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The Government’s Role In A Free Society

Stanley Feld M.D.,FACP,MACE

U.S. Congressman Paul Ryan gave a speech in January 2010 at Hillsdale College's Allan P. Kirby, Jr. Center for Constitutional Studies and Citizenship defining the role of government in a free society with particular reference to healthcare.

Paul Ryan understands the constitution and uses a lot of common sense.

Mr. Ryan traces the history of the progressive movement of the Democratic Party in America.

“The social and political programs of the Democratic Party’s progressive movement came in on two great waves: the New Deal of the 1930s and the Great Society of the 1960s”.

“Today, President Obama often invokes progressivism and hopes to generate its third great wave of public policy.”

 This desire by President Obama leads him to believe he will be judged as one of the greatest Presidents in American history.

President Obama believes his ideology will save the healthcare system, the financial system, and the country.

There is no question the healthcare system needs to be reformed. It has become unaffordable and inaccessible to people who need healthcare insurance coverage.

The need for reform leads Dr. Don Berwick former Director of CMS to conclude that by definition effective healthcare system means the redistribution of wealth.

The debate in healthcare is not whether we need healthcare reform but what form that reform should take.

“Under the terms of our Constitution, every individual has a right to care for their health, just as they have a right to eat.”

“These rights are integral to our natural right to life. It is the government's chief purpose to secure our natural rights.”

 But the right to care for one's health does not imply that government must provide health care, any more than our right to eat, in order to live, requires government to own the farms and raise the crops.

The government's chief purpose is to secure our natural rights. It is a critical sentence defining the role of government by our constitution.

It is not the role of government to provide healthcare any more than it is our right that the government feed us. It is the individual’s responsibility to do both. 

It is the government’s obligation to protect our rights. The government’s obligation is to establish free market conditions so providers and vendors cannot take advantage of us and abuse our rights. We should not be entitled to food or healthcare.

Paul Ryan goes on to say,

“ With good reason, the Constitution left the administration of public health—like that of most public goods—decentralized.

 If there is any doubt that control of health care services should not have been placed in the federal government, we need only look at the history of Medicare and Medicaid—a history in which fraud has proliferated despite all efforts to stop it and failure to control costs has become a national nightmare.”

All the stakeholders are experiencing this nightmare after 47 years of the government making adjustments to the Medicare and Medicare rules.

No one predicted the adjustments made by both the government and the stakeholders would result in unsustainable costs for the government, private sectors and the people.    

This national nightmare is going to expand with the passage of Obamacare, the funding of the multiple agencies formed and the proposed 32 million more uninsured people to be added to Medicaid along with the increasing number of baby boomer going on Medicare.

Democrats, Republicans and Independents believe in fairness to all. Americans are very charitable people and are frequently mobilized to help the needy.

However, President Obama has tried to appeal to our sympathy for him by painting a contrast between himself and his opponents.  He is trying to persuade us that he is the good guy and the rest are bad guys.

“If you believe this economy grows best when everybody gets a fair shot and everybody does their fair share and everybody plays by the same set of rules, then I ask you to stand with me for a second term as president.” 

On closer examination his actions have gotten us deeper into our fiscal dilemma. He has not leveled the playing field; he has wasted money and increased our deficit.  The U.S. is at the point where it cannot borrow itself out of its jam.

If the U.S. continues to try to print (money) itself out of the jam the economy will implode.

President Obama’s ideology has created uncertainty and decreased the private sector willingness to create jobs and stimulate the economy. He has not created enough jobs with his massive stimulus packages.

A reader wrote,

We ran out of money a long time ago.  Every dollar we spend is 40% borrowed money and healthcare in our country is comprised of 50% taxpayer money.  What else do we need to see in terms of the math to believe we are on an unsustainable path?

Paul Ryan argues,

“President Obama urges us today—out of compassion—to support the progressive model; but placing control of health care in the hands of government bureaucrats is not compassionate."

Bureaucrats don't make decisions about health care according to personal need or preference; they ration resources according to a dollar-driven social calculus.

