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Bigger Problems Ahead For Obamacare

Stanley Feld M.D.,FACP, MACE

Accountable Care Organization are supposed to be the organizations that reduce Obamacare’s healthcare costs.

Accountable Care Organizations (ACOs) were supposed to be operational in 2012 throughout the United States.

ACOs are supposed to provide financial incentives to health care organizations in order to reduce costs and improve quality of medical care. There are too many defects in the ACOs’ infrastructure to improve the financial and medical outcomes.

At a conceptual level, the incentive for ACOs is to increase efficiency and avoid overuse and duplication of services, resources, and facilities. In this model, ACO members (physicians and hospital systems) would share the savings resulting from the coordination and integration of care.

Accountable Care Organizations (ACOs) are not designed to decrease the waste in the healthcare system.

Waste occurs because of:

1. Excessive administrative service expenses by the healthcare insurance industry that provides administrative services for private insurance and Medicare and Medicaid. A committee is writing the final regulations covering Medical Loss ratios for President Obama’s healthcare reform act. The insurance industry regulations are far from curative.

2. The excessive administrative waste in hospitals and hospital systems leading to outrageous nontransparent hospital fees.

3. The lack of patient responsibility in preventing the onset of chronic disease. The obesity epidemic is an example.

4. The lack of patient education to prevent the onset of complications of chronic diseases. Effective systems of chronic disease self- management must be developed.

5.The use of defensive medicine resulting in over testing. Defensive medicine can be reduced by effective malpractice reform.

ACOs are not a market-based system. They do not put patients at the center of their medical care or permit patients to choose their medical care.

The government assigns patients to certain ACOs. The government controls the healthcare dollars and is at the center of patients’ medical care decisions directly and indirectly.

Consumers/patients are the only stakeholders in the healthcare system that can demand that this waste be eliminated. “They with walk will their feet” if given the chance.

Keith Smith M.D. and the Surgery Center of Oklahoma have proven that consumers desire choice and making their own medical care decisions with the Surgery Center’s transparent prices and their light administrative costs.

Patients must control their healthcare dollars and be responsible for their care in order to Repair The Healthcare System.  Consumers/patients will make sure prices become competitive. Patients in control of their healthcare dollars will not allow duplication of services.

In order to truly Repair The Healthcare System a system of incentives for patients and physicians must be created.

 “In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix.”  

ACOs shift the risk of patient care away from the healthcare insurance industry  to physicians and hospital systems.

Most physicians are reluctant to assume accountability for patient outcomes.  Physicians recognize that much of the outcome is directly under the patients’ behavior and adherence to recommended therapy.

ACOs remove the consumer/ patient from being responsible or accountable for their medical care. ACOs undermine any attempt to create a truly accountable healthcare system that can drive down costs.

There are also grave uncertainties and practical issues in distributing savings between the hospital system and physicians. There is a long history of hospital systems taking advantage of physicians’ skills and intellectual property.

Many physicians and hospital systems are concerned about the shifting of risk and the lack of control over this risk.

 “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.”

ACOs are really HMOs on steroids. There is too much risk that neither physicians nor hospitals can control. Neither consumers or physicians nor hospital system liked HMOs.

 This same sentiment is reflected in statistics released the Leavitt Partners Center for Accountable Care Intelligence. Centers for Medicare and Medicaid Services (CMS) and the Obama administration are spinning these numbers the same way they are spinning the figures for Obamacare enrollment.

Chart 4: Accountable Care Organizations by State; Source: Leavitt Partners Center for Accountable Care Intelligence

Aco by state-Chart-4

 California leads all states with 58 ACOs followed by Florida with 55 and Texas with 44.  ACOs are primarily local organizations, with 538 having facilities in only one state.


Chart 5: Accountable Care Organizations by Hospital Referral Region; Source: Leavitt Partners Center for Accountable Care Intelligence

Aco by region-Chart-5

 The number of ACOs, again, is of secondary importance to the number of covered lives.  Nationally, approximately 6 percent of the population is estimated to be enrolled in an ACO.

Chart 6: Estimated Accountable Care Organization Covered Lives by State; Source: Leavitt Partners Center for Accountable Care Intelligence

Aco covered lives-Chart-6

Chart 7: Estimated Accountable Care Organization Covered Lives by Hospital Referral Region; Source: Leavitt Partners Center for Accountable Care Intelligence

Aco covered lives by region-Chart-7

President Obama and his administration must be living in some fantasy world. It does not matter what the Obama administration is saying adoption of ACOs by physician groups and hospital systems is poor.

The call for forming ACOs started in 2010. The government tried to stimulate the formation of ACOs with sizable grants. It has not worked very well.

Many of the formed ACOs are not functioning in a cost effective manner. In ACOs that are sharing cost saving with the government the fighting between the hospital systems and physicians is just beginning.

Patients in ACOs are starting to feel the dysfunction.

The delivery of medical care under Obamacare and the ACOs are in big trouble.

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

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The Next Obamacare Tragedy

Stanley Feld M.D.,FACP, MACE

Late in the afternoon March 25th  the Department of Health and Human Services announced that it is extending the enrollment period for Obamacare to April 15th from March 31st.

“The Obama administration has decided to give extra time to Americans who say that they are unable to enroll in health plans through the federal insurance marketplace by the March 31 deadline.”

Those who are going to apply have enough time to apply in seven days if the website and the navigators are working correctly.

It sounds as if enrollment figures are not good.

“Under the new rules, people will be able to qualify for an extension by checking a blue box on to indicate that they tried to enroll before the deadline. This method will rely on an honor system.”

“The government will not try to determine whether the person is telling the truth.”

This is not a very good way to run a business.

The next tragedy in the implementation of Obamacare is providers’ participation in the Affordable Care Act. There is so much uncertainty in the Obamacare that many physicians and physician groups have opted out of participation in Obamacare.

