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Looking For Alternatives To Obamacare

Stanley Feld M.D.,FACP,MACE

The dice have been loaded against the American people by the rules and regulations in Medicare and Obamacare.

Patients liked their doctors. Once they discovered that they could not keep their doctors under Obamacare they became angry at President Obama for lying to them. The soon to be released new payment rules will increase the anger.

Physicians have found it more difficult to run small private practices.  The complexities of compliance with the rules, regulations and the payment systems for both Medicare and Obamacare are forcing physicians to sell out to hospital systems.

These complexities are in effect ending independent medical practices. This has been intentional. The Obama administration doesn’t want to control 600,000 independent physicians. It wants to deal with the hospital systems the are involved with. The hospital systems can then deal with the doctors.

Republicans are looking for a compelling alternative to Obamacare.

Just as Obamacare was forced through congress, President Obama is trying to force how medicine is practiced in America down the throats of Americans.

It is consistent with Jonathan Gruber’s view that Americans are to stupid to understand what is going on. It follows that Americans are too stupid to be responsible for their own care.

Americans want freedom of choice. They do not want the government to tell them what to do.

Republicans are looking for an alternative to Obamacare. A viable alternative could be to save the private practice of medicine and not subject Americans to the inefficiencies of a government controlled bureaucracy.

 Physicians by nature and education are competitive. Competition leads to improvement of the delivery of medical care.

All medicine is local. The alternative to Obamacare is to have local completion among physicians and permit patients to choose their doctors.

The answer to the Republican’s dilemma is right in front of their eyes.

A real Republican alternative to Obamacare would support physician ownership of independent medical practices and preserve local competition between doctors and maintain choice for patients.

Obamacare’s promotion of large hospital systems with salaried physicians eliminates physicians competing for patients. The lack of physicians competing for patients destroys the physician/patient relationship.

Physicians listen to patients if patients have a choice. The interaction is a partnership called the patient /physician relationship.

This solves the problem of President Obama’s lie. “If you like your doctor you can keep your doctor period.” Patients choose their doctors.

Dr. Donald Berwick and Jonathan Gruber’s view the consolidation of physicians and hospital systems as a necessary step to enable payment liability onto providers through hospital systems and away from government programs such as Medicare and Obamacare.

President Obama does not understand that doctors are not stupid either. At the moment physicians feel financially cornered by the government and the hospital systems and are joining hospital systems as a temporary means of surviving.

President Obama also does not realize that over the last 50 years there has been a build up of physician distrust for most hospital administrations.

Most administrators have tried to repair that mistrust but it has not been very successful. Hospital systems have been trying for years to own their physicians’ intellectual property and surgical skills for their hospital system’s profit. It is all about economics. Patient care is secondary.

As hospital systems consolidate competition will be eliminated.  Then hospital systems will realize they are losing money because of the risk they agreed to accept from the government. Hospital systems will demand more money from the government or consumers or go out of business.

Who loses? 

Patients lose, taxpayers lose, and the American healthcare system loses.

The abuses of the healthcare system by all the stakeholders must be fixed. It will never be fixed by forcing stakeholders to fix it. It will only be fixed by aligning incentives of all the stakeholders. Consumers must lead the way.

A recent Physicians Foundation survey of 20,000 U.S. doctors found that 35% described themselves as independent, down from 49% in 2012 and 62% in 2008.

It has also been reported that hospital systems are complaining that they are losing money on their physicians in these integrated systems.

Hospital systems are dropping out of the Obamacare Accountable Care Organization programs. There have been reports that salaried physicians are less productive that independent practicing physicians.

I believe in the team approach to the management of chronic disease. The patient must be at the center of the team with the physician being the head coach or manager and his team being an extension of the physician’s care.

Medical decision making entities must not be the insurance company or the government.

The idea that integrated systems with salaried physicians leads to increased economic efficiency, better quality of care and clinical outcomes than small independent private practices never made syllogistic sense to me.

Patient care becomes depersonalized in large hospital systems. Both patients and physicians become commodities in systems focused on the bottom line.

Small practices have the advantage of providing a personal style of care. Consumers want that comfort when they are sick. They want someone they know who is going to listen to them and talk to them.

In a private setting physicians can practice the way they want, without interference by a large, impersonal organization driving efficiency.

If a physician in private practice does not satisfy the consumer’s need the consumer can leave the practice and go somewhere else.

  "When you work closely with patients and empower them, they are going to make better choices," said Craig C. Koniver, MD, a solo family physician in North Charleston, South Carolina. He said a team of caregivers at a large practice will not have the same impact, because none of them are as close to the patient as he is.”

Health Affairs published a study in August 2014 looking at primary care physicians in small practices and “ambulatory care sensitive” admission rates. The study included such conditions as congestive heart failure in which admission to the hospital can be preventive by high quality primary care. The patient relates positively to the physician and the physician relates positively to the patient (positive patient/physician relationship).

“The study found that practices with 1 to 2 physicians had ambulatory care-sensitive admission rates fully 33% lower than practices with 10 to 19 physicians.”

This is not the only study that shows that small independent private practices can deliver just as high or higher quality of care than large integrated hospital systems with salaried physicans.

“ A 2013 study[2] showed that small practices in general had slightly lower hospital readmission rates than large practices.”

Additionally, “a 2012 study[3] looking at practices ranging from 5 to 750 physicians found that the smaller ones had fewer ambulatory care-sensitive admissions and lower overall costs of care for diabetes.”

 All three studies turned a piece of conventional wisdom on its head; that large practices, with their care management teams and sophisticated clinical information systems, produce better clinical outcomes.