 Dr. Ezekiel Emanuel, one of the administration's point people on health care, advocates what he calls a “whole life system”—a system in which government makes treatment decisions for individuals using a statistical formula based on average life expectancy and “social usefulness.”

“ In keeping with this, the plans that recently emerged from Congress have a Medicare board of unelected specialists whose job it would be to determine the program's treatment protocols as a method of limiting costs.”  (USPTF and IPAB)

I believe there are very few Americans who would be satisfied with this kind of halthcare system once they understand what is happening.  

Ryan goes on to say:

"The good news is that we have a choice.

 There are three basic models for health care delivery that are available to us:

 (1) Today's business-government partnership or “crony capitalism” model, in which bureaucratized insurance companies monopolize the field in most states."

Medicare and Medicaid’s administrative services are outsourced to the healthcare insurance industry by the government. The healthcare insurance companies charge the government 40% of the Medicare and Medicaid healthcare dollars for overhead.

President Obama claims that the medical loss ratio will limit the overhead to 20% and 80% will go to direct medical care. Wrong!

 The overhead is disguised in direct medical care costs.

How do you think top healthcare insurance executives can receive many millions of dollars in compensation each year?

 "(2) The progressive model promoted by the Obama administration and congressional leaders, in which federal bureaucrats tell us which services they will allow."

We have seen over and over again unintended consequences, excessive waste created by cumbersome rules and regulations, and stakeholders adjustment to take advantage of the rules and regulations, all of which lead to intolerable costs, taxes and the erosion of the value of the dollar. Obamacare is going to result in greater administrative waste plus rationing of care.   

" (3) The model consistent with our Constitution, in which health care providers compete in a free and transparent market, and in which individual consumers are in control."

 The government's chief purpose is to secure our natural rights by leveling the playing field for all the stakeholders and enforcing the rules. It is essential that the rules are transparent and simple.

The patients must be empowered to be responsible for their healthcare dollars and their health. Entitlements do not promote personal responsibility

One of Paul Ryan’s concluding points is,

“The answer is that the current health care debate is not really about how we can most effectively bring down costs.”

 It is a debate less about policy than about ideology. It is a debate over whether we should reform health care in a way compatible with our Constitution and our free society, or whether we should abandon our free market economic model for a full-fledged European-style social welfare state.

 This, I believe, is the true goal of those promoting government-run health care."

My Ideal Medical Saving Account can be an extremely democratic and fair model. By changing a couple of existing healthcare insurance rules the administration would create a truly free competitive free market for healthcare consumption.

The government should also educate patients to assess the value of the medical care they freely choose. It should be the consumer’s decision, not the government’s decision.

These actions would reduce the cost of healthcare and create a sustainable healthcare system.

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

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Can President Obama Intimidate The Supreme Court?

Stanley Feld M.D.,FACP,MACE

It is unlikely that President Obama can intimidate the Supreme Court.

The Supreme Court is going to judge “Obamacare” on the basis of its constitutionally.

Two weeks ago President Obama tried to intimidate the Supreme Court.

With a rhetorical back of the hand, President Obama seemingly attempted to browbeat Supreme Court justices into rescuing his increasingly imperiled signature legislative accomplishment – Obamacare. The president proclaimed that it would be "unprecedented" and "extraordinary" for the Supreme Court to overturn "a law that was passed by a strong majority of a democratically elected Congress." To add insult to self-inflicted injury, the president suggested that "judicial activism" would be an appropriate label if the Supreme Court were to "somehow overturn a duly constituted and passed law."

The president is wrong on the facts and wrong on the law. As we all know, the law was not passed by "a strong majority" of Congress. It won House passage by a razor-thin seven votes and even more narrowly escaped filibuster in the Senate. Even that close margin was sullied by vote-buying allegations such as the Cornhusker Kickback. The law turns out to be even more unpopular with the American people.”

I was horrified at President Obama’s attempt at intimidation. The public backlash he received compelled him to backpedal. He tried to explain what he meant the next day. He was unsuccessful.

He should understand “as a constitutional lawyer” the Supreme Court’s job is to decide if a law is constitutional. 

On May 3,2012 President Obama tried another route to influence the Supreme Court’s potential decision on his healthcare reform act. 

