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Consumer Driven Health Care


The Wrong View Of The Right Problem

Stanley Feld M.D.,FACP, MACE

Most of the stakeholders in the healthcare industry are not stupid. Most understand the issues very well.

The problem is they all look at the same problem from the prism of their own vested interest. Each government action causes these stakeholders to react in their vested interest.

Each reaction causes a compensatory reaction from the other stakeholders, which in turn causes another chain of reactions.

The healthcare system becomes further twisted into a tighter non-functioning hairball that is more expensive than previously.

Aetna CEO Mark Bertolini was the keynote speaker at HIMSS14. His analysis was correct He said,

“Antiquated systems and out-of-control healthcare costs in the United States are not sustainable.”

He went on to say the healthcare system is plagued by inefficiency and waste.

“ We can’t afford it. It’s unsustainable.”

Employees are now paying 41 percent of their healthcare dollars to the healthcare insurance industry. It includes premium costs, deductibles, and copays.

These costs consume much of employees’ disposable income.  Mark Bertolini predicts that employees will be paying 50% in 5 years as insurance premiums increase.

Mark Bertolini is really saying consumers will stop buying insurance soon. The result will be a decrease in Aetna’s profit.

Who is at fault?

All the stakeholders are at fault. Consumers are at fault for not taking care of themselves. The incidence of the onset of all chronic diseases increases with the incidence of obesity.

When there is an increase in chronic disease there is an increase in the complications of chronic diseases.

Eighty percent of the money spent on treating that chronic disease is spent on treating the complications of that chronic disease.

Patients must manage their chronic diseases under their physicians’ direction. The patient lives with that disease 24/7.

Patients must be taught to be the “Professor of Their Disease” so that they do not get a complication of that disease.

Patients must also be given financial incentives to become the manager of their disease. This incentive can be developed in many ways.

Reimbursement for education is not routine. There is little financial incentive for physicians to set up educational systems.

Hospitals at one time set up educational systems for chronic disease. They found them a financial burden and discontinued them.  The educational systems did not distinguish one hospital from another.

The educational systems were not set up correctly. They should have been set up as an extension of the patient’s physician’s care.

I believe the healthcare insurance industry really wants to lower costs while retaining the profit margins enjoyed in the pre and post Obamacare era.

Aetna’s Bertolini got it right. “We can’t afford it.”

“If we really want to take care of people, we should align incentives around keeping them healthy.”

He is right. His problem is he thinks he controls patients and patient care.

The government thinks it controls patients.

Physicians know they do not control their patients’ behavior.

Neither the healthcare industry and government nor physicians controls patients.

Patients control themselves.

Bertolini said. "Recent data compiled by Aetna found that the top 5 percent of Medicare patients consumed 43 percent of Medicare dollars. They spent on average $108,000 a year per person."

The demographics of these patients disease including past and present lifestyle are not discussed in the data mining survey. This information would be helpful to know the true meaning of this data.

He then concludes, “Let’s not keep sending these people around with 25 different prescription and all these different doctors and hospitals.

Who is the stakeholder sending patients to all the different hospitals and giving all the different prescriptions.

Physicians, of course!

Therefore, let us penalize physicians for spending all this money on our patients.

This is the wrong way to look at the problem.

If there was meaningful Tort Reform, physicians wouldn’t be doing so much unnecessary testing and treating to avoid missing something that could result in a malpractice suit.

If there were meaningful incentives for patients to be responsible for themselves people would stay healthy.

Patients should be responsible for their healthcare dollars not the government or the insurance industry.

People should also be rewarded if they stay healthy just as the auto insurance industry rewards drivers who do not have an accident.

If the government made a meaningful effort to change our eating habits through meaningful education much illness and medical costs would be reduced.

The center of the new healthcare system should be the patients. It should be a consumer driven system.

As soon as all the secondary stakeholders focus on that fact and start helping instead of penalizing patients and their physicians, the cost of the healthcare system will come down.

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

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Stanley Feld M.D.,FACP,MACE

The purpose of insurance is to cover risk. For many years the government has protected the healthcare insurance industry’s profit through laws and administrative regulations.

The state insurance regulators are supposed to protect consumers again abuses by the healthcare insurance companies. Many State Boards of Insurance have not administered their responsibility effectively.   

The federal government put out for bid the administration of the federal programs such as Medicare, Medicaid and the VA systems. It has not done this job very effectively. There has been much fraud and abuse in this system.

Somehow the healthcare insurance industry has talked these regulators into permitting the insurance industry to take 40% of the healthcare premiums off the top.

Obamacare mandated a Medical Loss ratio of 80/20. Eighty percent of the premium dollars are to be spent on direct patient care and 20% can be held back for expenses and profit.

However, the regulatory agencies have permitted an additional 20% of expenses to be written off as direct patient care.

The details of these expenses are so complex that few can understand the direct patient care expenses.

Recently, we have heard that if the insurance demographic mix is inappropriate, provisions are written into Obamacare that permit the healthcare insurance industry to achieve a profit.

If it does not reach its profit goal, Obamacare will bail out the healthcare industry. The traditional media has not paid much attention to this provision.

High deductible healthcare plans are very attractive to people who are at low risk for disease. If an unforeseen illness occurs they could buy an inexpensive first dollar coverage plan.

Obamacare is slowly eliminating those plans.

President Obama is trying to drive everyone into a health insurance exchange plan in the name of creating competition among insurance companies. His administration is also picking preferred insurance companies to sell these plans state by state.

President Obama is also choosing hospitals to participate in the state insurance plans’ networks. In some states the insurance company choices are thin to nonexistent. An example is New Hampshire with one healthcare insurance vendor. The same state has eliminated two thirds of hospitals and physicians eligible to participate in the health insurance exchanges.

Some of the best hospitals and clinics are not participating in the exchanges. In some cases reimbursement is too low.

Obamacare’s excuse is this will eliminate the facilities that overcharge and eliminate the risk of cost overruns.

All this keeps the healthcare insurance industry in charge of the risk. In order to reduce costs patients have to be motivated to avoid illness and be responsible for their own health and healthcare dollars.

