Self-Management for Type 2 Diabetes Mellitus.” Clinical endocrinologist knew that in order to avoid the complications of diabetes mellitus, patients had to be taught how to manage their disease. It was a team approach. Patients had to be taught by physicians and their healthcare teams to be responsible for their day to day blood sugar control.

The AACE Diabetes guidelines were an outline of a process of care. Over the last 15 years many new oral drugs have been introduced to control blood sugar in Type 2 Diabetes. The concept of patients’ responsibility for the self management of their disease must not be de-emphasized.

Patient responsibility has not been included in President Obama’s healthcare reform bill.

In the last few years there have been studies that have discredited the concept that normalizing the blood sugar would decrease diabetes complications. One such study was a study call ACCORD “The Action to Control Cardiovascular Risk in Diabetes”. The study found patients in the intensive control of blood sugar group had a higher mortality from Coronary Artery Disease than patients in the control group.

This conclusion was counterintuitive to previous evidence, evidence I believed to be statistically significant. However, I understood the defects in Accord’s statistical analysis at publication. The journal referees did not pick up the defects

The media publicized the findings undermining the significance of the progress in the culture change toward tight blood sugar control in Type 2 Diabetes Mellitus. Patients were confused. They decreased their effort to normalize their blood sugar.

I wrote extensively about the defects in the statistical analysis of the Women’s Health Initiative (WHI). My critique fell on deaf ears. None of the finding in the WHI were statistically significant.

The conclusion that estrogen therapy was dangerous to women’s health was misguided. The costly NIH study was poorly designed and did not prove there is an increased incidence of complications statistically.

It might be that estrogen therapy is dangerous to the health of women. This study did not prove it in a statistically significant way.

The study did change the course of women’s health in this country forever. None of the academic leaders spoke out to refute the study statistically.

The WHI is the Holy Grail for evidence based medicine in women’s health. I think the WHI has been a setback in treatment for post menopausal women 50 years and older.

The Accord study has been a setback for the concept of intensive self management and tight blood sugar control for Type 2 Diabetes Mellitus.

President Obama’s healthcare reform bill is in the process of creating bureaucratic review boards that determine the standards of evidence based medicine.

Some clinical studies are excellent and should set the standard for evidence based medicine. It should be the way physicians practice. President Obama’s boards should be educational boards for physicians. Instead they will be punitive boards focused on reducing reimbursement.

Some evidence based medicine is shabby, poorly designed, and not statistically significant. Those studies conclusions should not be forced on the practicing medical community.

The Action to Control Cardiovascular Risk in Diabetes (ACCORD) study was abruptly halted in 2008 when researchers noticed an increase in deaths in the group of Type 2 diabetics being intensively treated to bring their blood sugar levels down to near-normal levels.”

Termination of the study received wide coverage by the traditional media. No one critiqued the design of the study or the reasons for its statistical outcome.

Two years later the investigators have realized the errors in the study.

A new analysis of data from that study has concluded that a rapid lowering of blood sugar (glucose) levels was not the cause of the increased risk of mortality.

However, even though the researchers were able to exclude intensive diabetes management from their list of suspects, they still aren’t clear what factors may have played a role.”

I applaud study author Dr. Matthew Riddle, a professor of medicine at Oregon Health and Science University in Portland, for further analyzing the data.

"The original question underlying the study was,

would rapid lowering of blood glucose be an explanation for the excess mortality rates?"
"The answer was no.

People who rapidly lowered their A1c didn’t have excess deaths," Riddle said. In fact, "it was the ones who couldn’t bring their A1c’s down that had increased mortality."

This is the way errors in clinical research findings have been discovered in the past.

President Obama’s quest to reduce government spending will result in decisions about evidence based medicine made by bureaucratic panels before the data is tested and retested. My fear is the standards of care will be changed to reflect new evidence too swiftly. The change will be to the detriment of advances in patient care.

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

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What Is A Medical Home?