In California, independent insurance brokers who work with both insurance companies and doctor networks estimate that about 70 percent of California's 104,000 licensed doctors are boycotting Covered California, the state health exchange.

Dr. Richard Thorp, president of the California Medical Association said,  “It doesn't surprise me that there's a high rate of nonparticipation,” 

The CMA represents 38,000 of the roughly 104,000 doctors or 20% of the physicians in California. Dr. Thorp said nothing about the California Medical Association doing a study to determine the percentage of physicians who are not participating in Obamacare.

However the Daily Kos ranted about the Washington Examiner story not being true.

“The latest right-wing disinformation campaign, all over the far-right media is that 70 percent of California's doctors are boycotting Obamacare. Is it true? Of course not. Is anything the Washington Examiner, WND, or Breitart publishes true?”

However the Daily Kos did not offer any facts about what is true.

It is a typical Alinsky disinformation tactic. You must freeze your enemy and then criticize and discredit him.

The LA Times reported in December that the state exchange Covered California reported,

In fact, according to Covered California, the only source with verifiable numbers, some 58,000 doctors, or more than 80% of the state's practicing physicians, will be available to enrollees in the exchange's health plans.

First of all, 58,000 physicians are not over 80% of California practicing physicians, if the 58,000 number is true. It is 55.77% of practicing physicians.

“Covered California says that the doctors participating in its exchange plans include 100% of Kaiser Permanente's 14,000 California doctors, 43,000 taking HealthNet patients and 35,000 in Blue Shield's network. (There's probably some overlap between the latter two networks.)”

The twisting of the facts is the method of operation.

On February 7, 2014 the LA Times reported Covered California admitted there are many errors in their physician directory.

“Admitting Covered California gave some consumers bad information, California's health insurance exchange pulled its physician directory for having too many errors.”

It appears that Covered California was not a very good source for the LA Times and Daily Kos to quote. Both media outlets called the Washington Examiner story a right wing lie.

Covered California made the move late Thursday amid growing frustration among both consumers and doctors over inaccurate information about insurance networks in the state marketplace.”

California patients are discovering that their physicians are not participating in Covered California. Some have discovered that they are not covered by healthcare insurance coverage at all because of computer glitches.

The exchange previously yanked its online directory of medical providers in mid-October after acknowledging there were serious problems then with the data. It published an updated list in November.

The updated list at that time still had some serious problems. The list misled consumers into signing up on the exchange. Covered California is bragging about the number of people they have signed up.

California is supposed to be the star of the state exchanges. Yet they had to close down the exchange in February for repairs and updates. The federal government gave the state exchange an additional $155,000 million dollars to fix the exchange. This is not a small amount of money for a “superb exchange”.

Here are some facts from practicing physicians.

In September 2013 insurance companies disclosed that their rates would be pegged to California’s Medicaid plan, called Medi-Cal. This is contrary to the Daily Kos claim that the physician fees are negotiated.

Dr. Theodore M. Mazer, a San Diego ear, nose and throat doctor is quoted as saying, “In other states, Medicare pays doctors $76 for return-office visits. But in California, Medi-Cal's reimbursement is $24,.” “In other states, doctors receive between $500 to $700 to perform a tonsillectomy. In California, they get $160.

It is logical that physicians in California would say no to the state exchange, Covered California. No matter what lies the spin masters use the facts are the facts.

Physicians say, “We need some recognition that we’re doing a service to the community. But we can’t do it for free. And we can’t do it at a loss. No other business would do that,”


California physicians have protested that the Covered California's website lists many doctors as participants when they aren't. This is false advertising.

“Some physicians have been put in the network and they were included basically without their permission,” Lisa Folberg said. She is a CMA’s vice president of medical and regulatory Policy.

Donald Waters, executive director of the Alameda-Contra Costa Medical Association said. “They may be listed as actually participating, but not of their own volition”.  

Waters said. He called the exchange's doctors' list a “shell game” because “the vast majority” of his doctors are not participating.

 “This is a dirty little secret that is not really talked about as California promotes Covered California”.

Dr. Sherry Franklin, a pediatric endocrinologist at Rady’s Children’s Hospital, San Diego said, last summer she "got a letter in the mail letting me know if I wanted to participate with Blue Cross through the exchange, which is different from my regular Blue Cross practice, because they are paying les.s

 They did not tell me how much less. You had to agree or disagree. So, of course, I said no."

Covered California expects 85% of the physicians in California to participate. So far they have made these statements to the press but have not published any proof of participation.

 Covered California asks physicians to participate but does not disclose the reimbursement rates they will pay for participation in Obamacare.

Other state exchanges’ are also in trouble. Oregon and Connecticut are the most outstanding.

This is only the beginning of Obamacare’s provider problems. It is too bad that America is afflicted with this albatross at this time. Obamacare is destroying the healthcare system for consumers and physicians.

President Obama will not be able to charm his way out of the failure of Obamacare.

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

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Medical Care Is Serious Business

Stanley Feld M.D., FACP,MACE

Medical practice and healthcare policy are on a collision course. The politics of progressivism and socialism are dictating the course of medical practice.

Medical practice is a craft practiced between a physician and a patient. The physician patient relationship is the keystone to that craft.  Politicians and secondary stakeholders who influence on the healthcare system are destroying the craft.

Obamacare has accelerated the destruction of the physician patient relationship. Obamacare’s goal is to have the government make the decisions for consumers. The freedom of Americans to choice their physicians will disappear.

Why? The Obama administration’s view is that Americans do not have the ability to make the right medical choices.

The concern of healthcare policy makers has been about costs and not the relationship between physicians and patients. They are trying to cut costs.