This concept is not embodied in Obamacare. The government and the healthcare insurance industry will make the healthcare decisions for consumers. 

Another big idea included in Obamacare is the concept of shifting risk from the government and the healthcare insurance industry to physicians and consumers.

Accountable Care Organizations (ACOs) are supposed to be set up to integrate care. If an organization does better than average or better than the year before it gets to share the cost savings with the government. If it does worse it receives less money.

If it improves one year there is little room for improvement the next year. Its share will be less. It is self-defeating motivation.

A major problem is physicians can only control certain risks. Many risks depend on patients’ ability or willingness to adhere to the care recommended. Eighty percent of the healthcare dollars for any chronic disease is spent on treating the complications of the chronic diseases.

There are no provisions for risk weighting payments to physicians for disease complications resulting from patients’ lack of adherence to treatment. The more complications of a chronic disease patients have the greater the risk of higher costs that cannot be controlled.

Severe complications and decreased adherence increases the risk of higher medical costs.

ACO’s bundle payments for disease entities. One size does not fix all.

ICM-10 increases the number of diagnostic and treatment codes from 18,00 to 68,000 codes. This increases the complexity of coding. It is an opening for fraudulent coding. It also can result in the possibility of over or under coding as well as miscoding.  It will take years to learn and years to get right.

If physicians miscode those physicians will not get paid by the government or the insurance industry.

This brings us to the next barrier to the success of Obamacare. There is a constant threat of penalty to consumers and physicians. There should be a constant incentive to receive a monetary reward.

Consumers have higher deductible and higher premiums with Obamacare. Many middle class people cannot afford the higher premiums and higher deductibles. The government subsidizes the healthcare insurance for the poor.

The funding for these subsidies is unclear. It will probably result in yet another tax increase for the middle class. The poor are exempt from income tax payments.

Is this redistribution of wealth?

There are no incentives for anyone to stay healthy and avoid unnecessary and expensive physician visits and diagnostic testing.

There is no tort reform in Obamacare. The lack of tort reform increases the need for excess testing in order to avoid lawsuits for physicians not doing a complete workup.

Physicians and hospital systems have never figured out how to calculate Health Maintenance Organizations’ reimbursement. Physicians and hospitals lost a great deal of money trying to price HMOs bundled payments.

Physicians and hospital systems know less about pricing bundled payments for ACOs. They have no control over consumer usage even though they are being asked to cover the risk. They are hesitant to assume risk.

This is part of the reason ACO participation has been so poor as I pointed out in my last blog.

 It is Insurance coverage (public or private) that should cover and assume the risk. This is the definition of insurance. It is not in the physicians power to control risk nor should it be his responsibility.

It is the responsibility of the State Insurance Boards to price that risk for the healthcare insurance industry wisely. These boards should provide a wide range of products to fit consumers needs. The consumer should have the freedom to choose.

Federal and State officials should not accept the insurance industry’s word.

It is unacceptable.    

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

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The Obamacare Alternative That Would Work!

Stanley Feld M.D.,FACP,MACE

Some have complained that "My Ideal Medical Savings Account" cannot work. I have communicated with some of these people who made this and similar comments. I discovered two common themes to their comments.

The first theme was that people are too dumb to take care of themselves and make their own medical decisions.

The government must make the healthcare decisions for them.

The second was people would not handle their healthcare dollars appropriately if they were given the money.

These people might be talking about 5% per of the population who will be a burden to society no matter what healthcare system is put into place.

Why burden the other 95% of the population who want to be responsible for their health and healthcare dollars if they were given the chance?

The chance given has to include complete transparency, equal tax treatment, and adequate education to use their healthcare dollars wisely to made wise medical care decisions.

The week Tammy Bruce wrote an article in the Washington Times entitled, “Obamacare Isn’t A Train Wreck, It’s A Cancer.”

She explains how it is metastasizing throughout our economy and culture. It will destroy our society.

It is clear me that people commenting did not read my blog “My Ideal Medical Savings Account Is Democratic” carefully.

I decided to republish that blog at this time when it appears that Obamacare is failing on every level as I had predicted.

My hope is people will read the blog more carefully this time and understand it as an alternative to the impending disaster of Obamacare. 

My Ideal Medical Savings Account Is Democratic!

Stanley Feld M.D.,FACP,MACE

A reader sent this comment; “My Ideal Medical Savings Account (MSA) was not democratic and leads to restriction of medical care for the less fortunate.'

This comment is totally incorrect. I suspect the comment came from a person who has “an entitlements are good mentality.”

I believe that incentives are good. They lead to innovation. Innovation leads to better ideas.

Healthcare entitlement leads to ever increasing costs, stagnation, restrictions on freedom of choice and a decrease in access to care.

I have written extensively about the virtues of My Ideal Medical Savings Accounts (MSAs). They are different than Health Savings Accounts (HSAs).

HSAs put money not spent in a trust for future healthcare expenses. MSAs take the money out of play for healthcare expenses. MSAs provide a trust fund for the consumer’s retirement.

MSAs provide added incentives over HSAs to obtain and maintain good health.  Obesity is a major factor in the onset of chronic diseases. Consumers must be motivated to avoid obesity to maintain good health. MSAs can provide that incentive.

The MSA’s can replace every form of health insurance at a reduced cost. It limits the risk to the healthcare insurance industry while providing consumers with choice.

This would result in competition among healthcare providers. Competition would bring down the cost of healthcare.

Some people might not like MSA’s because they are liberating. They provide consumers of healthcare with freedom of choice. They also give consumers the opportunity to be responsible for their healthcare dollars while providing them with incentives to take care of their health.

MSAs could be used for private insurance purchasers, group insurance plans, employer self-insurance plans, State Funded self-insurance plans and Medicare and Medicaid.

In each case the funding source is different. The cost of the high deductible insurance is low because the risk of spending $6,000 for most people is low. 

