The Defects And Waste In Medicare

Stanley Feld M.D.,FACP,MACE

President Obama should listen to individual physicians and physician groups. They can tell him how to make Medicare more efficient.

President Obama is ignoring the power of innovation in competition. Government control leads to increased inefficiency.

Medicare wastes millions of dollars. The government should be focused on identifying and eliminating this waste.

It should not be concentrating on developing a bureaucratic infrastructure that will increase waste.

Taylorism of the early 20th century must yield to disintermediation of the 21st century.

President Obama is not listening to practicing physicians. Republicans and their leaders should be listening to practicing physicians. Republicans should be developing policies to fix the inefficiencies in the healthcare system right now.

I received this note from a group of physician leaders of large group practices throughout the country expressing some major concerns. These are a consensus of their top five concerns. Most practicing physicians and physician groups would agree. All have been frustrated by these issues.

“Stan, we polled a few of my colleagues about what would be our top issues/concerns as it relates to our current involvement with Medicare and Medicaid (CMS). We have summarized our discussions in a "5 top list".

1. “There is an inconsistency and difficulty in administration of local coverage policies versus national coverage policies and the costs associated with the variances.”

The administrative services for Medicare are outsourced to the healthcare insurance industry. Vendors in each state are autonomous. They have the ability to interpret and institute Medicare policy as they wish.

This inconsistency causes problems in tourist states for physicians and patients. There should be national policies and specific guidelines for policy implementation by carriers.

This simple fix would streamline the payment process for seniors and reduce physicians’ costs associated with claims payments. Complex payment appeals by both physicians and seniors would be reduced. The healthcare insurance industry’s staff costs and physicians’ staff costs for processing, reprocessing and adjudicating claims would be reduced. The wasteful administrative cost passed to Medicare would be saved.

2. “Oversight and management of Medicare Advantage Plans must be improved.”

There is a lack of appropriate oversight of management for the Medicare Advantage program. This defect impacts the cost of senior citizens’ medical care. Medicare Advantage does not implement the ever changing policies rapidly. There is no source for adjudication of complaints. Reimburse is delayed in some cases for a year.

Traditional Medicare carriers have no power to offer help. There needs to be more consistency and transparency on coverage policies for Medicare Advantage plans.

Medicare Advantage was created as a step to relieve the government of responsibility for Medicare. It shifts the entire responsibility from the government to the healthcare insurance industry.

The healthcare insurance industry charges the government a $3,000 premium above the cost of traditional Medicare to assume this responsibility. Seniors pay a lower premium for Medicare Advantage also. The healthcare insurance industry profit on Medicare Advantage is greater than traditional Medicare.

It is much easier for physicians to deal with traditional Medicare carriers than Medicare Advantage carriers. The amount of time spent by both providers and carriers in correcting payment problems would be reduced. This reduction in administrative waste would reduce the cost of medical care quickly.

3. “All stakeholders; physicians, hospital systems, insurance carriers and government should be held accountable for fraud and abuse.”

There is no mechanism to measure fraud and abuse by CMS. Physicians’ challenges to carriers are expensive, time consuming and minimally rewarding.

Reimbursement challenges will only increase when future rationing and control of medical care decisions are made by the new powerful commission boards and advisory panels. There is no government accountability or defense by physicians or patients for these new agencys’ decisions.

The government claims CMS saved $900 million by hiring external contractors to review provider compliance. Is this report published and validated?

Does CMS undergo similar audits of best business practices, administration staffing and other benchmarks to test its bureaucratic efficiency of operations?

4. “Operational impact of government policy on physician practices must be considered. “

An example of this comment is e-prescribing. The government should make it as easy as possible for physicians to e-prescribe. Instead, e-prescribing is mandated for 2012. The government is creating punitive rules for physicians not in compliance with this mandate.

The government should understand that mandates do not work. Usually, the cost of enforcing mandates is greater than the cost of not having a mandate .

The government should make it voluntary, easy and profitable comply with a rule that should be part of every practice. E-prescribing will make practice more efficient.

More that 90% of physicians have a smartphone. Many physicians have IPADS. All have computers with internet connectivity.

If the government promoted an application like ScriptPad, the e-prescribing problem would be solved instantly at no cost to the government or the physicians.

Monetary incentives for compliance should be provided to physicians participating. There should be no penalty for non participation.

What does ScriptPad do?

ScriptPad allows physician to write e-prescriptions faster and safer than their current paper process. ScriptPad will eliminates prescription writing mistakes. It sends prescriptions directly to the patient’s pharmacy.

This I minute video demonstrates how it works.

The same can be done in the cloud for a fully functional electronic medical record. Instead the government is setting up a complicated subsidy program that falls short of the cost of an EHR. The government should provide a fully functional web based electronic medical record to physicians.

5. “ Medicare Part B fee schedule administration”

CMS changes Part B fee schedules several times a year. Physicians are not compensated for updating their billing systems. Physicians’ reimbursement is often delayed by the changes. Patients and physicians are irritated by these fee changes. The explanations of benefits are always changing for the same services.

"Has someone at CMS kept tabs on how much it costs CMS and the taxpayers for each fee schedule implementation/delay?"

This group of physician leaders estimated the government would save $108,984,375 million dollars a years if fee schedules were not changed so often. The calculation does not include cost savings for the physicians or any overhead for the healthcare insurance carrier the government has outsourced administrative services to.

Small changes such as those suggested above would save Medicare at least one half a billion dollars a year in waste.

I hope someone is listening.

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