“In papers filed with the Supreme Court, administration lawyers have warned of “extraordinary disruption” if Medicare is forced to unwind countless transactions that are based on payment changes required by more than 20 separate sections of the Affordable Care Act.”

The administration counters that even if the Supreme Court strikes down the insurance mandate, the court should preserve most of the rest of the legislation. That would leave in place the administration’s changes to Medicare as well as a major expansion of Medicaid coverage.

“Justice Department lawyers said reversing the Medicare payment changes “would impose staggering administrative burdens” on the government and “could cause major delays and errors” in claims payment.”

President Obama rolled out Dr. Donald Berwick, former non-congressional confirmed head of CMS, to inform the public of the devastating affects repealing the law would have on seniors.

“Tossing out President Barack Obama’s health care law would have major unintended consequences for Medicare’s payment systems.

“Medicare cannot turn on a dime,” said former administrator Don Berwick, Obama’s first Medicare chief. “I would not be surprised if there are delays and problems with payment flow. Medicare has dealt with sudden changes in payment before, but it is not easy.”

AARP is also helping President Obama with his dirty work. It should not be forgotten that AARP took $4 billion dollars from UnitedHealthcare to be it exclusive vendor for Medicare Part D and Medicare Advantage.

 AARP says it’s concerned. If doctors became embroiled in a legal battle over payments, then “a general concern would be that physicians would cease to take on new Medicare patients, as well as potentially have issues seeing their current patients,” said Ariel Gonzalez, top health care lobbyist for the organization.

President Obama was smart enough not to personally frighten seniors. If the Supreme Court’s decision goes against him and hardships are created for seniors because of the disruptions to Medicare he can point to the Supreme Court as being a political activist court. He can say the Supreme Court has thwarted his agenda and has harmed seniors.

He can claim he is the defender of seniors. His hope is this maneuver will help in his reelection campaign.

The Supreme Court is the interpreter of the Constitution. It is not the defender of President Obama’s ideology. The Supreme Court’s integrity should not be attacked before or after a decision is made.

If the Supreme Court deems President Obama’s Healthcare Reform mandate unconstitutional, it is unconstitutional.

President Obama’s politics are a dirty business. Manipulating the traditional media and American public’s thinking rather than presenting the truth seems to be President Obama’s goal.

The traditional media has omitted the fact that President Obama is going to make major disruptive changes to Medicare on his own. He is going to decrease Medicare funding by $500 billion dollars.

In fact, the decrease funding was to take effect before the election.

He conveniently delayed the scheduled reduction until after the election in order to not upset seniors and lose the senior vote.

Former Medicare/Medicaid administrators disagree on the potential for major disruptions in Medicare.

“There is an independent legal basis to pay providers if the Supreme Court strikes down the entire law,” said Thomas Barker, a former Health and Human Services general counsel in the George W. Bush administration.

Tom Scully was CMS Director Medicare during former President George W. Bush’s first term.

He said,

He does not foresee major problems, although he acknowledges it would be a “nightmare” for agency bureaucrats.

Scully dismissed the notion that private Medicare plans would be jeopardized if the Supreme Court throws out the law.

“The idea that Medicare Advantage plans would shut down and patients would be thrown into the street is just people making up arguments to stir the pot,”

 President Obama has been planning to get rid of Medicare Advantage with his Medicare funding reductions. Seniors will then be in an uproar.

“Even if the law were completely overturned, the government would still have authority under previous legislation to pay hospitals, doctors, insurance plans, nursing homes and other providers.”

My interpretation is that this is another “trick play” by President Obama intended to put pressure on the Supreme Court to not overturn the law.

It will not work. President Obama’s disinformation and manipulations of the traditional media are wearing thin on everyone.

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

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Medicare Coding Is Becoming More Complicated Under Obamacare

Stanley Feld M.D.,FACP,MACE

Physicians make coding errors. These errors result in decreased reimbursement.   The denied claims might not be noticed for months by the physicians’ office.

In a busy practice the details of all the changes in coding rules are sometimes impossible to understand.

