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All items for June, 2011


Obamacare Unraveled


Stanley Feld M.D.,FACP,MACE 

It is hard to remember all the defects in President Obama’s Healthcare Reform Act at once.

President Obama’s Healthcare Reform Act is so flawed it cannot possibly work as it was intended. It must be repealed. A serious, thoughtful, practical and common sense way to “Repair The Healthcare System” must be enacted before all the stakeholders have adjusted to President Obama’s coming changes that will create a more dysfunctional system.

A reader sent me a photo of a poster hanging in his local ice cream store. It is a reminder of previous criticisms of President Obama’s Healthcare Reform Act.

  Harrys ice cream 2


I predicted and discussed all the defects it the Healthcare Reform Act that will come back to haunt President Obama and  America’s consumers.

The last month the cracks in President Obama’s Healthcare Act have started to widen. Some of the cracks are starting to look like the entire Healthcare Reform Act is falling apart.

1.  President Obama’s selected model Clinics for his integrated care “experiment” (ACOs) have turned down applying to this pilot study. The goal of these pilot projects was to demonstrate that Accountable Care Organizations (ACOs) will reduce the cost of medical care and increase the quality of medical care. ACOs are a primary tool in proving that President Obama’ Healthcare Reform Act will be effective in reducing cost and increasing quality of medical care. There are too many impractical and costly regulations. There are too many logistical barriers to creating ideologically effective ACOs.

2. Individual States are refusing to set up federal directed State Health Insurance Exchanges as directed by President Obama’s law. The insurance exchanges’ economic burdens will be shifted to the state at the direction of the federal government. The end result will be to increase state budget deficits and decrease state control over their local healthcare delivery systems. Texas is planning to set up its own Health Insurance Exchange under Texas rules even though Governor Perry believes “Obamacare” will be repealed.

Governor Perry firmly believes that Texans should be in charge of our health care programs.”

There is great antipathy between Governor Perry and President Obama. Texas officials have concerns that President Obama’s administration in the end will say,

 “You all didn’t bother to make a significant effort with the lead time you had,’ ”

 “I wouldn’t put it past President Obama’s administration not to certify what we come up with.”

President Obama’s advisors at the Urban Institute have told him that he is creating an additional entitlement and increasing hidden taxes with his Health Insurance Exchanges. Once the America people discover that this is President Obama’s intention they will oppose Healthcare Insurance Exchanges. The exchanges are not going to put a muzzle on the healthcare insurance industry’s devouring of the healthcare dollar. One must question why the healthcare insurance industry is in favor of Healthcare Insurance Exchanges. The answer is they will increase their share of the healthcare dollar with Healthcare Insurance Exchanges.

 I suspect few people understand this.

President Obama is once again decreasing states’ rights and limiting personal freedom to choose. President Obama’s exchanges will increase states’ budget deficits. The result will be an increased tax burden for all.

"The exchanges don't just handle health insurance. Rather, they are expected indirectly to operate an entirely new "tax" system that collects another 9 or 10 cents from most insured household for every additional dollar earned and a new "welfare" system that tries to determine in advance and at various later stages households' eligibility for different subsidies."  

3. A discovery of a quirk in the law would allow an additional 3 million who earn over $64,000 to $80,000 a year to enrollee in Medicaid. Medicaid cannot attract enough physicians for its current enrollees. Physicians refuse to participate because its reimbursement is less than physicians’ overhead. Adding 16 million new enrollees plus an additional 3 million is untenable.  

4. The lawsuits by 24 states challenging the constitutionality of President Obama’s Healthcare Reform Act is slowly proceeding to the Supreme Court. The Supreme Court might have tipped its hand as to the direction it is leaning last week by another decision in favor of “States Rights” and “individual rights.”

Justice Kennedy wrote in an opinion,

 "The whole point of separation of powers, the whole point of federalism, is that it inheres to the individual and his or her right to liberty; and if that is infringed by a criminal conviction or in any other way that causes specific injury, why can't it be raised?"   

5.  Last week McKinsey published an in-house survey that showed that at least 30% of corporations would drop employee sponsored healthcare insurance (ESI) and let employees buy the government’s  “affordable and subsidized” healthcare insurance (the Public Option) through government’s Healthcare Insurance  Exchanges in each state.The government criticism of the survey was unjustified. The criticism weakened President Obama’s support even further because it became apparent that he was going to try to intimidate his distractors and not heed reality.

All of these defects in Obamacare are becoming more apparent to all consumers. Public support is decreasing daily. It is going to take the Supreme Court to declare it unconstitutional or a Republican President with a Republican House and Senate.

President Obama remains oblivious to the defects and unpopularity of his Healthcare Reform Act. 


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President Obama Tries To Intimidate Critics

Stanley Feld M.D.,FACP, MACE

Last week McKinsey published an in-house survey that showed that at least 30% of corporations would drop employee sponsored healthcare insurance (ESI) and let employees buy their own “affordable” “government subsidized” healthcare insurance (Public Option”) through the Government’s Healthcare Insurance Exchanges in each state. Adding thirty percent of the corporate work force to Healthcare Insurance Exchanges would place states and the federal government in deeper debt.

The McKinsey survey echoes what Doug Holz-Eakin (economist and former head of the CBO) and John Goodman (a healthcare economist and CEO of NCPA) have said about the impact of President Obama’s Healthcare Reform Act.