Republicans should start presenting alternatives to Obamacare. The alternative must provide consumers with what they want rather than systems that let the government to tell consumers what they are going to get.

The ideal medical savings account will let consumers choose and keep their doctor if they like their doctor.

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

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Fantasy vs. Facts

Stanley Feld M.D.,FACP,MACE

President Obama is continues to mock the critics of Obamacare who predict failure even as Obamacare is obviously failing.

He knows the media is the message even if his message has nothing to do with the facts.

 

President Obam's first victory lap.

 There had been three failures at the time he declared Obamacare a success this month.

1. The Obama administration announced that accountable care organizations (ACOs) in the Pioneer ACO model and Medicare Shared Savings Program (MSSP) have generated more than $372 million in total program savings for Medicare ACOs over the program’s two-year span.

The details of the Pioneer ACO models’ savings are difficult to follow.

  • An estimated total model savings of over $96 million and at the same time qualified for shared savings payments of $68 million
  • Eleven Pioneer ACOs earned shared savings, 3 generated shared losses, and 3 elected to defer reconciliation until after the completion of performance year three.
  • The organizations showed improvements in 28 of the 33 quality measures and experienced average improvements of 14.8 percent across all quality measures.
  • The mean quality score among Pioneer ACOs increased by 19 percent, from 71.8 percent in 2012 to 85.2 percent in 2013.

 

Can anyone make any sense out of this word salad?

One week later three of the 22 remaining Pioneer ACOs dropped out of the program. The program originally had 32 members. 

The Franciscan Alliance, Genesys PHO and Renaissance Health Network have exited the Pioneer ACO program, which is now in its third year.

Only 19 of the original 32 ACOs remain.

Sharp Healthcare, a San Diego-based health system, dropped out August 2014, saying that the ACO model was “financially detrimental.”

The Mayo Clinic and Cleveland Clinic were invited to be in the Pioneer ACO program but rejected the offer. It was clear to them that ACO’s meant taking on too much uncontrollable financial risk.

The ACOs were supposed to deliver a higher quality of care through their integrated hospital systems. The hospital system would also experience greater profits.

At the onset of the program some hospital systems and integrated medical practices recognized they would lose money and possibly be penalized.

The thirteen integrated systems that quit the Pioneer ACO model recognized their losses after they started the program.

I predicted ACOs would fail and provided detailed reasons. I predicted that ACOs would fail because of the financial risks to the ACO. The job of risk is an insurance issue. A healthcare provider cannot control the confounding variables influencing risk.

“Genesys PHO received a $2.5 million penalty in the program's first year and a $1.9 million penalty in the program's second year (Evans, Modern Healthcare, 9/25; Leventhal/Hagland, Healthcare Informatics, 9/25; Beck, Wall Street Journal, 9/25).”

One could conclude that Genesys’ ACO was becoming an improved integrated better because it experienced a smaller loss the second year. It was not Genesys’ conclusion. It withdrew from the program.

2. Last week President Obama predicted that enrollment in Obamacare increase this year. The web site is fixed and enrollment will be easier.

At the same time at least 300,000 people in last years group of enrollees lost their subsidies or coverage because they did not offer proof of their eligibility by September 30th.

There has been little media coverage of this event. This is not the definition of success.

3. In addition, the insurance industry announced that thousands will lose health insurance their current insurance policy with their employer by the end of 2014.

They will have to apply for which will probably be more expensive through the health insurance exchanges. Insurers are cancelling the private healthcare insurance policies because they no longer make business sense.

Of course, it makes no business sense when the insurance company can make more money from the federal health insurance exchange plans. The Obama administration is guaranteeing the healthcare insurance company’s profit and eliminating its risks.

All this appeared at the time President Obama called Obamacare a success and mocked his critics who predicted failure.

The media is the message. If President Obama can manipulate the media enough he can help the Democrats maintain a majority in the Senate with two more years of Harry Reid control.

I do not think the American public is going to fall for President Obama’s disinformation campaign once again.

I hope not.

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



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Government Is The Problem Not The Solution

Stanley Feld M.D.,FACP,MACE

 

The government has been attempting to take over the healthcare system since 1935 at the time of the Roosevelt administration.

The government took over the healthcare system 30 years later during the Lyndon Johnson administration. LBJ passed Medicare and Medicaid. It turned out that financial projections were faulty and the business model was defective.

Medicare and Medicaid provided medical care for the elderly and the poor at an affordable price at that time. Everyone loved it. At the time it was also affordable for the government.

I do not think anyone contemplated the healthcare inflation that occurred as a result of the government’s business model.

Inflationary pressure increased rapidly.

Finally, President Reagan said the government could not afford the increasing prices any more. He said enough is enough. He decreased provider (hospital, doctors, pharmaceutical company, and insurance company) reimbursement for Medicare and Medicaid services.

The reduction in reimbursement for services resulted in price shifting increases in reimbursement in the private sector.

Both the private sector and the public sector experienced increased inflationary pressure as a result of this maneuver.

It was clear by 1984 that Medicare and Medicaid were unsustainable long term.  

America did not have a free market healthcare system before Obamacare. It was a hybrid system.

The country already had 90 million Americans in a single-payer system. Ninety million Americans get coverage from Medicare, Medicaid, and the Veterans Health Administration systems.

The problem is these government controlled single-payer systems did not work efficiently. They were financially unsustainable.

Obamacare expands the single party payer system to eventually cover all Americans. Obamacare simply adds on to an existing unsustainable healthcare.   Raising taxes is not going to make it more sustainable.

The expanded bureaucracy will only make the system more inefficient and more prone to fraud and abuse.

