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The Anatomy of Healthcare Billing

Stanley
Feld M.D.,FACP,MACE

The start of exposing the real cause of healthcare inflation has begun.  The billing and reimbursement system is
finally being questioned.

I hope the debate creates an uproar among consumers who are the most
important and most disadvantaged stakeholders in the debate. My hope is consumers will realize they
are pawns in the complex billing and reimbursement system created.

Consumers must also realize they have the power to demand control over their
healthcare dollars and not hope the government will protect them.

Steven
Brill’s article in TIME magazine started the debate.
The demand for transparent
pricing has started.  Steve Brill’s
numbers are far from accurate.  However,the
pricing information is close enough to get consumers mad as hell.

The Centers for Medicare and Medicaid
Services finally released its massive database containing what 3,000 hospitals
charge for 100 of the most common medical procedures.

The database compares the hospital
“chargemaster” to the prices Medicare actually paid.

The reimbursement to hospitals is based
on the hospital system’s estimates of the actual hospital costs plus hospital
administrative overhead. These estimates are an error. The calculation should be the actual costs
and not an estimate of the actual cost.

The database only covers 100 of the
most common illnesses.

I have written about hospital
administrators’ salaries being in excess of 1 million dollars a year with many
being up to 15 million dollars a year.
These salaries are included in the
overhead covered by Medicare payment.

I have questioned the appropriateness
of these massive salaries. In Boston there seems to be a contest between hospital
systems for which CEO gets a bigger salary.

Another important question is how many
hospital administrators in a hospital system get an excessive salary for the
value they add to medical treatment.

Who is worth more, a physician or a
hospital administrator?

 In many cases the
reimbursement by Medicare to some hospitals is 10% of the hospital’s billing.  In other hospitals the difference is 20-40%.

The payment gap between hospital charges
for procedures and Medicare payments is also stunning. The average difference
between hospital charges for the 100 procedures tracked and what Medicare’s
average actually payment is a difference of 72%.

A good metric is to beware of the man
that quotes average percentages if you want to understand the actual
difference.

The best example I have seen to visualize the variation of these prices
in simple terms is as follows.

 

“Imagine a banana in a supermarket. It costs $1 for those paying
with Visa, $3 for those paying with MasterCard, and $32 for those paying with
cash.

You can't sign up for Visa until you're 65, and you can only get
a MasterCard if you have a nice employer or a decent income.


Worse, customers have no
idea that such price discrepancy exists. They don't even know how much they'll
pay for the banana until long after they've eaten it.”


“That would be absurd. No
one would put up with it.


But it's how our health
care system works.”


Why should healthcare consumers in
America put up with it? Isn’t it the government’s job to protect us from this
abuse and not have a system that encourages it? Obamacare claims to stop the
abuse as it has been going on its merry way to encourage it.

This is not the entire grizzly story.

The average prices by states shows
massive discrepancies. In California, the average hospital charges $101,844 to
treat respiratory infections. In Maryland the average price for the same respiratory
infection is $18,144. The difference is 82% for the same disease in two
different states. The government is the same payer for both states.

 New Jersey hospitals bill an average for
$72,084 for "simple pneumonia," while Massachusetts’ hospitals charges
an average of $20,722. Neither of the state’s hospitals receives that much
reimbursement for treating these infections from Medicare. However, New Jersey
hospitals receive more.

Uninsured patients and the indigent
without insurance are getting the shaft. These people will have to pay retail
hospital prices or get sued by the hospital system.

None of the hospital prices are
transparent. A patient cannot even beg the hospital system to get a price.

Many treatments can be administered as
an outpatient. The government pays at least three times more for chemotherapy
in a hospital setting or a hospital outpatient clinic as it would to a freestanding
private outpatient oncology clinic.

 What’s the deal? The government doesn’t
trust physicians. It is afraid physicians will overcharge.

What does the government think the
hospital systems are doing?

I have also written about primary care
physicians’ salary being about $100,000- $120,000 a year. Surveys of physician
salaries have shown salaries varying between $100,000 to $600,000 per year. Surgical
subspecialists receive more than primary care physicians.

Let us assume the average physician’s salary
is $300,000 per year. There are approximately 600,000 practicing physicians in
the U.S.

The total physician reimbursement is $180
billion dollars a year in a $2.7 trillion dollar industry
. This is less than
10% of the total dollars spent. Even if you doubled physicians’ salaries to
include an overhead of 50% physicians receive 13.2% of the healthcare dollars
spent.

A major question is where is the
remaining 2.5 trillion dollars going?

The healthcare insurance companies take
40% off the top of all care delivered including Medicare and Medicaid and other
government programs. They do all the government administrative services and
hide the fees through deductions that should go to expenses but with the
government’s permission go to direct patient care.

The most important metrics are never
discussed and inaccurately measured. 
They are clinical outcomes and quality of procedures performed with
respect to financial outcomes.

The reason this measurement is not done
is because there is no accurate definition or measurement of these metrics.
Clinical outcomes as it relates to cost of care has to be included in the
measurement of quality of care.  No one
knows how to do this.

How does all this get fixed?

Consumers must drive the healthcare
system.
My ideal medical saving account would go a long way in
dis-intermediating the healthcare insurance industry
.

An easy to use web site should be constructed
using the Travelocity, Expedia or the Orbitz formula.

All hospital and physicians’ prices
should be online. All insurance and government reimbursement should be
published on this web site, plus
insurance premiums and their justifications. The real government overhead
should also be available to consumers. 

A government web based educational
program to make consumers smart medical consumers would decrease healthcare
costs immediately.

All of the above would be a good start.

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

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EMRs Real Politics.

Stanley Feld M.D.,FACP,MACE

 

Dr. Jerome Groopman and Dr.Pamela
Hartzmen uncovered the real politics of EMRs.
 They are both on the staff of Beth
Israel Deaconess Medical Center in Boston and on the faculty of Harvard Medical
School.

 Dr. Groopman wrote a best seller “How
Doctors Think.”

In a Wall Street
Journal article they wrote,

 The electronic medical record (EMR) is touted
as the key to containing costs, reducing errors, improving quality, and
simplifying administration: an “elegant exercise in wishful thinking

Dr. Groopman and Pamela Hartzman debunk the 2005 RAND study. The
RAND EMR study of 2005 led to President Obama’s belief that EMRs will save $81
billion dollars a year for the healthcare system.

Groopman and Hartzman show that there is little evidence to
support the president’s belief.

The RAND analysts claim that more than $350
billion would be saved on inpatient care and nearly $150 billion on outpatient
care over a 15-year period of time.

Unfortunately, data from three other studies, a cardiology
group, a Harvard group and Canadian group showed there is no savings difference
between paper records and electronic records.

Dr. Groopman claims the RAND study is self-serving to EMR software
companies that sponsored the study.

 

 Allscripts
Healthcare Solutions
, the Cerner Corporation and Epic Systems of Verona, Wis. are the major EMR software companies.