The problem is they are cutting costs and increasing premiums and taxes on the wrong stakeholders, namely physicians and patients.

Obamacare’s focus is on providing subsidized healthcare insurance for the lowest 20% of the population while it is destroying medical coverage for the other 80% of the population.

At the same time Obamacare has been destroying the safety-net hospital systems throughout the country.

Safety net hospitals took care of that 20% of the population that is uninsured.

Many of these safety net hospitals were the best teaching hospitals in the country. Most of these hospitals are teaching hospitals serviced by medical schools.

President Obama has ignored improving the care and the facilities of these safety net hospitals.    

Americans are losing their healthcare insurance coverage because of Obamacare’s mandated requirements for healthcare coverage by the private healthcare insurance industry. He should be concentrating what is considered a direct medical care cost.

Employers are avoiding penalty for not providing Obamacare required coverage insurance by cutting full time employees to part-time employees working less than 30 hours a week. This has impacted the full time employment rate. It has also decreased purchasing power of part-time employees.

President Obama did not improve the situation when he unilaterally changed by executive order the law increasing the hours temporarily to 50 hours per week. This new executive order disappears in one year. The uncertainty in the future remains. Employers are still decreasing hiring to less than 30 hours per week.

President Obama has changed the law by direct executive orders 25 times. He has lost the trust of the American public with all his waivers to favored groups and to pressure groups.

The Obamacare waivers have created chaos and uncertainty for all the stakeholders. It is difficult to try to adjust to one set of rules and then find the rules have been indiscriminately changed the next month.

The Obama administration has increased the cost of care. He has not saved an American family $2500 a year as promised. He has cost them an additional $2500 a year. 

President Obama has asked Democrats to promise voters that he would fix the flaws in Obamacare.  I am convinced he doesn’t know what is basically wrong with Obamacare. He refuses to listen to others and labels them as destructive opponents.  He is making thing worse with waivers and uncertainty. These unilateral changes are probably unconstitutional. 

In order to talk his way out of the criticism he has been caught in a web of lies. These lies did not appear to the public as lies when he was running for reelection against Governor Romney. However, American citizens get it now.

Governor Romney said Russia is our number one enemy. President Obama and his spin machine ridiculed Romney without presenting any evidence to the contrary.

Now President Obama is telling Democrats to run on Obamacare because he will fix it. He has not presented the plan he will use to fix Obamacare.

How can Democrats running for re-election and voters trust President Obama again to fix the problems in Obamacare?

The effect Obamacare has had on taxes and economic growth has been devastating.

Obamacare is no longer an abstraction. Taxes, higher healthcare premiums and the lack of jobs and economic growth are now directly affecting the middle class and small businesses.

This effect had been predicted during the debate at the time of the bills passage.

President Obama’s taking points are the bill is doing so poorly because of Republican opposition. This is another attack on his opponents without any evidence. The problems with Obamacare are his doing and not the Republicans doing

His “best supporters” such as unions and Hispanics are realizing the devastating effects Obamacare is having on them directing. These groups are now opposing Obamacare.

Democrats in vulnerable states who are running for election are running away from President Obama and Obamacare. They believe President Obama and his talking points are toxic to their election.

The truth is Obamacare cannot be fixed. President Obama’s ideology is its biggest barrier.

We are beginning to see the direct affect on Americans of the next catastrophe resulting from Obamacare. The catastrophe is the impending effect on medical care in America.

Americans are going to experience medical care manpower shortages, medical care reimbursement problems, access to care problems and rationing of care problems.

Americans on the east coast and west coast will be directly affected. Most of them will start realizing they can no longer think about Obamacare in theoretical, abstract and intellectual terms.

Repairing the healthcare system and the medical care system must be thought about in realistic and pragmatic terms.

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

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Disinformation Campaign In Full Force.

Stanley Feld M.D.,FACP,MACE

The consequence of Obamacare is hitting home to many people as taxes and the cost of insurance premiums increase.

Obamacare is not an abstract concept anymore.

People cannot keep their doctors as promised by President Obama. People cannot keep their insurance as promised by the president either.

Healthcare insurance premiums have increase for the middle class, who are being forced to use Obamacare’s Health Insurance Exchange. These health insurance exchanges have been inefficient. Many of the State Health Insurance Exchanges are failing.

Healthcare insurance premiums have increased by $2,500 a year and not decreased by $2,500 a year as promised by President Obama during the disinformation campaign to pass Obamacare.

If you make less than $50,000 a year it might be a good deal. The government through tax increases is paying the difference to the insurance companies.

Consumers are angry. In order to counteract and neutralize this anger away from President Obama and the Democrats running for congress and the Senate (especially the Senate) in November 2014 President Obama has put into operation the Saul Alinsky disinformation tactics.

The traditional mainstream media is falling for this tactic once again.

The intent of the tactic is to keep your enemy off balance. Whether by mockery, subterfuge, or any available strategy, the purpose behind the tactic is to keep the pressure on you opponent, constantly jabbing and goading them until they lose their clarity of thought, and react in a way that you can exploit to defeat them. “ Rules for Radicals”  

Saul Alinsky has been very direct in his instructions. He also puts the burden of creative execution of these rules on the executor of the rules. The goal is to change the public’s believing the facts by discrediting the person or persons exposing the true facts.

“The job then is getting the people to move, to act, to participate; in short to develop and harness the necessary power to effectively conflict with the prevailing patterns (the truth) and change them.”

When those prominent in the status quo turn and label you an “agitator” they are completely correct, for that is, in one word, your function- to agitate to the point of conflict.

The key to success is to be an outside agitator.

This has been one of President Obama’s major problems. He is the inside agitator.  He is being discovered even though he has done everything is his power to look as if he does not have his fingerprints on any of the agitation.