President Obama is already modifying the law without congressional approval. He is trying to hide elements of this unsustainability from the American public.

The federal government’s Obamacare enrollment system www.Healthcare.gov alone has already cost taxpayers about $2.1 billion dollars according to a Bloomberg government analysis of contracts related to the project.”

The website is still not working perfectly at the backend after spending $2.1 billion dollars.

Americans will experience more of the www.healthcare.gov dysfunction after the mid term elections.  

Navigator companies hired to help people enroll cost $48 a session. These companies are increasing their prices for the 2015 enrollees.

 

These same companies have had their fraud and abuse exposed. Nevertheless they have been rehired at the increased price by the Obama administration.

President Obama announced to Democrats last spring that Obamacare would not be an issue at the time of the midterms.

This week the administration also announced that the cost of healthcare insurance through the health insurance exchanges is decreasing next year.

It was also announced that there is an increase in the choice of insurance carriers in most states resulting in competitive premium pricing and lower premiums.

President Obama announced that Obamacare is working. He said Obamacare is a non issue in the 2014 mid term elections.

Nothing could be further from the truth.

If our elected officials cannot see President Obama’s trick play how can the public expect to understand the deception?

This is another of the manipulations of Obamacare designed to hide its impending failure from the public.  

The Obama administration set up a reinsurance company funded by taxpayers that eliminates any insurance risk the healthcare insurance companies might incur in insuring enrollees.

Healthcare insurance companies are signing up and competing for market share to gain profit from this no risk insurance. They can easily afford to lower the premiums because the government will cover their supposed loses.

None of this has anything to do with patient care or the quality of patient care.

It has little to do with providing low cost insurance. The cost of insurance keeps increasing. The government pays the difference between the cost of insurance and what patients who receive subsidies pay for their premiums.

Obamacare misses the main problems in the healthcare system. Obamacare creates more dysfunction in the healthcare system.

 Obamacare will result in greater unfunded future liabilities.

White House spin pretends otherwise, but the unfunded liabilities may exceed $100 trillion.”

 The Congressional Budget Office said,

 “Looking indefinitely into the future, the unfunded liability, with optimistic assumptions, is $43 trillion—almost three times the size of today's economy.”

Based on more plausible assumptions, such as those reflected in the "alternative" scenario for Medicare produced by the Congressional Budget Office in June 2012, the long-term shortfall is more than $100 trillion.

It is the responsibility of our elected officials control America’s expenditures.

Unfortunately, for American’s, this is not how a government controlled system works.

Voters must decide how long they are going to tolerate this abuse of power.

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



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Holy Cow!

Stanley Feld M.D., FACP,MACE

 I cannot believe it.

President Obama continues to deceive the America public about his "Accountable Care Act" (ACA or Obamacare). Our elected officials continue to do nothing to stop him. Unelected administrative officials are making spending decisions that neither congress nor the public is aware of until after the fact. A case in point is www.healthcare.gov.

William T. Woods, a senior official at the Government Accountability Office in testimony prepared for a House hearing on Thursday, warned of “significant risks in the next open enrollment period, which begins Nov. 15.”

He said, “the marketplace and its website,HealthCare.gov, were over budget and behind schedule because of “new and changing requirements” imposed by administration officials.”

This is in direct contrast to what Sylvia Mathews Burwell, the secretary of Health and Human Services told the congress and the American people a few weeks ago. She said the problems were mostly solved.

The American people have still not gotten an accurate accounting of how many people have signed up legally through the health exchanges. My best estimate it is less than 3 million and not 8 million.

About 80% are getting subsidies by signing up on the federal government health insurance exchanges. It is also against the law according to the definition for subsidy eligibility as written the law. President Obama said the administration did did not mean what the law says.

Let us concentrate on the costs of the website until this point. Initially it was supposed to cost $56 million dollars.

The cost rose from $56 million dollars to $209 million dollars from September 2011 to February 2014. The Obama administration launched the disastrous web site in October 2013 without having a quality assurance surveillance plan to monitor the work of the main contractor CGI. A principle in CGI was a college buddy of Michelle Obama. A linkage of their friendship and the contract with CGI has never been proven.

On October 1, 2013 the disaster of the web site became apparent. There was confusion within the Obama administration about who had the authority to approve contractor request to expend funds for additional work.

Mr. Woods said,“In 40 instances, the staff members of the federal exchange inappropriately authorized contractors to expend funds, totaling over $30 million.”

Mr. Wood also said, “As the Oct. 1 deadline approached, federal officials identified significant performance problems in computer systems developed by CGI Federal, but “took only limited steps to hold the contractor accountable.”

The administration withheld only $267,000, or 2 percent of CGI’s $12.5 million fee. There is no indication of the profit CGI made on the work done that cost the government $209 million dollars.

It gets more complicated and bizarre.

In January 2014 the Center for Medicare and Medicaid Services (CMS) awarded a contract valued at $91 million to Accenture Federal Services to continue work on the project.

“Accenture Federal Services costs have ballooned to more than $175 million and the marketplace is still unable to perform essential computer functions needed to pay insurers and update information on consumers.”

The question that must be asked is what in the world is going on?

James E. McAvoy, a spokesman for Accenture said that another “task order” had increased the total to $190 million.

Accenture said, “It is helping the government develop an insurance exchange for small businesses, is expanding the federal exchange to serve additional states and is adding new features to verify the income of people seeking federal subsidies.”

The Government Accountability Office, an investigative arm of Congress, said that through March of this year the administration had made formal commitments to spend $840 million on the federal health insurance exchange and marketplace.

The $840 million dollars is a long way from the original $56 million dollar in the original Obamacare budget.