If it were a $6,000 deductible MSA, the first $6,000 would be placed in a trust for the consumer. Whatever they did not spend would go into a retirement trust.  If they spent over $6,000 they would have first dollar healthcare insurance coverage. Their trust would obviously receive no money that year.

The incentive would be for consumers to take care of their health so they do not get sick and end up in an expensive emergency room.

If a person had a chronic illness such as asthma, Diabetes, or health disease with a tendency to congestive heart failure and ended up in the emergency room they would use up their $6,000.

If they took care of themselves by spending $3,000 of their $6,000 trust their funding source could afford to give their trust a $1500 reward. The benefit to the funding source is it saved money by the consumer not being admitted to the hospital. The patient stayed healthy and was more productive.

President Obama does not want to try this out. He wants consumers and businesses to be dependent of the central government for everything.

MSAs would lead to consumer independence from central government control of our healthcare. MSAs would put all consumers at whatever socioeconomic level in charge of their own destiny.

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

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I Gave President Obama An Alternative To Obamacare

Stanley Feld M.D.,FACP, MACE

I formulated an alternative to Obamacare in 2006, long before Obamacare existed.  President Obama has ignored a plan that will work and align every stakeholder’s incentive.

Obamacare is failing because President Obama does not know who the customer is in the healthcare system. He is blinded by ideology and the belief that government knows what consumers need.

The consumer is the customer. Without consumers of medical care and physicians to provide medical care we would not need a healthcare system.

Consumers and physicians are the primary stakeholders. All the others are secondary stakeholders.

However, physicians receive between 15-20% of the healthcare dollars. Hospitals receive 25% of the healthcare dollars.

Where does the remaining 60% of the healthcare dollars go?

The insurance industry takes at least 40% off the top. The pharmaceutical industry receives 10% and the government wastes 10%.

It is a pity that only 40% of our healthcare dollars is spent on direct medical care. There is much waste and inefficiency built into that direct medical care.

 There is also much waste included in the 60% the secondary stakeholder take off the top.

How else would UnitedHealth’s CEO get paid $1.8 billion dollars in cash and stock options from 1998 to 2006? 

 The excessive insurance industry profits are the direct result of ineffective regulatory agencies controlling insurance pricing.

In 2006 consumer power was demonstrated when UnitedHealth tried to decrease reimbursement to Hospital Corporations of America. HCA protested and threated to quit participation in United Health. Consumer protests followed.

UnitedHealth was the main insurance carrier in the Denver Area. Consumers threated to boycott buying insurance from UnitedHealth. UnitedHealth backed off.

The HCA/United pushback is the first big step. It represents how “Patient Power” should work. Patients should be madder than hell and not want to take it any more.”

In 2006, many of the uninsured were self employed consumers who cannot qualify for insurance because they have a preexisting illness or they are at risk for illness.

The insurance companies refused to sell them insurance. The same consumer in a group insurance plan by law would receive insurance from the same insurance company that turned down the individual.

A self-employed individual can only buy insurance with after tax dollars. A corporate employee receives healthcare insurance coverage with pre-tax dollars.

The same applies for the individual insurance market post Obamacare.

The price of insurance is very high for small businesses. The small business owners do not have the negotiating power of the large corporations.

This results in both the individual and small business not being covered by healthcare insurance. All of the above can be easily fixed.

The problem with Obamacare is the insurance premiums are higher than they were pre- Obamacare. The reasons are obvious.

The only winner is the individual who makes a low enough income to receive a federal subsidy. The loser is the taxpayer.

Obamacare also creates a perverse incentive resulting in people not striving to get ahead.  

In 2006 I wrote:

Patients drive the healthcare system. Patients have tremendous power. They must be taught to use that power in order to Repair the Healthcare System.

Patients must use their  “Patient Power” to take control of their healthcare dollars and their health. They should be provided with financial incentives to save the money they spend on medical care.

Neither the healthcare insurance industry nor the government should determine the consumers’ access to care. Patients’ freedom of choice and self- responsibility is the key to Repairing the Healthcare System.

If there are financial incentives consumers will learn to become informed consumers of healthcare. Reliable education must be provided to give consumers the opportunity to become informed consumers.

There are preconditions.

 Prices must be transparent so consumers know what they are buying. The insurance industry should negotiate the price with the physicians and the hospitals. The industry can remain the surrogate broker for the payment of money belonging to the consumer. Consumers’ who overspend will not receive the financial incentive. They will lose their medical saving account money. Patients who have an expensive illness, like diabetes, can be rewarded for spending money if they keep themselves in good health and prevent complications of disease.

The consumers are then the responsible party purchasing their medical care. It is not the healthcare insurance industry or the government.

The healthcare insurance industry or any financial industry with an adequate computer system can be the administrator and adjudicator of payment.

Medicare director Mark McClellan M.D. said that 90% of the healthcare dollar of a specific disease (Diabetes) is spent on the complications of disease. If we reduce the complications of a disease we could save at least 45% of the current healthcare expenditure for that disease.

Obamacare gives this vital fact lip service. It puts the responsibility of outcomes on physicians’ shoulders. If physicians have poor outcomes they get penalized.

The medical outcome is a dual responsibility of both consumers and physicians. Consumers should be made aware of physicians’ outcomes. Some of the poor outcomes are the result of consumers not taking the responsibility to learn about their disease, prevent the complications of their disease, or comply with the treatment recommended. The result is a poor outcome.

Consumer overspending is another important aspect of increasing healthcare costs. Consumers do not have incentive to be cautious with their healthcare dollars because they have been given first dollar coverage. They do not have financial incentives to save money on medical care.

Consumer overspending was best described by Victor Fuchs an economist from Stanford.

He made the case for a Consumer Driven Health Care System.

The Health Saving Accounts that congress has approved in my opinion is impotent. It does not provide a strong enough financial incentive for consumers to want to save money.

The trust account of $1,000 per year is too low to motivate consumers to become wise shoppers. A Medical Savings Account of $6,000 per year begins to represent financial motivation.

 HSA’s represent the same false hope HMO’s and managed care represented in the 1980’s and 1990’s.

 Dr. Fuchs calls it “The Restaurant Check Problem.”