The first step of the agitator is to disrupt the present system in order to replace it with a new system.  The public must be made uncomfortable enough to demand change in the old system.

Isn’t this what President Obama has done in the financial system, the environmental system, and the healthcare system?

It is backfiring on him because of the uncertainty is has created.  In turn it has affected economic growth and caused great pain for middle class consumers.

However, he is smart. He has exempted almost everyone from the mandate temporarily. The exemptions are going to create other problems.

By exempting everyone from the Obamacare mandate, he is not only ignoring the constitution, he is disrupting his new system (Obamacare) that the major stakeholders are trying to execute. The result has been havoc. However, the Obama administration believes it have shifted the blame for the havoc onto the healthcare insurance industry.

He methodology is very transparent. It has become unsuccessful.

The next step is a disinformation campaign.

The published an article entitled Americans Stick With Obamacare As Opposition Burns Bright. This headline is totally false. Americans are not sticking with Obamacare. Nevertheless administration press releases fed to the traditional media are published without appropriate fact checking.

President Barack Obama’s health-care law is becoming more entrenched, with 64% of Americans now supporting it outright or backing small changes. This is a lie.

A major talking point of the Democrats now is that “Obamacare is great but it just needs to be fixed.” If you tell a lie enough times it becomes the truth.

Tell voters they can fix ObamaCare, but Republicans won't let them.”

This is the Democrats' midterm election strategy, as revealed in a memo Politico got its hands on this week. The Democrats are going to admit that Obamacare has flaws. They will promise to repair the flaws. They will argue that Republicans will only make things worse.

However, it has not worked in the Florida special election where Ms. Alex Zisk (Dem) lost to David Jolly (Rep), an unknown, after outspending him by 500%.  The people in the district did not buy the disinformation lie that Obamacare is great and Ms. Zisk will fix the errors.

 A week ago, HHS Secretary Kathleen Sebelius, President Obama's top health official, declared there was no evidence Obamacare was costing any jobs.

HHS Secretary Kathleen Sebelius said.  “There is absolutely no evidence, and every economist will tell you this, that there is any job loss related to the Affordable Care Act,"

This is another lie in order to confuse the facts.

 The Congressional Budget Office a couple weeks ago concluded that Obamacare would shrink the workforce by 2.5 million jobs because of its work disincentives.

President Obama admitted to the law's adverse effects on businesses when he twice put off the employer mandate.   

 Senator Harry Reid addressed the American people from the Senate floor and solemnly claimed that “there’s plenty of horror stories being told,” about ObamaCare. “All of them are untrue, but they’re being told all over America.”

The tactic is to tell lies to obfuscate the true.

 That dog will not hunt anymore. The American people got it!

 "In addition, 54% of Americans say they’re unhappy with the president’s handling of the issue, according to a Bloomberg National Poll."

That’s an improvement since the last poll, in December, when Obama’s public standing on health care hit a low of 60% disapproval after the botched rollout of the insurance exchanges, according to the March 7-10 poll of 1,001 adults.

The Obama administration’s spin of the story is a complete lie. This week the number shot up to close to 60%.

Things definitely seem to be getting better,” said Paul Attard, 50, a political independent in Evergreen, Colorado and a program manager for a cell-phone company who wants the law modified rather than repealed.

“It seems like they are getting a lot more people to join. It’s a sign that the system is working.”

This is another lie. I think in real numbers Obamacare will be lucky if 3.5 million have signed up and have paid their premiums by March 31.

All that has to be done to confuse the truth with misleading statistics in the press.

 The discussion moves from statistics that might not be correct from the true. The real question i:.

Can Obamacare work? I have presented data along with many others that show that Obamacare cannot possibly work.

 All the agitators have to throw at the public is confusing statistics and lies.

One such incorrect fact is that 4.2 million have enrolled. The public does not know if the 4.2 million include Medicaid or are just private insurance plans.

What about the 48 million people who were uninsured before the 2013 rollout? What about the additional 6.6 million consumers who lost their healthcare insurance? None of this is part of the discussion.

The public does not know how many have not paid their premiums. The administration says it does not know. Those people are technically uninsured.  

Private institutions have claimed that 20-30% who have applied have not paid premiums. Only 25% of those who purchased insurance are under 30 and healthy. The administration needs at least 37% of the insured to be healthy for Obamacare to be financially viable.

The health insurance exchanges enrolled less people last month than it did in January. The number for success has changed from 7 million for Obamacare to be viable to an unspecified millions. The Obama administration refuses to publish the health demographics for consumers who have purchased insurance through the exchanges.  

My guess is less than 3 million previously uninsured people became insured under Obamacare compared to the 48 million uninsured that were supposed to become insured. It is a pretty awful number.

 President Obama is throwing a bunch of statics at us to confuse us. Here are some examples

1.Fifty-one percent of Americans favor retaining the Affordable Care Act with “small modifications,” while 13% would leave the law intact and 34% would repeal it in the Bloomberg poll.


2. Seventy-three percent of Bloomberg poll respondents who would repeal Obamacare say the law will be a “major” decider of their vote, compared with 45% of those who support modifications and 33 percent of those who back the law as is.

Isn’t this confusing? The confusion is generated on purpose. It should not be tolerated anymore.

November elections are just around the corner!

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

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Obamacare’s New Taxes And The Middle Class

Stanley Feld M.D.,FACP, MACE

It is important to review all the taxes written into the Affordable Care Act (Obamacare). Americans are recognizing that those tax increases are being passed on to all consumers.  The middle class were not supposed to experience tax increases. The middle class is realizing it has less disposable income because of these new taxes.

Since 65% (sixty-five percent) of America’s economy is dependent on consumers discretionary spending, America is destined to further economic difficulty.

These new tax increases are timed in the hope that no one would notice them.

