Stanley Feld M.D.,FACP,MACE

Here we go again. On Friday June 11, 2010 at 4.30 pm internal administration documents were leaked. The documents reveal that up to 51% of employers may have to relinquish their current health care coverage because of ObamaCare. President Obama promised us that if we like our insurance we can keep. (See 3.46 minutes of the following You Tube.}

This is getting to be a habit with this administration.

Late in the afternoon on Fridays is a convenient time to leak information. No one will notice the information. The leaks’ impact will be old news by Monday morning.

The administration claims it did not know how it leaked. It is only a draft of the regulations created by Kathleen Sebalius Secretary of HHS. President Obama’s healthcare bill gives her the authority to write the regulations.

“The "midrange estimate is that 66% of small employer plans and 45% of large employer plans will relinquish their grandfathered status by the end of 2013," according to the document.

In the worst-case scenario, 69% of employers — 80% of smaller firms — would lose that status, exposing them to far more provisions under the new health law.”

The report was part of a joint project of the Departments of Health and Human Services, Labor and the IRS. The final report will be 118 pages. The report examined the effects ObamaCare’s regulations will have on existing, or "grandfathered," employer-based health care plans.

President Obama pledged it would have no effect on the healthcare insurance you have now. He did not say anything about modifications to present plans.

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This is another trick play by President Obama. The Republicans have been caught flatfooted once again. The healthcare reform bill allows President Obama and the Secretary of Health and Human Services to interpret broad provisions in the bill any way they want.

The President has said that a single party payer system works in other countries. It can work in America. His goal is to work his way toward a single party payer.

People have accused President Obama of wanting to eliminate private insurance. He said “we can keep our insurance if we like our present insurance.”

It turns out with these new regulations that we cannot keep our healthcare insurance plan if our employers modify the provisions in our plan. Americans will be forced to buy healthcare insurance from President Obama’s health insurance exchanges.

The health insurance exchange is supposed to provide affordable healthcare insurance. The healthcare insurance will be purchased with after-tax dollars.

The problem is cost controls will be regulated by the government. The program will fail to control costs just it has failed to control cost and improve service in Massachusetts.

President Obama has also said if something does not work we will adjust the system. Here comes the Public Option. However, the government and the states cannot afford to pay for healthcare insurance.

What are the conditions that eliminate your retaining your present healthcare insurance?

* The plan eliminates benefits related to diagnosis or treatment of a particular condition.

* The plan increases the percentage of a cost-sharing requirement (such as co-insurance) above the level at which it was on March 23, 2010.

* The plan increases the fixed amount of cost sharing such as deductibles or out-of-pocket limits by a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points.

* The plan increases co-payments as a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points or medical inflation plus $5.

* The employer’s share of the premium decreases more than 5 percentage points below what the share was on March 23, 2010.

The regulations are a done deal. Employers modify healthcare insurance plans every year. It is cheaper to pay a $2,000 per employee penalty than $15,000 a year per employee healthcare insurance premium.

“A White House official said, “This is a draft document, and we will be releasing the final regulation when it is complete. The president made a promise to the American people that if they liked their health care plan, they can keep it. The regulation, when finalized, will uphold that promise."

Jonathan Alter in his book “The Promise” which is about President Obama’s first year in office quotes him on healthcare. “President Obama said to a group of Single Party Payer advocates that “they had to deal with the world as it is and not wanted it to be.”

President Obama is dealing with the world as he is working his way toward how he wants it to be. A government controlled world.

The next step is a single party payer.

Consumers will not have freedom of choice or free access to care.

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

Stanley Feld M.D.,FACP,MACE

During our father son weekend Brad introduced me to Ian Sigalow. Ian is a 31 year old principle in the venture capital firm Greycroft LLC. He received his BS in Economics from the Massachusetts Institute of Technology and an MBA from Columbia University Graduate School of Business. He is a smart fellow.

Ian felt comfortable with the healthcare insurance policy his firm provided him before he got sick. At the Lindzonpollosa he told me his horrible story. He has permitted me to repeat it. There are several important points to illustrate the dysfunction of the healthcare system.

There is also a lesson here for President Obama. Government is supposed to be by the people for the people. Government should make the rules that are be fair to consumers of healthcare.

Ian published his story in the Huffington Post. I hope I will give his story a little more publicity.

Ian had never been sick until he was diagnosed with Seminoma at age 29. Seminoma is a type of testicular cancer that affects one percent of males. It is the most common type of cancer among men aged 20 to 35. It is often cured by surgery alone, but advanced disease requires the addition of radiation therapy or chemotherapy. His seminoma had spread to his lymph nodes. He needed to have chemotherapy for a cure.

“My insurance provider was Oxford Healthcare, a subsidiary of UnitedHealth, the largest private health insurer in the United States.”