“If Mr. Holtz-Eakin is correct that there will be 11 million more people in the exchange, then costs could be nearly 40% higher than the $511 billion price tag. If between 78 million and 117 million people are moved into the exchanges the NCPA predicts the costs could more than triple to $2 trillion dollars more than expected over the first decade.”

“Most of this extra expense would come from workers losing their employer-sponsored insurance.” 

Immediately, President Obama’s administration attacked McKinsey’s honesty. The Obama administration accused McKinsey of patronizing their clients and working for the sponsors of the survey.

The administration had no proof to support any of its accusations against McKinsey. Its aim was to tarnish McKinsey’s reputation as well as intimidate McKinsey and other organizations that might draw negative conclusions about his healthcare law.

Nancy Parmalee, the deputy chief of staff who is running “ObamaCare” from the White House in her Whitehouse blog, launched a ferocious attack on McKinsey.

 Unfortunately, the study misses some key points and doesn’t provide the complete picture about how the Affordable Care Act will strengthen the health care system and make it easier for employers to offer high quality coverage to their employees. Here are the facts:

She said the McKinsey survey is an outlier. She also accused the survey of being fixed. The results of the McKinsey survey were the opposite of the results of respected independent organizations and the CBO.

She said “McKinsey says they obtained their data after they “educated respondents” about reform and that their survey used proprietary research. We don’t know what respondents were told or whether they had the chance to check with their colleagues or crunch the numbers for their business before responding.”

In Ms. Paralee’s mind McKinsey cooked the survey in favor of a negative result about Obamacare. She then quotes the findings of three independent surveys.

Respected independent organizations have examined whether employers will continue to offer coverage. Here’s what they found:

The Rand Corporation: "The percentage of employees offered insurance will not change substantially, but a small number of employees in small firms (defined as those with under 100 employees in 2016) will obtain employer-sponsored insurance through the state insurance exchanges."

The Urban Institute: "Some have argued that the Patient Protection and Affordable Care Act would erode employer-sponsored insurance (ESI) by providing incentives for employers to stop offering coverage. Others have claimed that most businesses would face increased costs as a result of reform. A new study finds that overall ESI coverage under the ACA would not differ significantly from what coverage would be without reform."

Mercer: "In a survey released today by consulting firm Mercer, employers were asked how likely they are to get out of the business of providing health care once state-run insurance exchanges become operational in 2014 and make it easier for individuals to buy coverage. For the great majority, the answer was 'not likely.'" 

 The White House has routinely tried to intimidate its health-care critics. Nancy Parmalee’s facts in the administration’s campaign against McKinsey are wrong. She misread the studies she quoted.

  1. The White House sponsored the Urban Institute study cited by Nancy Parmelee. Bowen Garrett who now works for McKinsey wrote it.
  2.  Some of the notable work on employers discontinuing to sponsor healthcare insurance and pay the penalty comes from Eugene Steuerle of the Urban Institute. His paper predicts a mass discontinuation of ESI by corporation of all sizes.

 Even so, droves of employees—potentially tens of millions—are likely to shift out of employer-provided insurance over the next decade or two, especially as newer firms and their employees find it more profitable to get the exchange subsidies than the subsidies for health insurance provided by the employer.”

 Eugene Steuerle of the Urban Institute wants universal coverage run by the government as the single party payer. I could just see President Obama saying, “Don’t worry Gene we will get there.” 

Nancy Parmalee also misstated the Mercer findings.  The graphs show exactly what Mercer reported. It is not dissimilar to McKinsey’s survey.


  Mercer 2

David Brooks expressed common sense in a recent New York Times article.

He said,

 "Obamacare incentivizes companies to drop health coverage for their employees. Employers who drop coverage have to pay a fine, but the fine is cheaper than offering health insurance. Employees will be able to buy their insurance on state-based “exchanges,” where they can take advantage of the law’s new subsidies.

(Americans making less than 400 percent of the federal poverty level are eligible for subsidized coverage on the exchanges.) AT&T has calculated that it would save $1.8 billion a year by dumping its workers into the government’s lap.

Other companies are keeping quiet about their plans for now, but make no mistake: If Obamacare remains the law of the land, nearly every corporation in America will do what AT&T has contemplated. So will cash-strapped state governments." 

McKinsey released the entire methods, detail and results of its survey. The survey was non biased, well designed and answered each of President Obama’s administration’s criticism.

1.McKinsey and not clients funded the survey. 

2.Ipsos, a well-established neutral opinion research firm, conducted the survey. 

3.The companies surveyed were representative of corporations and businesses from the broader economy. 

4.Respondents were required to be either the “primary decision maker” or “have some influence in the decision-making process” for employee health benefits. 

5.Respondents were informed of Obamacare’s exchange subsidies in a neutral, factual manner.

6.Employer surveys (McKinsey survey) and economic simulations (CBO’s analysis) are different. CBO analysis has underestimated the result by a factor of five.

The attack on McKinsey was unfounded. Hopefully, McKinsey’s reply will not inhibit others from revealing the truth about President Obama’s policies not only in healthcare but in other areas.








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Economic Incentives Motivate!


Stanley Feld M.D.,FACP,MACE

The use of economic incentives to motivate behavior is neither a Democratic or Republican idea. It is human nature to be motivated by economic incentives. The concept of individual responsibility is an American idea. It has been tarnished in recent years.