“You go out to a restaurant with a bunch of friends and you sort of understand that you will split the check,” he said.

 “The waiter comes along and says, ‘the lobster looks very good, and how about a soufflé for dessert?’

The restaurant check balloons, but you are not so careful because you figure everyone is splitting it.

“That’s the way medical care gets paid for,” he said.

 Dr. Fuchs added, “We want to spend our money on the things that will bring the most value for the dollar.

When we are spending collective money as we are in health care, then it becomes much more difficult.”

We want Diabetics to spend money for good medical care in order to prevent complications. Prevention of complications will keep Diabetics out of the hospital and out of the emergency room. The result will be a decrease in medical costs.

The consumer driven healthcare plans can be set up to give provide Diabetic consumer the financial motivation to take care of himself. This reward is much cheaper than paying for a hospitalization or emergency room visit.

 If an insurance product is overloaded with salaries, waste, overhead and unnecessary benefits patients will not buy the product.

The insurance product would have to be modified. It would become more cost efficient.

Patients have it in their power to remove the waste and inefficiency in the system.

Some very clever entrepreneur will realize the consumer is the customer. He will develop an insurance product that everyone wants. State governments have the power to encourage development of this product.

The examples in industry in America are numerous. Sam Walton revolutionized retailing in America with Wal-Mart and Sam’s. Michael Dell almost brought IBM to its knees and revolutionized the distribution of information technology.

 My goal is to describe the necessary components of a healthcare insurance product that does not offer another and false hope.

I hope to show the way to develop an insurance product that can work for patients first and then all the other stakeholders.

There is no reason we cannot provide excellent affordable insurance coverage to all including the corporate employed, the small business employed, the self employed, the unemployed, and the Medicare covered seniors, with all the stakeholders making a reasonable profit in a simplified system.

President Obama, I have provided a viable alternative long before you became President.

I also provided this alternative to you when you became President in the letters I wrote to you.

For you to say no one has come up with a better alternative than Obamacare is disingenuous on your part.

I hope you are listening now.

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

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What Is It All About?

Stanley Feld M.D.,FACP,MACE

It is all about concentrating control over the healthcare system in the federal government. It is about increasing profits of the healthcare insurance industry. It is about decreasing consumers’ freedom to choose a physician. It is about inhibiting physicians’ freedom to use clinical judgment. 

It is designed to happen slowly and insidiously. The trick is to increase control and decrease freedom so that it is not noticed until after it has happened.

Obamacare will not collapse in the next day or two. It will take months to a few years before the major stakeholders (consumers/patients) realize what has happened to our healthcare system.

Only when every consumer is affected will there be a unified public community outcry to repeal Obamacare.  

It might be too late at that time. All the stakeholders will have adjusted to the new but unsuccessful healthcare system at the taxpayers’ expense.

Socialized medicine has not been cost effective anywhere in the free world.

Eighty percent of the people are not sick at any one time. The healthy think the socialized healthcare system in their society is fine until they get sick.

Most people do not realize that the bureaucratic costs and inefficiency in a socialized medicine system consume a high percentage of the GNP.

 Americans would not tolerate 50% of the GNP going to the healthcare system. Especially when the quality of care and access to care has diminished along with the rationing of care.

Medical care is personal. Commoditization of medical care is not personal. When consumers realize they do not have the freedom to choose there will be a reaction.

President Obama’s public relations machine is pumping out deceptions and half-truths right and left about the success of the web site in December without producing any facts except the number of people who visited the site. The implication is these consumers have signed up and received healthcare insurance.

The defects in the implementation are too numerous to count.  The New York Times is not deterred. It is regurgitating the Obama administrations press releases. The administration admits the rollout has had a lot of glitches. However, the administration as well as the New York Times has said that over time all Americans will all be happy with the results of Obamacare.

The mainstream media is spinning President Obama’s story.

Eugene Robinson of the Washington Post started off the New Year with the following statement.

“Now that the fight over ObamaCare is history, perhaps everyone can finally focus on making the program work the way it was designed. Or, preferably, better.”

It is no longer a matter of logic. It is no longer a question of what will work or what will not work. Obamacare is the law of the land. Therefore it is best to shut up and live with it.

No one is talking about Obamacare defects or its inevitable failure.

The fight is history, you realize. Done. Finito. Yesterday's news.

Any existential threat to the Affordable Care Act ended with the popping of champagne corks as the New Year arrived.

 “That was when an estimated 6 million uninsured Americans received coverage through expanded Medicaid eligibility or the federal and state health insurance exchanges.”

“ObamaCare is now a fait accompli; nobody is going to take this coverage away from the millions of uninsured”

 Let us keep half-truths in perspective. Where did Eugene Robinson get the fact that 6 million people got insurance coverage on the health insurance exchanges?

Over 6.5 million people lost their healthcare insurance already under Obamacare and 48 million people were said to be uninsured before Obamacare. President Obama promised that 30 million new people would receive insurance under Obamacare.

These calculations should give most thinking people a headache.

Carl Sandburg, in the Prairie Years ,said that a liar has to have a good memory. However, if you tell enough lies and cover them with enough distractions the audience experiences information overload and doesn’t remember the lies.

It seems to me that Obamacare does not solve any of the problems in the healthcare system.

It is going to make the healthcare insurance industry richer, the pharmaceutical industry richer and the middle class poorer as coverage is reduced, deductibles are increased, access to care is reduced and rationing of care is increased.

Access to medical care should be universal.

Obamacare changes the entire healthcare system. It permits 20% of the population to have access to healthcare insurance while destroying the present healthcare coverage system for 80% of the population. Most of that 80% claim they liked their insurance and their doctor.

President Obama lied to them when he told them they could keep their insurance and their doctor. He is now telling them Obamacare is for their own good.

Why should the government decide on our healthcare coverage?

Healthcare insurance never made people healthy. People help themselves stay healthy.

The main issue is the present healthcare system is unsustainable.

Medicare and Medicaid are unsustainable.

The private employer sponsored healthcare system is unsustainable.

