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All items for December, 2011

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Another Attack On Freedom: Censorship

Stanley Feld M.D.,FACP, MACE

I want to wish everyone a Happy Holiday and a Healthy and Happy New Year.

In my last blog I outlined Obamacare’s threat to our freedom. The Supreme Court will rule on the issue in the summer of 2012.

Another example of increasing government control over our freedoms are the two  bills working their way through congress, Protect IP Act (PIPA - S.968) and Stop Online Piracy Act (SOPA – H.R.3261)).

Newspapers, TV and the movies are the traditional media. It is not surprising that these two media would work hard to protect their vested interests. The Internet is a threat to their vested interest. They are trying to put restrictions on the Internet that is a threat to our freedom of expression. It also represents a threat to our economy.

I think some members of the Judicial Committee of the House of Representatives do not understand the implication of the bill and the unintended consequences.  If they do they are doing an evil thing to our freedom of speech and freedom of the press.

The Internet has provided the individual a voice. It is the freedom of choice to listen to that voice.

My son, Brad Feld, outlined the unintended consequences of the two bills clearly.

These bills are consistent with President Obama’s apparent quest to increase governmental control over our freedoms.  Both bills have had minimal coverage by the press.

Brad said,

There are two very disturbing bills making their way through Congress: Protect IP Act (PIPA - S.968) and Stop Online Piracy Act (SOPA – H.R.3261).These bills are coated in rhetoric that I find disgusting since at their core they are online censorship bills. It’s incredible to me that Congress would take seriously anything that censors the Internet and the American public but in the last few weeks PIPA and SOPA have burst forth with incredibly momentum, largely being underwritten by large media companies and their lobbyists.”

“ I’ve been incredibly agitated the last few days by SOPA after watching three hours of the House Judicial Committee hearing on Friday. SOPA is such an evil thing at so many levels and the people in the House that want it to happen appear to refuse to listen to facts or logic, and – when they talk about what they are confronted with – claim the facts and logic aren’t actually factual or logical. “

 The Judicial committee of the House of Representative was going to vote for the bill and send it to the entire house for passage on December 16th.  By some miracle at a last minute the decision was made to delay the bill until the committee could learn more about the unintended consequences

President Obama said he would sign the bill. My sense is most of the congressmen on the committee did not understand the bill. Testimony has been heard so far only from advocates for the bills passage. It almost looks rigged.

My fear is the facts are immaterial to the committee membership.

Brad went on.

“In addition to being censorship bills, these are anti-entrepreneurship bills. They are a classic example of industry incumbents trying to use the law to stifle disruptive innovation, or at least innovation that they view as disruptive to their established business.

 To date, the Internet has been an incredible force for entrepreneurship and positive change throughout the world (did anyone notice what recently happened in Egypt?) It’s beyond comprehension why some people in Congress would want to slow this down in any way.”

Wake up America. We must speak up using the tool that lets our voice be heard. The Internet.

STOP CENSORSHIP.

 

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

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  • Nursing Home Supplies

    I hope all is well. I miss your posts on here, but understand you have lots going on. Just want to know you’re okay!

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A Wakeup Call About Individual Freedom

Stanley Feld M.D.,FACP,MACE

President Obama and congress have made major progress in increasing central power over individual freedoms during President Obama’s tenure in office.  Congress has done it by passing unpopular laws; President Obama has done it issuing unpopular by executive orders.

Two prominent examples are working their way through the governmental system right now.

The first is Obamacare with its many defects. The next congress and President will probably repeal Obamacare. President Obama’s Healthcare Reform Act has already damaged the economy, increased the budget deficit and is destroying the healthcare system.

The Supreme Court will not overturn Obamacare completely. The court is only judging the law on limited issues. The Supreme Court’s decision is going to take at least two years fro the time the bill was passed.

The real issue at stake with President Obama’s Healthcare Reform Act is should the central government have the power to control our lives and our choices.

The states are protesting that the federal government is taking power away from the states.

 Citizens are complaining that the federal government is limiting their rights and freedom of choice.

This conflict has existed throughout American history. America has struggled with the challenge of the balance of power between federal control, states rights and individual rights.

President Obama is a strong advocate of central control. In the process he is trampling states rights and individual freedoms.  He has bypassed congress and by executive order conferred absolute power to administrative appointees.