“When it comes to testicular cancer, the Centers of Excellence are Indiana University, which treated Lance Armstrong, and Memorial Sloan Kettering Cancer Center (MSK) in New York.”

Sloan-Kettering was not in his Oxford healthcare insurance plan’s network. He couldn’t switch to an upgraded plan because he works for a small business.

“Oxford’s better plans are reserved for large employers. I was willing to pay any amount to get in-network access but there were no options. However, I learned that Oxford offers an "in-network exception", where in-network privileges are granted to out-of-network hospitals based on doctor referral. I was told that if three Oxford oncologists referred me to Memorial Sloan Kettering, an in-network exception would be granted.”

Oxford supplied him with a list of 300 doctors to call. Many were not in practice anymore and most were not oncologists. This was the situation despite Oxford’s claim to be user friendly.

Ian found ten oncologists in the Oxford network. They all recommended Sloan Kettering based on the advanced stage of his disease. Oxford then reneged on its offer to grant an in-network exception.

“Oxford was going to call another set of doctors to see if they could find someone in-network to treat me. I asked the woman from Oxford why I was told to make the calls if Oxford was planning on doing it themselves. Her response was, "We were hoping you wouldn’t bother."

Oxford called a few days later. It was on a Friday afternoon. The representative told him she found three physicians who were willing to meet with him. He was advised by his oncologist that rapid initiation of treatment was important. He had scheduled himself for treatment the following Monday morning at Sloan Kettering. Oxford’s representative knew all this before she called him.

"We cannot tell you not to go to Memorial Sloan Kettering, and we cannot tell you to delay treatment. However, we found three doctors in New York who agreed to meet with you. It will require a new consultation…" and more delay in treatment.

The first lesson is of private healthcare insurance abuse in order to save money. This happens countless times a day. Unless you are the victim you would not be aware of the restrictions of access to care.

The state and federal government must paying attention to the consumer abuse. Consumer abuse has been ignored for 20 years. A simple regulation fining Oxford or rescinding its license to sell insurance in the state where the abuse took place would be an effective deterrent to the industry’s restricting access to care. In order to get Oxford’s full coverage he would have had to delay his treatment and pay an additional deductible to see three other physicians in consultation to grant permission for an in network exception.

“I made the decision to go out-of-network.”

After being treated at Sloan Kettering Ian called the three additional doctors Oxford had recommended. They all agreed he made the right decision to go to Sloan Kettering. He also found out from a former Oxford executive that patients with out-of-network benefits are almost never granted an in-network exception. All Oxford was doing was stalling and trying to impose its will on him.

Ian tried to quantify, in advance, the costs of out-of-network as opposed to in-network. It was impossible. Hospital systems do not publish their fees no matter how hard a patient tries he cannot get them.

This defect presents another opportunity for President Obama to Repair the Healthcare System. All that would have to be done is to require hospital systems to publish their fees in order to get certified to treat patients. Instead, President Obama is creating bureaucratic agencies to fix prices.

Ian obtained Oxford’s reimbursement rates for procedures and drugs. He figured his out of pocket expenses would be between $5,000 and $7,000. He was prepared to pay that fee based on his in network benefits.

His final out of pocket expenses bill were $35,000. Hospital systems have multiple negotiated prices. The multiple fees are one of the travesties of the healthcare system. If you are out of network you are responsible for the inflated retail price.

If a hospital system will accept five hundred dollars for a service from a healthcare insurance industry an individual patient out of network should not be responsible for a fifteen hundred dollar retail price for the same treatment and services. There is a total lack of transparency of negotiated prices.

All President Obama would have to do would be to require publication of negotiated prices Transparency would immediately empower consumers.

“What surprises many people is that the largest part of the bill was not doctor’s fees — those were only $3,000.”

Physicians do not know what hospital systems charge. Hospital systems have lobbied the government to restrict physicians from delivering the chemotherapy in their clinics because the in hospital profit margin is so large.

Why is the government always using physicians as a scapegoat? Physicians are the scapegoat because they are the weakest stakeholder in America’s political system. We lack effective representation.

Ian used the example of drug costs.

“One example of how this adds up: I was prescribed three shots of Neulasta, which is a white blood cell booster. At drugstore.com, a single shot of Neulasta costs $3,500. At Memorial Sloan Kettering, it was $5,600. Oxford’s usual and customary reimbursement was $2,600. I didn’t have a choice. I was left with $9,000 out of pocket for three shots.”

How was the cost of $3,500 at www.drugstore.com calculated? How much did it cost to produce the drug? How do you price R&D for the drug? Why should Sloan Kettering charge $5,600 a shot? Why would a hos
pital accept $2,600 from Oxford?

There is nothing in President Obama’s healthcare reform bill that deals with this problem. The solution is easy. Develop rules of transparency to price various services and treatments which include all the negotiated prices.