An entire coding industry with coding professionals taking certification examinations has developed with a great increase in the cost to the healthcare system.  

President Obama’s healthcare reform act is trying to institute a completely new electronic claims system. It is called 5010. It will replace claims system 4010.

As far as I can tell the goal is to obtain more data on physicians’ practice patterns. The goal of the new system is to determine the “quality” of physicians care. If the quality is poor, reimbursement will be reduced. Claims will be denied. Its execution looks confusing and expensive.

5010 was suppose to be in place and required for all to use by January 1, 2012. Apparently, it was not fully installed or tested by enough healthcare organizations to be validated. The date of full implementation was moved to March 31, 2012. Last week full implementation was moved to June 30, 2012.

The other complicated “innovation” of Obamacare is ICD 10 coding system.  This new coding system replaces ICD-9. It has increased the number of codes from 18,000 to 68,000 for coding in-patient and out-patient care. Effective implementation of these codes will be very difficult.

The implementation of these two “innovations” will add billions of dollars to the cost of healthcare.

 It will increase physicians’ paperwork. It will result in more mistakes. It is questionable whether the new systems will increase the quality of care.

It is adding more complexity to an already dysfunctional system.

It is impossible for physicians to keep up with all the new regulations the Centers for Medicare and Medicaid Services is about to impose on them.

Most physicians do not have the time to study the new regulations and their implications. They hope their professional organizations will pick up the important ones and point out the problems in plain English.

Many times one regulation contradicts another regulation. The administrative service providers (healthcare insurance industry) for CMS interpret the regulations the way they want. There is often a lack of consistency from state to state.

The Texas Medical Association recently informed us of an error related to submission of measure No.235, Hypertension: Plan of Care for the 2012 Physician Quality Reporting System.

 The Texas Medical Association sent the following message to all Texas physicians. I challenge anyone to understand this message.

The Centers for Medicare & Medicaid Services (CMS) has identified an error related to the submission of measure No. 235, Hypertension: Plan of Care, for the 2012 Physician Quality Reporting System (PQRS). Hypertension: Plan of Care is a claims/registry measure with G-codes that are inactive due to an error. Consequently, Medicare carrier TrailBlazer has rejected or denied claims containing the G-codes associated with the measure.

The following is a note I received from a physician.

“I thought I went to medical school to learn how to take care of sick patients?”

“I did not go to medical school to deal with complicated and impossible rules and regulations daily. These regulations interfere with my ability to help sick patients”

Physicians are faced with these confusing rules daily. I do not believe that these rules promote quality care for patients. These rules serve to irritate physicians. The rule changes result in a non-user friendly Medicare system.  I predict it will ultimately result in non-cooperation by physicians.

The TMA goes on to tell us what CMS is going to do and what we can do to obtain reimbursement for treatment given using CMS’ rules.

 CMS will reactivate the codes G8675, G8676, G8677, G8678, G8679, G8680, and 4050F with its next update of the HCPCS code data in April 2012. For 2012 claims-based reporting, PQRS requires at least three measures be reported at a 50-percent reporting rate.

In the interim, if you had intended to report this measure via claims for the 2012 PQRS, consider doing the following:

  • Report additional measures to substitute for measure No. 235, Hypertension: Plan of Care.
  • Hypertension: Plan of Care is a per-visit measure, which requires reporting for 50 percent of eligible patient visits. Therefore, you could report the measure on more than 50 percent of eligible visits from April through December 2012 to increase the likelihood for successful reporting of the measure.

As an alternative to reporting PQRS quality measures via claims, physicians can report using a qualified registry (PDF). TMA endorses two such vendors. Or, practices can submit measures using a qualified electronic health record (PDF).

Published March 16, 2012

Is it any wonder the Medicare and Medicaid System have tremendous bureaucratic cost overruns?

There has to be a better way?

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

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  • Brandon

    Interesting… thank you for the blog. In regards to the medical coding, you said they added some 50,000 new codes. Was the purpose to dilute the system, or to just make sure there is a code for every imaginable situation? Is there like a database or something that you just search keywords and you find the correct code? I have to be honest, I find this fascinating, I had no idea this was how medical billing worked.. or didn’t work I should say.