 In February 2009, after years of behind-the-scenes lobbying by
Allscripts and others, legislation to promote the use of electronic records was
signed into law as part of President Obama’s economic stimulus bill.

“But today, as doctors and hospitals struggle to make new records
systems work, the clear winners are big companies like Allscripts that lobbied
for that legislation and pushed aside smaller competitors.”

At Allscripts Healthcare
solutions, annual sales have more than doubled from $548 million in 2009 to an
estimated $1.44 billion last year.

At the Cerner Corporation of Kansas City, Mo., sales rose 60 percent during that
period.  

“Current and former industry executives say that
big digital records companies like Cerner, Allscripts and Epic Systems of
Verona, Wis., have reaped enormous rewards because of the legislation they
pushed for.”

Unfortunately, many of the
EMR systems bought by large hospital systems and physician practices are not
fully functional. They do not fit the administration’s criteria of meaningful-use
EMRs. These EMRs are requiring additional hospital systems and physicians;
practices outlays of cash to make them fully functional.

Panama
City-based Pain Clinic of Northwest FL filed a purported class action lawsuit
on Dec. 20, 2012 against Chicago-based Allscripts (NASDAQ: MDRX).

“The purported class action
lawsuit says that about 5,000 small group physicians were sold an EMR called
MyWay from 2009 until late last year, when the company stopped supporting the
product.”

“The company was also hit with
a federal shareholder class action securities fraud lawsuit in the Northern
Illinois District last year over allegations that it misled investors about the
performance of its EHR programs.”

 The MyWay EMR cost about $40,000
per physician. ThePain Clinic of Northwest Florida claims it was misled by
Allscripts Healthcare Solution.  The
Clinic stated that MyWay has “shortcoming
and inherent defects,”  

The
complaint says Allscripts was unable to obtain “meaningful use” bonus status
for MyWay because of the problems with the program. The lawsuit claims that

 “Allscripts has been unjustly enriched by
retaining the money paid by MyWay purchasers and users without delivering an
EHR software product that performs as it was intended to work,”

 These costs are always
passed on to the consumer
. Drs. Groopman and Hartzman  go on to say,

The
president and his health-care team have yet to address these difficult and
pressing issues.

 Our culture adores technology, so it is not
surprising that the electronic medical record has been touted as the first
important step in curing the ills of our health-care system.

But
this notion is an overly simplistic and unsubstantiated part of the solution.


It is important to note Drs. Groopman and Hartzman’s total
and refreshing frankness.

“We both voted
for President Obam
a, in part because of his pragmatic approach to problems,
belief in empirical data, and openness to changing his mind when those data
contradict his initial approach to a problem”.

We need the
president to apply
scientific rigor to fix our
health-care system rather than rely on elegant exercises in wishful thinking.”

Please note that Drs. Groopman and Hartzman said it not
me.

In
a new study The RAND Corp has backed off on its 2005 study earlier this year
and withdrew its estimate of saving to the healthcare system of $81 billion
dollars annually.

In the
RAND Corp’s view, the disappointing performance of health IT to date can be
largely attributed to several factors:

 

  1.  “Sluggish
    adoption of health IT systems
  2.   Coupled
    with the choice of systems that are neither interoperable nor easy to use;
  3.   The
    failure of health care providers and institutions to reengineer care processes
    to reap the full benefits of health IT.
  4.  We
    believe that the original promise of health IT can be met if the systems are
    redesigned to address these flaws by creating more-standardized systems that
    are easier to use,
  5.  EMR are
    truly interoperable,
  6.  Afford patients more access to and control
    over their health data.
  7.  Providers must do their part by reengineering
    care processes to take full advantage of efficiencies offered by health IT, in
    the context of redesigned payment models that favor value over volume.”

 

It should not be a blame game.

General Electric sponsored this new RAND study.  It is important to note that GE is a major
Allscripts competitor.

There is true value in the EMRs to patient care. However the
focus of the marketing and development is on the wrong customer.

The RAND still does not get it. Perhaps
it does not want to get it.

EMRs should be for the benefit of physicians and their
patients. It must be at a price physicians can afford to pay. It should not be
for the benefit of the government, the healthcare insurance industry and
hospital systems.

It should be a tool to
continually educate physicians and patients. It should not be a tool used by
secondary stakeholders to penalize physicians and patients.

Patients and physicians control My Ideal Electronic Medical
Record. It should be seriously considered to achieve the maximum benefit of EMRs’
potential.

I believe it would be of value to interested readers to go
to this link.

 http://www.lijit.com/search?uri=http%3A%2F%2Fwww.lijit.com%2Fusers%2Fstanleyfeld&start_time=&p=g&blog_uri=http%3A%2F%2Fstanleyfeldmdmace.typepad.com%2F&blog_platform=&view_id=&link_id=7386&flavor=&q=Idel+Electronic+Medical+Record+%28EMR%29&x=33&y=6.

 Those articles will
not only describe the problems with EMRs, problems which I have predicted and are
now recognized. These articles will also outline real  solutions to having universal adoption of
EMRs.

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

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Getting Around The Rules: Hospital Readmission Rates

 Stanley
Feld M.D.,FACP, MACE
 

Everybody knows about the
Obama administration’s tricks and cover-ups. Few know what to do about them. Some know what to do. More and more people are seeing right
through the charades. 

In America, unfortunately,
strong vested interest lobbies are effective. I pointed out some of the abuses
of hospital systems lobbies a few weeks ago.

Consumer advocacy
lobbyists do not seem to understand the real issues causing the healthcare
system to be dysfunctional, nor have the money to fight these issues.

Steve Brill’s article in
Time Magazine
published hospital retail prices and not the actual prices the
hospital collects. Retail price get the public’s attention. The real issue is
the wholesale prices the government and the healthcare insurance industry pay.
These allowed wholesale prices are also grotesque.

There is a lot of non-transparent
funny business going on behind closed doors with Medicare. It is going to be
accentuated with Obamacare.

Most of us have heard that
hospitals will be responsible for the costs of patient care if the patient is
readmitted to the hospital within 30 days.


This is a very stupid
rule. Sometimes it is the hospital that should be responsible for readmission
because the care was poor, the patient was not ready to be discharged or the
patient had inadequate education about their disease to avoid hospitalization.

The hospital systems’
pressures are to get patients discharged quickly.

My guess is it is the
patient that is responsible for the readmission most of the time.

Many factors could
contribute to a patient’s readmission. They include

  1. Not
    following the physician’s post discharge orders.
  2. Not
    given appropriate post discharge orders
  3. Not
    being taught to become the professor the their disease.
  4.  Not participating in adequate follow-up care.
    Follow-up care is important but it has become outrageously expensive.
  5. Medicare
    has permitted home healthcare services to charge high prices for simple
    services and procedures that have little impact on patient education and
    avoidance of readmission.
  6. Documentation
    by the home healthcare service drives the expensive reimbursement and not the
    value of the care.

The real question is
should the hospital system be responsible for patient irresponsibility?

The answer is clearly no.
The bureaucracy’s answer to the problem is that one size fits all.