 The plot thickens.

Andrew M. Slavitt the No. 2 official at the Centers for Medicare and Medicaid Services told Congress that the agency was changing requirements for its contracts to expand the scope of work that must be done.

Mr. Slavitt said that the administration was making improvements in the federal health insurance exchange’s software , but that the second round of open enrollment, starting in November 2014, would not be perfect. “There will certainly be bumps,” he testified at a House hearing.

Mr. Slavitt avoided answering how much the website should cost. 

 Mr. Slavitt said, “That’s a really good question.” He did not specify the proper cost, but he said the nation was getting invaluable results, including new insurance coverage for millions of people.

Mr. Slavitt, who joined the government three weeks ago. A congressional panel has questioned his credibility.

Mr. Andrew Slavitt, a former executive at Optum, the technology company tasked with “saving” HealthCare.gov,ran into sharp questions from a House panel about a potential conflict of interest in his new role.

Rep. Morgan Griffith, R-Va., pressed Mr. Slavitt on his previous job at OptumInsight/QSSI.  Optum, and its parent company, UnitedHealth Group. UnitedHealth Group, one of the nation’s largest insurers, offers health plans on the federal health insurance exchanges. Optum had a large role in the creation of HealthCare.gov and built the data hub, The data hub is still not working properly.

The Obama administration granted an ethics waiver to Mr. Slavitt so that he could participate in decisions affecting his former employer, Optum, and its parent company, the UnitedHealth Group.  

Optum is the tech firm the Department of Health and Human Services picked in October 2013 to straighten out HealthCare.gov. It was awarded an $84.5 million contract with HHS’s Centers for Medicare and Medicaid Services in January 2012 to build the part of HealthCare.gov known as the federal data hub.

The purpose of the data hub is to connect multiple government agencies to streamline verification of crucial consumer information—including Social Security number and immigration status when Americans log into the federal and state exchanges and apply for Obamacare subsidies.

Doesn’t this sound fishy? Can we trust the Obama administration to decide what treatment American should get and what treatment Americans cannot get access to?

It looks like the VA all over again?

Let the buyers beware!

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

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Physicians’ Barriers To Practice Their Profession

 Stanley Feld M.D.,FACP,MACE

Over the past 30 years practicing physicians have seen their revenue fall. As Medicare deficits have increased the government has lower physicians reimbursement.

Who is responsible for the deficit increase if physician reimbursement has decreased?

Private Insurance premiums have increased because of advances in technology and increases in specialization leading to increases in testing and physician visits.

Private insurance reimbursement to physicians has decreased in an attempt to keep premiums as low as possible for the private employers who need to be able to afford insurance for their workers.

Physicians have tried to compensate for this decreased reimbursement by seeing more patients. Despite seeing more patients physicians’ incomes have fallen.

Physicians’ overhead has increased. The need for more full time employees has increased. As government regulations have increased many practices have had to hire full time employees to do coding for care and paperwork. Physicians have tried to buy fully functional computer systems but they have failed.  Computer systems are expensive and not completely functional.

“Physicians have seen their incomes fall, their clout with insurers shrink, and their practices weighed down by a plethora of new requirements.

What is the value of a physician’s service? What is the value of secondary stakeholders in the healthcare system?

These are hard questions to quantify. The goal of healthcare policy makers is to reduce the national healthcare costs.

The healthcare system is fragmented, complex and unbalanced. Many physicians feel their skills have been devalued by payers, hospital systems, policy makers.  These groups have become more powerful than the representatives of physicians’ organizations.

Healthcare has become a gigantic industry costing our society 2.9 trillion dollars a year.

Healthcare has, unfortunately, become all about money with the third party payers making the rules. Effective medical care has been stifled.

Physicians barriers’ to effective medical care are,

1. Lack Of Malpractice Reform

Government has estimate the value of malpractice reform incorrectly. It thinks malpractice costs the healthcare system 3 billion dollars a year.

Several good studies estimates the lack of malpractice reform costs somewhere between $200 billion to $750 billion dollars a year without including the cost of the wear and tear on physicians and patients.

2. Problems Trying to Increase Reimbursement

3. Lack of Negotiating Clout

4. Being Turned Into Captives of the Insurance Industry and the Government

Physicians do not have the ability to modify charges on the bases of costs. Medicare and Medicaid won't allow physicians to negotiate reimbursement rates. Physicians must take the reimbursement fees or refuse to participate in Medicare or Medicaid. More and more physicians are leaving the Medicare/Medicaid system.

Private insurers have forced physicians to sign contracts limiting charges. Individual physicians and physician groups have little negotiating power or ability to have loss leaders as do hospital systems with multiple hospitals in a regional area.

Physician organizations have not negotiated for physicians. Some organizations have teaching courses that teach physicians to get around the loopholes in the healthcare system.

Physicians have no incentive to add innovative programs. These programs can increase their overhead without being reimbursement.

All of this is to the disadvantage of patients and patient care as insurance premiums rise and access to care falls.

Intuitively physicians know that the medical care contract is between physicians and patients. Third party interference has stood in the way of this interaction. It has disrupted and/or destroyed patient/physician relationships.

More and more physicians are dropping out of Medicare, Medicaid and private insurance because they cannot deal with the third party interference with the practice of medicine financially or emotionally.

Rob Lamberts, MD, an internist in Martinez, Georgia  said "Doctors have been turned into tools of the insurance industry,"  "You always work for whoever pays you. When you work for an insurer, you are constantly under pressure to do a lot of things that don't improve the care of the patient."

Dr. Lamberts became a concierge medicine doctor.

