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A January 1st, 1957 Adventure

December 31, 2012
inLife's Experiences
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Stanley
Feld M.D.,FACP,MACE

As
a Columbia College student in the late 1950’s I worked in a Catskill Mountain
hotel resort as a waiter during the summers to earn money for college tuition
and expenses.

My
college tuition was $450 per semester.

I
had a great job in a wonderful adult only hideaway hotel at the end of a
winding country road. The tips were great. I was able to earn enough to pay for
college tuition and some expenses each year.

Even
in 1957 college kids did stupid things. The hotel was usually closed after
Labor Day until the first week in June each year. I always started the first
week in June.

The
Catskill Mountains are a winter wonderland at Christmas time. Only Grossinger’s
Hotel was open and had winter activities.

 The owner of my hotel decided to open the hotel
Thanksgiving and the last two weeks in December. In 1957 New York City was
beginning to close down the last two weeks in December. The owner felt she
could fill the hotel even though winter activities were not yet in abundance in
the Catskill Mountains.

She
figured she could fill the hotel up by providing enough on activities at the
hotel for the guests.

She
was right.

The
fall semester at Columbia College was over. My finals were finished. Spring
Semester would start January 16th.

The
owner invited me to work those two weeks. I jumped at the opportunity despite
the protests of my parents. The only bad thing was I did not own a car. I did
not look forward to taking the Greyhound Bus to Woodbourne New York.

I
called around to a few of my friends who worked with me in the summer. Freddie
W. had just gotten a car. He volunteered to drive me and two other friends. We
were to pay for the gas.

I
thought Freddie was great. We left New York City on December 17th
1956. It was an uneventful trip on a beautiful sunny cold day.

The
hotel was gorgeous it the snow.  The snow
emphasized its architectural beauty.

My
waiting tables were full. The entertainment and activities were spectacular.
Christmas Eve and New Years Eve were a knockout. Some guest had already made
reservations for next year.  

The
guest left after lunch New Years Day. We all cleaned up the dinning room and
our serving stations and prepared to leave.

It
was a cloudy cold day with snow and ice on the ground. I wanted to stay over
until January 2nd. Freddie said he couldn’t. He had a date that
evening. I couldn’t figure that out because we didn’t leave until 3.30 p.m. He
had to have another reason.

About
half way to New York City we encountered a snowstorm. The roads at that time
were back roads, not highways.  

My
father’s advice that was burned into my head about driving in snow was to  “Drive
slowly in a snow storm. Try not to hit the brakes. Downshift and turn into a
skid.”

The
roads were very slippery. Freddie was cautious. However, he was a little less
cautious than I would have been.  

I
did not say anything because I knew Freddie would never listen.

We
came to a bend in the road. We could not see anything beyond the bend. The
visibility was poor because of the heavy snow.

I
felt like telling him to stop until we could see a little better. I knew he
wouldn’t listen. I kept my mouth shut.

As
we turned the bend, we started going down a steep slippery hill. It was too
late to stop and wait.

Freddie
downshifted. The car did not hold. We were sliding downhill. The car was
picking up speed as it skidded.

At
that point it looked like everything was in slow motion.

There
was a steep drop off on each side of this two-lane road. I could see Freddie
was becoming nervous. The last thing I wanted to give him was advice.

 I could see him starting to move his foot toward
the brake pedal. We were almost at the bottom of the hill.

I
yelled. Freddie, “no brake and turn into
the skid.”  Somehow he listened to me
and gently turned into the skid.

In
seconds we were at the bottom of the hill and on a flat road. We were safe!

The
remaining drive was uneventful but slow. It snowed like crazy all the way into
New York City.

We
were shaken. Freddie dropped me off at my house.

As
soon as I walked through the front door of my house my father asked how much money
I made in tips during the two weeks of work.

My
mother noticed how shaken I was. I was white. She came over and hugged her
nineteen year old. She wished me a Happy New Year and told me she loved me.
Then she asked why I was so shaken.

I
told her and my father what happened. I immediately saw that my father wanted
to take back his first question. The money was meaningless.