Hospital systems are aware
of this defect. Hospital administrators and their lobbyists are working hard to
get around the rule.

Some have figured it out.
They are keeping the patients in the emergency room and charging ER fees that
they can collect rather that putting patients in the hospital and generating
charges they cannot collect.

Hospital systems can
charge patients increasing fees the longer patients stay in the emergency room.

Medicare does
not count most discharged patients who come to the emergency department (ED)
but are not readmitted, according to a 
study in Annals
of Emergency Medicine.”

The study
looked at nearly 12,000 discharged patients from Boston Medical Center. Twenty
five percent of the patients discharged from the hospital appeared in the
emergency room in less than 30 days and forty percent of those patients were readmitted
to the hospital.

Hospitals
keeping patients in the ER amounted to a great saving and indeed profit for the
hospital.

Defective
rules and regulations lead to many unintended consequences. No one has tried to
motivate patients to be responsible for not being readmitted to the hospital.

Some
readmissions cannot be avoided. Many readmissions can be avoided.

The main
question would be how to motivate all stakeholders to have incentive to avoid
readmission to the hospital.

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

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What Happened to the “Physician/ Patient Relationship?”

Stanley Feld M.D.,FACP,MACE

The only way America’s healthcare system will be repaired is by
revitalizing the Physician/ Patient Relationship.

Veterans complaining about the VA Hospital System in my last
blog brought
on a flurry of negative comments about practicing physicians not
connecting with their  Medicare and
commercial insurance patients in the private sector.

The chief complaint is that physicians are not connecting to
their patients or their patients’ illness. I have heard enough stories to
believe it is true.

A 44-year-old male with
private healthcare insurance sent one such complaint to me.

His acute illnesses history was compatible with acute prostatitis.

He needed a new physician because his previous primary care physician
had taken a sabbatical leave.

He called for help in finding a physician to his friends on
Facebook, Twitter and Link In. The consensus was the physician he describes
below.

The physician did multiple tests, several of which I did not
think were necessary, along with a cursory physical examination. The physician
thought the patient had prostatitis and prescribed Cipro for one month. A
follow-up examination was not scheduled.

The last paragraph in the patient’s note to me was,.

By the way, my doctor's office called to let me know the
lab results are in and they are mailing them to me. The doctor told the front
desk person to send me a letter, which I'll get in a day or two. According to
the front desk person, in the letter he says that my labs look good, and that I
need to work on getting my lipids up. Apparently he included a link to a
website that I can learn more about lipids. Pretty great patient care, eh…

This is horrifying to me. The patient will probably do well.
However there is no contact or concern about the patient’s outcome in this
interaction. There was no physician patient relationship formed for a patient
who is looking for a primary care physician.

I would be very upset if this interaction happened to me.  I would be more upset if I then receive a bill
for $800 for the visit.

This patient does not know what the bill will be because the
office said it will bill his insurance company.

The evidence of the loss of the Patient-Physician Relationship of delivering medical care did not happen overnight.

A reader Dr. Dale Fuller sent me this commentary. He walks us through the
evolution of the destruction of the Doctor- Patient relationship.

Dr. Fuller’s view is similar to the view I have discussed in this
blog on multiple occasions. I believe it is important to publish his thought in
its entirety.

 

 "Whatever Happened to
the “Doctor- Patient Relationship?”

 

Dale Fuller M.D.

Lately, I
find myself thinking about this question more and more.  I think the first time I heard the term,
“doctor-patient relationship” was back during Harry Truman’s administration,
when there was an effort led by the Democrats to create a National Health
Insurance Program.

“Socialized
Medicine” the opposition cried, and “The end of the doctor patient
relationship!   I wasn‘t even a student
in college back then, and in the absence of more information, I saw the
doctor-patient relationship in the context of my experience with the doctor who
looked after me on those rare occasions when I needed to see him,

Dr. T.D.
Jones, who was a very kind man.  He was a
small town doctor, and the only doctor in my hometown as well as a good many
other towns around it during World War II.

I kind of
understood the term “socialized medicine” in the context of the then-new
National Health Service being launched in Great Britain. 

Truman and
company lost the battle for NHI back then.

The next big
“Socialized Medicine initiative arrived in 1960 
“Socialized   during the Republican administration of Dwight
Eisenhower.

Senator
Robert Kerr, of Oklahoma and Rep. Wilbur Mills of Arkansas, both Democrats
introduced the Kerr-Mills act, the “Medical Assistance for Aged Act 1960-1965”
(benefiting primarily the elderly on Old Age and Survivors’ Assistance).

Kerr-Mills
was passed in 1960, again over cries that it would destroy the doctor-patient
relationship.  But this time the cries
were neither so loud, nor as successful. 
By this time I am a newly minted MD, and my awareness of the total
meaning of the term is still mostly intuitive.

During the
administration of Lyndon Johnson, came the Social Security Amendments of 1965,
which brought us Medicare and Medicaid. 

When I
entered practice in 1968, Medicare and Medicaid were just getting under way, so
I never experienced what it was like to practice in the absence of the law.

In March of
2010, President Obama signed into law The Patient Protection and Affordable
Care Act, and we are now living through the incremental steps preceding that
law becoming fully in effect in 2014.

The various
legislative initiatives have, to be sure, impacted the doctor-patient
relationship in many ways, as the opponents predicted, but it appears to me
that we have been hearing less and less about that relationship as the years
have passed. 

I think it
might just be that the relationship we are discussing may be threatened by a
number of other forces other than the laws described above, but before I
attempt to list those forces, I want to spend a little time setting the stage
to describe just what the doctor-patient might and might not mean.

Goold and
Lipkin
, in an article published in 1999 (1) called the doctor-patient
relationship “a keystone of care: the medium in which data are gathered,
diagnoses and plans are made compliance is accomplished, and healing, patient
activation, and support are provided.”

They say that
the medical interview is the major medium of health care, and that more than
82% of diagnoses are made by history alone.

The three
functions of a medical interview are the gathering of information (both through
history and physical examination) developing and maintaining a therapeutic
relationship, and communicating information.

In the eyes
of the law, physicians also have a fiduciary responsibility toward their
patients. Physicians are bound to act in their patients’ interests even when
those interests may conflict with their own.

In that
physicians are often directly involved with events and conditions that are
life-altering for their patients and families, at birth, during severe illness,
healing or death, it can also be said that in being a physician, and providing
health care, doctors are engaging in a moral enterprise.

There was a
time when the unwritten social contract laid out above, simply existed as an
understanding between patients and doctors.

In the early
1940’s the arrival on the scene of what became the Blue Cross and Blue Shield
program, initially serving the employees of the Dallas, Texas Independent
School District began to interpose a third party, the insurance company,
working through the employers, in the social contract that was the Doctor-Patient relationship.

Initially
that interposition was pretty innocuous, with the insurance plan simply paying
the bills of the doctor as they were presented. The phrase, “usual and
customary” arose to define the fees involved that the insurance company paid.
Unusual fees or fees exceeding customary levels became subject to challenge,
requiring justification if they were to be paid.