The increased taxes are supposed to fund Obamacare. The taxes continue to be collected even though much of the law’s implementation is delayed.

The increases in Obamacare taxes arearranged by their respective effective dates. Below is the total list of all $500 billion-plus in tax hikes (over the next ten years) in Obamacare, where to find them in the bill, and how much your taxes are scheduled to go up as of today:


Taxes that took effect in 2010:

1. Excise Tax on Charitable Hospitals (Min$/immediate): $50,000 per hospital if they fail to meet new "community health assessment needs," "financial assistance," and "billing and collection" rules set by HHS. Bill: PPACA; Page: 1,961-1,971.

2. Codification of the “economic substance doctrine” (Tax hike of $4.5 billion). This provision allows the IRS to disallow completely-legal tax deductions and other legal tax-minimizing plans just because the IRS deems that the action lacks “substance” and is merely intended to reduce taxes owed. Bill: Reconciliation Act; Page: 108-113.

3. “Black liquor” tax hike (Tax hike of $23.6 billion). This is a tax increase on a type of bio-fuel. Bill: Reconciliation Act; Page: 105.

4. Tax on Innovator Drug Companies ($22.2 bil/Jan 2010): $2.3 billion annual tax on the industry imposed relative to share of sales made that year. Bill: PPACA; Page: 1,971-1,980.

5. Blue Cross/Blue Shield Tax Hike ($0.4 bil/Jan 2010): The special tax deduction in current law for Blue Cross/Blue Shield companies would only be allowed if 85 percent or more of premium revenues are spent on clinical services. Bill: PPACA; Page: 2,004.

6. Tax on Indoor Tanning Services ($2.7 billion/July 1, 2010): New 10 percent excise tax on Americans using indoor tanning salons. Bill: PPACA; Page: 2,397-2,399.

Taxes that took effect in 2011:

7. Medicine Cabinet Tax ($5 bil/Jan 2011): Americans no longer able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin). Bill: PPACA; Page: 1,957-1,959.

8. HSA Withdrawal Tax Hike ($1.4 bil/Jan 2011): Increases additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent. Bill: PPACA; Page: 1,959.

Taxes that took effect in 2012:

9. Employer Reporting of Insurance on W-2 (Min$/Jan 2012): Preamble to taxing health benefits on individual tax returns. Bill: PPACA; Page: 1,957.

Taxes that took effect in 2013:

10. Surtax on Investment Income ($123 billion/Jan. 2013): Creation of a new, 3.8 percent surtax on investment income earned in households making at least $250,000 ($200,000 single). This would result in the following top tax rates on investment income: Bill: Reconciliation Act; Page: 87-93.


Capital Gains











*Other unearned income includes (for surtax purposes) gross income from interest, annuities, royalties, net rents, and passive income in partnerships and Subchapter-S corporations. It does not include municipal bond interest or life insurance proceeds, since those do not add to gross income. It does not include active trade or business income, fair market value sales of ownership in pass-through entities, or distributions from retirement plans. The 3.8% surtax does not apply to non-resident aliens.

11. Hike in Medicare Payroll Tax ($86.8 bil/Jan 2013): Current law and changes:


First $200,000
($250,000 Married)

All Remaining Wages

Current Law

2.9% self-employed

2.9% self-employed

Obamacare Tax Hike

2.9% self-employed

3.8% self-employed

Bill: PPACA, Reconciliation Act; Page: 2000-2003; 87-93

12. Tax on Medical Device Manufacturers ($20 bil/Jan 2013): Medical device manufacturers employ 360,000 people in 6000 plants across the country. This law imposes a new 2.3% excise tax. Exempts items retailing for <$100. Bill: PPACA; Page: 1,980-1,986

13. Raise "Haircut" for Medical Itemized Deduction from 7.5% to 10% of AGI($15.2 bil/Jan 2013): Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only. Bill: PPACA; Page: 1,994-1,995

14. Flexible Spending Account Cap – aka “Special Needs Kids Tax” ($13 bil/Jan 2013): Imposes cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education. Bill: PPACA; Page: 2,388-2,389

15. Elimination of tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D ($4.5 bil/Jan 2013) Bill: PPACA; Page: 1,994

16. $500,000 Annual Executive Compensation Limit for Health Insurance Executives ($0.6 bil/Jan 2013). Bill: PPACA; Page: 1,995-2,000

Taxes that take effect in 2014:

17. Individual Mandate Excise Tax (Jan 2014): Starting in 2014, anyone not buying “qualifying” health insurance must pay an income surtax according to the higher of the following


1 Adult

2 Adults

3+ Adults


1% AGI/$95

1% AGI/$190

1% AGI/$285


2% AGI/$325

2% AGI/$650

2% AGI/$975

2016 +

2.5% AGI/$695

2.5% AGI/$1390

2.5% AGI/$2085

 Exemptions for religious objectors, undocumented immigrants, prisoners, those earning less than the poverty line, members of Indian tribes, and hardship cases (determined by HHS).Bill: PPACA; Page: 317-337

18. Employer Mandate Tax (Jan 2014): If an employer does not offer health coverage, and at least one employee qualifies for a health tax credit, the employer must pay an additional non-deductible tax of $2000 for all full-time employees. Applies to all employers with 50 or more employees. If any employee actually receives coverage through the exchange, the penalty on the employer for that employee rises to $3000. If the employer requires a waiting period to enroll in coverage of 30-60 days, there is a $400 tax per employee ($600 if the period is 60 days or longer).Bill: PPACA; Page: 345-346

 Combined score of individual and employer mandate tax penalty: $65 billion/10 years

19. Tax on Health Insurers ($60.1 bil/Jan 2014): Annual tax on the industry imposed relative to health insurance premiums collected that year. Phases in gradually until 2018. Fully-imposed on firms with $50 million in profits. Bill: PPACA; Page: 1,986-1,993

Taxes that take effect in 2018:

20. Excise Tax on Comprehensive Health Insurance Plans ($32 bil/Jan 2018): Starting in 2018, new 40 percent excise tax on “Cadillac” health insurance plans ($10,200 single/$27,500 family). Higher threshold ($11,500 single/$29,450 family) for early retirees and high-risk professions. CPI +1 percentage point indexed. Bill: PPACA; Page: 1,941-1,956

This “tax” is under everyone’s radar. It has never been mentioned in the traditional mainstream media. It is the tax on Seniors who are on Medicare.