Concierge medical practices need fewer full time equivalents, do less paperwork, deal with less regulations, have more time to practice medicine and more time to spend with their patients.    

5.Being Pressured to Sell Healthcare as a Commodity

6. Being Force Into Abandoning Clinical Judgment

There are many physicians complaining about the commoditization of healthcare.  They are complaining about the constant need for authorization of care demanded by the government and the healthcare insurance industry.

Physicians complain that insurers and other corporate interests have too much control of healthcare. They are dictating what clinical decisions physicians can make. Physicians are becoming accountable not to their patients but to what other interests decide. The system is forcing doctors to give up their medical judgment in favor of clinical practice guidelines.

The clinical guidelines are used to determine prior authorizations. These guidelines are used to determine reimbursement in many pay4performance contracts and shift the risk burden onto physicians.

Several studieshave questioned the validity of guidelines. Close to half the physicians in the 2012 Medscape survey said quality measures and guidelines will have a negative impact on care.

Mark Shelley, MD, a family physician from Port Allegany, Pennsylvania, decried what he calls the "commoditization" of healthcare. "The art of medicine has been turned into the business of medicine". "Rather than trying to make patients functional and happy, the physician gets caught up in financial issues, such as whether Medicare will pay for a wheelchair."

 Dr. Shelley said. "I know doctors who earn a lot of money and are absolutely miserable."

7. Being Captives Under Hospitals' Thumb

8. Being Shunted Aside by Policymakers

9. Being Shunted Aside by Entrepreneurial Management Companies

Many physicians believe that by being employed by hospitals they are at risk of being co-opted by the hospital's vested interests. In many cases this has been proven to be true.

Many employed physicians have passively aggressively undermined the hospital and its vested interests. Rather than making money from physicians intellectual property hospital systems have claimed that they have lost money.

Hospital employment has been attractive to young physicians just completing residency training. They do not have to make an investment in a medical practice and fear the uncertainty of the future of medical practice.

These physicians’ goals are to have regular and predictable office hours in an outpatient practice setting with adequate coffee and lunch breaks. They do not follow their patients in the hospitals.  They have no connection to patients, their anxiety or fears. Patients are interchangeable and seen by the next available physician as in the VA system. A physician patient relationship does not develop.

This is bad for patients.

Another problem is many physicians believe that policy makers have not been listening to the physicians’ perspective about the problems in the healthcare system. Policy makers are trying to solve the problems of our dysfunctional healthcare system from their perspective and not from the physicians or consumers’ perspective.

“Obamacare is often cited as an example of when policymakers turned a deaf ear to physicians' interests. As many physicians see it, the law lacks substantive tort reform, failed to repeal the sustainable growth rate, and doesn't improve healthcare.

Obamacare ignores patients’ responsibility in keeping themselves healthy and staying healthy after being treated. It assumes physicians are responsible for maintaining patients’ health.

Ignoring this point alone will cause Obamacare to fail. There are many other issues involved in Obamacare’s ultimate demise at a great cost to our country and our healthcare system.   

America healthcare system is in trouble. Obamacare is causing more trouble for America’s healthcare system. 

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

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Another President Obama Lie

Stanley Feld M.D.,FACP,MACE

 At the moment, ideology and political philosophy stands in the way of Repairing the Healthcare System.

President Obama believes in central control of the healthcare system. Central control of other healthcare systems has not worked to control healthcare costs while maintaining quality of care. The only possible exception is Switzerland’s healthcare system.

Each province in Canada spends at least 50% of its GDP on healthcare  according to the Frazier Report. The access to care is less than ideal. Healthcare spending is unsustainable in Canada

England is slowly switching to a private healthcare system.  

Obamacare has already demonstrated its inefficiencies and lack of cost control even though most of the population has received waivers from Obamacare for at least one year.

The trajectory of failure is not going to change until President Obama is out of office and the system changes to put the consumers in control of their health and healthcare dollars rather than having the government in control.

President Obama declared in 2010;

“Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing.  Thanks to the regulations, consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement.   If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.”

Unfortunately, for Americans, President Obama tells us what we want to hear in a very seductive way and then does the opposite.

President Obama is always calling for someone to provide a new idea in order to fix Obamacare. His promise to the public is a good idea. However it is not reflected in the Obamacare regulations.

What is the meaning of Medical Loss Ratio?

The definition of medical loss ratio is the incurred claims received divided by premiums collected.

The healthcare insurance industry negotiated all the rules it wanted from President Obama and Kathleen Sebelius in defining incurred claims in the new Obamacare regulations. The rules contradict Mr. Obama’s promise to the American public.

The healthcare insurance industry is supposed to spend 85% of the premiums collected on direct medical care costs.

The remaining 15% of the premiums is for the insurance industry’s expenses and profit.  

The healthcare insurance industry claims it is lucky if it clears 3% profit under the Obamacare rules.

In order to encourage the healthcare industry to participate in Obamacare, President Obama pledged that the government would subsidize the healthcare insurance industry for any shortfall in profit.

A self-insured employer sponsored healthcare plan outsources the administrative services to the lowest bidding healthcare insurance company. The government outsources Medicare, Medicaid and Tricare (VA insurance) to the lowest bidding healthcare insurance company.

The Obama administration has included most of the healthcare insurance industry’s requests in the incurred claims (direct patient care) formula that is used to calculate the medical loss ratio.  

Inflating the incurred claims decreases the amount of money spent on direct patient care in order to maintain an eighty-five percent (85%) medical loss ratio.

If the incurred claims costs go up the medical loss ratio goes down. The potential increase in the medical loss ratio is the justification used by the insurance industries to increase premiums.