Over time, a
database of fees that really were usual and customary began to become a better
and better tool to define where the usual kind of fee stopped and the unusual
kind of fee was recognized.

Kerr-Mills,
when it came along, introduced the federal government as a payer, and
relatively soon thereafter, the health care bureaucracy began to grow and
insert itself between doctors and patients to an increasing degree.

Since this
was in the “Pre-Medicare era” the number of patients involved was relatively
small, and so the impact on the doctor patient relationship was still somewhat
limited.

The arrival of Medicare and Medicaid served to
illustrate that the old “camel entering the tent” analogy was beginning to come
true.

Initially,
while the organizations were formed to administer the programs, “usual and
customary” was still the order of the day where payments were concerned, and
the social contract still functioned much as it had always done.

At the
request of the Department of Defense, organized medicine (AMA) created a set of
relative value scales in an attempt to standardize professional fees. The set
of codes was called “Current Procedural Terminology (CPT codes)” (first
introduced in 1966).

The charges
were to be based upon a blend of time required, professional skill involved,
and liability risk.

The compendium
of procedures have grown over the years, the principles remain essentially the
same.

In a fit of
zeal, the Federal Trade Commission inserted itself and accused professional
societies of “price fixing” via the CPT codes.

Settlements
eventually ensued, and money passed from the societies that were sued to the
FTC, and life, after the “nolo contendere pleas’ went on as usual.

The reason
for this was that the societies were not well enough funded to defend their
position vs. the FTC, even though they might have won their cases.

Increasingly
though, as might be expected, the government began to insert itself more and
more into the transaction between doctors and patients, generally, drawing upon
the reality that it was paying, directly or indirectly, for more than 50% of
the care given in the US.

Regulations
and rules have proliferated, respecting what can and cannot be done for
patients who are beneficiaries of federal programs. 

Another force
was also becoming more vocal in making statements and policy regarding what
could and could not be done for patients.

This force
began with the passage of the Health Maintenance Act of 1973.  This act enabled a vast acceleration of the
whole concept of managed care. 

Healthcare
Insurance Companies citing the growing demand for, and cost of medical care to
employers, found a ready market among employers for their “products” to serve
as “benefits” for their employees. 

Physicians
and hospitals, fearing that they might be left out of the managed care programs,
made haste to “join” this program or that program, seeking access to the
populations of patients enrolled in the programs by the insurance companies
selling coverage to employers. 

The fear was
that exclusive arrangement with insurance companies would eliminate whole
populations of patients from providers who had not “signed up”.

This meant
that the traditional bilateral social contract between doctors and patients
essentially had come to an end of sorts.

Patients’ expectations
were that service and behavior of the doctor they were allowed to see remained
pretty much the same except for a small by important fact.

Those
employees covered by managed care were required to see the doctors who
participated in the program, and to use the hospitals the programs had
agreements with.

Financial
penalties awaited those patients who sought their care “out of plan”, for
whatever reason. 

Now patients
and doctors both have someone else “calling the tune” when it comes to the
delivery of healthcare.

Each time the
“plan” purchased by the employer changed, for whatever reason, there could be a
change in the physicians and hospitals available to the patient. 

This brings
us to a key element of the doctor-patient relationship. A key element is
continuity of care.

Continuity of
care
brings with it an opportunity develop relationships in which doctors and
patients really know and trust one another. This relationship allows physicians
to recognize changes in patients and recognize the early onset of disease.

Neither the physicians’ understanding nor the
patients’ trust cannot be rebuilt immediately between two individuals each year
who are basically strangers to one another.

 Doctor of days past, the trusted counselor, often
friend and confidant, is no longer exists. 
Now, patients are simply seeing another person in an office. Both
parties are at sea when it comes to knowing what they need to know about one
another to allow the encounter to produce the necessary result within the time
allowed.

Time, like
continuity, is also a vanishing element in the doctor-patient
relationship.  Fewer and fewer
practitioners have the time, amidst the pressures of “patient throughput” to
really engage in patients’ needs.

Physicians
must gather and record data, establish a diagnosis, and create a treatment plan
of quality.

The
documentation has to be complete in order to get paid by the government or the
healthcare insurance carrier.

Doctors must also
explain his treatment plan in such a way that they are assured of patients’
compliance with the treatment proposed in the time available to doctors.

As a result
of decreasing reimbursement and increasing overhead the time necessary for
patient education is insufficient. Patients do not understand the significance
of the therapy. The result is a lack of compliance.

Another
problem is that the “third party payers” rather than the patients approves of any
tests and procedures that doctors believe are needed to strengthen the
diagnosis.

The result is
a further erosion of patients trust in the doctor.

The time for
a consultation is short. Tests and procedures are now increasingly used to
substitute for the gathering of data to make the diagnosis.

Tests and
procedure escalate the costs of medical care.

Data
gathering by history and physical examination is time consuming. If a history
and physical examination is properly done it can yield the diagnosis of patients’
problems about 80% of the time.

The
doctor-patient relationship is indeed fading into the past. The third party carriers
and the federal government have, in their zeal to contain cost, pretty much
seen to that.

The reality
is that the destruction of the doctor-patient relationship costs more in the
long run.

The federal government, in its enthusiasm to
make a positive impact on the quality of care patients receive, has mandated
the use of electronic medical records.

The EMR in
its own way have also served to diminish the doctor-patient relationship.

In many
doctors’ offices, the focal point in the room is a computer with data entry.
The keyboard and the screen have almost the full attention of the doctor, who,
without looking at the patient, asks the questions and types the responses.

The patient is lucky if the doctor makes eye
contact with him/her for a brief interval a couple of times during the visit,
thus further diminishing the possibility that trust can be built in the
encounter. 

The quality
of the encounter can, in the opinion of various policy makers and consultants,
be measured and changed in the same way that manufacturing processes can be
impacted by applying the principles taught by Deming and others.

Maybe it can,
but it has yet to be demonstrated. 
Processes peripheral to the interaction of patient and doctor, may be
made better, but there is little evidence that the same approach can bring back
anything like the doctor patient relationship we used to know."

The three basic goals of Obamacare are
to create an affordable healthcare system with access to care of high quality.

A complicated and complex
bureaucracy that is over regulation will be very difficult to enforce.

It will penalize physicians’
judgment as it tries to decrease reimbursement. It will restrict patients’
access to medical care. It will reduce freedom choice.

Obamacare will not enhance the
Patient Physician Relationships that are so vital to a successful therapeutic
effect. 

A healthcare system that places
consumers in control of their healthcare dollars and provides incentives to
consumers to be responsible for their health and healthcare will encourage
physicians to save money and rejuvenate the Physician Patient Relationship for
improved therapeutic outcome at an affordable cost.

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

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Hospital Systems’ Abuses Of The Healthcare System

Stanley
Feld M.D.,FACP, MACE

In my very first blogs in
2006 I made the point that all the stakeholders are to blame for the dysfunctional
healthcare syste
m.