If the federal government can require people to purchase health insurance, what else can the government force Americans to do?  The government will be able to compel citizens to do any number of things by decree.

President Obama has ignored this basic issue.  Has congress and the executive branch overstepped their constitutional authority?

His administrations’ lawyers have had a difficult time providing a coherent response to the question in court appearances around the country.

Judge Laurence H. Silverman said, Let’s go right to what is your most difficult problem,”

 “What limiting principle do you articulate?” If Congress may require people to purchase health insurance, what else can it force them to buy? Where do you draw the line?

Would it be unconstitutional, to require people to buy broccoli?

Beth S. Brinkmann, the administration’s lawyer said, “No,” then “It depends.”

Judge Silverman asked the next logical question,

 “Could people making more than $500,000 a year be required to buy cars from General Motors to keep it in business?

Beth Brinkman’s response was “I would have to know much more about the empirical findings,”

Judge Brett M. Kavanaugh asked,

“How about mandatory retirement accounts replacing Social Security?”

Ms. Brinkmann replied. “It would depend.”

None of these ridiculous responses were published in the traditional media at the time of the testimony. The administration’s lawyers are trying to define its views of the limits of government power. The have not provided constitutional justification for their views.

 “They have said, for instance, that laws authorized by the Constitution’s commerce clause must be economic in nature, must concern interstate commerce and must address national problems.”

I do not think this should be done at the expense of states’ rights and individual freedoms.

The reason President Obama’s Healthcare law requires an individual mandate to purchase healthcare insurance is because Obamacare is not actuarially sound. It might work if everyone pays into the premium pool.

Rather than repairing the healthcare system and its inefficiencies President Obama is adding more revenue to a failing system by mandating everyone to pay into something they do not want. 

In reality, Medicare has failed economically even though seniors are satisfied with the insurance.

Medicare Part A mandates everyone to pay into the system through payroll taxes.  The reason the government had gotten away with the Part A mandate is because Americans had the right to opt out of Medicare Part B.

Another hollow argument President Obama’s lawyers have used is that the health care market is unique.

The administration’s lawyers have suggested,

 “Questions about constitutional limits can miss the point. The only question actually before the courts, they said, is whether the particular law under review was within Congress’s authority. Other cases, they said, can be decided as they arise.”

There are many unintended consequence of Obamacare already. Hopefully, the Supreme Court judges will understand these implications of these unintended consequences. Most important is the precedent the law set for other cases.

In 1995, when the court struck down a federal law that prohibited people from carrying firearms in school zones, Chief Justice William H. Rehnquist wrote that “we pause to consider the implications of the government’s arguments” in defending the law — that stopping activities that could lead to violent crime relates to interstate commerce because it affects “national productivity.”

Under that reasoning, Chief Justice Rehnquist wrote, “It is difficult to perceive any limitation on federal power,” adding that “if we were to accept the government’s arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate.”

Many judges are reluctant to issue rulings without some sense of what their consequences will be in other cases.

The outcry about Obamacare has been loud and clear.  Our constitutional government should be government for the people by the people.

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

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The Healthcare System vs. The Medical Care System

Stanley Feld M.D.,FACP,MACE

The difference between the healthcare system and the medical care system is very clear to me. The stakeholders in the healthcare system are patients, physicians, government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies. 

 Government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies are secondary stakeholders in the healthcare system.

 The primary stakeholders are patients and physicians. They also comprise the medical care system. Without the primary stakeholders there would be no need for a healthcare system.

 The secondary stakeholders have long ago taken over the healthcare system. All businesses and the government deal with the hand they are dealt using their best judgment. The people running the business or government pursue their vested interest. The difference between businesses and government is businesses work to make as big a profit as possible. Government, depending on the political party in power, pursues fulfillment of its ideology.  

 Since 1942 and the Economic Stabilization Act of President Roosevelt the market place for medical care has been distorted. In 1946 healthcare insurance was introduced. At that time the interaction between the primary stakeholders, physicians and patients, started to be destroyed by secondary stakeholders.

The cost of healthcare has progressively increased since the government passed the Medicare and Medicaid in 1965. Costs increased further in 1980 when the government said we couldn’t keep paying these increasing costs and instituted price controls for Medicare and Medicaid.

This led to cost shifting of the difference to the private healthcare insurance sector.  Businesses providing healthcare insurance for their employees accepted the resulting premiums associated with cost shifting until 1985. At that time they said, “stop.”