There is no question in my mind that government has the responsibility to be compassionate and help the needy. It is my view that government should help individuals help themselves.

The costs associated with Medicare and traditional healthcare insurance are rising. Every stakeholder points a finger at the other stakeholders as the cause.

President Obama’s Healthcare Reform Act is raising costs higher in anticipation of cuts in the future. He is in the process of forcing individuals to be more dependent on the government rather than promoting individual responsibility.

Obamacare will fail to control costs.

All anyone has to do is look at a Rand Corp. study of 29 years ago to see what works and what doesn’t work. After all that is said what matters are results in decreasing costs, not your political ideology.

The Rand Corp’s political leanings are more left of center than right of center. The Rand Corp tries not to be biased by these leanings in its scientific studies. Its conclusions from its own data are sometimes skewed to the left ignoring its own evidence.

The Rand Health Insurance Experiment looked at consumers’ healthcare consumption in healthcare plans with different deductibles as well as an HMO. It monitored the results and reported its findings in 1982.

The findings were:

  1. Patients are responsive to out-of-pocket costs (the more they have to pay, the less health care they buy).
  2. Changes in the amount of spending have no apparent impact on health care outcomes in most cases.
  3. Judging from the difference in behavior between HMO doctors and fee-for-service doctors, physicians are also very responsive to economic incentives.
  4. Consumers with high deductibles were as likely to cut back on useful health services, as they were to cut back on unnecessary care.
  5. The critics of the consumer driven model have used this last point as proof that consumer driven healthcare doesn’t work. They claim that these consumers will not get appropriate care if they have a high deductible and try to save money.

If health care was free, spending soared with no improvement in health status. In the government controlled model government has to limit individual choice of care and access to care in order to keep consumption of care down.

The 1982 RAND study proved to me that consumer driven healthcare can work. Healthcare consumption is driven by the economic incentives the healthcare system offers consumers, physicians, hospital systems, pharmaceutical companies and healthcare insurers. Consumer driven healthcare patients used services they felt were essential to them and did not spend money on services they felt were not essential.

A consumer driven healthcare system would stimulate the growth of full-service diabetes centers that would force physicians into competing for diabetic patients because patients would be managing their own healthcare dollars. CDHC could energize the chronic disease healthcare market. It would create specialized centers competing for the care of patients with chronic diseases. Preventing the complications of chronic disease with education about self-management is in the interest of patients with the disease as well as society. The medical care of the complications of chronic diseases consume 80% of all healthcare dollars. Consumers and physicians respond to economic incentives. The healthcare social contract is really between consumers and physicians not government and hospital systems.  

A 2011 Rand study of more than 800,000 families from across the United States found when people shifted into health insurance plans with high deductibles their healthcare spending dropped an average of 14 percent compared to families in health plans with lower deductibles.

In October 2010 Cigna released a report covering 5 years of real-world experience with 897,000 plan members, about half in “traditional” coverage plan and the rest in consumer-driven plans. 

All of the results show that CDHPs are working beyond anyone’s expectations.

  1. CDHPs save 15 percent in the first year, 18 percent in year two, 21 percent in year three, 24 percent in year four, and 26 percent in year five.
  2. All this while individual out-of-pocket exposure is about the same (17 percent) in both types of plans.
  3. Using Cigna’s quality measurements (which are wrong), there is 8 percent to 10 percent higher use of preventive services in the CDHPs.
  4. CDHP enrollees are 9 percent more likely to get evidence-based treatment in the first year and 14 percent more likely in the second year of enrollment.
  5. CDHP enrollees are five times more likely to complete a health risk assessment.
  6.  CDHP enrollees are19 percent more likely to work with a health advocate.
  7. CDHP enrollees are 40 percent more likely to use on-line cost and quality tools when making decisions.
  8. CDHP enrollees have a 13 percent decrease in the use of emergency rooms.
  9. CDHP enrollees are 9 percent more likely to switch to generic drugs.
  10. CDHP enrollees have a 14 percent lower prescription costs.
  11. CDHP enrollees are 21 percent more likely to participate in a disease management program.
  12.  CDHP reduce their costs by 21 percent for joint disease, 8 percent for diabetes, and 7 percent for hypertension.
  13.  CDHP enrollees are slightly more satisfied with their plans than people in traditional approaches (83 percent versus 82 percent).

Finally according to the Employee Benefit Research Institute(EBRI), 22 million people are enrolled in consumer-driven and high-deductible health plans.

In 2010 EBRI conducted “Consumer Engagement in Health Care Survey” (CEHCS) analyzing the behavior and attitudes of 4,509 adults ages 21–64 with private health insurance coverage.

The findings were;

  1. People who enroll in these plans are more cost-conscious than those who have traditional health insurance policies.
  2. 53 percent routinely check to see whether their plan would cover specific care, compared with 47 percent of traditional policyholders.
  3. More than 50 percent check if a generic drug is available, compared with 44 percent in traditional plans.
  4. CDHP enrollees were more likely than traditional plan enrollees to choose doctors based on their use of health information technology.
  5. CDHPs enrollees also were more likely to exercise and less likely to be obese compared with traditional health plan enrollees.

President Obama’s Healthcare Reform Act will eliminate consumer driven health care plans.  I believe this is ill advised. CDHPs have decreased the cost of healthcare by motivating consumers to drive their healthcare decisions. A government directed system will not achieve this goal.