Stanley Feld M.D.,FACP,MACE

In the 1980’s primary care physicians thought they were king. In reality, they were pawns for the managed care companies. Their job was to be the gatekeeper and manage costs not care. Patients could not see a specialist unless referred by a primary care physician. The managed care system did not decrease medical care cost. It restricted access to care. Patients rebelled.

In 2002, seven U.S. national family medicine organizations created the “Future of Family Medicine Project” to "transform and renew” the specialty of family medicine.

The specialty of family medicine has been devalued in the last 20 years. Primary care physicians practice cognitive medicine. Reimbursement for cognitive medicine is low and has been decreasing while overhead has been increasing.

Primary care organizations have proposed a Medical Home Model to increase their value. Medical Home is a strange name for this model of medical care.

The definition of a Medical Home is a patient-centered approach to providing comprehensive primary care. Patients should understand that their care would be coordinated by their personal primary care physician and his/her team of physician extenders.

The model emphasizes a partnership between patients and their physicians. In recent years physicians have been called healthcare providers. I have insisted they be called physicians because they provide medical care; healthcare care providers should provide assistance to physicians’ medical care.

The term healthcare provider devalues physicians’ contribution to patient care. In turn it is used to decreases reimbursement.

Medical Homes might deliver better access to health care, increase satisfaction with care, and improve health. Primary care physicians should have been doing this all along.

However, economic conditions have forced primary care physicians to see a greater number of patients in a shorter time. Many primary care physicians have not related well to patients because of the time limitations.

Primary care physicians have to incorporate systems of chronic disease management into their practice of medicine. These systems of chronic disease management must teach patients how to be professors of their chronic disease so they can avoid the costly complications of chronic disease.

Eighty percent of the healthcare dollar is spent on the complications of chronic disease. In order to avoid these complications patients need to be taught to self-manage their chronic disease.

If primary care “Medical Home” could teach patients to be responsible for the control of their disease and increase compliance with medical treatment recommendations a cost savings would occur.

It remains to be seen if the “Medical Home Model” will achieve its goal. President Obama is setting up pilot studies to see if “Medical Homes” work. I fear the physician incentives are too small. Also patient incentives are not included but are critical to the models success.

There is a shortage of primary care physicians. With 30 million more people insured the shortage of primary care physicians will intensify. The result will be long delays in seeing a primary care physician. Long delays have occurred with Romney care in Massachusetts.

President Obama’s pilot studies will increase primary care physicians’ reimbursement 5.6%. I do not believe this is enough. He plans to get the money by decreasing specialist compensation.

“In President Obama’s Washington, medical specialists are slightly more popular than the H1N1 virus. Compared to bread-and-butter primary care doctors, specialists cost more to train and make more use of expensive procedures and technology—and therefore cost the government more money. .”

President Obama has declared war on medical and surgical specialists.

Future of Family Medicine Project has recommended;

that every American should have a "personal medical home" through which to receive his or her acute, chronic, and preventive services. The services should be "accessible, accountable, comprehensive, integrated, patient-centered, safe, scientifically valid, and satisfying to both patients and their physicians."


Execution by primary care practices will be the problem. Articles supporting the concept Medical Home are not scientific studies. They are at best survey estimates and consensus documents declaring that a medical cost savings will result.

I believe it would be very difficult for Medical Homes to be accessible 24/7, comprehensive, scientifically valid and satisfying to both patients and physicians.


If the Future of Family Medicine recommendations were followed (including implementation of personal medical homes), "health care costs would likely decrease by 5.6%, resulting in national savings of 67 billion dollars per year, with an improvement in the quality of the health care provided."

In 2007, the leading primary care physician organizations in the United States released the "Joint Principles of the Patient-Centered Medical Home."