The healthcare insurance industry asked corporations what percentage of your gross revenue could you afford for healthcare insurance benefits. The healthcare premiums were 18% of gross revenue.

 The corporate answer was they could afford up to 12% of gross revenue. The healthcare insurance industry’s response was, no problem.

HMO pricing became the most economical option for corporate employers. HMO fixed healthcare cost for corporations and healthcare insurers.

HMOs shifted the risk to physicians and hospitals. HMOs failed because physicians and hospital did not know how to assess risk. They accepted risk initially because they were afraid to lose patients.

 Hillarycare failed to become law because of the potential for patient abuse, restrictions of access to care, rationing of care and loss of freedom of choice. Patients did not want the government to dictate their medical decisions.

 Obamacare was passed by a Democrat controlled congress with a very liberal ideology.

  Many congressmen did not read the entire document or debate the potential unintended consequences.

  The difference in ideology between liberal and conservative is easy to understand.

 “Liberals believe that health care is treated as a market commodity today but should not be, and conservatives think that health care is not treated as a market commodity but should be.”

 The healthcare system is not a true marketplace. The healthcare marketplace has been continuously distorted by government regulations and adjusted regulations since Medicare passage in 1965.

 All the stakeholders have distorted the market even further by adjusting to government regulations in order to purse their vested interest.

If real repair of the healthcare system is to occur a real marketplace has to be created. Obamacare is another adjustment in an already distorted marketplace. Obamacare is accelerating the dysfunction in the healthcare system until it implodes and results in increasing costs not savings.  

 The healthcare insurance industry controls costs. Many Democratic healthcare policy experts have ignored the facts. The healthcare insurance industry’s goal is to maximize its profit. It takes 30% of the healthcare dollars off the top.

The healthcare insurance industry should not be in control of the economics of the healthcare system.

 Consumers should be in control of their medical care decisions and the money they spend for those decisions.

Personal medical care decisions should not be left to the munificence of the government. The government has never done anything efficiently.  

 Private and Medicare insurance has kept control of medical decisions out of consumers’ hands.  Consumers purchase healthcare insurance individually or from Medicare. Consumers also can receive healthcare insurance from their employers as a job benefit.

 The healthcare insurer directs consumers to use physicians and hospital in its network. The insurer negotiates reimbursement rates for the insured with hospitals and physicians.

Consumers are given little or no information about the comparative cost or quality of any particular doctor or hospital.  Consumers go to a doctor in their network.

Physicians do a history and physical exam and order tests and procedures on patients’ behalf.  When the test and procedures come back physicians prescribe the appropriate medication after a follow-up visit.

The healthcare insurance company reimburses physicians.

  Patients receive a copy of the bill from the insurer with patient portion of the co-pay. The explanations of benefits are impossible to interpret.

This is not a marketplace transaction. Patients have no control over the reimbursement. Patients and physicians have little incentive to restrain overuse of the healthcare system. They have no incentive to even scrutinize the bill. Patients’ have no incentive to control costs.

The use of healthcare services is divorced from marketplace forces that constantly assess cost benefit ratios.  Neither physicians nor patients have incentive to get the best care at the lowest price with the best quality.

As healthcare costs increase each year the source of the increase remains opaque. The increasing costs are made to appear to be the result of patients’ and physicians’ overuse of the healthcare system.

The increase in cost could be the result of the healthcare insurance industry and the pharmaceutical industry’s increased profits.

All stakeholders pursue their vested interests. The only way to align vested interests is to have consumers be responsible for thei health and healthcare dollars.

Only then will a true market place exist. Entitlements and price controls do not work. The cost of healthcare will skyrocket with Obamacare and create a larger budget deficit.

 

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

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    difference between medicare and medicaid

    Repairing the Healthcare System: The Healthcare System vs. The Medical Care System

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Pharmacy Monopolies

Stanley Feld M.D.,FACP, MACE

 Pharmaceutical companies have been merging for years. Pharmacies have also been merging for years. The excuse for mergers has been efficient production, distribution and sale of drugs.

“Senior executives say the merger will significantly reduce the nation’s health care costs and deliver drugs in a safer, more efficient fashion. “

If any one believes this I have a bridge to sell you.

The real reason is to form a monopoly. President Obama and his Federal Trade Commission (FTC) have allowed pharmacies to get away with it.  