I
told them tomorrow I was going to spend every penny I made on the best hi fi
set could find. I said I thank god I am alive!

They
both understood and approved.

Life
is inches. It must be remembered. I promised myself that I would have to
remember that I must enjoy every moment I am alive.  I believe I have.

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

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  • twitter.com/bfeld • January 1, 2013

    Great story dad – I’d never heard this one before. It is an awesome reminder that life is inches.
    Ben Casnocha came and visited last week. He had a Hyundai and lost control of it on the last curve near our house. He got lucky and just ended up in a ditch. Amy towed him out with her Range Rover – the Hyundai was such a weak car that it caught air when she pulled it out of the ditch!

  • elizabeth greene • January 6, 2013

    My dad, just sent me a link to this blog. After reading it, I must admit I have a big smile on my face.”Life is inches. It must be remembered. I promised myself that I would have to remember that I must enjoy every moment I am alive. I believe I have.”
    I really like this…
    Happy New Year Stanley!!
    Elizabeth Greene…

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Problems With State Health Insurance Exchanges

December 17, 2012
inMedicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

December 15th was the deadline
for states to sign up to implement state health insurance exchanges.

President
Obama was hoping all 50 states would agree to set up and implement health
insurance exchanges.

Health
insurance exchanges might be able to dis-intermediate the healthcare insurance
industry. They might also cause the insurance industry to leave the healthcare
business.  

If that happens President
Obama would not have anyone to provide administrative services for Medicare and
Medicaid.

Why
would President Obama be interested in expanding a failed entitlement program
such as Medicaid? Medicaid is bankrupting the healthcare system.  States would 
go deeper in debt if they try to implement health insurance exchanges.
In order to survive states would have to increase state taxes.

Businesses
and people are leaving California in droves because of the real effective tax
rate will be over 60% of gross income on January 1, 2013.  

Governors
realize their state can have a competitive advantage over others in  attracting corporations to move to their state
if they balance their budget. They are trying to avoid this federal government
disaster. 

Over
60% of the population is opposed to Obamacare.  

States
refusing to set up state health insurance exchanges are reflecting public
opinion.

President
Obama’s goal should be to improve entitlement programs such as Medicare and
Medicaid so that the programs would save money and improve the healthcare
system.

 “Even
President Obama has recognized Medicaid is broken," says Mike Schrimpf,
spokesman for the Republican Governors Association. "For many states,
placing more individuals into a broken system would be like adding more
passengers to the Titanic. And regardless of whether it's federal dollars or
state dollars, taxpayers are still on the hook."

A total of 30 states are leaning toward rejection
of the health insurance exchange concept. Only 17 states plus DC have agreed to
run a health insurance exchange.

The federal government will have to set up 30
health insurance exchanges. The latest reports are the administration is not
prepared to set up run the exchanges.

“As
of November 19, 2012, seventeen states, NY, MA, RI, NH, DC, KY, DE, W VA, MS.
NM, CO, CA. OR, NV, MN, WA, and HI have declared their intention to establish a
State-based Exchange (SBE).”

After my recent articles about health insurance
exchanges several readers asked why the health insurance exchanges were a bad
idea from a state’s point of view.

There are many reasons:

 1. States are under
no obligation to create a health insurance exchange that could create a large
financial burden to the state and its citizens. A Supreme Court ruling has given
states that option.

2.  14 states have
enacted either statutes or constitutional amendments (or both) forbidding state
employees to participate in an essential exchange function. It made operating
Obamacare illegal in the following states; Alabama, Arizona, Georgia, Idaho,
Indiana, Kansas, Louisiana, Missouri, Montana, Ohio, Oklahoma, Tennessee, Utah,
and Virginia

States passing these amendments was by a state was part of
the strategy to reject Obamacare.

 3. State governors
estimated that health insurance exchanges would cost the state $10 to $100
million dollars a year. State constitutions prohibit budget  deficits. Health insurance exchanges would
necessitate increased taxes.