The Veterans Administration healthcare system is unsustainable.

The present and impending failures of Obamacare are unsustainable.   

What can America do?

The consumer’s responsibility is missing from the entire discussion. How do you create a system that lets consumers be responsible for their health and healthcare?

How do consumers stop healthcare insurance executives from making obscene salaries and drug companies obscene profits?

It is by consumers not buying their products.

There must be total transparency of healthcare products available to consumers. Consumers must be educated to evaluate these products. Only then can consumers choose the best healthcare and medical care value for them.

There must also be a financial incentive for consumers to be responsible for their own healthcare and medical care decisions.  

It is not by imposing an ideology that promotes central government control of the healthcare system.

It is not by creating more entitlements

Government bureaucracy is inefficient. It does not help the masses. It helps insiders. It leads to cost overruns.

 It stifles innovations.

 It is not by imposing a system of redistribution of wealth that is going to fix the healthcare system.

Politicians are forced to disguise the redistribution of wealth because it threatens their re-election prospects.  

Our elected officials passed the 10 hidden taxes that have been in force for four years going on five to finance Obamacare before it is fully implemented.

The costs of these taxes have been passed on to consumers. The majority of consumers are in the middle class. They are paying for these taxes indirectly.

In reality President Obama is taxing the working middle class and lower class as well as people making over $250,000 a year. Despite these increased in taxes Obamacare still in for more cost overruns.

The taxpayers’ problem is the administration is unwilling to reveal these cost overruns.

President Obama recently promised to bail out the healthcare insurance industry if they lose money on Obamacare.

This promise is almost as upsetting as providing a waiver to Congress from Obamacare.

Government’s role is to educate consumers.

It is not to create increasing entitlements to have more and more central control over the population.

Entitlements do not work!

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

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  • Richard A Dickey,MD

    I agree with your assertion that the greed of the insurance and drug industry leaders are wrong and that Obama and Congress accepted feeding that greed to get the ACA passed. It is time to correct that but, on the whole, I support the ACA. Here is my recently submitted letter to the Editor of the NC Med Journal about this:
    To the Editor — The November/December NCMJ’s letter to the Editor, ‘Health Care Costs Must Come Down’ by Ron Howrigen, president of Fulcrum Strategies, Raleigh, NC, demands a response. This is mine.
    I heartily agree with the author that Health care costs must come down. This is inarguable and, in spite of the author’s pessimism, I note that the rate of rise of health care costs has already moderated since the Affordable Care Act ( ACA) was passed, even though it will cause a rise (estimated at 6%) as the millions of uninsured (at least double the 6%) are extended coverage by the ACA as it is fully implemented. However, the author totally avoided discussion of the ethical and moral issues the ACA sought to address, particularly the American public’s right to access and coverage of good health care. It has been our obligation, as fellow members of a wealthy nation, to provide that coverage after having failed to address it for over fifty years. Notably, the author, a consultant to physicians, is certainly not a disinterested party in the health care system and therefore his denial of any conflict of interest is hardly forthright. He actually admits his conflict in his statement of his ‘biggest concern,’ i.e. that the ACA will try to control costs by drastically reducing reimbursement to physicians. He and we must realize that our health care system is rapidly evolving to become not nearly as dependent on the physician as it has been in the past.
    When the ACA was being considered by the Congress, those whose corporate bottom lines might be significantly impacted by it and the lobbyists who represent those interests read and studied the ACA carefully. I too read it, all of it. Yet few physicians or patients to whom I spoke had actually read even a small portion of the ACA. As I discussed it with others, I shared my excitement about the significant amount of the ACA which was directed to research ways to assess and improve medical care and coverage. I believe these aspects of the ACA had been included with the expectation that, someday, the findings of the research funded by the ACA could and would be used to improve health care and save money through the implementation of evidence-based practices and payment policies identified by that research. I am not unaware of the considerable compromises and gifts our elected officials in Washington, including our President, had to accept to get the ACA through Congress. I hoped that, over time, the positive effects and benefits of the ACA, such as the coverage of the nearly 50 million Americans without insurance and the removal of the pre-existing condition clauses, would be appreciated by most Americans. While I was disappointed especially in the failure of our President to be successful in his quest to avoid many of those concessions in the final ACA, I hoped those gifts to some corporate interests, including hospital, insurance, and pharmaceutical businesses, could be ameliorated or even reversed with time.
    While I am dismayed by the unrelenting efforts in Congress to undo or limit funds for the ACA, the deficiencies of which are remediable, I remain excited about the good things which have already come and will be coming from this act, one of the most courageous, morally right steps our nation has ever taken.
    Richard A Dickey, MD, FACP, FACE
    Retired endocrinologist
    51 Players Ridge Road
    Hickory, North Carolina 28601-8839
    (828) 495-1230

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Obamacare Drives Premiums Up In 45 Of 50 States

Stanley Feld M.D.,FACP, MACE

President Obama promised
during his campaign for passage of the Affordable Care Act that the Act would
cause premiums "for the typical family" to fall by $2500.

He also said it would bend
the healthcare cost curve and if you like your doctor you can keep him or her.
We all remember these sound bites. The sound bites are all turning out to be

Many intelligent people who
believe in Obamacare refuse to consider these facts. I can understand the

They will pay attention as
soon as it effects them.   

The added required benefits mandated
in insurance coverage in the law and the way the healthcare insurance industry
is permitted to calculate its Medical Loss Ratio makes President Obama’s
calculation impossible.

President Obama has been telling
the American public a lie all the while. People are starting to understand.  

The average one month premium
change from buying insurance in the non-group market in 2013 versus the
Obamacare exchanges in 2014 is not revealed in any government statistics. Two
studies were completed by private sources.

 Premium comparisons between
2013 and 2014 are not available from Health and Human Services (HHS).

The 2013 premiums increased
by double digits from the 2012 premiums because of Obamacare. The traditional
media has not pressed the government to provide these comparisons.

The media continues to quote
the administration press releases of lower premium prices.  The Obama administration uses CBO estimates
of premium prices calculated in 2010 for 2016 by data provided by the Obama
administration. The tradition media refuses to report reality.