Most of the incentives that
created a technology driven healthcare system have been perverse. All the major
stakeholders’ incentives are misaligned.

The major stakeholders are
consumers, physicians, government, healthcare insurance companies,
pharmaceutical companies and employers.

The primary stakeholders
are consumers and physicians. The government, healthcare insurance companies,
pharmaceutical companies and employers are secondary stakeholders. Some
secondary stakeholders provide administrative services and some reimbursement.
None provide medical care.

None of the actions of any
of the stakeholders are transparent. All the stakeholders are trying to take
advantage of the payers (consumers, employers and the government).

The government should be
the neutralizing force. It should level the paying field for all the stakeholders.
Government should not permit one stakeholder take advantage another
stakeholder.

Everyone except the
primary stakeholders “patients and physicians” figured out the money game in
the healthcare system early on.

Government and employers
were next to last in figuring out the game of money gouging.  This happened in the early 1980’s when both
said they cannot pay any higher price for healthcare services.

At that point the hospital
systems and the healthcare insurance industry figured out another way to continue
the money gouging. The result was HMOs and managed care. They did not work.

The opacity of pricing
continued, cost shifting flourished, and the price of medical care continued to
rise.

Physicians are not
blameless. However, they are the easiest to blame. Physicians are the least
organized and least aggressive stakeholders in the healthcare system.

In the past, I have
pointed out the real problems that have resulted in the dysfunctions of the
healthcare system.
Health policy wonks seem to ignore the real problems.

Consumers and physicians
are mere pawns in this money game.

Without consumers or
physicians there would be no healthcare system.
They generate the engine that
provides the need for medical care and administrative services.

I have covered much of the
abuse of the healthcare system by most of the stakeholders.

I have been relatively
easy on hospital systems and pharmaceutical companies until now.

However, the basic problems
in the healthcare system must be to be recognized and then fixed. All of the
problems have to be recognized at the same time and fixed simultaneously.

A patch on one problem
simply intensifies the overall problems.

Obamacare does not solve
any of the real problems. It is an attempt at patching a problem. It will only
make the problems worse and will not reduce the cost of care.

On February 20,2013 TIME
Magazine published an article by Steven Brill. The article is an excellent article
pointing out the abuses of the hospital systems.

“Bitter Pill Why Medical Bills are Killing Us” presents
examples of the abuses of large and small hospital systems.

The basic philosophy that
hospital systems should operate by should be “Patients First.”  It is not. It is how much money can I make
from each patient.

Steven Brill asked the
major question. “ Why are hospital bills so high?”

He presented the answer:


 

http://www.time.com/time/video/player/0,32068,2178453595001_2136781,00.html

The answer is obvious to
all physicians.

One fellow physician
wrote.

Stan

Although
we know much of this, this is an excellent overview of healthcare costs.

 Steve

All Americans ought to
understand the distortions hospital system pricing creates. The government
ought to make hospital pricing transparent to everyone..

The government should include
the hospital system’s retail price, wholesale price and actual cost for an item
or service.

Then, consumers can choose
the hospital system to go to.

Policy makers continually criticize
this ideal saying that illnesses are sudden and patients are not in a position
to choose a hospital system or negotiate price.

If the hospital system is
compelled to compete on price the price will be the same as the competitive
price when the patient gets sick. If one hospital is much higher than the next
hospital the patient will know this before hand.

Hospital system charges
are actually higher than they appear. Most hospital systems are non-profit
organizations. The hospital systems do not pay taxes.

Hospital charges are
opaque to everyone, including physicians. Physicians generate the services
hospitals charge for.

As seen in Steven Brill’s
article oncology charges are extremely high.

One oncologist wrote to me
and said he could administer the same therapy in his office for one-tenth the hospital
cost.

However, neither the government nor the healthcare insurance industry
would reimburse him for the office procedure. It is the same procedure he performs
in the hospital.

Doesn’t that seem strange? What is going on?

Steven Brill discovered
that it is almost impossible to find out what hospital systems are charging.

The same opacity is true
for pharmaceutical charges.  The
pharmaceutical charges are further inflated by multiple middlemen involved in
drug distribution.

This has been less true
for drugs since Internet Drug stores publish drug prices.

However, since the patients’
physicians prescribed the drug patients are hesitate to use substitute drugs.
The patients’ attitude is that the healthcare insurance company will pay for
the drug less the copay.

Therefore the patients are not interested in looking
up the difference in price or the options for substitution.

This is the reason consumers need skin in the game.

The result of consumer apathy is an increase
in healthcare insurance premiums.

Steven Brill covers the
grotesqueness of retail hospital system charges. He also points out the amount
Medicare reimburses for the grossly inflated charge.

The consumers without
insurance are the consumers that get stuck with the retail charges. Insurer consumers recieve a large discount.  The uninsured
consumers are least likely to be able to afford these charges.

In some cases Medicare
reimbursement is less than 20% of the hospital retail charge. Steven Brill
points out that at this time Medicare reimbursement to hospitals is still 10
times its actual costs.

The article “Bitter Pill” is
excellent. It covers many categories of hospital system abuse by the use of
case studies.

The facts are
overwhelming.  I am going to try to
categorize these facts in my next blogs. The abuses will be easier to remember.

Consumers must be educated.
The hope is consumers can be activated by education. Only a consumer driven
healthcare system can drive the abuse out of the healthcare system. 

Then,
Americans will have an affordable healthcare system.

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



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Permalink:

How Are Accountable Care Organizations (ACOs) Doing?

Stanley Feld M.D.,
FACP, MACE

 In a word the formation
of Accountable Care Organizations is doing poorly.

If one believes the CMS
press releases one would believe the formation of ACOs is doing well.

In the past, I have gone
into great detail on why I believe Accountable Care Organizations will fail.

I believe physicians and
hospital systems should be accountable for outcomes but only the outcomes they
can control.

They should not be
accountable for outcomes they cannot control.

ACOs are really HMOs on
steroids.
Risk is transferred from the government to the healthcare providers.

HMOs failed in the 1980’s
and 1990’s because physicians and hospital systems realized that they could not
evaluate risk or manage risk.

It is impossible for
providers (physicians or hospital systems) to control patients’ behavior in
adhering to treatment for their disease.

It is almost impossible for
the government to commoditize reimbursement accurately for diseases unless the
government can weigh the risk of poor disease outcomes.

No one has figured out
the way to accurately risk weight the outcome of a patient’s disease and
treatment.

CMS believes by
increasing the number of cod
es in ICD-10  to 68,000 codes vs. ICM-9 18,00 codes, the old coding system, the
government will be able to weigh risk leading to accurate cost assessment.

I believe this is a
fantasy of healthcare policy wonks working for the Obama administration.

Many physician groups
and hospital systems believe they will lose money taking on these risks. These
are the groups that are holding back and not forming ACOs.

It is the reason the
Mayo Clinic and the Cleveland Clinic have refused to form ACOs.