 “The Federal Trade Commission (FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the elimination and prevention of what regulators perceive to be harmfully anti-competitive business practices, such as coercive monopoly.”

The commission has not done a very good job in protecting consumers of healthcare for years.

The next wave of monopolies which will hurt consumers is the merging of pharmacy benefit management companies.  Their executives are using the same excuse to both the FTC and the congress.

“Senior executives say the merger will significantly reduce the nation’s health care costs and deliver drugs in a safer, more efficient fashion. “

 I have finally figured it out.

First, I must explain this attempt to create another healthcare monopoly that will result in increased cost to the healthcare system.

If past behavior is a predictor of future behavior, whoever is paying for the drugs will pay more.

 Express Scripts’ has offered to pay $29 billion for the acquisition of Medco Health Solutions. Both pharmacy benefit manager are among the biggest in the business.  

 Combined they will handle prescription drug benefits for more than 115 million people. The two companies now control 33% of the prescriptions filled in the United States. Their combined revenue is $110 billion dollars a year and growing.

 The Federal Trade Commission wants more details before it approves the merger. The antitrust subcommittee of the Senate Judiciary Committee wants to examine the antitrust implications of the merger.

 It is pretty obvious that the merger will decrease competition leaving only two major pharmacy benefit managers Express Scripts/Medco and CVS Caremark. 

  A Morgan Stanley Research indicated that the 50 largest companies in the United States rely heavily on the services of Medco, Express Scripts and the third major benefit manager, CVS Caremark.

"Dan Gustafson, an antitrust lawyer who recently helped write a letter to the F.T.C. objecting to the merger on behalf of the American Antitrust Institute, a Washington organization. “These are customers who require a broad spectrum of services on a national level,” he said."

The smaller pharmacy benefit managers (40) typically do not have the geographic reach, bargaining power or data-handling capabilities of Express Scripts, Medco and CVS Caremark.

“When benefit managers steer health plans to their own pharmacy fulfillment services, employers may have little choice but to agree, said Edward A. Kaplan, a benefits consultant at Segal, which advises employers and others about health insurance. “They have very little leverage,” he said.

The Senate subcommittee and FTC regulators want to study the implications of the merger on the individuals, large companies that provide drug insurance to their employees, the mail order pharmacy and specialty drug markets.

The merged company would control a third of the specialty drug market. This market produces a high net profit. By controlling the market Express Scripts/Medco would not only increase the price it would increase their net profit.

Robert Seidman, a former pharmacy executive at WellPoint who is now a health care consultant in Los Angeles said,

We’re not talking pennies here,” he said. “We’re talking thousands” per drug.

  Express Scripts/Medco retort is pretty lame. It asserts there is plenty of competition including companies like UnitedHealth Group, the powerful insurance company. The obvious reply should be that there is not enough competition.

 A number of consumer groups including Consumers Union, along with associations representing community pharmacists, chain drugstores and supermarkets, have sent letters to regulators and legislators arguing that the combined company would create a drug benefit giant with unrivaled power.

 The fear is Express Scripts/Medco would have the power to steer patients to its own mail order and specialty pharmacy businesses.

 “Our concern is that a mega P.B.M. would have tremendous power and control over what prescription drugs Americans can get, where they get them, and how much the drugs cost,” said Don Bell, senior vice president and general counsel at the National Association of Chain Drug Stores.

DeAnn Friedholm, the director for health care reform at Consumers Union, said her group was particularly concerned that the merger could reduce consumer choice.  

“We like the idea of having good choices for consumers that meet their needs, not just the need of these huge P.B.M.’s,” Ms. Friedholm said.

Just as President Obama and previous administrations has encouraged hospital systems to become monopolies in the name of efficiency, President Obama is going to believe Express Scripts/Medco’s promise of efficiency and lower costs and have the FTC push through the merger.

I would guess President Obama thinks he can control Express Scripts/Medco or he is playing favorites again or he wants the healthcare system to implode.

This is one more step toward the implosion of the healthcare system.

 

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

Please send the blog to a friend 

 

 

  • Joanne Velazquez

    Merging doesn’t happen because they want to help other people. They are merging because they just want to help their business to grow fast.