Increasing taxes has a negative effect when states are trying
to lure businesses. i

4. Deadlines have continually been delayed. Concrete rules
and regulations have not been published. Uncertainty prevails as if a trap is
going to be sprung on the states.

 President Obama has
not yet provided the crucial information for
states to make an intelligent decision about setting up a health insurance
exchange. President Obama wants the states to trust him, sign up, and then
accept federal regulations.

5. States have been given the option to create health
insurance exchanges at a later date. Some state politicians fear the loss of
federal funds. Others see the federal funds as a carrot that will cost their
state more in the long run.

6. In the preliminary rules the “state-created exchanges”
are not controlled by a state-controlled exchange.
The exchanges are to be controlled by rules created by the Obama
administration.

7.  President Obama has authorized payment to the states
for start up costs and expenses for Medicaid Expansion until 2017.

Congress has not authorized these
funds. President Obama might not be able to get the funds from congress to fund
the states’ health insurance exchanges.

The states’ would be stuck with
the bill.

8. State officials responsible for setting up the exchanges
believe Obamacare will fail. Many feel it will increase private insurance
premiums and deny assess to care.

These state officials do not want to take the blame for this
disastrous mess that they have no control over.  

9. President Obama’s ultimate goal is to create a “Public Option”
and then have the federal government control all the stakeholders in the
healthcare system.  His ultimate goal is
to have a single party payer system.

State governors understand that public outcry will stop it.
States want to control their own destiny.

10. If the federal government must set up health insurance
exchanges because the state refuses, the Obamacare law as written exempts a
state’s employers from the employer mandate of $2,000 per employee per year.

The Supreme Court called the mandate a tax but everyone
knows it’s a mandate.

11.  If the states
avoided the mandate and save $2,000 per state employee it would put the state
at a competitive advantage to improve the prospect for job creation. It would
protect individual and states rights. It would protect some tenants of
religious freedom that Obamacare ignores.

 There is no evidence that Medicaid is
cost effective, that medical outcomes are improved or that access to medical care
for the poor would improve.

“There is scant reliable evidence that Medicaid improves health
outcomes, and no evidence that it is a
cost-effective way of doing so.” 

In the short term it has been predicted that healthcare insurance premiums for the
middle class will increase by 50% and access to medical care will decline.

State health insurance exchanges
will result in higher state taxes, fewer jobs, and less protection of religious
freedom. States are better off defaulting to a federal exchange.

Neither the states nor the federal government has the money
to expand Medicaid.

Theoretically,
health insurance exchanges are a good idea. Practically, they are not.

If all states refuse to set up health insurance exchanges
and avoid falling into President Obama’s trap Obamacare will be doomed.

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

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An Unintended Consequence of Obamacare.

December 12, 2012
inDisinformation and the healthcare system, Medicaid, Medicine: Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP,MACE

As we get closer to full implementation of Obamacare in 2014 corporations
such as Wal-Mart are figuring out ways of avoiding healthcare insurance
coverage for their employees.

Darden Restaurants, owner of Olive Garden and Red Lobster,
and a New York-area Applebee’s franchise owner has
announced that they will limit hours worked to under the thirty hours a week
threshhold. They will simply hire more employees who will work less than thirty
hours a week.

It will
mean that those workers will be forced to work two jobs if they can. With the
unemployment rates remaining high this might be difficult.

“iNew Obamacare rules that require companies
with at least 50 full-time workers to offer health coverage to all employees
who work 30 or more hours a week or pay penalties.”

However,
these people might not be eligible for Medicaid coverage under Obamacare.

The
definition of eligibility depends on the state rules. HHS just announced rules
for Medicaid expansion. The goal of these “Medicaid Expansion Rules” is to
force states to participate in the expansion of Medicaid.

States must increase Medicaid eligibility to 133% of the poverty level in
order to receive 100% of
the matching federal funds made available under Obamacare.  A state will receive mating funds from January
1,2014- January 1,2017.

After
January 1,2017 the states are on their own. The increase in enrollees will
become a huge burden.

President Obama is counting on the states to
assume the cost of Medicaid as he has the CBO calculate his fictitious scoring
on the cost of Obamacare.