President Obama has chosen to impose prices through price controls and not rules to negotiate prices.

Price controls never work.

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

Stanley Feld M.D.,FACP,MACE

President Obama has tried to marginalize the law suits filed by 20 states concerning the constitutionality of his healthcare reform bill. President Obama has the power of the pulpit. He also has the traditional media helping him.

There are two main issues with these legal challenges:

1. Is the mandate to force citizens to buy healthcare insurance constitutional?
2. Is the nationalization of healthcare a constitutional infringement on States rights?

The lawsuits against the Obama administration have come from 20 State Attorney Generals, plus physicians’ groups and constitutional legal centers. An attempt has been made by the administration marginalize each lawsuit without much explanation.

It is difficult for the average citizens to understand the merits of the challenge. President Obama and his staff keep telling us the bill will reduce the cost of healthcare. It will be good for everyone. President Obama says he has been assured by legal counsel that the bill is constitutional.

Two weeks ago the National Federation of Independent Businesses filed an amended complaint to the lawsuit originally filed by 13 states.

“In addition two individuals also joined the litigation. One is the uninsured owner of an automobile repair shop in Panama City, Fla. The other is a man from Washington State who prefers to pay his medical bills out of pocket rather than being compelled to obtain insurance, as will be the case starting in 2014.”

President Obama’s administration claims the lawsuits are a political ploy by Republicans. The administration has stated it will challenge the law suits on their legal standings and authority.

Dan Danner, president and CEO of the National Federation of Independent Business (NFIB), a nonprofit, nonpartisan organization that works to promote and protect the rights of small businesses to own, operate and grow their businesses wrote;

“We also believe the health-care law is unconstitutional.

The centerpiece of this law is an individual mandate requiring virtually all Americans to purchase health insurance or pay a fine.

We strongly believe that the Commerce Clause of the Constitution does not give Congress the power to force individuals to purchase a private product or face a fine.

Requiring individuals to purchase something simply because they are alive is unprecedented.”

President Obama’s lawyers’ response to the constitutional challenge is it is a political ploy to tarnish the healthcare reform bill.

In court filings the administration has claimed that an individual decision to not purchase insurance is, in effect, a decision about how to pay for future medical care. Taken in the aggregate, those decisions substantially affect interstate commerce by shifting the cost of covering the uninsured to policy-holders, health care providers and taxpayers.

This is a lame argument.

Individual businesses have realized that President Obama’s healthcare bill will dramatically raise health-care costs rather than lower costs. This will increase the overall cost of doing business. There is a built in bias against small businesses.

What’s more, the federal mandate requiring that nearly all U.S. residents carry health insurance by 2014 seriously threatens our basic constitutional rights and individual freedoms.

The government cost estimates are already rising.

“According to the Congressional Budget Office (CBO), the overhaul will cost about $115 billion more than first projected, bringing the total to more than $1 trillion.”

One trillion dollars does not even come close to the real and hidden costs of President Obama’s healthcare reform bill. The bill is not a healthcare reform bill. It is a way of centralizing federal power over individual rights.

President Obama has said the law will significantly help small businesses. He continually focuses on the small business tax credit. In reality the tax credit is not real.

“The reality is that the tax credit is complex and very limited because firms qualify based on number of employees and average wages.

The credit, which is only available for a maximum of six years, puts small business owners through a series of complicated "tests" to determine if they qualify and how much they will receive.

Fewer than one-third of small businesses even pass the first three (of four) tests to qualify: have 25 employees or less, provide health insurance, and pay 50% of the cost of that insurance.”

“More importantly, the credit is temporary, but health-care cost increases are permanent. When the credit ends, small businesses will be left paying full price. They’ll also be forced to deal with all sorts of new taxes, fees and mandates buried in this 2,000-page law.”

One hidden tax is the healthcare insurance industry fee of $8 billion (that escalates to $14.3 billion by 2018) on insurance companies based on its market share. The fee will be passed on to employers in high premiums.

This tax will be paid almost exclusively by small businesses and individuals. The law specifically excludes self-insured plans. Most large corporations and labor union are self insured and will avoid this tax.

President Obama said his healthcare reform bill is going to “go after” the healthcare insurance industry’s grotesque profits.

The healthcare insurance industry is lining up to help the government write the new rules and regulations.

The rules they are helping write will permit the healthcare insurance industry to load its expenses as it has done previously.

With the business association and individual plaintiffs joining the lawsuit public perception might shift from the lawsuit being primarily a political device as President Obama has tried to emphasize to this lawsuit being a serious constitutional and states’ rights issue.

America wake up!

President Obama’s healthcare reform bill is a very expensive law. It will not decrease the cost of healthcare or increase the quality of healthcare.

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