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Hospital System Monopolies And ACOs

Stanley Feld M.D.,FACP,MACE

I have been a constant critic of Accountable Care Organizations. I have said they cannot work to the benefit of patients and physicians because of the difficulty of organizing them and the subsequent unintended consequences. ACOs will increase the costs to the government and healthcare insurance industry to provide the administrative services.

Government has proven over and over again its ability to make complicated mistakes. These mistakes result from bloated bureaucracies and conflicting bureaucratic missions.

Additionally the government outsources administrative services to the healthcare insurance industry. Administrative services fees are constantly increasing because of waste, inefficiency, and mark-ups.

Hospital systems have been merging for 15 years. In the process they are attempting to buy physicians practice and provide a salary for physicians.

 Hospitals are brick and mortar structures. They are not the future of medical care. Hospitals, now hospital systems, had to change their business plan because more and more patients are being treated out of the hospital.

Outpatient clinics, diagnostic imaging centers, chemistry laboratories and ambulatory surgical centers have shifted income from hospitals to physician owned outpatient clinics.

Hospital systems goal has been to buy physicians’ practices and ancillary care facilities. Hospital systems’ consultants have concluded that they would be in a better position to negotiate price if they owned the physicians infrastructure regardless of the cost and pay physicians a salary.

The published reason given for this action is to provide better and integrated medical care within their hospital system. The real reason is to capture the revenue lost to outpatient facilities and profit from physicians’ productivity. Physicians are realizing they are being taken advantage of and are demanding their fair share of their own productivity.

 The Federal Trade Commission is supposed to have the authority to challenge monopolistic hospital mergers to protect consumers.

 

In 1996, the FTC amended its policies on health care mergers. The new policy encouraged hospital systems to merge by providing safe harbor to competing hospital systems when the hospital system could prove their hospital could achieve sufficient clinical integration.

 

The definition of sufficient integration was very loose and ill defined. The government thought it could save money by having all the fees under one roof. The FTC encouraged healthcare system monopolies in order to achieve more efficient and integrated care. It did not realize it would bite them in the leg someday.

It has always been a mystery to me how the government came to this conclusion. Suddenly the government has realized that the monopolies have turned on it and are in a position to demand more reimbursement. 

J. Frank Rosch the FTC Commissioner said,

 “I thought that the 1996 amendments…were the biggest loophole in the antitrust laws I had seen,”

 “Subsequent Advisory Opinions issued by Commission staff…were about as clear as mud.” 

Dr. Donald Berwick and President Obama claim that Accountable Care Organizations are the cure to our rising healthcare costs. A gigantic and expensive bureaucratic system has been constructed by CMS to regulate these new ACOs.  ACO’s promote further consolidation and mergers of physicians and hospital systems.

“The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”

Remember the government outsources all of the administrative services to the healthcare insurance industry. I have shown how the healthcare insurance industry has taken 30 to 50% of every Medicare healthcare dollar to the disadvantage of the taxpayer and seniors. 

Large merged hospital systems have in turn taken advantage of their size to take advantage of the healthcare insurance industry.

The healthcare insurance industry has taken advantage of the government in pricing administrative services.

Finally, the government has taken advantage of seniors by increasing Medicare premiums, increasing deductibles and decreasing benefits..

“ The final ACO guidelines, says Rosch, are “extraordinarily generous to providers,” and will constrain the FTC’s ability to block exploitative provider mergers.”

The Congressional Budget Office, much to the dismay of Obamacare’s advocates, did not think ACO’s would save much money in ten years.

 The CBO projected that the Medicare ACO initiative would save $5.3 billion over ten years.

 “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”

 This supposed savings amounts to eight-hundredths of one percent of Medicare’s spending over the projected ten years.

People have a tendency not to do the arithmetic when present with what sounds like a big number.              

 “Against the very meager prospects for cost savings,” Rosch concludes, “there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.

Middle-class Americans are already struggling with the burdens of the rising cost of health insurance. The potential ACO policy blunder is not to be taken lightly.

 Obamacare’s failure will skyrocket our federal debt. The lack of consideration of the dysfunctional dynamics of the healthcare system will result in unintended consequences that will create greater dysfunction and higher costs.  

Obamacare and ACOs will end up making health care even less affordable and accessible.

Maybe that is President Obama’s goal.

 

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

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  • physical therapist salary

    By some weird arithmetic, the more life stuffs itself into the valley, the more spaces it creates for further life.

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Hospital Systems Are Creating Local Monopolies.