The principles are:

  • Personal physician: "each patient has an ongoing relationship with a personal physician trained to provide first contact, continuous and comprehensive care."
  • Physician directed medical practice: "the personal physician leads a team of individuals at the practice level who collectively take responsibility for the ongoing care of patients."
  • Whole person orientation: "the personal physician is responsible for providing for all the patient’s health care needs or taking responsibility for appropriately arranging care with other qualified professionals."
  • Care is coordinated and/or integrated, for example across specialists, hospitals, home health agencies, and nursing homes.
  • Quality and safety are assured by a care planning process, evidence-based medicine, clinical decision-support tools, performance measurement, active participation of patients in decision-making, information technology, a voluntary recognition process, quality improvement activities, and other measures.
  • Enhanced access to care is available (e.g., via "open scheduling, expanded hours and new options for communication").
  • Payment must "appropriately recognize[s] the added value provided to patients who have a patient-centered medical home." For instance, payment should reflect the value of "work that falls outside of the face-to-face visit," should "support adoption and use of health information technology for quality improvement," and should &
    quot;recognize case mix differences in the patient population being treated within the practice."

These are all important principles.

The last principle deals with increasing reimbursement. Candidate Obama pledged to support Medical Homes when elected President. Multiple accrediting agencies are being formed to oversee the practice in Medical Homes. Increased bureaucracy leads to increased inefficiency and increased costs. It also leads to the increased possibility of failure of the pilot.

The concept of Medical Homes is a step in the right direction. If successful it can help the important specialty of primary care flourish. It will require teaching primary care physicians how to set up systems of intensive self management for chronic disease as well as adequate reimbursement for these services.

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

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Here Comes The Public Option. Next: Single Party Payer.


Stanley Feld M.D.,FACP,MACE

Barney Frank declared during the healthcare reform bill debate, if we do not have a public option healthcare reform will fail.

Senator Kerry felt we must have a single party payer system. He stated the Democratic Party did not have the votes to put it in the bill.

President Obama and the Democrat figured out how to sneak a single party payer system into the healthcare system in America by default.

President Obama’s signature promise about the healthcare reform bill was "If you like your health care plan, you can keep your health care plan. If you like your doctor you can keep your doctor.”

What President Obama left out of his promise was that if your employer stops your healthcare insurance coverage there will be no choice but to use the subsidized government healthcare plan from the healthcare insurance exchange “Public Option”.

President Obama uses this move a lot. It is called misdirection.

As companies crunch numbers on what the new law means for their bottom line, some have concluded they might be financially better off canceling their health care coverage and moving their workers to government-subsidized "exchanges" that will be created in four years. “

Corporate action to drop healthcare insurance will make Barney Frank, Nancy Pelosi, John Kerry and President Obama happy. I do not think the Democrats have thought about the unintended consequences. Just think what the influx of consumers to the government subsidized plan will do to the CBO’s estimate of the healthcare reform bill reducing the deficit by $115 billion dollars in ten years and 1 trillion dollars over the next 10 years.

The CBO revised its estimate this week. It stated that the bill will increase the deficit by that amount in the tenth year instead of decreasing it. I believe this is an underestimate.

AT&T Inc has concluded that eliminating employees’ healthcare insurance could mean a $1.8 billion dollar saving per year. It is much cheaper to pay an estimated penalty $2,000 per employee than $15,000 to 18,000 in non deductible dollars for employee healthcare insurance coverage.

The documents, obtained by Fortune magazine and posted online this week, reveal that four companies – AT&T, Verizon Communications Inc., Caterpillar Inc. and Deere & Co. – had investigated to varying degrees the impact of dropping health care coverage and pushing their workers onto the new exchanges, where they will be able to buy their own insurance.”

This year AT&T spent about $2.4 billion to cover medical costs of its 283,000 active workers. Next year they are scheduled to pay more.

AT&T instantly denied that it has a plan in place to drop healthcare insurance for employees. AT&T would only have to pay an annual penalty of $600 million, or $2,000 a worker if the company dropped the healthcare insurance.

The burden would be on the employee and the government. President Obama promised us all affordable healthcare insurance.

Large companies are sick of dealing with increasing insurance premiums, insurance paperwork and regulatory compliance. These large companies would pocket huge savings by eliminating healthcare insurance for employees.

"Even though the proposed [penalties] are material, they are modest when compared to the average cost of health care," Hewitt Resources said in its report. "To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees to the exchanges."

All the large corporations are denying they have plans to drop healthcare insurance. However it is o
bvious this is just what they should do to protect their vested interests.