The Federal Poverty Level was defined inaccurately in 1955. The U.S.
still uses the 1955 criteria.

133% Federal Poverty Level for one person means an annual income of $14,856.
For a family of four it means $30,657.

Many states have poverty levels above the nationally defined levels. In Indiana
the eligibility level for Medicaid is an annual income below $63,000 for a
family of four.

An independent
restaurant owner and caterer, in the smallish town of McKinney Texas, employs
55 people full time.  He told me he is
going to have to fire 6 people in order to avoid the Obamacare rule. He must
also reduce hours worked to below 30 hours per week.

He must
also contract his business rather than expand it.  He cannot afford the $110,000 Obamacare penalty.

Wal-Mart is the nation’s
largest private employer. Wal-Mart employs 1.4 million workers.

It plans to begin denying
health insurance to newly hired employees who work fewer than 30 hours a week
starting January 1st 2013 to avoid the Obamacare penalty for not
providing healthcare coverage for employees.

Wal-Mart also reserves the
right to eliminate health care coverage for employees whose hours drop under 30
hour per week.

Tom Billet
a senior consultant at Towers Watson said,

”Some of his clients were planning to track workers’ hours
more carefully. “I expect health plans like Walmart’s won’t be uncommon as
firms adjust to this law.”

 Wal-Mart’s decision to exclude
workers from its healthcare plans is an attempt to limit costs while taking
advantage of Obamacare.  Obamacare is
going to have to expand Medicaid coverage well beyond 31 million people.

Many of Wal-Mart’s employees would qualify for the expanded
Medicaid program.

Wal-Mart would rather pay the $3,500 penalty than pay $12,000 to
$18,000 dollars a year healthcare insurance premium for their employees.

There are many other companies that are going to follow suit such
as McDonald’s, Burger-King and thousands of others that got waivers from
President Obama for Mini-Med healthcare coverage.

Mini Med healthcare coverage is in reality zero healthcare
insurance coverage. It is a giant rip off of people making minimum wage.

“Walmart is effectively
shifting the costs of paying for its employees onto the federal government with
this new plan, which is one of the problems with the way the law is
structured,” said Ken Jacobs, chairman of the Labor Research Center at the
University of California, Berkeley.

“Medicaid Expansion” is a big joke. The uninsured workers will increase
from 31 million to some higher number when companies drop healthcare insurance
coverage and pay the penalty.

“The Supreme Court ruled earlier this year
that the decision to expand the Medicaid program is voluntary for the
states. At least eight states, including Texas, have said
they will not expand the program,’ 

At present before “Medicaid Expansion” the entire Medicaid program is
unaffordable. Medicaid cost will now escalate. President Obama will not be able
to afford to keep his promise to the poor.

States realized President Obama has set them up to get stuck with the
increased Medicaid cost. States are not signing up for the “Medicaid Expansion“
even though they would like the matching federal funds.

The nation’s governors were told,

“States that don't expand
their Medicaid rolls to include residents at 133% of the federal poverty level
won't get 100% of the matching federal funds made available under the Patient
Protection and Affordable Care Act (Obamacare).

The unintended consequence of large employers and corporations not
covering their employees with healthcare insurance is escalating.

Who is going to qualify for Medicaid? Who will get stuck being uninsured?

The poor people earning an annual income of less than 133% Federal
Poverty Level will qualify for Medicaid coverage. 

Anyone earning a penny more than the Federal Poverty Level will be rejected
and not qualify to receive Medicaid coverage.

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

 

 

 

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Price Competition for Medical Care

December 9, 2012
inDisinformation and the healthcare system, Healthcare Insurance Industry, Innovations in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld
M.D.,FACP,MACE

Thank goodness many physicians are starting to recognize the problems of abuse
and waste in government run healthcare programs.  The run up in cost is secondary to the
healthcare insurance industry taking 40% of the healthcare dollars off the top
as patient care dollars and the hospital systems over inflating the costs to
patients because of inflated operating expenses and administrative salaries.