"The per person Medicare Insurance Premium will increase from the presentMonthly Fee of $96.40, rising to:

$104.20 in 2012

$120.20 in 2013

$247.00 in 2014."

All seniors are means tested. This means the greater your income from any source including work income, pension income, capital gains and interest or dividend income the higher the baseline premiums become.

This “tax” had been decided by a Democratic controlled congress that had not read the bill or understood all of its consequences.

These are provisions incorporated in the Obamacare legislation, purposely delayed so as not to anger seniors during President Obama’s 2012 Re-Election Campaign.

Please send this blog to everyone you know and their children. It is important for them to know that President Obama is throwing seniors under the bus.  Obamacare must be repealed.

Everyone must stay focused. President Obama is going to try to change the conversation and create a diversion to the facts.

Some of these taxes have already gone into effect. If the Republicans win the House and the Senate as well as the Presidency, Obamacare must be repealed.   

Everyone interested in America’s economic future must tell a friend to repeal these crippling taxes. President Obama has deceived Americans with Obamacare and its new taxes.  

It is time for everyone to get angry and give control of the House and Senate to the Republicans in November.

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

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Spinning The Truth

Stanley Feld M.D.,FACP,MACE

President Obama and the Democrats are trying to spin the truth to win the congressional election in November 2014. The Democrats can lose the majority in the Senate in November because of Obamacare. Democrats in the Senate passed the bill. They own it.

Democrats hope to minimize the importance of Obamacare as a political issue by focusing on other topics in this November's midterm elections.

After weeks of trying everything they could to get Obamacare off the front page of even the traditional mainstream media, it took the Russian invasion of the Ukraine to accomplish the feat.

Democrats recognize that Obamacare is flawed. Democrats are promising to fix the flawed national health care plan they passed in 2010.

President Obama and the Democrats are trying to blame Obamacare’s problems  on the Republicans. They are appealing to voters who have been helped by the law to speak out.

Almost every day there is a prominent article in the traditional mainstream media reporting about people who have been helped by Obamacare.

President Obama has asked the Republicans to help fix Obamacare rather than criticize it. President Obama keeps saying “It is the law.” “Live with it and help us fix it.”

Mr. President, IT CANNOT BE FIXED.

In the meantime President Obama has changed the law 25 times by executive order because things have not worked out as he planned. There are questions about whether his executive orders are constitutional.

 I do not think the public will buy his trick plays this time around.  The Alinsky rule in “Rules For Radicals” of attacking your enemy with lies or half-truths is not going to work the way it worked in the Presidential elections of 2008 and 2012.

The consequences of Obamacare are not abstract anymore. They are personal.

Obamacare will be an issue in November 2014. The issue cannot be controlled by the Obama attempts at diversion. Obamacare as an issue in the November 2014 elections can only be controlled by Obamacare’s performance as law in the next 10 months.

Obamacare was destined to failure at the onset. Obamacare’s failures and burdens to this point have directly affected people who had not paid attention to the law’s details at passage.

President Obama has lost the trust of the people. The Democratic Party is not protecting the interest of the American people. The Democratic Party has also lost total credibility.

With each passing day the failures of Obamacare and its burdens to all Americans increase. It is time to examine the increased taxes that have occurred since the passage of Obamacare.

President Obama has just delayed implementation of Obamacare to 2016 to try to avoid discussion of its failures before the 2014 elections.

Obamacare’s changes have added to economic uncertainty in the country. Most insurers are trying to keep the higher costs hidden even though their premiums are increasing. President Obama promised to bail them out if they lose money.

 Blue Cross Blue Shield of Alabama, has decided to itemize the impact of Obamacare. It has added a separate line item to its premium call the "Affordable Care Act Fees and Taxes." 

“The new taxes on one customer’s bill added up to $23.14 a month, or $277.68 annually, according to Kaiser Health News. It boosted the monthly premium from $322.26 to $345.40 for that individual.”

The extra $23.14 per month per individual has increased premium cost by $1,100.72 a year for a family of four.

There are additional new taxes and fees levied on every health plan. There is also an additional $2 fee per policy that goes toward a new medical-research trust fund.

Americans will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.

 There is another sneaky tax to those with high out-of-pocket medical expenses. They will get smaller income-tax deductions.

 The currently allowed deduction is for medical expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under Obamacare.

This hidden tax affects both the rich and the middle class.  

President Obama’s statement “no new taxes on anyone making less than $250,000 a year” was a lie.

Historically, raising taxes has been shown to decrease economic growth.

Democrats belittle Republicans and conservatives by saying all they know how to do is decrease taxes.

The American public is angry about President Obama’s deceptions about Obamacare. He cannot blame the impending failure on the Republicans and get away with it.

Explaining Obamacare In One (1) Sentence



Democrats have the tax and spend reputation. Big government and increasing bureaucracy has come to mean inefficient execution.

More government cannot fix Obamacare. Americans have learned their lesson.

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

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Healthcare Needs Some Big Time Disintermediation

Stanley Feld M.D., FACP, MACE

What is disintermediation?

Disintermediation is a process that provides a user or end consumer with direct access to a product, service or information that would otherwise require a mediator (middleman) such as a wholesaler, lawyer or salesperson.