Just as bad an unintended consequence is firms fewer than 50 full time employees do not have to pay a penalty for dropping insurance. A firm at the 50 employee threshold could fire workers to get below the 50 mark. They could then hire them back as part time employees.

If al these people lose healthcare insurance they will be forced to go into Medicare, Medicaid or the government subsided “Public Option” through the healthcare insurance exchange. Either option will increase government spending. The estimate increases are low at $160 to 300 billion dollars per year.

President Obama’s little trick will work. The losers will be consumers. Everyone will be forced into the “Public Option” by default. The single party payer (the government) will automatically take over the healthcare system in America (socialized medicine).

The federal deficit will increase without Repairing the Healthcare System.

Taxes on everyone will have to be increased . Does President Obama understand all of this?

Americans must wake up. The 2010 midterm elections are near.

“It is time to trow da bums out

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

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Accountable Care Centers Continued


Stanley Feld M.D.,FACP,MACE

I received the following note from Dale Fuller M.D. a retired Radiation Oncologist. Like me Dr. Fuller does not have a billfold agenda for Repairing The Healthcare System. I will add my comments to his extensive critique of Accountable Care Organizations (ACO).

“I read your piece this morning, and a number of thoughts come to mind; One is a quote from Richard Nixon, who when he was "vamping for time", would say.”Let me say this about that!"  In this case the "that" is the issue of ACO’s. It stimulated some general ideas about how medicine is structured, and how care is or could be paid for.”

Dr. Fuller has expressed some of the same concerns that I have about ACO. He nailed it with his concern for the hospital systems taking advantage of physicians’ intellectual property.

It concerns me that the lead in the formation of ACO’s is generally a hospital, and most often, a large one, with multiple sites of service.  My fifty years in medicine have caused me to recognize that the management of hospital organizations and the leadership of doctor groups of any size, small or large, do not have interests that are congruent.

When hospital systems realize its vested interests must be aligned with physicians’ vested interests systems such as ACO might be effective.

I have no reason to believe that the administrators of hospitals understand the business side of medicine very well. Hospital administrator may be able to learn the business of medicine over time. The doctors would be well advised to "watch their hats and coats" while the learning is taking place.

Moreover hospital administrators tend to come and go, sometimes with great frequency, and each change brings new managers with new management strategies. Doctors, changing as they do with much less frequency, will have to learn to adapt to constantly to new management strategies.

Hospital administrations usually change because the hospital is not making enough money. Hospital systems might not make enough money when administrators treat staff physicians poorly. Physicians can undermine hospital systems’ built in profit leverage. Physicians’ may have also negotiated too good a deal.

Some of those changes will in one way or other impact physicians’ earnings. That is to say nothing about recognizing the difference in the earning expectations and compensation strategies among the various specialties likely to be swept up together in an ACO.

The division of the "pie" of dollars will be a daunting exercise, just as it is now, but with the added complexity of hospital administrators adding their own expectations to the process, and claiming their own piece of the pie.

The transition will mark the end of the era of the practice of medicine as a "cottage industry" as it is transformed into an assembly line approach to the delivery of  the care of patients.

You can bet the process of dividing reimbursement will be contested. It is difficult enough when deciding compensation among physicians in multi specialty groups.

“In your piece you mention that the dollars paid to the ACO will still be procedures based, and I believe that same process, probably with RVU’s, could easily be translated into an algorithm to facilitate the division of the revenue to those delivering the services, with, of course, that healthy slice off the top, for the administration of the ACO, provided by you-know-who.(hospital administrators).

Physicians are beginning to understand that the healthcare insurance industry loads its overhead. As physicians enter into partnerships with hospital systems they are starting to realize that the hospital systems administrators overload physicians overhead. Hospital systems pay all the overhead for employees, rents and equipment maintenance many times at an inflated fee.

Physicians are not stupid. They are starting to wake up.