The results above were gotten with Health Savings Accounts. The use of my Ideal Medical Savings Account increases the economic incentives for consumers.

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

  • Emily

    I agree with the idea of CDHC, but as a consumer, I’m frustrated by the execution. I absolutely pay attention to price with the plan, but it is frequently a problem to know what the price is. I took my son to the ER after a fall and when I asked about price, they had NO IDEA. Not even a ballpark. In fact, by reading a sign posted in the room, I was more clear about the billing process than the woman collecting my billing information. Doctors often don’t know either when it comes to tests and meds. I don’t hold them entirely responsible or think cost can always be a leading consideration, but you can’t really even consider costs if you don’t know even know them. It’s a hassle to find them out too.
    If you want to look at prescriptions, look here The prices vary considerably from pharmacy to pharmacy. Who would pay over $600 for Topamax at Walgreens when you could buy it for $440 from Walmart? But, I’m guessing few would even consider that a great option if they realized it was under $25 at Costco. This is one of the more breath-taking examples, but it is not unique.

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If President Obama Cannot Get A Public Option One Way He Will Get It Another Way


Stanley Feld M.D.,FACP,MACE


McKinsey Quarterly has reported its survey concluding there will be a radical restructuring of employer-sponsored health benefits (ESI) as a result of President Obama’s following the 2010 passage of the Affordable Care Act.

Healthcare insurance rates have already skyrocketed as a result of anticipating the conditions of Obama care. President Obama has been powerless to do anything about the increases. 

Thirty percent (30%) of companies providing ESI to their employees will drop healthcare insurance coverage once Obama care takes effect in 2014.

The survey included 1300 employers providing ESI across industries, geographies, and employer sizes. Other surveys have found that as we get closer to 2014, President Obama’s Healthcare Reform Act will provoke a much greater number of employers to drop employer sponsored healthcare insurance.

The penalty for not providing healthcare insurance coverage is much cheaper than providing healthcare coverage. 

 McKinsey’s survey suggests that when more employers become aware of the new economic and social incentives embedded in Obamacare the percentage of employers dropping ESI will come closer to 100%.

The Congressional Budget Office estimated that only 7 percent of employees currently covered by employer-sponsored insurance (ESI) will have to switch to government subsidized-exchange policies (Public Option) in 2014.

The McKinsey study concluded;


  • Overall, 30 percent of employers will definitely or probably stop offering ESI in the years after 2014.
  • Many Human Resources officers and CFOs do not know the implications of Obama care.
  • Among employers having a high understanding of President Obama’s Healthcare Reform Act more than 50% will stop offering employee healthcare benefit and more than 60% will make some kind of change.
  • At least 30 percent of employers feel they would gain economically from dropping coverage and paying the penalty. They would even gain if they increase their employees’ salary or other benefits.
  •  The insurance coverage is in excess of $15,000 per year per employee. The government penalty is $2,000 per employee.
  • The difference in cost will force employers to drop ESI and force employees into the Public Option.  This was President Obama’s plan all along.
  • The survey also showed that more than 85 percent of employees would remain at their jobs even if their employer stopped offering ESI.
  • Sixty (60) percent of employees would expect an increase in compensation from their employers
  • Who are these rules in favor of? They are not in favor of the employee.


Health care reform fundamentally alters the social contract inherent in employer-sponsored medical benefits and how employees value health insurance as a form of compensation.

 “Obamacare” guarantees the right to health insurance regardless of an individual’s medical status or ability to pay. In doing so, it minimizes the moral obligation employers may feel to cover the sickest employees, who would otherwise be denied coverage in today’s individual health insurance market.

The logical result is healthcare insurance premiums would increase for the individual and benefits would decrease to keep the premium cost down.

In 2014, people who are not offered affordable health insurance coverage by their employers will receive income-indexed premium and out-of-pocket cost-sharing subsidies from the government.

The highest subsidies will be offered to the lowest-income workers. It enables these low paid workers to obtain coverage they could not afford in today’s individual market.

The government will pay the subsidies for the increasing premiums in this Public Option. The government would then pass the increased premium cost on to the taxpayer on a means tested basis.

This is what Don Berwick and President Obama meant by redistributing wealth. 

The next step is government’s complete control of the healthcare system using a single party payer system. 

Employers will no longer be able to offer better healthcare insurance benefits to their highly compensated executives. Obamacare requirements will increase medical costs for companies.  Companies will be forced to discontinue employee healthcare coverage. The penalty is set low to further encourage companies to discontinue coverage. President Obama’s goal is to have most people in the “Public Option” This will lead to government control of the healthcare system.

 State insurance exchanges will be paid for by the states with a federal subsidy. These exchanges will offer individual and family policies of set benefit levels (bronze, silver, gold, and platinum) from a variety of insurance companies.

The effect on the federal deficit will be much greater than the original CBO’s estimate of 10 million people, or about 7 percent of employees, currently covered by ESI.

Seventy (70) million people will be added to the “Public Option”. This increase in numbers will add to the deficit. The result will mean higher taxes for the middle class.

President Obama wins his ideological goal. Consumers will have less control over their decision-making and choices.  The healthcare insurance industry will gain more control over pricing and profit. President Obama will continue to outsource the administrative services to the healthcare insurance industry.