Stanley Feld M.D.,FACP,MACE

The primary stakeholders in the healthcare system are patients and physicians. Without patients or physicians there would not be a healthcare system.

Patients should be the drivers of the healthcare system. They are not. The primary drivers are the government and the healthcare insurance companies.

Hospital systems play the next largest role in driving up the costs of the healthcare system. Large hospital systems are constantly playing a game of chicken with the government and the healthcare care insurance industry.

Somehow, large hospital systems have been able to stay under the radar.  They have been able to avoid the responsibility of the rising costs of healthcare.

Large hospital systems and large hospital chains know that insurers need them to service their network of patients.  The healthcare insurance companies know that the hospital systems can hold them hostage to increased reimbursement.

 When a large hospital system demands an increase in reimbursement the healthcare insurance industry simply increases premiums.

 An example is the increasing premiums and costs that resulted from  Romneycare in Massachusetts. Romneycare’s structure is one large driver of rising costs in Massachusetts.

 Hospitals in Boston were extremely competitive before 1990.

 The race in the late1980’s was to build the best hospital/physician network in town. The goal was to attract patients, overwhelm the competitors and get the best reimbursement from insurers.

 In 1993 the model changed from a competitive model to a monopolistic model.

The merger between two eminent Harvard-affiliated hospitals, Massachusetts General Hospital and Brigham and Women’s Hospital developed a hospital system (Partners) that would control the marketplace.

 The two most prestigious hospitals in the state forced the healthcare insurance industry to increase their reimbursement for providing care. Meanwhile, the Tufts hospital system offered a lower reimbursement rate but patients wanted to go to Partners.

Partners HealthCare created a monopoly. It could deny access to the patients of any insurer who dared not accept whatever Partners wanted to charge.

 What patient would want to be on an insurance plan that didn’t have access to the two most prestigious hospitals in Boston? 

 “Partners’ secret agreement in 2000 with Blue Cross Blue Shield of Massachusetts, in which Blue Cross would give Partners more money, in exchange for Partners’ promise that they would demand the same rate increases from everyone else. The growth rate of individual insurance premiums in the state doubled.”

   

 Many executives at Blue Cross/ Blue Shield wanted to fight Partners’ demands. However discretion was the better part of valor.

An executive of Blue Cross/Blue Shield said,

“We are a successful business up against a hospital system that save people’s lives. It’s not a fair fight…

Many hospitals are merging throughout the country to take advantage of this market leverage and increase reimbursement from the healthcare insurer.

 Hospital systems are frantically trying to buy primary care physicians’ private practices to enjoy this leverage. The statistics claim that from 30% to 70% of practices have been bought by hospital systems.

 The fiction is that medical schools are producing a different breed of physicians. The fiction is all the present day physicians want is a salary.   I do not think this is true.

The barrier of entry to opening a private practice is cost. Physicians completing medical school have already incurred large debt.

The problem with being employed by hospital systems is the hospital system controls the overhead expenses. These expenses are inflated.  Many salaried physicians do not realize the unfair overhead expenses because the expenses are opaque.

 It takes a while for physicians in the system to figure out that they are not getting their fair share of the reimbursement for their productivity. At that point physicians start fighting with the hospital system. Some physicians quit en mass and open their own practice.

 Partners’ physicians figured it out. Partners is still intact but the physicians are now getting their fair share.

Physicians are starting to realize they have leverage over their hospital employee and that they must have control of their overhead.

 The Department of Justice is opening an investigation of hospital systems engaged in anticompetitive behavior. It is also challenging mergers in various parts of the country. Hospital systems have offered the defense that mergers will lead to “more efficient and cost-effective care.”

“But the long history of hospital mergers shows no evidence that consolidation leads to either. Indeed, according to FTC lawyer Matthew J. Reilly, the merged Toledo hospitals immediately went to work jacking up rates:”

 “Soon after the acquisition was consummated,” Mr. Reilly said, “ProMedica approached certain health plans to obtain higher reimbursement rates.” 

 “The higher rates, he said, are typically passed on to consumers in the form of higher premiums, co-payments and other costs.”

 Businesses act in the pursuit of their vested interests. Government sets the rules and businesses seek to take advantage of those rules.  

Somehow, secondary stakeholders must be controlled. It will take a consumer driven healthcare system to control it.

 

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

Please send the blog to a friend 

 

 

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