Physicians realize that an efficient free market system will reduce the
cost of care. Physicians are tired for being blamed for the entire healthcare
systems problems. They do not deny being part of the problem.

Many physicians have decided to move forward and develop consumer driven
free market systems of care. 

One example is Nextera Health in Longmont Colorado. I have discussed this
previously.

Nextera Healthcare
is a new model for delivering primary care at an affordable price. It follows
many of the principles embodied in my ideal medical savings account
model.  Nextera delivers compassionate care at an affordable cost and
encourages patients to be responsible for their health.

Nextera
Healthcare services all of a families needs at an affordable monthly cost. It is
combined with a high deductible healthcare insurance plan to cover costly
illness.  

The
reason I am so high on Nextera Healthcare is that it closely fits a model of
healthcare delivery that will work to decrease the cost of medical care. It
will increase the quality of medical care and permit primary care to be a
viable specialty. 

Nextera Healthcare has the potential to permit the patient
to be responsible for managing their health and their healthcare dollars.

Nextera
Healthcare has the potential to reduce healthcare cost to individuals, employer
sponsored self insured plans, associations and even government funded
healthcare plans while permitting consumers to make their own healthcare
decisions.

Surgeons are developing their own innovative systems.  In free standing surgery centers they are
developing surgical procedures that cost at least 70% less than Medicare is
paying hospitals for the same procedure.   

 Dr. Keith Smith, co-founder and managing
partner of the Surgery Center of Oklahoma, took
an initiative that would only be considered radical in the health care
industry.

Dr. Smith posted a
list of prices online for 112 common surgical
procedures. Dr. Smith ,an anesthesiologists, became disillusioned about how
patients were treated and charged at St. Anthony Hospital in Oklahoma City.  

Dr. Smith’s goal
was to create a for-profit facility that could deliver first-rate care at a
fraction of what traditional hospitals charge. The goal was to eliminate the
hospital and healthcare insurance industry as the middlemen while decreasing
the cost of surgical care without decreasing the quality of care.

He wanted to create a system in which consumers and their employers
could receive surgical value at an affordable price. In the existing healthcare
system patients have no incentive to look for dollar value.

A healthcare system in which consumers buy goods or services from a
physician, surgeon or hospital systems all being paid for by the healthcare
insurance industry or government does not constituent incentive for consumers
to seek value and quality.

The lack of patient responsibility and value hunting is one of the major
causes of exploding U.S. heath care costs.

Physician owned transparent Surgery Centers are becoming increasingly
common as Americans look for alternatives to the traditional health care market
which is unaffordable and out of reach.

Consumer-driven models are appearing as fewer people have healthcare
coverage from their employers and are on their own

The unintended consequences of Obamacare are creating more uninsured not
less. The Medicaid insurance coverage that Obamacare is offering is
unappealing.

Patients may have no choice but to look outside the traditional health
care industry in the face of higher costs and reduced access to doctors and
hospitals. It is only going to get worse as we get deeper into Obamacare.

The Oklahoma Surgery
Center demonstrates that it’s possible to offer high quality care at low
prices. Surgeons can do twice as many surgeries in an outpatient surgery center
than they can in a traditional hospital surgical suite.

Most industries
try to improve efficiency. However, simple efficiencies have not occurred in
most traditional hospitals. Surgeons spend half their time waiting for the
patients to come to the operating room or for the availability of operating
rooms and equipment.

The Surgery
centers have solved these efficiency problems. They can service surgeons’ needs
at less than half the cost without the wasted time.

A key reason is
there are not multiple administrators creating multiple regulations and
collecting multiple $500,000 to $3 million dollar a year salaries. Surgical
centers have one head nurse responsible for everything and zero administrators.

The cost of a “complex
bilateral sinus procedure” at the Surgery Center was an all-inclusive $5,885.
The traditional hospital bill totaled $33,505 without the surgeon’s and
anesthesiologist’s bill included.

It was discovered
at the time of the nasal surgery that the hospital charged $360 for a
dexamethasone injection. A dexamethasone injection cost the hospital $.75.