“I have the sense that not only of the adage "he who has the gold makes the rules “will apply, but in addition, "he who has the data controls the flow of payments".  And, more often than not, the data is controlled by the insurance companies and by the CMS (aka the government)”

  Generally the doctors are pretty clueless about the existence and the potential usefulness of the data, prevented as they have been from negotiation with the payers with both sides having equal access to that information.

I have been told by healthcare insurance executives that physicians will remain clueless. I replied that physicians are a sleeping tiger. When they awake the party for secondary stakeholders will be over.

Physicians are reluctant to purchase and install expensive electronic medical records. Data such as claims data have been used against them. Claims data are inaccurate. Physicians are starting to learn how to collect data to be used for their advantage.

“The data is all there and could readily be used to develop case rates for individual diagnoses, or, given the characteristics of a given patient population, a capitation rate could be set quite easily based on the experience and the risk factors inherent in the makeup of the population.”

Useful data presupposes a large data base. Most of the physicians are solo or in small groups. It had been impossible to calculate capitation rates with data available in the past.

A large margin of error must be built into the cost of care. Patients are becoming sicker because of the obesity epidemic and poor lifestyle choices. Patients over utilize the healthcare system because they have first dollar coverage.

“ Once the ACO is paid, the division of the income could be made in a variety of ways, the easiest being by the Relative Value Units (RVU’s) for the services provided to the patient by the physicians.  The physicians in the ACO over time should be able to monitor the actual RVU’s reported by individual physicians.”

From the physician side if the RVU’s were fair and primary care was valued appropriately. ACO might work. ACO would not control patient utilization of the healthcare system. Patients must be motivated and incentivized to control utilization.

“When "outliers" are identified, those physicians can be re-educated about the wisdom of practicing medicine with some greater level of restraint where the provision of services is concerned.  Some of the larger organizations are already using such an approach with the evolution of clinical pathways.”

Data could be used and should be used constructively to control outliers. Groups of physicians must control the data and discipline to outliers. A peer group must have incentive to control “outliers”. It must be done in a non punitive way.

“It isn’t all that easy.”

ACO will no
t decrease costs.

“An ACO will change forever the business side of medical practice, but that may be the way the ball will be made to bounce”.

An ACO might wake up physicians and patients. It might stimulate secondary stakeholders not to take advantage of primary stakeholders (physicians and patients). I believe the chances are slim.

All in all, it is a good time for the docs to be very careful, and not to rush into something they may later have cause to regret.    DEF

The idea of ACO is a good one if it could be priced fairly. The patient incentive component is missing. Consumers of healthcare with first dollar coverage drive increasing utilization and costs.

Prevention of the onset of disease and the complications of chronic disease will drive the cost down. This can only be accomplished by consumer driven healthcare utilizing the ideal medical savings account.


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

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Accountable Care Organizations

Stanley Feld M.D.,FACP, MACE

Accountable Care Organizations (ACO) are supposed to manage Medicare cost. Policymakers are desperate to control costs. Proponents of ACO want to test it along with such alternatives as patient-centered medical homes, pay-for-performance and payment bundling.

President Obama’s practice models pilots are going to be a great waste of money. Each model has major defects.

None of the models offer patients the ability to control of healthcare dollars. None of the models provide incentives to patients to be responsible for their own health.

The models replace individualism with collectivism. They replace individual self-responsibility with community governance. Bureaucracy stifles initiatives and innovation, two characteristics that have been the engine of progress in medical advances.

The models subject medical care to the deadening hand of bureaucracy. The net result is a more costly healthcare system and increasing federal deficits. Bureaucracy always has loopholes. The advantaged vested interests always game the system to the disadvantage of consumers.

What are Accountable Care Organizations (ACO)?

“The goal of ACO is to encourage physicians and hospitals to integrate care by holding them jointly responsible for Medicare quality and costs.”


A typical Medicare ACO would include a hospital, primary care physicians, specialists and potentially other medical professionals. Services would still be billed under fee-for-service. The ACO’s members would coordinate care for their shared Medicare patients.

I do not know when hospital systems have not tried to profit from its physicians’ intellectual property. What will suddenly get them to not take advantage of physicians intellectual property?