 The losers will be consumers and physicians.


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

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    Repairing the Healthcare System: If President Obama Cannot Get A Public Option One Way He Will Get It Another Way

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Mayo Clinic Rejects Accountable Care Organization(ACO) Provisions


Stanley Feld M.D.,FACP,MACE


The sooner President Obama’s Healthcare Reform Act (Obamacare) is repealed the faster we will be able to get on with healthcare reform that will work for all stakeholders. President Obama was figured that 30 existing and successful integrated medical care organizations would be in the first group of clinics to join and be included in his Accountable Care Organization (ACO) system of care.

ACOs are a critical part of Obamacare’s goal to provide affordable, universal and quality healthcare. ACOs are really HMO’s on steroids. ACOs are supposed to be better versions of HMO’s.  The public and physicians despised HMO’s because of its control over patient choice and access to care.  President Obama thinks Medicare will save over $500 billion dollars a year with ACOs.  Unfortunately for President Obama, neither the CBO nor the Medicare actuaries believe it.

So far at least 4 of President Obama’s premier integrated healthcare organizations have withdrawn from applying for ACO status. The stage 2 ACO regulations produced by CMS and CMS’s chief Dr. Don Berwick make clear President Obama’s intentions to control medical care and shift the risk of care to hospital systems and physicians.

Each organization has withdrawn with a slightly different excuse. It looks are if no one is going to show up at President Obama’s party.  

 “The Mayo Clinic says it will not be part of a critical piece of national health care reform under the government's proposed rules.”

 The Mayo Clinic announced that the proposed regulations “conflict with the way it runs its Medicare operations.” Mayo treats about 400,000 Medicare patients a year. The bottom line is that Mayo figured out that they would assume too much risk, lose too much money and relinquish too much control over its processes to the federal government.

Dr. Douglas Wood, Mayo's chairman of health care policy and research said Mayo "is not going to participate in a Medicare accountable care organization under the circumstances proposed."

Mayo Clinic’s public reasons as expressed by Dr. Wood are;


  1. Mayo does not want to significantly change what it believes is an efficient, patient-friendly program. President Obama has used Mayo’s program as an model.
  2. The gap between Mayo's way of staying accountable and the government's regulations may prove too wide to bridge.

3. Mayo objects to the government's demand that patients be included on oversight boards to judge performance. Mayo doesn't do that now and is not eager to change. Dr. Wood said, "You don't have to have a [patient] on the board to make [treatment] patient-centered,"

4. The Mayo Clinic’s lawyers decided that the antitrust rules that are part of the ACO proposal would be violated. Mayo already provides most of the health care in most of Minnesota's rural counties. Dr. Wood believes it could not operate ACOs in those areas without violating the proposed regulations.

5. The Mayo Clinic objects to the way the government plans to measure effectiveness and quality of medical care. The effectiveness measures proposed by the government include such things as 30-day mortality statistics and the number of diabetes treatments.

The Mayo Clinic believes that the way CMS proposes to measure quality will be ineffective. They will only waste money without improving outcomes.

"They don't get you close to measuring health," Wood maintained. "The simplest measure for consumers is: How effectively did the organization keep me functioning?

    6. Mayo Clinic also objects to the CMS’ way of assigning patients to ACOs.

Mayo is confident in its current approach to accountable care. It has asked CMS "to take an entirely different approach to implementation of ACOs in the country." Mayo wants the government to contract directly with groups that are already providing accountable care programs.

"We're not looking to intentionally give [health care reform] a black eye," Wood said. "We're working to implement accountable care."

President Obama’s healthcare team has stated that they are not going to be influenced by Mayo’s practical demands. They will decide on the correct course based on their theoretical ideology. 

Elliott Fisher, director of population health and policy at Dartmouth Institute in New Hampshire as spokesman for the administration said,

"Every affected stakeholder said it's not good enough yet," Fisher said. "This is how the process is supposed to work."

Dr. Fisher is statement is meaningless and non-committal.  

 Michael E. Chernew, PhD is a Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. He is a disciple of Dr. Donald Berwick and a member of the Medicare Payment Advisory Commission (MedPAC), which is an independent agency established to advise the U.S. Congress on issues affecting the Medicare program. He is also a member of the Institute of Medicine’s Committee on Determination of Essential Health Benefits.

 He said in response to Mayo’s announcement, "I don't think the success or failure hinges on one participant."

Mayo’s Clinic decision was the correct one. CMS wants to control every aspect of medical practice. It wants to shift the risk of care to the providers and control the criteria to judge providers. It is a no win situation for providers. “Cooperative” providers are finally starting to understand the trap President Obama has set.

The best way to win a war is not to show up.






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    It’s fantastic that you are getting ideas from this piece of writing as well as from our dialogue made at this time.

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Paul Ryan Will “End Medicare As We Know It


Stanley Feld M.D.,FACP,MACE


The battle cry of the Democratic Party in its opposition to Paul Ryan’s Medicare plan is “It Will End Medicare As We Know It.” 

If you are told a lie enough times it becomes the truth.

Paul Ryan’s plan will not end Medicare, as we know it for people over 55 years old. I do not know how many times Mr. Ryan Has to repeat his point.

Paul Ryan’s plan is not going to push grandma off the cliff.