 A fentanyl shot which is a pain-killer cost the
hospital system $1.50 but the bill to the insurance company was $630.00 dollars.
Everyone has heard of the $45.00 hospital aspirin   

A traditional
hospital discounted non-inclusive bill to the healthcare insurance industry for
a carpel-tunnel release would be $7,452. The fee for the procedure pre-op is
not be available. The same procedure done for the all-inclusive transparent
cost at the Surgery Center was $2,775.

More tragic was
that the patient would have had to pay $5,299 out-of-pocket  to cover her deductible and co-pay for the
hospital bill before she even received the bills for physicians’ services. 

Below are some
examples of the differences in costs for procedures.

 
Transparency-Matters-larger jpg
A list of the surgical fee for the Oklahoma Surgery Center is on its web
site. http://www.surgerycenterok.com/pricing.php

How do hospital systems get away with this?

The more the hospital bills the more the insurance company puts in reserve.
The reserves are in the medical costs column and include the non-discounted
costs. The result is greater profit for the insurance company.

President Obama does not want physicians to be innovative in this way.
He wants physicians to be dependent employees of hospital systems. His goal is
to control physicians and dictate their medical care.

President Obama has provided some non-transparent favors to hospital systems
that are forcing physicians to be employed by hospitals. 

"A new provision buried in Obamacare effectively prohibits doctors from starting their
own hospitals or expanding the hospitals they already own, which has been
widely interpreted as a give-away to the American Hospital Association."

Hospital systems claim they must charge more to cover their overhead and
bureaucratic inefficiencies. So fix your system. Surgery centers have.

Dr. Smith says: "Everyone can
see what the prices are at the Surgery Center, and that affordable health care
is possible. So the jig is up.”

Dr. Smith believes that despite the obstacles being put in the way by
Obamacare, market-driven facilities like his will thrive and proliferate as
consumers catch on to costly collusion between big government and big health
care.

I totally agree. As Obamacare’s unintended consequences proliferate
consumers and captured physicians (hospital employed) will pay more attention
to physician innovation. The jig for big government and big healthcare will
certainly be up.

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

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Bad Ideas Made Worse By Unintended Consequences

December 5, 2012
inDisinformation and the healthcare system, Medicine: Healthcare System
• Leave a comment

Stanley Feld M.D., FACP,MACE

I love when someone has great innovative ideas that have a chance to be
effective. I dislike ideas that anyone using common sense can see it is going
to fail.

President Obama is trying to set up health insurance exchanges in all 50
states.

Common sense tells us the exchanges will not work. They are counter to
stakeholders’ vested interests. They are trying to force stakeholders into
doing something they do not want to do. Health insurance exchanges will be
unmanageable. The costs will be uncontrollable. They will lead to waste and
fraud and abuse.

Government’s role should be to level the playing field for all
stakeholders and then get out of the way.

America’s healthcare system needs innovations that inspire the
healthcare industry to be competitive and efficient.

What are the specific problems with health insurance exchanges?

Health insurance exchanges were supposed to be operational by October
2013.  Only preliminary rules have been
published to date.

The states are not anxious to be subject to federal controls that
challenges state rights and drives states deeper into debt.

The federal government is requiring full transparency from the states
while it is conducting all of the setup work in secret.

Federal officials have disclosed little about their plans to the states
or the press. They have been vague about the financing for the health insurance
exchanges.

The Obama administration has stated that if states decline to
participate in health insurances exchanges by December 15, 2012
(postposed from August 15 to November 15 and now December 15) the federal government
will form its own exchanges for those states.

President Obama sold Obamacare to congress and the American people on
the basis that it was going to save $115 billion dollars in healthcare spending
in ten years. This number was calculated by the CBO on the basis of data
provided by the Obama administration.

The most recent CBO estimate using recent data is that healthcare
spending will increase by $2.5 trillion dollars over the next ten years.

Obamacare does not permit federally operated exchanges to provide
subsidies to enrollees that the enrollees would be eligible for in state
operated exchanges.

This provision was included in the law to encourage the states’ creation
of exchanges. States would then receive additional money from the federal
government.