“Because ACO members are held jointly accountable for this care, they would share in any cost savings that stem from the quality gains.”

Cost overruns would be deducted from the fees billed. Realistically surgeons have always dominated the primary care physicians. It is unrealistic to believe surgeons would relinquish this position passively. Surgeons would not agree to increase compensation to primary care cognitive physicians at their expense

The goal of ACOs is to pay providers in a way that encourages them to work together, to pay providers in a way that does not encourage supplier induced demand, and to create an organization that is rewarded for providing high quality care.”

The Medicare Advantage program pays a lump sum to private insurers. The government holds the healthcare insurance industry accountable for all medical care. The healthcare insurance industry is in control of the healthcare dollars.

Medicare pays the healthcare insurance industry a $3000 premium per patient above and beyond the average cost of $6600 per patient. Patients pay on average 33% of the total $9600 premium. The healthcare insurance industry decreases physician reimbursement to increase its profitability.

Medicare Advantage looks good to the patients because premiums are low. Patients do not realize restriction to access to care exists. Patients are happy.

The government was happy despite the large subsidy because it had a fixed cost. The insurance industry was happy because its profit increased.

The problems with ACO are:

Accountability rests with the providers.  Providers or provider groups, rather than insurance companies, are evaluated on the quality and efficiency of care.”

Physicians are unhappy. They are being judged on utilization without concern for medical risk their patients present or the need for defensive medicine to avoid malpractice liability.

Patients’ responsibility for their health and medical care is not considered. Obesity, substance abuse, or noncompliance are not considered as a patient responsibility in this or any other model considered by President Obama’s healthcare team.

Eighty percent of healthcare dollars are spent on treating the complications of chronic diseases. When the risk of disease and complications of disease is high the risk management is the responsibility of physicians and not patients.

“ACO allow for flexibility in the type of organization.  Some regions may prefer independent practice associations (IPAs) while others may prefer a physician-hospital organization (PHO).”

The ACO is a fixed reimbursement system. Cost overruns will occur at the expense of physicians. Physicians and hospital systems will not know how to price reimbursement in advance. Utilization of medical care services is dependent on both patient and physician behavior. If patients were healthy there would be great cost savings. There are no incentives in ACO for patients to remain healthy.

“The physician-centered organization makes much sense to many policymakers because “the resources that flow from the decisions physicians make with patients account for a major portion of overall health care costs, regardless of where the care actually takes place.”

Physicians are good at treating illness. They are not good at risk management. Patients must be incentivized and taught to manage the risk of complications.

Many physicians will get stuck with high-risk patients. Medicare will have to increase payments to those physicians or risk losing them as providers. ACO will become insolvent. This will increase the deficit.

 If participant believe that ACOs are essentially tightly managed ‘HMOs in drag’ that are going to restrict their choices, undermine the doctor-patient relationship, and result in cheaper but lower-quality care, the concept will be met with skepticism, if not overt opposition.”

Physicians and patients should view ACO for what they are. ACO are HMO in disguise. They represent a fixed reimbursement for variable amounts of necessary service.

Physician groups and hospital systems are allergic to HMO because they did not know how to price the reimbursement adequately. They also do not know how to price risk and manage risk.

Neither the healthcare insurance industry nor the government knows how to manage or price risk. The healthcare insurance industry compensates for overuse by increasing the premium next year.

How can they expect physician groups to price risk? Many physicians’ practices and hospital systems lost money on HMO. This resulted in non participation in HMO.

Many patients hated HMO because medical care became commoditized, choice was restricted and the doctor-patient relationship was undermined. The resulting cost was not lower.

The HMO were a failure. ACO will be a failure. The result will be opposite of the intent with increasing cost, increasing deficits and decreasing quality of care.

The only way to manage risk is to
motivate consumers to manage risk. This is the definition of consumer driven healthcare using the ideal medical savings account.

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

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President Obama’s Legislative Strategy

Stanley Feld M.D.,FACP,MACE

President Obama’s healthcare reform bill was rammed through congress over a month ago. He has been first to point out that the world has not fallen apart yet. He is being disingenuous since he healthcare reform plan does not influence medical care until 2014.