A 50-state study has found
that insurance premiums will increase the first year of Obamacare in 45 of 50

Insurance cost under obamacare

Premiums paid outside the
health insurance exchange will increase the same percentage or more.

No one can
say the American public has not been warned.  

There is
going to be tremendous public outcry in the individual market for insurance
when the cost to individuals and the American taxpayers is realized.

1,2013 is open enrollment season for the individual and group insurance market.

Obama has exempted the group market from Obamacare until 2015.

One of the
reasons for the exemption for the group market is to try to mute the outcry by
splitting the non group insurance from the group insurance holders.

Some of the
premium increases have already been report in the traditional media.

 "Individuals in most states will end up
spending more on the exchanges," policy analyst Drew Gonshorowski writes”

The Department of Health and Human Services published a similar
report. The government’s report is incomprehensible to me.

It does not compare pre Obamacare premiums of 2013 to
Obamacare Health Insurance Exchange premiums of 2014.

are literally no comparisons to current rates. That is, [the Department of Health
and Human Services] has chosen to dodge the question of whose rates are going
up, and how much. Instead they try to distract with a comparison to a
hypothetical number that has nothing to do with the actual experience of real

President, American Action Forum[1]


The Department of Health and Human Services has
declared a 16% decrease in premium costs compared to the CBO’s 2010 estimate of
premiums for 2016.

It is important to remember the CBO’s
calculation was with faulty data provided by the administration.

Based on a Manhattan Institute analysis of the HHS numbers,
Obamacare will increase underlying insurance rates for younger men by an
average of 97 to 99 percent, and for younger women by an average of 55 to 62
Worst off is North Carolina, which will see individual-market rates
triple for women, and quadruple for

The Obama
administration’s methods of deception are cunning, powerful and effective.

He always blames others and hides his ideology.

Obama continues to try to fool a majority of the people most of the time.

Americans will
get the point where the rubber meets the road. The public is going to
have to reach into their pockets and pay these enormous increases in premiums
or not buy healthcare insurance coverage.

Americans are also going to experience massive increases in taxes above and beyond those already experienced.

I predict the
public outcry will drown out the spin of the Obama administration. The
traditional media will not be able to ignore this public outcry.

People will
finally realize the enormous government grab of power and control of Obamacare at
taxpayers’ expense.

can’t complete applications or secure premium prices on the health insurance
exchanges because of technical problems resulting from ancient information technology
used by the government to construct the exchanges.

All of the
consumers’ demographics must be filled out before the government provides a
premium price. There is at tricky reason for this.

computer “glitch” solidifies my view that President Obama wants Obamacare to
fail in order to replace it with a single party payer system that America
cannot afford.

This last
statement is counterintuitive but I believe true.

Is it wise
for consumers to hand over all their medical decision making to a government
that has this much difficulty with executing a computer program and providing
healthcare insurance premiums?

must wake up soon. They have to insist on a consumer driven healthcare system
in which they have control over their healthcare and their healthcare dollars.

Americans have
to insist on having an Ideal Medical Saving Account healthcare system

I have described the Ideal Medical Saving Account System in great detail.


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

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Obamacare’s Games For Stakeholders And The Unintended Consequences


I can’t help remembering
Nancy Pelosi’s famous statement, “We have to pass the bill to find out what is
in it.”

The public didn’t like
Obamacare to begin with.

Each day “we are finding out what is in it.”

Each day it gets worse
despite the fact the President Obama keeps saying Obamacare is great and will save us
money. Americans do not believe him.

If you are a big
government control advocate, the ideology of Obamacare could be applauded.

Practically, Obamacare is
naïve and an impending “train wreck.
Unintended consequences keep appearing because of defects in the theory and poor

Patients, the healthcare
care insurance industry, physicians, hospital systems, and drug companies could
have predicated these unintended consequence if they knew what was it the bill
at its passage. Those who did understand the Accountable Care Act (Obamacare)
hated the act at its passage.

Many of my progressive
friends blame the problems Obamacare is having on Republicans.

I think they are getting
that idea because the New York Times and its editorial op-ed writers that are making
that claim. However, the New York Times offers no concrete proof.

Obamacare is failing on it
own. Its implementation gets harder and more expensive each day.

The unions were President
Obama biggest ally. All of a sudden Obamacare’s unintended consequences has
angered the unions. The unions realize what Obamacare is doing to them.

On July 12, James Hoffa of the Teamsters (1.4
million members), Joseph Hansen of the Food and Commercial Workers (1.3 million
members) and D. Taylor of UNITE-HERE (200,000 members, mostly culinary and
hotel workers) wrote to complain about the president's Affordable Care Act.

Obamacare is destroying
the 40-hour workweek unions worked many years to achieve.  Employers are hiring part time employees to replace full
time employees that had been laid off because of the recession.

Employers are doing this
to avoid a $2,000 penalty for not providing healthcare insurance for each employee.

The majority of the job
growth figure of 195,000 for June consisted of part time job growth.

leaders are correct. Obamacare "creates
an incentive to keep employees’
work hours below 30
hours a week."

all, employers can avoid a $2,000-per-worker penalty if they don't provide mandated insurance as long as employees
work fewer than 30 hours a week.

" Union leaders have realized—too late—that
ObamaCare will affect the livelihood of millions of workers who wait tables,
wash dishes, clean hotels, man registers, stock shelves and perform other tasks
that can be limited to shifts of less than 30 hours a week."

house Press Secretary Jay Carney said it "is
belied by the facts."

again he was lying. He used 2010 Bureau of Labor Statistics numbers to answer
the complaint.

“So far
this year, as ObamaCare is being implemented, full-time employment has grown at
an average monthly rate of 21,700 while part-time employment has increased an average
of 93,000 a month.”

are terrible numbers that belie Jay Carney’s “facts.”

 Three big unions
worry that the health law will hurt their members' benefits and paychecks.

The letter to Nancy
Pelosi and Harry Reid was unusually harsh.