Nevertheless on January 1st CMS proudly announced that
it has nearly doubled the number of ACO programs in the country by adding 106
new ACOs to the existing 148 programs for a total of 254 programs to date
.

The CMS announced its latest and
largest round of accountable care organizations
 under the Medicare
shared-savings program.

I would not be as proud as CMS is to applaud this level of
participation in the ACO program. ACOs are the keystone of Obamacare.

Complete national participation is supposed to occur by January
2014.

There are a total of 254 ACO’s signed up in 50 states or 5.08 ACO’s
per state.  There are many more potential
ACOs per state than 5.08 per state.

CMS said half of ACOs are physician-led and
care for less than 10,000 Medicare enrollees.” 

This is not a good sign.
The success of the ACO program is defined as shifting the risk of medical care to
hospital systems and physicians.

What is the problem?

The problem is obvious.
The definition of insurance is,

“Insurance is the
equitable transfer of the risk of a loss
, from one entity to another in
exchange for payment. It is a form of
risk management
primarily used to
hedge against the
risk of a contingent, uncertain loss.”

“An insurer, or insurance carrier, is a company selling the
insurance; the insured, or policyholder, is the person or entity buying the
insurance policy. The amount to be charged for a certain amount of insurance
coverage is called the premium.

Risk management,
the practice of
appraising and controlling risk, has evolved as a discrete field of
study and practice.”

Risk management is far
from an exact science. Risk management depends on a large number of people
paying premiums who are not at risk for disease.

Obamacare’s goal is to
have all the low risk consumers pay for the higher risk consumers.

However, President Obama
has provided low risk consumers an out. The penalty for not participating is
modest compare to the cost of the insurance. If a low risk consumer gets sick
he can immediately join the health insurance exchange program without
restrictions.

The increased cost of
illness is compounded when a large number of patients have chronic diseases.

A contributing factor to
developing chronic disease is obesity.

America has a national
obesity epidemic.

Patients with Diabetes
Mellitus are vulnerable to multiple diseases such as hypertension,
hyperlipidemia, kidney disease, eye disease and vascular disease.

Each might be at a
different stage of progression. The risk for costly complications is different
for each at each stage of disease progression.

The diabetic might or
might not adhere to the treatment regime outlined. It is difficult to risk
weight these patients. It is risky to take the responsibility for the medical
care outcomes for these patients.

In reality the principle
risk managers are consumers.

Healthcare policy
experts have not practiced medicine. They either do not understand these risks
or they want to place the risk with physicians and hospital systems and provide
undervalued reward.

Many medical outcomes are
dependent on patient responsibility for managing their own risk. Patients must
participate in their own care to receive maximum benefit and the best medical outcomes.

Patients must become
professors of their disease.

 

There are many reasons ACOs will fail

1. ACOs
do not empower consumers to be responsible for their own medical care. 
Healthcare should be consumer driven with consumers controlling their healthcare
dollars. They will then make informed choices about their care and insurance
coverage.

2. ACOs create artificial
incentives to improve quality medical care and provider performance.

3.  Consumer driven healthcare creates real
incentives to promote price competition by physicians and hospital systems. True
competitors will constantly work to improve their products, attract
consumers, and ultimately increase market share.  

In a systems of ACOs consumers do
not play a role in stimulating completion. Consumers are passive recipients of
treatment from an assigned ACO.

4. Most physicians are reluctant
to assume accountability for patient outcomes.  Physicians recognize that
most medical outcomes are directly under consumers behavioral control.

5.  ACOs structure does not include consumers’
incentive to be responsible or accountable for their own medical care.

 ACOs undermine any attempt to create a truly
accountable healthcare system that can drive down medical costs.

6. ACOs do not encourage provider
accountability.  ACO’s shared savings incentive
does not seem to be adequate for the risk assumption.  

 Providers will continue to
be paid for each service they perform until the government provided
funds run out for that ACO.

7.  There are also grave uncertainties and
practical complications of distributing government funds and savings if any
between the hospital system and physicians on the hospital systems staff.

 8. ACOs create an
unfair competitive advantage for large organizations that are hospital system centric.
Eligibility requirements are vague and ambiguous. The eligibility
requirements suggest that larger organizations have an unspoken
eligibility advantage.

 9.  This is the reason
hospital systems are trying to form ACOs. Hospital systems think they will make
money. I believe hospital systems will lose money. The government will have to
supplement payment for hospital systems to stay afloat.

10. When hospital systems lose
money they will fight with their staff physicians over the distribution of
government reimbursement.

 The cost of hospital services will then
skyrocket further. Consumers will be the losers.

11. Groups of independent
practitioners as well as other types of small and mid-sized practices may
lack the infrastructure, information technology facilities, or other resources
needed to qualify for ACO eligibility.

12.  They will be forced to join hospital systems.
Hospital systems have a long history of taking advantage of physicians
skills and intellectual property.

 Tension between hospital systems and staff
physicians will be created. Hospital systems’ ACOs will crumble. The cost of
medical care will continue to increase further.

These are just a few of the reasons ACO’s will fail.

No matter how hard CMS tries to change the narrative
these are some of the reasons explaining the lack of hospital and physician participation
to this point.

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

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It Is Time To Re-examine Our Premises

Stanley Feld M.D.,FACP,MACE

About once a week I have an in-depth conversation with my
son Brad. In my view his perception of the world is more accurate than most. In
his younger days I did most of the teaching and he did most of the listening.

Today, I do most of the listening and he does most of the
teaching. This morning he said something profound. We were talking about large
corporations business models. He said most corporations do not know what
business they are in.

He is right. As technologies change business model must
change. If the business model does not change the corporation cannot survive.

The healthcare industry and the medical care industry
(physicians and hospital systems) must re-examine their premises and change
their business model.

President Obama is trying to change the business model
with Obamacare. In reality he is not changing the old business model at all. He
is expanding the old business model that has failed.

He is also making the business model more complicated. He
is building an elaborate and expensive structure whose goal is to decrease
costs. It will cause the system to fail faster.

Obamacare is adding a more punitive and restrictive
element to healthcare delivery rather that a more innovative and rewarding
element to both the patients and physicians.

It is not designed to promote health; it is designed to
cut costs by limiting access to care, rationing care and decreasing freedom of
choice.

Obamacare pays lip service to preventive care. Preventive
care will be largely ineffective because of the reimbursement metrics and lack
of incentives provided to consumers. 
Consumers must be incentive driven.

There are many examples of long time successful
corporations that could not change their business model fast enough. These
companies were muscle bound either because of a lack of vision, a lack of
leadership, multiple committee meetings and too much decentralization of an
ever-expanding bureaucracy.

Eastman Kodak is a perfect example. It was the premier film,
film processing and photography paper manufacturer in the world.

 Kodak did not
recognize that it was  in the imaging
business. The technology of digital photography put Kodak out of business
because Kodak could not change its business model fast enough.

Royal Typewriter Company viewed itself as a typewriter
manufacturer. As soon as IBM developed the innovative Selectric typewriter
Royal should have figured it out.