In many cases the information available on the Internet has often eliminated the need for a middleman.

As commerce grew in the United States after WWII, there was a need for multiple middlemen to fulfill each commercial endeavor.

One of the strongest examples of early Internet disintermediation was Dell Computers. Consumers were able built custom computers by picking the components. They bought exactly what they wanted at a lower price. Michal Dell sold directly to the consumer and bypassed all the middlemen channels and normal retail outlets.

Amazon is another compelling example. It started with books and now includes almost everything. Amazon bypasses most of the channels and all of the expense of brick and mortar structures to lower the cost to the consumer.

Steve Jobs did it best with ITunes. Most people did not want the16 tunes on a CD. They might want one or two. Music publishers and all the middlemen in that industry fought him tooth and nail.

Steve Jobs won because he provided the consumer with what they wanted, the one song at 99 cents as opposed to 16 songs at $16 dollars.

The music publishing companies have now realized that they are doing better since ITunes with less middlemen and more product sales.

My son, Brad Feld, is going to disintermediate the book publishers. Brad authored 5 books for Wiley Press as part of the Start Up Revolution. Wiley Press and its bureaucracy treat him and other authors unfairly.

He and his partners at Foundry Group Venture Capital started FG Press.

“We treat authors like partners, not service providers. Instead of flat fees and unequal royalty assignments, we abandoned the old model and rebuilt it with the author as our top priority.”

I believe the FG Press results will be to disintermediate the entire book publishing industry.

Disintermediation though the Internet also happened in the travel industry, the airline industry, the stock broker industry and the banking industry.

Disintermediation cuts out the middleman.

By using the Internet, companies and even manufacturers can deal directly with users or end consumers, which is a significant factor in decreasing the cost of servicing customers. The high market transparency often enables the buyers to pay less as they deal directly with the manufacturer, bypassing the wholesaler and the retailer. As another alternative, buyers can also buy directly from wholesalers.”

There is no reason disintermediation cannot be applied to healthcare. The goal in healthcare is to lower the cost, increase quality of care and increase access to care.

The way to do it is by making consumers the most important stakeholder. Consumers must drive the healthcare system just as consumers are put at the head of the line in other disintermediated systems that work.

I have described the evolution of the healthcare business model of 1946 to the business model of 2014 and beyond.

In 1946 the healthcare business model was simple. The healthcare contract was between consumers/patients and physicians.

  1946 business model


Consumers were responsible for their medical care. The only technology was physicians’ car his stethoscope and his doctors bag. Consumers were also cautious in their utilization of healthcare services. They did not want to waste their money. They were responsible for their health and their healthcare dollars.

Healthcare insurance destroyed this relationship. Healthcare insurance was attractive to sick people. It was attractive to employers to help their employees stay well. It also helped employer keep their valuable labor force.

Consumers became less cautious about spending their healthcare dollars as third parties were paying for healthcare costs.  

The use of technology boomed in medicine. The cost of healthcare escalated as more and more technology was used.

 In 1965 the government created Medicare. Medicare regulations distorted the free market healthcare system. The distortion increased further in the early 1980s.

 All of a sudden there were more and more middlemen. The middlemen added little value to the medical care of consumers/patients. However they did add increased costs to the healthcare system.

In 2008 the healthcare system became so complex and riddled with rules and regulations that enormous barriers existed between the consumers/patients and their physicians.

2012 busniss model


It looks like a giant hairball that cannot be digested.

Obamacare was invented to use technology and ideology to straighten this all out. It has made and is making healthcare more unsustainable.

Obamacare cannot work. It is government control. The majority of consumers and physicians are against it.

Obamacare destroys the patient physician relationship. Obamacare has resulted in more bureaucracy, large overhead, more middlemen and an increase in costs to the consumers in terms of higher taxes and higher healthcare insurance premiums. 

The major problems are there are too many middlemen and the bureaucracy is superimposed on a failed legacy healthcare system.

The healthcare insurance industry takes 40% off the top leaving 60% of the premium dollars working for the delivery of medical care.

Hospitals charges are outrageous. Hospital expenses are inflated.

The need for cost shifting puts a large burden on hospital systems.  

Government interference simply escalates costs.

An example is the cost of chemotherapy. In hospital chemotherapy cost is 2 to 3 time the cost of the chemotherapy done by the same doctor in that doctor’s office. The government does not pay for chemotherapy in the doctor’s office.

An example of disintermediation in the healthcare system is the Oklahoma Surgery Center.

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.”

Hospital systems in the area are lowering their prices and becoming more transparent.

Obamacare has made the healthcare insurance costs worse for the middle class. The middle class healthcare insurance premiums are not subsidized by the government.

Obamacare has made the premium cost better for the poor and sick. It has not necessarily lowered the deductible. It has not made access to care better for the poor.

Obamacare may make quality of care worse. It will restrict access to care. It will ration care. Obamacare will make medical care decisions for consumers.

The only way to repair the healthcare system is to make it a consumer driven healthcare system using my ideal medical saving accounts.

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

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Another Day, Another Unconstitutional Change

Stanley Feld M.D.,FACP,MACE

The Obamacare’s new mandate delays are a bid to save Senate Democrats from losing their election in 2014.The mandate delays are also a bid to save Obamacare’s health insurance exchange.   

It is strange that no one has noticed that the taxes resulting from Obamacare have not been waived.

An additional insider leaked delay in the law is coming up in the next few days. The hope of this next delay is to keep Obamacare off the minds of the voters in November 2014.

The Russian invasion of Ukraine has steered the subject away from Obamacare in the news. 

President Obama has continued to spin Obamacare positively.

President Obama predicted at the House Democratic retreat on Friday that "10 years from now, five years from now" people will look back on the Affordable Care Act as "a monumental achievement."