The letter was not from
Mr. Obama's GOP adversaries but from the president’s allies, the big three most
powerful unions. A fourth union joined the group a few days later.

The unions finally
realized that Obamacare was going to cut unions out of some government
subsidies. Obamacare makes a unionized workforce more expensive for employers.  It makes it less attractive for workers to
join unions.

"Millions of union workers, the
letter notes, are covered by nonprofit health plans jointly administered by
employers and unions, and won't qualify for ObamaCare's generous taxpayer

This will drive union
members out of their unions.

Further, the unions
nonprofit insurance plans are subject to "Obamacare’s new 2-3% tax on each
insurance policy they place."

The union wants their members
exempt from this tax because the union will be forced to pass it on to their
members. Members will be forced to use the health insurance exchanges to buy
their healthcare insurance.

Unions are starting to
realize the goal of Obamacare is to force everyone into his “Public Option”
that will default to a single party payer. The result will be complete
government control of the healthcare system.

There are three insurance
options in the health insurance exchanges. Citizens will buy the cheapest
“affordable option.”  The deductibles
will be high. Citizens will have to pay deductibles out of pocket decreasing
their purchasing power.

Republicans are enjoying
this meltdown. They want Obamacare

House Republicans say their goal is to repeal President Obama's
health care law, not to present an alternative plan.”

This is a big mistake on
the part of the Republicans
. Republicans do not have a viable substitute to
repair the dysfunctional healthcare system.

"Every voter knows what Republicans are against. They don't
know what they're for" on health care, said Rep. Steve Israel of New York,
who heads House Democrats' campaign committee.”

 “He said the strategy would haunt Republicans next year among
moderate and independent voters who want changes, not outright repeal.”

Republicans need an
innovative alternative to Obamacare that will work and excite the public.
  They need a plan that will put consumers in
charge of their health and healthcare dollar. Consumers do not want a healthcare
system that puts the government in charge of their health.

Consumer driven
with my democratic ideal medical savings account should be adopted
by the Republican Party to replace Obamacare.

Republicans must take a
stand and help Americans avoid Obamacare’s impending disaster to our economy,
job growth and financial viability. 

Republicans must show Americans
that they care about them and have a viable solution to our healthcare systems problems.

Otherwise as President
Obama said this week, “he will blow right
through it”
as he
has done in the past.

 Now that Americans are waking up it is time
for the Republican leadership to start waking up and fight back effectively.

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

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Free Market Price Transparency and Price Competition

Stanley Feld M.D.,FACP,MACE

Physicians can take a leadership role in creating price transparency
leading to price competition.

An excellent example is the Surgery Center of Oklahoma.

Dr. Keith Smith and Dr.
Steven Lantier launched the Surgery Center of Oklahoma 15 years ago. I wrote
about the Center’s guaranteed online all-inclusive surgery prices six months

There are several innovative physician driven market driven pricing systems in the nation.

The Surery Center's price transparency is
catching on. It is leading to price competition, which in turn is leading to
reduced healthcare costs.

The Surgery Center of
Oklahoma’s online pricing is disrupting the lack of price transparency in their
local area.

“What we’ve discovered is health care really doesn’t cost that
much,” Dr. Smith said. “What people are being charged for is another matter

are paying a high premium for buying healthcare insurance. The healthcare
industry takes at least 40% off the top of healthcare premiums.

Systems inflate their prices for many reasons. Some insurance companies pay
more than others for hospital systems’ services. Hospital systems do not know
what the consumer’s insurance would pay when consumers come into the hospital
so they register the highest prices on the consumer’s bill.  

systems try to charge as much as they can to collect as much as possible. The
pricing is not based on reality.

Surgery Center of Oklahoma started posting their prices online
about four years ago.

Click here to see the online prices at Surgery Center of Oklahoma.

When we first started we
thought we were about half the price of the hospitals,” Dr. Lantier remembers.
“Then we found out we’re less than half price.

 Then we find out we’re a
sixth to an eighth of what their prices are. I can’t believe the average person
can afford health care at these prices.”

It is important to note that most physicians do not know what
hospital charges are.

The Surgery Center of Oklahoma has stated that they were founded on the simple principle of
price honesty and transparency.
The Surgery Center of Oklahoma’s return on
investment and net profit is extremely healthy at the prices it charges.

The prices for procedures are
all-inclusive quotes and are guaranteed.

 The result was to start a local price war.
The Surgery Center of Oklahoma is disruptive to the hospital pricing in its
community. This disruptive pricing is spreading across the nation. Consumers from
all over have come to the Surgery Center of Oklahoma because the price is
transparent and reasonable compared to hospital systems in their local area. One
specific example is.

“Matthew Gang, 22, tore his patella tendon, dislocating his
knee-cap playing basketball earlier this year.”

Mr. Gang is uninsured. He lives in California.
Surgery in his California community was going to cost him about $30,000.

The Surgery Center of Oklahoma Internet
price was $5,700.

 Matthew and his father Tom Gang flew from
California to Oklahoma for surgery.

“It was well worth it,” Tom Gang said. “I need a rotator cuff
surgery right now. I’m thinking about flying out there and having my surgery
because it was such a positive experience for us.”

Other Oklahoma medical and surgical
facilities have started joining Surgery Center of Oklahoma in posting prices
and becoming price transparent. Hospital systems are realizing they will have
to compete with low price transparent prices to attract patients.

Surgery Center of Oklahoma does accept
private insurance, but the Center does not accept Medicaid or Medicare.

 “Dr. Smith said federal Medicare regulations would not allow for
their online price menu

 “They have avoided government regulation and control in that area
by choosing not to accept Medicaid or Medicare payments”.

order to circumvent the Medicare guidelines the Kempton Group’s website, a
third party administrator, posts prices for other providers in the area.