Obamacare requires insuring with a pre-existing condition. Insuring everyone with a pre-existing condition increases the insurance risk. Hence Americans experience double-digit increases in healthcare of insurance premiums.  

 The expenses the industry wanted included:  

1. The cost of verifying the credentials of doctors in its networks.

2. The cost of ferreting out fraud such as catching physicians over testing patients or doing unnecessary operations.

3. The cost of programs that keep people who have diabetes out of emergency rooms.

4. The sales commissions paid to insurance agents.

5. Taxes paid on investments.

6. Taxes paid on premium income.

7. Unpaid claim reserves associated with claims incurred.

8. Change in contract reserves.

9.  Claims-related portion of reserves for contingent benefit.

10. Lawsuits experience-rated refunds (exclude rebates based on issuers MLR.  

All these expenses are administrative expenses in my view. It is questionable that these should be included in direct patient care (incurred claims).

These expenses also increase a healthcare insurance company’s profit. Each incurred cost has a built in 15-20% profit.

As these expenses continue to be are permitted as incurred claims (direct medical care expenses), the resources available for direct medical care decrease from eighty-five cents to sixty cents on every premium-collected dollar.

At the same time people complain about the grotesque profits and salaries of those in the healthcare insurance industry.

Obamacare, contrary to President Obama’s promise, did nothing to solve this abuse.

It is almost as bad as the promise," If you like your doctor you can keep your doctor. If you like your insurance plan you can keep your insurance plan.

The closest I could get to transparency and the distribution of one healthcare dollar to direct medical care is the following. 

Slide medical loss ratio 2

 

Fifteen cents goes to the doctor and twenty-five cents to the hospital. The remaining sixty cents goes to the healthcare insurance companies.

What are we paying for?

 

The definition of direct medical care according to Obamacare is:

 Definition of Medical Claims By Obamacare

Incurred claims = direct claims incurred in MLR reporting year + unpaid claim reserves associated with claims incurred + change in contract reserves + claims-related portion of reserves for contingent benefits and lawsuits +

experience-rated refunds (exclude rebates based on issuers MLR

Medical Claims and Quality Improvement Expenditures

As illustrated in Figure 1, increases in either medical claims or quality improvement expenditures (holding other factors constant) will increase

the MLR and reduce the likelihood of premium rebates to policyholders. Conversely, reductions in medical claims and/or quality improvement

expenditures (holding other factors constant) will decrease the MLR and increase the likelihood that insurers will have to provide rebates to policyholders.

Medigap plans (Medicare Part F) have separate medical loss ratio requirements. The healthcare insurance industry has to meet a 65% level for individuals and a 75% level for groups. It means that for every dollar in premium the individual has 65 cents minus incurred expenses coverage for direct medical care and for groups 75 cents minus incurred expenses.

Medigap plans, which are supplemental policies that Medicare beneficiaries can purchase to fill gaps in Medicare coverage, are not covered by the ACA MLR provisions.

Medigap plans are subject to their own separate MLR requirements, found in Title 18 of the Social Security Act; the MLR requirements are 65% in the individual marketplace and 75% in the group market.

Finally, the ACA’s MLR requirements do not apply to long-term care, dental, vision or retiree healthcare plans.

President Obama promised to fix these problems. He said,

 “Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing.  Thanks to the regulations, consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement.    

He didn’t. He won’t.

He knows the problem. Fix it.

 If he did he would save Obamacare and tax payers a great deal of money. 

I am confident this suggestion will be ignored and at election time more false promises will be made.

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

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Bigger Problems Ahead For Obamacare

Stanley Feld M.D.,FACP, MACE

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

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

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

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

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

Waste occurs because of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 “The Mayo Clinic says it will not be part of a critical piece of national health care reform under the government's proposed rules.”

“ The Mayo Clinic announced that the proposed regulations “conflict with the way it runs its Medicare operations.” Mayo treats about 400,000 Medicare patients a year. The bottom line is that Mayo figured out that they would assume too much risk, lose too much money and relinquish too much control over its processes to the federal government.”

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

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

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

Aco by state-Chart-4

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

 

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

Aco by region-Chart-5

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

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

Aco covered lives-Chart-6

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

Aco covered lives by region-Chart-7

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

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

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

Patients in ACOs are starting to feel the dysfunction.

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

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

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It Is Just The Beginning Of The Problems

Stanley Feld M.D.,FACP,MACE

The recent problems with www.HealthCare.gov are just the beginning of President Obama’s problems with Obamacare.

CMS has tried every public relations trick in the book to restore public confidence in Obamacare. The web site is failing. The cost of healthcare insurance is rising above affordability for everyone except people who qualify for government subsidies.

The deficit is going to skyrocket because the young healthy people are not going to sign up unless they receive a subsidy. Even with a subsidy, the price of insurance through the health insurance exchanges is too high to afford.

President Obama has even tried to rebrand Obamacare. The new name is the Affordable Care Act. The ACA is the wrong name. Maybe it should be called the Unaffordable Care Act (UCA)? 

The health insurance exchange policies are unaffordable because of government mandates for required care. This unaffordability will result in an increase in uninsured.

At the beginning of October, President Obama placed a November 30,2013 date for the web site being fully operational after the glitches were fixed.

It turns out that the problems are much worse than a few glitches.

“Despite recent progress at HealthCare.gov, a raft of problems will remain beyond the Obama administration's Saturday deadline to make the troubled federal insurance website work.”

The November 30th deadline will be missed. President Obama has revised his declaration. Now the web site will be partially operational.

Once again President Obama’s original promise does not ring true. President Obama announced web site would be 80% operational. What does that mean?