President Obama’s Healthcare Reform Act and the Democratic Party have already “Ended Medicare As We Know It” in 2011. The changes in Medicare will only get greater when fully implemented in 2014.

How has “Medicare Ended As We Know It” under President Obama?

1.    President Obama’s Healthcare Reform Act cut $145 billion over 10 years from Medicare Advantage. The cuts start in 2012, at first slow and then build up yearly. Insurers are going to shift the burden of payment from government to beneficiaries in the form of fewer services and higher out-of-pocket costs. Insurers will then stop offering Medicare Advantage coverage.

In April, President Obama used another trick political move to appease seniors who have Medicare Advantage coverage. He is going to give a  $6.7 billion dollar bonus to above average Medicare Advantage plans. The bonus is only 4.6% of the total Medicare Advantage cut and will only be good until 2015. I wonder when he is going to realize that seniors are not stupid and another trick will not work to gain political favor. 

2.    Medicare deductibles have increased as has the cost of base premiums and means tested premiums for Medicare Part B. Medigap premiums have also increased. Nevertheless, the most recent Medicare trustees’ report declared the system is going be bankrupt in thirteen years, five years earlier than predicted last year. They have used the term unsustainable.         

3.     Tim Geithner explained  the reason the alarming update was the result of "technical changes in the economic assumptions underlying the projections."  "We were counting on our economic policies actually working”.                                                                                              

Richard Foster the Medicare actuary said this would happen before we saw the failure of President Obama’s economic policies.

Paul Krugman wrote an article entitled “ Medicare Is Sustainable In Its Current Form”. He then goes on to describe sustainable in its current form.

4.     “Medicare American-style is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items.”  Paul Krugman is saying government should say no to paying for government defined dubious procedure. The Democrats made that mistake in paying for “dubious procedures” with the Medicare entitlement program at the onset. Patients should decide on “dubious procedures” with government input and not government.

5.  "So Medicare will have to start saying no; it will have to provide incentives to move away from fee for service, and so on and so forth." My interpretation of this statement is government will have to start restricting access to care, interpret the value of care and pay providers a lump sum rather than fee for service for their services to patients.

6.     "But such changes would not mean a fundamental change in the way Medicare works". I do not get it. Paul Krugman’s statement means it changes Medicare as we know it, doesn’t it? Doesn’t Accountable Care Organizations mean it changes Medicare as we know it?

President Obama, America’s seniors are not stupid.

7.     "So this business about Medicare in its present form being unsustainable sounds wise but is actually a stupid slogan. The solution to the future of Medicare is Medicare should be smarter, less open-ended, but recognizably the same program.”  Republican politicians did not introduce the term unsustainable. The Congressional Budget Office and Medicare Actuaries and the Medicare Trustees introduced the term before Paul Ryan’s plan existed. Paul Krugman is incorrect.

The difference in philosophy between Republicans and Democrats is clear. Both sides are proposing to "end Medicare as we know it."  President Obama has done it already.

Paul Ryan and the Republicans are offering solutions to give individuals more control over their healthcare decisions. Paul Krugman and the Democrats are suggesting and implementing changes to give the government more control over individuals and their healthcare decisions.

Americans must understand the problems Medicare faces. They must see through the Democrats’ demagoguery.    

I believe my position is a libertarian position if labels are needed.  Only the consumer will solve our healthcare systems problems. Government must empower consumers to make choices about their health and healthcare. The government must give consumers control of there healthcare dollars. If the government did this it would generate competition for among stakeholders for consumers healthcare dollars. These actions would cleanse the dysfunction of the healthcare system rapidly.


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




  • Senior Planning NJ

    Interesting article, it really makes someone think. I always like to read thought provoking articles about things like this. Keep the great posts coming. Thanks again for sharing it with us.

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A More Logical Plan Than “Obamacare”


Stanley Feld M.D.,FACP,MACE 

I do not think President Obama understands basic healthcare economics. Patients and physicians will always drive spending for healthcare. The government will not be able to control spending centrally.

Forty to sixty cents of every healthcare dollar is spent on administrative costs. CMS claims that Medicare spends only 2.5% on administrative services.  This 2.5% is the cost for CMS to outsource Medicare coverage to the healthcare insurance industry.

The healthcare insurance industry takes 40% to 60% of every healthcare dollar for their administrative fees. The law says they can only take 15% out of every dollar for administrative fees. Eighty five percent of the premium dollar must go to patient care. 

 The problem is the 85% includes many fees that are, in reality, administrative expenses such as certifying physicians for their plans and insurance sales fees among others. There is a profit margin for each of these “expenses.” President Obama has permitted these administrative fees to be included in the 85% category for direct healthcare costs.

Physicians get 15% and hospitals get 20% of every healthcare dollar. Where does the rest of the money go?

Forty percent gets taken off the top by the healthcare insurance industry. A good place to start is by setting up a system that creates competition among the healthcare insurance companies. 

The government always blames physicians for the waste. Physicians and patients drive healthcare expenses. Waste occurs as a result of perverse incentives and middlemen abuse. All the stakeholders are to blame. The healthcare insurance industry generates the most waste. Defensive medicine is the second leading cause of waste. Legislation using common sense could eliminate most of this waste.

"A 2005 report by the National Academy of Engineering and the Institute of Medicine found that 30-40 cents of every dollar spent on health care are spent on costs associated with "overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency. Medicare is especially vulnerable to waste, fraud and abuse.”