The administration did not anticipate so many states would refuse to
participate.

Sarah Kliff wrote for the Washington
Post: wrote that there are many other problems
facing the health insurance exchanges.

“After people become aware of benefits, the health exchange faces its
biggest challenge: Figuring out who is eligible for what. In many states those
who earn less than 133 percent of the Federal Poverty Line are eligible for
Medicaid — except if the state has already extended benefits to an even higher
level, as 35 states have for children.”

“There may be different family members eligible for different programs,”
says Sam Gibbs, vice president of sales at eHealthInsurance. “There needs to be
a technology system that can support that activity, and look at multiple
programs for multiple people.”

A state can’t figure out how much an individual earns on its own. For
that, it needs to ping a federal data hub that does not yet exist.

The problems with President
Obama’s health insurance exchanges are worse. The exchange subsidies will vary
by income and family size. A federal agency does not exist that can tell a
family’s current income. It takes the IRS at least a year and a quarter to
determine last year’s income.

Family income can vary
substantially from year to year. 
Families have to pay healthcare insurance premiums based on what they
earned over a year ago. The breadwinners might be unemployed and required to
pay an unaffordable premium.

The federal government does
not seem to have developed its plans for a federally run health insurance
exchange. It looks as if the federal government’s plan was to stick the costs
and administration on to the states even though it promised to pay for the fist
two years.

Its goal was to force
states to do what the federal government wants them to do. Running a health
insurance exchange will be at great cost to the states and state budget
deficits.

The health insurance
exchange development is a mess. The real threat lies in its execution and
implementation.

It will be surprising if
they are operational by January 2014. The cost overruns will be astronomical.
They are already substantial. The unintended consequence will escalate.

In order to pay for the
exchanges President Obama’s administration just announced a 3.5% tax on every
premium sold by a healthcare insurance company. The result will make insurance
less affordable.

The original announcement
was revised. The 3.5% premium tax would only apply in states that did not have
state health insurance exchanges.

 The announcement sounds like a little power
play by the Obama administration.

The healthcare insurance
companies will simply pass the tax on to consumers with increased premiums.

The increase will have no
effect on the profitability of the healthcare insurance industry.

The government should enforce
the new Medical Loss ratio of 80/20. Eighty percent  of healthcare premiums should go to direct
patient care.

The government should not
permit help desk expenses and physician network development expenses to be
charged to direct medical care.

The government should
change the accounting rules. The formula for counting unpaid liabilities as
direct medical care expenses is outrageous. Much of these reserves are medical
reimbursement are the remains of discount fees have been  paid to providers already for direct patient
care.    

There are many other
categories of expenses that should not be included in the 80% of direct medical
care.

The federal government
needs the healthcare industry to adjudicate claims and perform all of the
administrative services for all the government funded healthcare services.
Government accounting for its own overhead does not include the fees charged by
the healthcare insurance industry to provide these services.

There is so much the public
does not know about how Medicare and Medicaid money is spent. If the government
were transparent it would let the people know what the defects are and then
force government to fix them.

Apparently President Obama
prefers to go deeper in debt.

All the stakeholders are
villains and take advantage of the healthcare system. The healthcare insurance
industry is the worst villain. Health insurance exchanges will not cure this.

They will make it worse. 

 

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

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Permalink:

States Decline to Set Up Exchanges for Insurance

December 2, 2012
inMedicine: Healthcare System
• Leave a comment

 Stanley Feld M.D.,FACP,MACE

President Obama has an interesting
way of negotiating. Rather than trying to  compromise and meeting some of the needs of the
opposition, he always plays a game of chicken at the last minute.

Most of his supposed
innovations have failed because of this.

He has backed off many of
his proposed innovations either because of resistance by opponents or because the
innovation was impractical.

The CLASS ACT (Community Living Assistance Services and Supports) was abandoned
by the administration because once it became apparent that providing long-term
care would be impractical, unaffordable and impossible to execute.

The same realization is
emerging for the formation of the health insurance exchanges (HIX). Health
insurance exchanges were supposed to be operational in every state on January
1, 2014.