The strategy is to not do anything drastic until after he wins the November 2010 elections for the Democratic Party and the Presidential election in November 2012.

He is disregarding American’s anger toward him for ignoring their wishes. He is hoping they forget their anger.

The traditional media is helping America forget the tactics used to pass the healthcare reform bill. They are not evaluating the long term consequences on medical care and the budget deficit. It is not economically feasible to enlarge failed entitlement programs.

The public opposes the healthcare bill yet Wellpoint, who has been making billions of dollars a year, raises insurance premiums by 39%.

Immediately, President Obama, Harry Reid and Nancy Pelosi demonized the healthcare insurance industry. The choice given the public was to keep the present system along with healthcare insurance company abuse or adopt President Obama’s healthcare reform plan. The Republican Party did not present an alternative loud enough.

President Obama’s healthcare reform plan won the day by a partisan vote and a frustrated electorate. It led to Nancy Pelosi’s comment that Americans will understand the bill after it is passed.

The reality is the healthcare reform bill will lead to a single party payer system with increasing deficits, increased taxes and decreased access to care.

The healthcare insurance industry and Big Pharma are supporting President Obama’s healthcare reform plan because they will continue to control the healthcare dollars. Now the government will subsidize their business.

After passage of the healthcare reform plan, President Obama went on to his financial reform bill. There was much opposition to his plan. The plan does not go far enough to repair structural defects in the financial system. It also increases government control of the financial system without preventing abuse. Fannie Mae and Freddie Mac are not restructured.

In the midst of the financial system reform debate the Democrats started a congressional hearing on alleged abuses by Goldman Sachs. Congress has demonized Goldman Sachs. The public has another choice. America can either support President Obama’s financial reform or the old structure.

President Obama’s environment and energy bill was going nowhere. Cap and trade looked dead. President Obama agreed to permit offshore drilling for oil as a compromise.

The catastrophic oil spill occurred. The traditional media obsessed over the leak. In order to be a “good guy” President Obama announced that off shore drilling is too risky and discontinues his plan to let federal leases for off shore drilling.

We now have an environment and energy bill without off shore drilling. There is no consideration about this decision’s effect on a fragile economy.

The immigration bill is going nowhere also. It has large structural defects. The federal government is not enforcing laws that already exist. Arizona passed a law duplicating the federal laws. Arizona gets demonized by the White House and the traditional media.

President Obama has condemned Arizona. Arizona is only doing what the federal government should be doing. There is now public sympathy for President Obama’s defective immigration bill.

I suspect President Obama will use this opportunity to push through his immigration bill rather than do it right. Where are the Republicans?

President Obama wants illegal immigrants to be legalized citizens. He wants them to have the right to vote. His plan is to get enough new voters to neutralize the independent voter who have defected since he was elected President.

The pattern is clear. You demonize the opposition and then pass your alternative as if it is the only alternative. President Obama’s method has legs with the traditional media. Experts in each area will tell you most of this legislation will not solve any of our problems. It will be ineffective legislation. It will increase the federal deficit and lead to more taxation. It will decrease economic growth by decreasing incentives. It will increase government power over States and suppress individual freedoms. Many unintended negative consequences will occur after government has operational control.

I am afraid the public is growing weary of protest. They will forget the tricks used to produce terrible legislation. We will have many costly unintended consequences for many years to come.

The most frightening consequence is government control over our lives and freedom and a never ending need to raise taxes. It will suppress America innovative spirit.

President Obama is moving ahead with his healthcare pilot studies. In my view all of the approved pilot studies have little chance of success.

A potential pilot study with the biggest chance of success is not being considered. The five models to be studied are Accountable Care Organizations, Primary Care Medical Homes, Bundled Payments, Partial Capitation, and Full Capitation.