Royal should have developed a faster and more innovative
typewriter. Royal also should have jumped on the development of a typewriter
that would store the typed data.  Instead
it was more of the same old.

It did not take long for consumers to drive the
typewriter companies out of business.  Word
processing on computers made typing documents  easier and more useful.

The railroad business did not have the vision to understand
it was in the transportation business. Airplanes, eighteen-wheelers and
Greyhound buses almost drove the railroads out of business. Railroads did not realize
that consumers wanted a better product. A product that is faster and cheaper.

Railroads have only partially recovered.  

Consumers drive innovation. If a new great product is
introduced to consumers, the new product can take off at the expense of the
legacy product.

Just think about ITunes and the music industry, the
IPHONE and the legacy landline telephone industry and the IPAD and the desktop
computer industry.

Amazon has dis-intermediated the Book Publishing industry
with its Kindle and wireless downloading of books.

The opportunity in healthcare is similar. However
Obamacare is driving the country in the opposite direction away from a consumer
driven industry into a government controlled, bureaucratically dictated
decision making industry.

The business model
of 2020 should look like this.

Slide14
Instead it is going to look like the slide below under Obamacare. The
healthcare industry is going to collapse under its own structure.

 
Slide11

The
effective future business model will put consumers in charge of their
healthcare dollars and provide consumers with financial incentives to stay
healthy.

It
will decrease the healthcare industry’s control of the healthcare system.
Consumers will have control of their own first dollar coverage.

Consumers
will drive the healthcare system to produce the best medical product. They will
seek high quality care at the lowest price.

Physicians
and hospital systems will want to produce the best product at the lowest prices
so they can attract patients.

Only
a consumer driven healthcare system will drive the technologies of efficiency
into the healthcare system.

Remember,
without patients or physicians there would not be a healthcare system.

My
2020 business model of the future can be studied in detail on the following
links.

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

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Big Data Is A Major Problem For The Healthcare System.

Stanley Feld M.D.,FACP,MACE

President
Obama is blinded by his ideology. His healthcare policy goal is to eventually
have a single party payer system. Medical care will be commoditized with
treatment decisions made by the central government.

It
is a charade that his health insurance exchanges will lead to affordable
private insurance. It is misguided to believe that a non-elected central
committee (IPAB) will be tolerated to make treatment decisions for the
population.

The
larger pretense is that President Obama is building an inexpensive bureaucracy.
Last week he again stated that government overhead for Medicare and Medicaid is
very low. He again declared that the overhead expense is only 2½ percent.

It
cost two and one half percent for the central government to outsource administrative
services to the healthcare insurance industry. The healthcare insurance
industry, in turn, charges the government 18-40% to administer the programs.

Everyone
knows most everything government run is inefficient. President Obama is
enlarging the scope of government in all areas at a time when government is too
large and inefficient. The government’s income is $1 trillion dollars less than
its expenses per year since he has been President.

President
Obama thinks if he spends enough money he will spend his way out off the jam.

President
Obama believes one way to become more efficient is to gather more data. He can
then figure out which hospital systems and physicians are inefficient and
penalize them.

This
philosophy has two potential pitfalls. If the data is faulty the conclusions
are wrong. The second pitfall is that penalties do not encourage cooperation
and meaningful improvements. 

Decision-making in
healthcare can be painfully slow, as any physician will tell you
.
Hospital systems and
physicians are being spurred on in part because healthcare is beginning to deal
with a shift in reimbursement toward one that rewards quality and disincentives
inefficiency and waste.

One problem is that quality is not clearly
defined and is sometime false. The government must reexamine its premises.

Most hospitals and health systems have lots of
data that might improve outcomes and cut waste.

The
problem is getting that data, which is often unstructured, into a format that
allows clinicians to make decisions faster and in a more coordinated fashion.

All
of the innovation is happening without input from physicians. It is being done
to decrease the cost of the hospitals. One thought would be to get rid of a few
excess salaried, $750,000 a year hospital administrators and $2,000,0000 plus
healthcare insurance company administrators which would go a long way to reduce
the cost of healthcare coverage.

Instead
the government is looking to penalize physicians
. Physicians are the providers
that deliver medical care.

There
is software being developed that deals with real time processing of clinical
data. The software can communicate those data to networked physicians instantly
and help physicians deliver more timely care.

Many
hospital systems are trying to install these real time systems. Unfortunately,
many hospital administrators do not understand its power as a teaching tool to
increase the efficiency and effectiveness of medical care.

 The hospital systems’ only interest is in the
financial result and the question of whether the huge investment is worth the
capital expenditure.

Some
physician group practices, independent of hospital systems, are incorporating
these software systems into their electronic medical records. These groups recognize the potential
importance of having instantaneous predictive data.

Most
physicians do not have an EMR and only 7% of physicians have a fully
functioning EMR.

In
the monograph from “Pathways to Data Analytics” two things were very apparent. It
looks like the healthcare insurance industry controls the committee and its
plans is to continue to control the healthcare dollars and hope to control the
healthcare data.

Increasingly, a
data-driven approach to healthcare is necessary.

The complexity of clinical care requires it, says Glenn Crotty
Jr., MD, FACP, executive vice president and chief operating officer at CaMC.

 “We’re moving from an
individual practitioner cottage industry to a team-based process now . . .. [Medical
care] is beyond the capacity of any one individual to be expert enough to do
that. So we have to do it in a team.”

A team requires information. The changing dynamics of healthcare
spending and reimbursements also require data to navigate.

“Our analytics are not just for finance, which traditionally is
what hospitals invested in,” says St. Luke’s Chief Quality Officer Donna Sabol
, MSN, RN. “When you look at how [hospital] payment is changing [to] a value-based
equation, you have to have good analytics for finance and for quality.”

Absent from the report is the patient and his/her responsibility
to the therapeutic unit. Until some policy maker understands the role of
patients to the therapeutic unit they will get nowhere in improving the
healthcare system.

A glaring example is the money spent by hospital systems to
improve the discharge process to avoid re-hospitalization within the 30 days
post discharge.

Obamacare has instituted the rule November1,2012 that if a
patient is re-hospitalized within 30 days of the initial hospitalization the
hospital system will not get paid.

I can think of 5 ways hospital systems can get around this rule
without suffering the penalty. 

None-the-less the hospital systems are buying software to study
and automate the process to avoid re-hospitalization using its clinical data in
real time.

 The Seton Hospital System in Austin Texas
might have figured it partially out.

It started what it calls an extensivist
program. It is acting as an extension of its physicians care to help avoid re-hospitalization
and use the best data it can collect.

Its is helping clinicians identify patients who
would benefit most from extra attention following discharge. The program
started with congestive heart failure patient



"A
lot of it is about enabling decision-making," Ryan Leslie says

"It's taking the whole universe of
information we have and cutting out what's extraneous and giving clinicians the
information they need to make decisions."


Ryan Leslie is vice
president of analytics and health economics at Seton Healthcare system.  He is taking
unstructured clinical information and connecting that with billing or
administrative information and social demographic information.