Medicare spending must be decreased. The best way to decrease the spending is to provide incentives for seniors to drive the system rather than the system driving seniors.

 “Unfortunately, the debate on Capitol Hill and in the media is too often fueled by partisan fear mongering instead of a thoughtful examination of the facts.” 

No amount of price cutting or central-government dictates will mitigate these problems.

A consumer (seniors) driven healthcare system providing incentives for providers and patients is the only way to fix the system.

Accountable Care Organizations (ACOs) are being proposed and organized to harness the spending of the fee for service systems.

ACOs are systems in which doctors and hospitals team up to offer coordinated care. Both are held accountable for cost and quality in a disguised capitation system. “Quality” is not effectively measured.

 Hospital systems and physicians have long had an adversarial relationship because hospital systems have leveraged its brick and motor value off the intellectual property and mechanical skills of physicians.

More and more physicians are realizing this fact. Physicians are building their own hospitals and outpatient surgical clinics. Physicians are consciously or unconsciously resistant to hospital systems dividing the money and participating in the reimbursement sharing judgments.

Neither group wants to be at risk for “poor outcomes” that might be the patients’ fault.

The incentives to form ACOs are too weak. The regulations are 400 pages too long and complicated.  Physicians do not have the time or money to fully understand the regulations.  “Trust me” does not work anymore.  The major hospital systems have backed out of forming ACOs under the regulations because they put the hospital system at too great a risk.

Paul Ryan’s plan of “premium support” can potentially encourage formation of Accountable Care Organizations The ACOs have to be attractive enough for patients to choose to join them. Hospital systems would have to be successful in organizing them.  Ryan’s plan is a “managed competition model.”  The government would make defined contributions for beneficiaries depending on the beneficiaries’ means. The subsidy would be a total subsidy for the poor and a sliding scale subsidy for others.

Beneficiaries would have a choice from a variety of health plans with no discrimination based on health status or wealth. Standard coverage contracts understandable by ordinary people would be required to make comparisons possible. Internet FAQs would be made available.

Competition for consumer (seniors) business would drive health plans to innovate in ways that would cut waste and improve “quality.” The use of well-designed healthcare insurance exchanges would drastically reduce healthcare insurance company marketing costs. The completion by healthcare insurance companies in effective healthcare insurance exchanges could result in healthcare insurance companies not taking 40% off top as they currently do. The system could be set up so that consumers could buy the insurance across state lines.

The Ryan plan does not deal with defensive medicine. States could easily be presented with an ideal tort reform model to adopt or modify. In Texas the model is not ideal but it is effective and would be effective nationally. If a model included a “loser pays” clause it would decrease frivolous law suits and decrease defensive medicine testing dramatically. In most instances physicians do not receive increased compensation for the increase in testing. Therefore the motivation is not testing simply to make more money.

President Obama needs to understand the basics of healthcare economics before he goes on and totally destroys the healthcare system.

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








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Medical Care Should Not Be About Politics.


Stanley Feld M.D.,FACP,MACE

On May 30,2011, an article was published in the New York Times entitled “As Physicians’ Jobs Change, So Do Their Politics.”

This article has been reproduced multiple times in multiple blogs. The New York Times article leads readers to misleading conclusions based on inaccurate facts.  I felt the story was insignificant and passed it by. After I received a few comments about the story, I decided to critique it.

The author quotes a Maine State Senator who proposed a tort reform bill.

State Senator Lois A. Snowe-Mello offered a bill in February to limit doctors’ liability that she was sure the powerful doctors’ lobby would cheer. Instead, it asked her to shelve the measure.”

“It was like a slap in the face,” said Ms. Snowe-Mello, who describes herself as a conservative Republican. “The doctors in this state are increasingly going left.”

Tort Reform should not be a political issue. It is a medical care issue. I described the Massachusetts Medical Society survey on defensive medicine in the past. By extrapolation of the survey facts between 300 billion and 700 billion dollars is wasted on defensive medicine per year. This does not include the wear and tear of frivolous lawsuits on patients and physicians.

The Maine Medical Association does not have the position quoted by Senator Lois A. 

“We are a coalition of three Maine health care associations collaborating to protect the public’s access to quality care and to restrain the inflation of health care cost. We hope to accomplish what many other states have already done by reforming liability laws so that your physician remains in Maine and the best new doctors continue to come here to practiceVictims of negligence deserve compensation and it not our intention to deny these patients their rights. But the liability system must be restructured to be fare to all.”

The article goes on to say’ Doctors were once overwhelmingly male and usually owned their own practices. They generally favored lower taxes and regularly fought lawyers to restrict patient lawsuits.” 

But doctors are changing. They are abandoning their own practices and taking “salaried jobs” in hospitals, particularly in the North, but increasingly in the South as well. Half of all younger doctors are women, and that share is likely to grow.”

There are no national surveys that track doctors’ political leanings, but as more doctors move from business owner to shift worker, their historic alliance with the Republican Party is weakening from Maine as well as South Dakota, Arizona and Oregon, according to doctors’ advocates in those and other states.”