Americans were warned by Henry Chao, the top IT official at the Centers for Medicare and Medicaid Services, who testified on Capitol Hill Tuesday on November 19th   2013 that more than 30% of the "back end" infrastructure still remains to be built in the federally-run marketplace.

The front end looks better according to recent users. The pages load faster. More people are getting through to sign up for health plans.

However the devil is in the details of the “back end.”

As of December 1,2013 healthcare.gov is missing the following,

  1. The ability to verify users’ identities.
  2. The ability to verify income for the purpose of subsidies.
  3. The ability to transmit accurate enrollment data to insurers.
  4. The tools for processing payments by insurers haven't been built.
  5. The data centers ability to support the various site functions has been inconsistent causing the site to crash often.
  6. The ability to supply adequate security for personal information.
  7. Total disregard for HIPPA privacy.
  8. Adequate security on every level.

 

http://youtu.be/uOk0vOup4yA

 

Problems with the performance of the site's databases, storage and servers and their interaction with each other continue to slow the site or make it unavailable for short periods, as of December 1,2013, according to government officials and contractors working on the project.

There are many problems. Forty-eight dollar an hour navigators, CMS spokespersons, and other government official are all rationalizing about the problems.

No one in the Obama administration comes out and tells the public the real problems. They just say it will be fixed.

The comment sections of online articles are many times more truthful than the media fed “facts” by the Obama administration.

One comment appearing in the article, “Health Site Is Improving But Likely to Miss Saturday Deadline.” Said the headline should have been written as  “Health Site Is Improving But CERTAINLY to Miss Saturday Deadline.” 

Richard Sullivan wrote,

“Our father, whose art be in heaven, Hollywood be thy name…………”

  John Rogitz wrote;“The web site will be fixed. Eventually. What won't be so easily fixed is a culture that has relinquished its medical care to government overseers.”

Teresa Rich replied; We haven't relinquished our "care," Mr. Rogitz. We have relinquished our "freedom" — all for the promise of "free" health insurance for "the COLLECTIVE." 

 Charles Whitlach wrote the most educational comment of all.

"We programmers are laughing at the incompetence of this administration. I write in the very same server code as this website developer.”

 “I am a Microsoft Certified Solutions Developer [MCSD]. I have been certified by Microsoft as an expert in this language.

Although I haven't written in ASP.net 2.0 since 2005. We use 5.0 now.”

The primitive program is a result of giving a non-bid contract to Michelle Obama’s friend rather than going through a competitive bidding process. 

“The Javascript & CSS files are uncompressed. Programming 101 says compress them before release. Why are there so many JavaScript files? I have never seen so many JavaScript files on a page, even with sites like Google.” 

“What happened to Unit Testing Mr. President? 

Didn't anyone test this web site for load capacity? That is why people can never get to the "Select State Page". No one tested for load capacity.

 Didn't anyone put in redundancy and fall back servers? These are the basic questions/steps every good IT person checks off before release.” 

“Every good programmer knows that ASP.net 2.0 is "Leak-o-Matic". Who uses 2.0 anymore? This goes beyond legacy issues. What possible justification could anyone have in creating a website today in 2.0? There are none. 

Obama calling in the best and brightest to fix the problem? Why didn't he call us in, in the first place?” 

Lastly, "YOU CANNOT FIX BAD CODE, YOU CAN ONLY REPLACE IT." 

The website written in 10 yr old code cannot be tweaked. There have been too many API changes since 2005. The code must be rewritten.

 The client-side and server side code of this website must be redone. 5 million lines of code need to be rewritten? In my field that is an epic failure.”

“Who ever created this website should return the money. This was utter incompetence. 

The $684 million was wasted."

President Obama has been modifying his statements about the web site being completely fixed by November 30th for the last two weeks.

“It will work for 80% of the people who try to enroll.“

 Officials mixed optimism with caution. "November 30th does not represent a relaunch of HealthCare.gov," said Julie Bataille, a spokeswoman for the government's Centers for Medicare and Medicaid Services, which operates the site.

 "It (November 30,2013) is not a magical date. There will be times after November 30th when the site, like any website, does not perform optimally."

The administration said plans are in place to replace the Verizon unit with H-P this spring.

Someone should tell the administration they need to rewrite the program. Switching database vendors is not going to fix the program.

HHS also didn't initially contract for a backup website or monitoring tools like those used by sophisticated consumer sites, according to people familiar with the matter.”

 Patrick Reikofski might be right when he said.  “Ladies and gentlemen, your Federal Government in action…”

I have not covered the problems Obamacare will have with physicians, insurance companies or hospitals. Obamacare’s implementation will be a nightmare.

If we wasted $684 billion dollars so far on broken web site, how much more will we waste until Obamacare fails completely?

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

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Don’t Confuse Me With Facts

Stanley
Feld M.D.,FACP,MACE

Sometimes,
in order to believe a certain ideology, some smart people take the position of
not wanting to be to be confused by facts.  

Countries
with socialized medicine have said their citizens are happy with their care.
Therefore, this is the evidence that the U.S. should have a socialized medicine
system.

Less
than 20% of a nation’s population experiences the healthcare system at a moment
in time
. The 80% who are not sick are happy because they feel secure. If they
got sick they believe they would receive free medical care. The result is the
majority of the population under a socialized medical system likes the system.

This
Is A FACT (TIAF)

Dr.
Donald Berwick former acting head of CMS and author of Obamacare wrote, in a
personal letter to “Senior Government Officials and Senior Executives of the National
Health Service in England after doing a review of the NHS.”