He says,  "you start connecting all those things
together and you get a more complete picture of the patient as a person, rather
than as a recipient of a bill," he says. "That's been the exciting
thing recently. You realize that a patients' success or failure may not have to
do with the care plan details or the clinical attributes of the patient as much
as the social attributes
."

Physicians
outside the hospital work with a team of social workers, nurses, and others to
visit patient homes and figure out what's keeping a patient from effectively
following treatment protocols that will likely keep them out of the hospital.

The software
helps determine, based on a host of combined data, which patients are most
likely to be re-hospitalized within 30 days. Targeting the patients is like
looking into a crystal ball. The hospital system cannot afford to service all
the patients with congestive heart failure. The program is in its early stages.
If successful the plan is to expand it to diabetes and other chronic diseases.

This will
happen well beyond November 2012 and January 1,2014. This hospital system
finally realized that it can and must be an extension of its physicians’ care
and not a competitor for patient care.

Missing is the
patients responsibility and incentive in not being readmitted to the hospital.
This can only be accomplished when consumers not only have a desire to be
healthy they have a financial interest to stay healthy.

This can be
accomplished in a consumer driven healthcare system where the patients are responsible
for their health and own their healthcare dollars. The easiest way to get there
is using my ideal medical savings accounts.

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

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It Is Time To Listen To Physicians

Stanley Feld M.D.,FACP,MACE

Physicians are getting tired of being blamed for the
rising healthcare costs. There are starting to realize that they have to take
action to preserve their professional integrity. In fact, six out of ten
physicians said they would quit medicine in a recent study by the Physicians
Foundation.

I believe physicians will have a hard time quitting
because they love practicing medicine. I do believe physicians in their early
60’s are contemplating quitting. Many physicians are looking for viable exit
strategies to avoid quitting.

The Physicians Foundation commissioned an extensive survey of nearly 13,575 physicians.
Meritt Hawkins, the physician search and consulting firm, conducted the survey.

 “The survey found that 60% of physicians would retire today, if given the
opportunity—an increase from 45% in 2008. And it's not just disgruntled and
tired Baby Boomers who want to abandon their healing work. At least 47% of
physicians under 40 also said they would retire today, if given the
opportunity.”

The survey pointed out many major problem areas.

Two specific issues consistently agreed
to were malpractice concerns and the need for tort reform as well as the lack
of cohesive leadership among all physician groups to represent the vested
interests of physicians and their patients.

This is an excellent and detailed
survey that has heightened the awareness of physicians’ practice problems.

The Massachusetts Medical Society
survey pointed out the scope of defensive medicine
. I extrapolated findings of
the society’s survey to the nation.

My conclusion was that $500 billion to $700
billion dollars a year is spent on defensive medicine testing in the nation.  Tort reform would serve to decrease this
defensive testing.

President Obama and his advisors have
ignored tort reform and defensive medicine as an insignificant cost. Ezekiel Emanuel
M.D. one of President Obama’s advisors thinks defensive medicine only raises
the cost of the healthcare system between $26 billion dollars a year.
Dr. Emanuel feel this is an insignificant number to deal with in a 2.7 trillion dolloar healthcare system. His metrics are wrong. This
is a misguided bias.

The Physician Foundation survey notes
that many policy makers, academics, and others identify fee-for-service
reimbursement as a key driver of health care costs. Physicians believe that "defensive medicine is a far more
important cost driver."

 
40.3% of the physicians surveyed said "liability/defensive
medicine pressures" was the least satisfying aspect of medical practice.

The survey also reveals that doctors
see as a major cost driver of healthcare liability/defensive medicine.

69.1% of physicians said defensive
medicine is the "number one ranked factor" driving up healthcare
costs. The survey described the ordering of tests, prescribing of drugs, and
conducting of procedures done "partly or solely to drive a wedge against
potential malpractice lawsuits."  

"Medical malpractice lawsuits are common,
adding an additional layer of paperwork, expense, and stress in virtually every
physician's work day," the report adds
.


The government ought to be listening to physicians practicing medicine every
day rather than ivory tower professors who have never practice a day in their
lives.

"Physicians understand to some degree
that's the cost of doing business, but the defensive medicine goes deeper than
that, in the ordering of extra tests, doing the extra procedures, and extra
scans to protect [oneself] against a malpractice suit.”

Medical malpractice is at the heart of
overspending in American healthcare. President Obama and Obamacare have ignored
it. Some states have addressed it and the cost of care has been decreasing
slowly. I believe it will take time in those states.  If anyone was sincere about bending the
healthcare cost curve they have to take defensive medicine seriously. 

According to the survey physicians felt that there is a lack of a
forceful cohesive voice representing them.

"There is a systematic, endemic series
of problems," Walter Ray M.D. vice president of the Physicians Foundation
, says. "Everywhere their defensive medicine,
regulation issues, reimbursement issues. We are all in the same boat. But
physician representation is balkaniz
ed. There is not a national organization
that represents a majority of physicians."

When the survey asked which best describes
their feelings about the current state of the medical profession, only 3.9
percent of physicians used the words “very positive,” while 23.4 percent of
physicians indicated their feelings are “very negative.”

The majority of physicians – 68.2 percent —
described their feelings as either somewhat negative” or “very negative,” while
only 31.8 percent of physicians described their feelings as “somewhat positive”
or “very positive”.

A "least satisfying" aspect of
practicing medicine included dealing with Medicare/Medicaid/government
regulations (27.4%) and reimbursement issues (27.3%).

 

The American Medical Association (AMA) represents only
15% of physicians, according to the Physician Foundation report. One of the
reasons for the low enrollment is that physicians feel the AMA does not
represent their vested interests.

 Sermo is another
physician organization. It is an Internet social network. In less than 2 years
Sermo had as many members as the AMA.

Sermo originally concentrated on
socioeconomic issues. It also discussed difficult clinical cases.  

The socioeconomic activity has recently
faded. Sermo’s power was using the social network to do instant surveys
expressing physician’s opinions on healthcare policy and patient care hassles.

These surveys were quickly disseminated to
the public as media stories of physicians’ opinions. It was done through public
service announcements and daily press releases.

Physicians were able to let the public know
how they felt about an issue instantly. It was very attractive. Somehow the
initial vigor stalled. Physicians are now left without a vehicle or
organization to express to express their feelings.

Government, the healthcare insurance industry
and the hospital systems have little desire to listen to the concerns of
practicing physicians. It is more important to tell physicians what to do. It
will not work long term.

The Physicians Foundation Biennial Survey is
valid and accurate
. However it is not dynamic or evolving. Neither has it gotten
much attention. It is a must read along with the Massachusetts Medical Society survey
for those interested in physician concerns and behavior.

Patients’ problem with the healthcare system
gets less attention. The government and insurance companies tell patients what
they can and cannot do

Repair of the healthcare system will only
happen when the American healthcare system evolves to a consumer driven
healthcare system with individual responsibility and individual control by the
patients of their healthcare dollars.

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

 

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