The difference in billed prices are
staggering between Mercy Hospital in OKC, Intergris Baptist Medical Center and
OU Medical Center vs. Surgery Center of Oklahoma. The prices are,


  • Mercy Hospital charged $16, 244 for a breast biopsy; the procedure
    will cost $3,500 at Surgery Center of Oklahoma.
  • OU Medical Center billed $20,456 for the open repair of a
    fracture; the procedure will cost $4,855 at Surgery Center of Oklahoma.
  • OU Medical Center billed $21,556 for a gall bladder removal
    surgery; the procedure will cost $5,865 at Surgery Center of Oklahoma.
  • OU Medical Center billed $23,934 for an ankle arthroscopy; the
    procedure will cost $3,740 at Surgery Center of Oklahoma.
  • Integris Baptist billed $37,174 for a hysterectomy; the surgery
    costs $8,000 at Surgery Center of Oklahoma.

However, prices may be dropping elsewhere because of the
transparency at Surgery Center of Oklahoma.”

am writing about the Surgery Center of Oklahoma for the second time for two

than crying about the issue of the lack of price transparency as Dr. Uwe
Reinhardt did in my last post, someone is actually doing something about it
. It
is causing hospital systems and large clinics to lower prices and make them

“Second, the government should not be in the
way.  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

As patients are starting to demand price
matching, some hospitals are giving in.

 “Hospitals are having to match our prices because patients are
printing their prices and holding that in one hand and holding a ticket to
Oklahoma City in the other hand and asking that hospital to step up,” Dr. Smith
said. “So we’re actually causing a deflationary effect on pricing all over the
United States.”

The economics are simple even though
hospital systems deny it. One only has to recall the multiple million dollar
salaries of hospital CEOs as well as other hospital administrator salaries to
understand the hospital systems’ desires for less transparency.

Physicians are waking up and realizing
they are not the main cause of escalating costs. The Surgery Center of Oklahoma
is a wonderful example of a price transparent organization that is doing
something to force price competition.

It is clear. The government is not going
to create price transparency.

Physicians and patients must drive the adoption of a free market

Consumers must drive price transparency.


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

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The Lack Of Price Transparency

Stanley Feld M.D., FACP, MACE.

I believe the New York Times is doing a great disservice to the American
public in its biased promotion of the virtues of Obamacare. The intellectuals
of our society read the Times and never question this bias. In fact the Times
publishes letters from these intellectuals that confirm its biased statements.  The more letters that come in the more they
are published. Before anyone knows it the bias becomes the truth.

On July 8 2013 the NYT published an article entitled “What Does Birth Cost? Hard to Tell”

The article's opening
paragraph reveals its bias.

continually told that when it comes to health care, we need to be savvy and
shop around
for the best prices. To that end, policy experts and politicians
promote health care savings accounts, saying they make “health care consumers”
(a k a patients) more conscious of prices, bringing down the cost of medical

It goes through this woeful story of how an uninsured
pregnant woman tries to find a best price for her delivery from hospitals in
her community.

“Here is what happened to my daughter, Therese Allison, when she
tried to be just the sort of shrewd and informed patient that politicians
should love.”

At this point I realized the article was another New York
Times propaganda article implying the potential virtues of Obamacare. President
Obama and the Democrats have mandated that patients like this buy healthcare
insurance from health insurance exchanges. They want patients to be dependent
on the government and not give patients the choice to make their own independent

The healthcare system’s dice are loaded against this woman’s
independent free choice.

“ Pregnancy is a pre-existing
condition, so she can’t get health insurance at any price
. And
now that the birth of her baby is imminent, she wants to find out what a
delivery will cost, maybe even negotiate a price for this expensive procedure.”

Therese’s  midwife offered to call the two hospitals the midwife
uses. She wanted pricing for an uncomplicated normal vaginal delivery without
an epidural. Therese’s plan was to leave the hospital the next day.

One hospital gave her a conditional price estimate. The other
didn’t. The second told her to apply for Medicaid. She thought there should be
a law making hospital systems reveal their prices.

 Uwe Reinhardt, a
Princeton health care economist who is a frequent contributor to The New York
Times said hospitals do not have to their reveal prices.

“He said. Hospitals do not have to tell you their prices, and
often they keep them secret until they send the bill.”

“When I was chair of the New Jersey commission on hospitals two
years ago, my wife, at my behest, tried to get a price for a normal delivery
from the Princeton Medical Center,” Dr. Reinhardt said. “She pretended to be an
uninsured entrepreneur earning $80,000 a year. She got nowhere. I then called
to try out a 
colonoscopy. I got nowhere too.”

Dr. Reinhardt is a big fan of Obamacare. His implication is the
Obama administration is going to fix the non-transparency barrier.

Dr. Reinhardt said, “The situation is all so

The problem is he does not
offer a solution to fix the problem.

The Obama administration has tried to break the price
transparency barrier by publishing Medicare and Medicaid prices. The effort is
confusing, insufficient and incomplete.

Medicare and Medicaid reimbursements have been published in some
states in the past. Private insurance reimbursements to hospital systems have
been published for some diseases but it has been incomplete and

These reimbursement figures have been difficult to find on the
Internet. Additionally the prices have nothing to do with private healthcare insurance
contract prices of private insurance co-pay.

The Obama administration just had Medicare publish a giant spreadsheet with its payments for
the 100 most popular hospital procedures and treatments in 3,000 hospitals
across the country using claims data.

The moment the ICM-10 coding system is mandatory the number of diagnostic
codes will increase from 18,000 to 68,000
. ICM-10 coding will decrease consumers’
ability to understand reimbursement and co-pays.

Pregnancy is not on the Medicare spreadsheet list along with
many other common procedures. The claims data is not connected to private
insurance payments and co-pays. As I have pointed out in the past, claims data
is notoriously inaccurate.

What is needed is a smartphone app listing prices for consumers
by zip code similar to Travelocity and Kayak for airline tickets and hotels. Consumers’
pricing would be instantly transparent.

There is no indication that the Obama administration is working
on this.

It is up to consumers to force the issue of price transparency.
It will lead to price competition and decrease the cost of healthcare..

Physicians in some parts of the country have taken the
initiative to encourage real price transparency and price competition.

I do not think we can rely on the government.

The Obama administration’s goal is to not have a healthcare system
with free market competition. He wants a government controlled healthcare

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