Unfortunately Obamacare has so many defects that it continually reminds the American people it is a disaster.

The laws mandate requires businesses with the equivalent of 50 full-time employees based on a 30-hour work week to cover 100% of their workers or else pay a fine, starting Jan. 1, 2014.

The unconstitutional change is to push the deadline to 2016. President Obama also changed the definition of the category. The new category is a business with 100 or less people rather than 50 people working in the business. 

Businesses with more than 100 people employed full time will have to cover only 70% of their workers as opposed to 100% of their workers.

I think this will continue to prevent businesses from expanding and dampen the creation of jobs. Business does not trust President Obama anymore.

The only way for President Obama to alleviate labor market uncertainty would be to ask Congress to repeal the mandate permanently.

I am waiting for someone to challenge these ad hoc changes to Obamacare on constitutional grounds. No one has the guts in this election year.

I think healthcare insurance cancellations will still occur before the November 2014 elections.

Insurance companies are permitted to charge for Obamacare’s costly gold-plated "essential benefits" that all plans will have to cover. Insurance premiums will be unaffordable. The elimination of these essential benefits would reduce the cost for small business coverage.

We get it. President Obama does everything for his political benefit. He has created a political alibi of claiming to exempt some businesses so he can shift the blame to the insurers when the cancellations begin.

 The public will remember that he created the insurance burden and had also permitted the healthcare insurance industry to raise the price of premiums.

The mandate delays can also serve as another President Obama trick play. As small business employers drop coverage of their employees more employees will sign up for Obamacare health insurance exchange coverage.

 He might be surprised as more and more healthy people opt out of the insurance market to be self-insured.

The Obama administration is doing its best to eliminate high deductible insurance plans. However hospital systems are exempt from the Obama administration restrictions on high deductible plans.  They are adopting these plans in order to  gain advantage over their local competitors.

Obamacare enrollment has been abysmal through February. The administration has been very quite about the actual numbers as both Dick Durbin and President Obama are announcing that10 million have signed up. 

My guest is they will be lucky if 3 million have signed up and gotten insurance coverage. All of these probably have preexisting conditions and are at high risk for high cost.

This number is far below the 6.6 million people who have lost insurance in the individual market so far because of Obamacare.

The more lies we are told the more credibility and trust is lost and the less cooperation will be forthcoming.

America is waking up.

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

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Why Is Obamacare A Mess?

Stanley Feld M.D.,FACP,MACE

Obamacare is a mess because the architects of Obamacare created a system that does not align all the stakeholders’ incentives.

Pre Obamacare we had a dysfunctional healthcare system because no one developed a system to improve the care of patients. When a consumer of medical care got sick he received very good treatment or the illness.

Consumers were not taught how to avoid illness. If consumers of medical care had a chronic disease they were not taught how to self-manage their chronic disease.

Medical care in the healthcare system became too expensive for employers to pay for. Consumers were the recipients of this largess. They had no responsibility or incentive for controlling their healthcare cost.

The healthcare system became more expensive because all the stakeholders except consumers tried to maximize their profit at the expense of each other.

President Obama promised to transform the healthcare system. Initially Tom Daschle was his chief. He wrote a book about healthcare after he was defeated in his bid for the Senate.

Any physician who practiced medicine knew that Tom Daschle’s ideas could not work. He had some good ideas to make healthcare delivery more efficient. The ideas were presented in an impractical way. He did not know who the customer was.

Dr. Donald Berwick was next. He tried to extend and implement some of Tom Daschle’s ideas with his own ideas.

Dr. Berwick was the co-founder the IHI (Institute for Healthcare Improvement).

Dr. Berwick has some excellent ideas. The ideas are an adaptation from the Institute of Medicine's six improvement aims for the health care system: care that is safe, effective, patient-centered, timely, efficient, and equitable.

The Institute of Medicine’s report “ Crossing The Quality Chasm” points out how to develop a new healthcare system for the 21st Century utilizing 21st century technology.

The problem is Dr. Berwick’s ideology is defective. His famous quote, “the very definition of a equitable healthcare system is the redistribution of wealth”  does not sit well with the American psyche.

There has never been a system of successful redistribution of wealth system.

Most people have experienced the deadening effect of bureaucratic systems on innovation. This is what we are experiencing right now with the Obamacare rollout.

People still cannot sign up. People are still spending hours on the telephone and not getting insurance. These are not glitches. These are system disasters.

I have long thought President Obama wants to destroy the present healthcare system so that the masses will demand a single party payer healthcare system with the government in control. Such a system will not be any different than Obamacare.

The government will still be dependent on consumers of healthcare, physicians, pharmaceutical companies, device companies and most of all insurance companies.

Insurance companies will still do the administrative services for the government at a very high price.

Obamacare has not even gotten to the problems it is going to have with the delivery of care, the access to care and the rationing of care. 

Obamacare’s business model is defective. It will be impossible to utilize the advances in technology under a system of increased government bureaucratic control.

I have previously presented a new business model. It’s possible it has not caught on for several reasons.  

1. My business model could have been presented too early in the course of  Obamacare’s demise.  

2. My business model is not politically correct.

3. My business model challenges legacy stakeholders. They do not want to give up any power.

 Legacy stakeholders are having a horrible time figuring out how to make a living under the evolving Obamacare system. Maybe by that adopting my new business model, one that aligns everyone’s incentive costs will decrease and profits for everyone will increase.

4. The presentation of my new business model could have been too complicated.

Over the next several months I am going to present my new business model.

This business model aligns all the stakeholders’ incentives except the government takeover of the healthcare system.

The government’s role should be that of a facilitator and not the director of the healthcare system.

I hope it will start making sense to people who can and want to do something to improve the healthcare system.

It will make life better for everyone.

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

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