There are several implications is these few sentences that would lead readers to conclude that;

  1. President Obama is correct in ignoring Tort Reform because as physicians become more “liberal” they side with the plaintiff attorneys’ arguments about the value of litigation. The article ignores the increase in medical care costs resulting from defensive medicine and malpractice insurance.
  2. Physicians who are taking “salaried jobs in hospitals” have no interest in protecting themselves against frivolous lawsuits.  The implication is malpractice is now the hospital’s problem. It implies that defensive medicine will decrease.

(The reference sited under hospitals is inaccurate. It has nothing to do with physicians being salaried by hospitals.) There are many problems and conflicts between physicians and hospital starting to surface (previously discussed) with hospitals buying physicians’ practices and deciding on the value of physicians in the healthcare system.

  1. As more physicians become shift workers rather than owners they are becoming more liberal.

(There is no discussion about why many physicians are joining hospital systems.)

       4. It implies that women are lazy and do not want to own medical practices.

        5.  Since physicians are more liberal they therefore believe “Obamacare “ is    good for America. 

The Maine Medical Association does not believe in any of these implications. Its statements are clear. It understands that physicians are driven out of the state because of the lack of malpractice reform. It has a declining number of physicians practicing in the state and the cost of care is increasing while the quality of care is decreasing.       

Our coalition is seeking to advance medical liability reform to preserve access to physician services, improve the affordability of health care and ensure high quality care in Maine.

Across the country, America’s patients are losing access to care because the nation’s out-of-control legal system is forcing physicians in some areas of the country to retire early, relocate or give up performing high-risk medical procedures. There are now 21 states in a full-blown medical liability crisis — up from 12 in 2002. In crisis states, patients continue to lose access to care. In some states, obstetricians and rural family physicians no longer deliver babies. Meanwhile, high-risk specialists no longer provide trauma care or perform complicated surgical procedures.”

 These statements contradict the accuracy of the article. However, the media is the message. The New York Times represents the traditional media. With its bias it drives this disinformation or misinformation front and center. Readers accept the bias and do not think critically.

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





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Let Us Forget Demagoguery And Face Facts!


Stanley Feld M.D.,FACP,MACE

I understand that President Obama wants to win the election in 2012. He will do everything in his power to win it.

I understand politicians do everything to spin an issue in their favor to win an election. 

I know that politicians believe many issues are too complicated for Americans to understand. The reason we elect government officials as our surrogates is for them to understand the issues and vote for our vested interest. 

How many congressmen read President Obama’s entire healthcare bill and believe they voted for citizens’ vested interest? I bet the answer is not many.

I have pointed out how President Obama presented the CBO with false assumptions to manipulate budgetary conclusions. Appointed CBO officials and Medicare actuaries find President Obama’s conclusions difficult to believe.  

Finally, a congressman has stood up and said let us look at the facts, America must face where we are headed. It is his responsibility to the American people to explain these facts. Americans are capable of understanding these facts and the consequences of the facts. Paul Ryan believes in the intelligence of the American people.

The trick is to get Americans to listen. I used to worship the New York Times. It was the place to get the facts. It has become biased.

At a recent party politics became a hot topic. The discussion was about the Republicans not having a candidate able to beat President Obama in 2012. People quoted articles from the New York Times and Time Magazine as the ultimate authority.

I was very quite. I was quiet because I could not believe that intelligent people would believe the hogwash they were quoting. President Obama has had a terrible record. Just look at President Obama’s economic policy, foreign policy and healthcare policy. 

Here are a couple of examples in two recent New York Times editorials;

"Rep. Ryan’s Dubious Sales Pitch"

Published: May 29, 2011

"Representative Paul Ryan is rebutting critics of his plan to turn Medicare into a “premium support” program, pointing to two existing programs that he says prove 
his approach would be better for beneficiaries. Don’t believe it."

My immediate reaction looking at the editorial while eating breakfast was, “I got it.” “Paul Ryan’s plan is no good. The media is indeed the message. Forget about critiquing the details. 

The second article was more subtle.

Published: May 28, 2011

Republican leaders in the Senate have spent weeks gleefully deriding the Democrats who run the chamber for not producing a budget proposal in more than two years. It is a classic tactic, designed to deflect attention from their party’s toxic plan to privatize Medicare. 

In the second quote it is a given that the Ryan Plan is toxic. Again, no facts. If the New York Times said so, the Ryan Plan must be toxic. 

No one at the party I mentioned has yet to be affected by President Obama’s policies yet. I am sure they will start paying attention to his policies when his policies affect their life, standard of living, and freedoms.

President Obama is building the infrastructure to affect all of the above. As he is building the infrastructure he and the Democratic Senate are bankrupting the country.

I have not seen tremendous support by the Republicans for Paul Ryan’s budget.

Paul Ryan’s budget does not attack entitlements in the near term. It attacks the government waste President Obama’s own National Commission on Fiscal Responsibility and Reform pointed out.

It is best to hear from Paul Ryan himself. Paul Ryan’s goal is to help Americans become less dependent on government, not more dependent.

Government should make rules that level the playing field for all stakeholders in all areas and then get out of the way. It should enforce the rules equally and fairly. 

To my chagrin only 256 people watched this You Tube announcing the Ryan Plan. In announcing the budget Mr. Ryan points out the path to disaster President Obama is heading us into.  He then goes on to describe the path to prosperity we must take. 

If you want to hear what Paul Ryan really has to say rather than having it editorialized by the New York Times and the traditional media, it is worth watching this You Tube.



The facts are more important than hearsay.

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


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