The traditional media continues
to play right into President Obama’s hands. It makes a battle between the good
guys and the bad guys out of every issue  rather than presenting the facts about the
issues.

President Obama and his team
are always the good guys. All of the critical issues for success or failure of
the health insurance exchanges have been left out of the public debate.

President Obama’s idealistic
hope was that all the states would make their commitment to set up the
exchanges. Many states have refused to set up the health exchanges. President
Obama increased state subsidies for the exchanges without congressional
approval to encourage states to join.

By August 2012 only 13
states agreed to set up their own state health insurance exchanges. As of the
end of November 2012 only 17 states agreed to set up their own healthcare
insurance exchanges.

The revised deadline of
November 15, 2012 for signing up has been extended to December 15, 2012.

States wanting to pursue a
"partnership exchange", a hybrid exchange to decrease costs to the
states by increasing Federal Funding still have until Feb. 15, 2013 to submit a
declaration letter and blueprint for its exchange. 

Federal officials have
stated if states do not set up the exchanges the federal government will.

“The exchanges — online markets where
consumers can shop for private insurance subsidized by the federal government —
are a centerpiece of President
Obama’shealth care law.”

HHS was supposed to certify HIX blueprints for all 50 states by Jan. 1,
2013.  The states are supposed to be ready for open enrollment by Oct. 1,
2013 and operational on Jan. 1, 2014.  

As of November 19, 2012, seventeen states, NY, MA, RI, NH, DC, KY, DE, W
VA, MS. NM, CO, CA. OR, NV, MN, WA, and HI have declared their intention to establish
a State-based Exchange (SBE).

Federal regulations have not been released. I will bet some of above
states will drop out when they will be able to calculate their costs.

The nineteen states that have definitely declined to participate in the
health insurance exchanges at this point are TX, OK, KS, NB, ME, VT, SD, ND, AK
WY, MT, VA, GA, AL, MO, SC, OH, IN, WI.

Most of these states realize the financial burden, administrative
burden, and challenge to states rights Obamacare’s health Insurance exchanges
will place on their states as they try desperately to balance their own
budgets.

An additional five states, AR, NC, Il, MN, and ME are pursuing an ill
defined  partnership plan offered by the
Obama administration to set up a health insurance exchange.

Nine states are undecided but leading toward rejection.

A total of 28 states are leaning towaed total rejection of the health
insurance exchange concept and 22 states are interested.

I am not a Rick Perry fan but sometimes he says some smart things.

"Neither
a 'state' exchange nor the expansion of Medicaid under the Orwellian-named
P.P.A.C.A. would result in better 'patient protection' or in more 'affordable
care,'" Texas Gov. Rick Perry said in July in a letter to
Health and Human Services Secretary Kathleen Sebelius. "What they would do
is make Texas a mere appendage of the federal government when it comes to
health care."

The administration has published preliminary regulations. Even though
the exchanges are supposed to be state run, the federal government is going to
dictate the rules. The loss of state rule is making many state governors
nervous.

 Gov. John R. Kasich of
Ohio, a Republican, said Friday that his state “will not run an Obamacare
health exchange, but will instead leave that to the federal government to do.”

“Based on the
information we have,” Mr. Kasich said, “states do not have any flexibility to
build and manage exchanges in ways that respond to unique needs of their
citizens.”

Gov. Scott Walker of Wisconsin said, “under
the law, Wisconsin taxpayers will not have meaningful control over the health
care policies and services sold to Wisconsin residents.”

Gov. Nathan Deal of Georgia, a Republican said, “his state would not establish an exchange. He expressed
concern about what he described as “the one-size-fits-all approach and high
federal burden imposed on states.”

It will be interesting to
see how President Obama is going to get around this problem. Especially when
the last CBO estimate of the cost of Obamacare will be $2.5 trillion dollars
over the next ten years rather than decreasing the cost of healthcare by $115
billion dollars over the next 10 as originally estimated.

This problem represents
just a fraction of the problems health insurance exchanges are facing.

I will cover some of the
other problems in my next blog. Stay tuned.

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

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