All five have problems. The chance of succeeding to reduce cost is marginal. The Ideal Medical Savings Account is ignored as an option. The MSA should be compared to each model tested. The Ideal Medical Savings Account model is the only model with a chance for success. The MSA is a consumer driven model. It puts patients in control of their healthcare dollars. It rewards consumer when they use their healthcare dollars wisely and maintain their health. It promotes self responsibility and self respect.

I will evaluate each model and point out the problems in each model.


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

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The American Taxpayer Should Wake Up!


Stanley Feld M.D.,FACP,MACE

Senate Majority Leader Harry Reid’s support for reelection to the Senate has been stagnating at less than 40%. Each potential opponent for the Republican nomination vs. Senator Reid has support of over 50% of the probable voters.

Senator Reid needs a costly, well choreographed campaign to overcome his poll deficit.

Who do you think is doing it for him?

Big Pharma is paying for his big push.

How come?

Big Pharma is supposed to have been slaughtered by President Obama’s healthcare reform plan. Harry Reid jammed President Obama’s healthcare reform plan through the Senate. Senator Reid is supposed to be Public Enemy Number 1 to Big Pharma and the healthcare insurance industry.

“A new TV ad is up in Mr. Reid’s home state praising the Democrat for creating "good Nevada jobs," expanding "clean energy" and providing "tax credits for small business." Moreover, "thanks to Harry Reid’s leadership, if you change or lose your job, you can keep your health care coverage."

Big Pharma is paying for Harry Reid’s campaign. The reasons are complicated but are becoming obvious. It is another one of President Obama’s trick plays.

“All this is courtesy of the Pharmaceutical Research and Manufacturers of America, in league with the liberal health-advocacy group Families USA.”

Isn’t that strange?What is going on?

Big Pharma should be overjoyed that Harry Reid will lose his election. The healthcare insurance industry is now teaming up with Families U.S.A. to promote Obamacare.

President Obama has promised to provide affordable insurance. If he does provide affordable insurance it will be at the expense of all taxpayers because the government will be subsidizing healthcare insurance and drug costs. It will not be at the expense of the healthcare insurance industry or Big Pharma. Both industries will have a mandated increased customer base with guaranteed payment yielding a larger net profit.

Big Pharma and health insurance companies are betting on short-term rent-seeking from legislation that subsidizes Americans to use more of their products

President Obama is not protecting the American taxpayer. He is protecting big business in a different way than big business has been protected in the past.

President Obama is protecting big business because big business provides the money that gets candidates elected. They are providing the money to get Harry Reid reelected.

Thomas P. Stossel M.D. Director, Translational Medicine Division at Brigham & Women’s Hospital Harvard Medical School cofounded the Association of Clinical Researchers and Educators (ACRE),an advocacy group for doctor/drug company partnerships. He believes there is no statistical objective evidence for a conflict of interest in such partnerships. The partnerships are a valuable addition to physician education and clinical research as government funding for both decreases. The partnerships help translate advances in bench science into clinical practice.

Big Pharma might be delighted to decrease its support of physician education. It will decrease its overhead and increase its short term profit. It will also decrease its drive to develop new drugs.

Big Pharma’s ad is partly a thank you to Democrats for new customers. But it’s also political protection. With their business model in the hands of government, the drug makers have to make sure the government doesn’t squeeze them in the bottom line.

Politics does not change. Only the guys running the government change. Someone is going to come along some day and do something to benefit the people. President Obama is just pretending to be doing things to benefit the people.

“Thus do sweeping government programs produce their own special-interest advocates? Lost in this palm-greasing are the customers who ultimately will pay for ObamaCare in higher prices and politically rationed medical care.”

President Obama’s healthcare reform plan is another unsustainable entitlement for the benefit of Big Pharma and the healthcare insurance industry.

Another reminder, if another reminder is needed, that powerful government serves the powerful.”

As government entitlements grow, government’s percentage of the GDP grows. Taxes must increase for all. Black market trading will start. Before America knows it America will be another Greece.

Patients and physicians do not realize how much power they have. They are the primary stakeholders in the healthcare system. Consumers must become vocal. They must force their elected government officials to pay attention to their needs. President Obama and the Democrats are only pretending to pay attention to taxpayers needs.

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

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