“You are stewards of a
globally important treasure:
the NHS. In its form and mission, guided by the
unwavering charter of universal care, accessible to all, and free at the point
of service, the NHS is a unique example for all to learn from and emulate.”

Dr.
Donald Berwick added, “redistribution of
wealth is the very essence of a compassionate healthcare system for all.”

I
disagreed with Dr. Berwick in an earlier blog. I said citizens responsible for
their own health, healthcare and healthcare dollars are essential ingredients
for a cost efficient healthcare system.

Patients
are the primary stakeholders. Patients must be actively responsible for their
health. They must have a moral and intellectual responsibility for their own
health as well as a financial incentive to be responsible for themselves.

They
must have own their healthcare dollars, have the freedom to make their own
healthcare choices and have access to care.

The
government must create educational vehicles to help patients make the correct
choices.

 The government must provide financial
incentives for people to make those choices.

Medical
care and medical decisions made for patients by a bureaucracy has historically
failed to control costs or provide efficient and compassionate medical care.

Socialized
medicine run by bureaucrats has failed in England. Medical care consumes more
than 50% of England’s GDP.

This
Is A Fact (TIAF)

Medicare
is wonderful for people over 65 years old. Seniors could not buy healthcare
insurance from a healthcare insurance company. The healthcare industry had not
figured out how to make money from these people so they disqualified them.

If
the government got rid of the $250 billion dollars in administrative waste and
inefficiencies each year, Medicare and Medicaid would become sustainable.

This
Is A Fact (TIAF)

Medicare
and Medicaid provide no incentives for patients to take care of their health.

Chronic
diseases are ineffectively managed. The complications of chronic diseases
consume 80% o
f Medicare’s healthcare dollars. If chronic diseases were managed
properly the complication rate from chronic diseases could be decreased by at
least 50%.

This
Is A Fact (TIAF)

Many
patients do not have the incentive to take care of themselves
. They leave it up
to the system to take care of them.

Unfortunately,
it has be demonstrated that a government controlled system creates ever
increasing bureaucracies and cost inflation.

This
Is Fact. (TIAF)

Most
all of the nation’s attempts to control healthcare costs in the past 50 years
have failed. (Price control of the 70’s, HMO’s, Managed Care, PPOs.)

These
systems had to be abandoned. Nevertheless, healthcare policy wonks continue to
give the same advice and make the same mistakes. The policy wonks’ advice is to
institute greater government controls over medical care.  

This
Is A Fact (TIAF)

 A recent report about England’s hospital
conditions in Mid Staffordshire has emphasized the defects in England’s 60 year
socialized medicine experiment.

The
report only covers hospital inpatient defects. It does not cover the many
defects in outpatient services. 

 The report is “Report of the Mid Staffordshire NHS Foundation Trust
Public Inquiry

5
February 2013 to the Secretary of State.”

The
report stated that;

1. For
many patients the most basic elements of care were neglected.

2. Calls
for help to use the bathroom were ignored and patients were left lying in
soiled sheeting and sitting on commodes for hours.

3.
Patients felt afraid and disenfranchised.

4. Patients
were left unwashed, at times for up to a month.

5.
Food and drinks were left out of the reach of patients and many were forced to
rely on family members for help with feeding.

6. Staff
failed to make basic observations and pain relief was provided late or in some
cases not at all.

7. Patients
were too often discharged before it was appropriate, only to have to be
re-admitted shortly afterwards.

8.
The standards of hygiene were at times awful, with families forced to remove
used bandages and dressings from public areas and clean toilets themselves for
fear of spreading infections.

9. These
healthcare conditions caused the deaths of an unknown number of patients.  

Robert Francis QC Inquiry Chairman who wrote
the report covered a wide range of system failures. I will only highlight the
key failures contained in the 500-page report. This report was mandated by the House of Commons.

These defect are occurring throughout the
entire NHS system. The NHS is not as glorious as the Obama administration or
Dr. Berwick’s has idealization the NHS to be.

"The
story the report tells is first and foremost of appalling suffering of many
patients. This was primarily caused by a serious failure on the part of a
provider Trust Board. (Bureaucracy)"

 "The trust board did not listen
sufficiently to its patients and staff or ensure the correction of deficiencies
brought to the Trust’s attention."

The NHS bureaucracy did not put patients
first. It put the various levels of bureaucracy in charge. Bureaucracies deaden
incentives and lose focus on who is the main stakeholder in the healthcare system.

"The
trust failed to tackle an insidious negative culture involving a tolerance of
poor standards and a disengagement from managerial and leadership
responsibilities".

"This
failure was in part the consequence of
allowing a focus on reaching national access targets; achieving financial
balance and seeking foundation trust status to be at the cost of delivering
acceptable standards of care."

Appropriate
statistical reports and collection of reports are more important that
appropriate patient care.

Robert
Francis goes on to outline how the bureaucracy puts measurements first, not
patients.

None
of the bureaucrats want to take responsibility for what is going wrong. Finger
pointing and blame shifting is an occupation in the British healthcare system.

"The
NHS system includes many checks and balances. These checks and balances should
have prevented serious systemic failure of this sort."

"There
were and are a plethora of agencies, scrutiny groups, commissioners, regulators
and professional bodies, all of whom might have been expected by patients and
the public to detect and do something effective to remedy non-compliance with
acceptable standards of care.

For
years that did not occur."

Watch out America!

We are falling into the same trap with Obamacare.
It might sound good to some. It will not work judging by the experience of
others.

Unfortunately,
the Obamacare’s model is the British healthcare system. I do not think the
traditional media should praise it. The traditional media should publish the
facts of history.

The
traditional media should call for the repeal of Obamacare.

 

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

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