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President Obama Is Destroying His Theoretical Basis For Obamacare In Order To Win Re- election.

 

 

Stanley Feld M.D., FACP,MACE

I have been speaking to many people about the hazards of Obamacare.

Many well-educated people do not understand the defects in President Obama’s Healthcare Reform law and its potential unintended consequences.

Unfortunately, many congressmen and senators do not understand the consequences of the law either.

Rather than President Obama’s Healthcare Reform law making the medical care system better it is destined to make it worse.

I have explained the reasons for these unintended consequences in past blogs.

Most people have difficulty understanding details of the law because it is poorly covered in the press in our sound bite society.

Only a small percentage of people need medical care at any one time.  To those not needing medical care the healthcare system under President Obama’s law has changed little except for higher healthcare premiums and deductibles.   

The 35-55 year olds are the group that must become aware of the changes that will result from the law. When they will need medical care our healthcare system will likely be decimated. 

Everyone is in agreement that our federal, state and local governments are bankrupt.  Everyone understands our federal government has borrowed and spent the money we should have saved to fund our future healthcare needs.

Additionally, entitlements and administrative inefficiency, waste and fraud will have intensified the problems of overspending.

Paul Krugman believes deficit spending is immaterial. He continues to insist that John Maynard Keynes was right even though he lack evidence for his conclusion. Deficit spending is immaterial until there is no one around to lend the government money.

President Obama keeps saying he is going to decrease healthcare costs with his law. His conclusion is theoretical. His conclusion defies his own government’s CBO and various experts.

President Obama’s conclusions also demonstrate his lack of understanding of the complicated defects that have accumulated over many years of adjusting to defective healthcare policy. 

Increasing bureaucratic structure and government control is at the root of the problems in the healthcare system. Increasing this structure is not the solution to the healthcare system.

President Obama is now backing off some of the draconian aspects of contaminating the theoretical basis of his Healthcare Reform Act.

The Obama administration’s surprise announcement Friday that it planned to give states broad leeway to pick the benefits offered under the federal health care law offers yet another example of a gradualist approach to carrying out its signal domestic policy achievement.

 Obamacare mandates what must be covered under the Federal Health Care Law

• Ambulatory patient services, like doctor’s visits

• Emergency services

• Hospitalization

• Maternity and newborn care

• Mental health and substance abuse services

• Prescription drugs

• Rehabilitative and habilitative services, and specialized social and medical services for people with conditions like autism and cerebral palsy

• Laboratory services

• Preventive and wellness services and chronic disease management

• Pediatric services, including oral and vision care

 

President Obama is choosing to avoid some crucial choices until well after the 2012 elections. Critics accuse the administration of political expediency. The Obama administration insists the decisions have been based on sound policy judgments.

I hope the public is not stupid enough to believe President Obama’s ploy. The public has been duped in the past. I think it is  waking up.

 In passing a good deal of the decision-making to states, the administration has guaranteed that Americans will continue to face a patchwork of state regulations that make coverage uneven and inefficient.

People in Utah and Wyoming, for example, are likely to have more limited access to expensive services now mandated in states like Massachusetts and Maryland. And consumer advocates worry that some states will limit benefits too strictly.

President Obama has taken the guts out of his law just as he previously discontinued the insurance mandate to large organizations in 2011.

 “I think what Congress had in mind was creating a uniform national level of benefits that would be available to everybody,”

President Obama is playing another trick play on the states and the American people. The net result will be more uncertainty, more unintended consequences and more deficit spending.

Let us not be fooled again. Let us wake up!

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

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The Healthcare System vs. The Medical Care System

Stanley Feld M.D.,FACP,MACE

The difference between the healthcare system and the medical care system is very clear to me. The stakeholders in the healthcare system are patients, physicians, government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies. 

 Government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies are secondary stakeholders in the healthcare system.

 The primary stakeholders are patients and physicians. They also comprise the medical care system. Without the primary stakeholders there would be no need for a healthcare system.

 The secondary stakeholders have long ago taken over the healthcare system. All businesses and the government deal with the hand they are dealt using their best judgment. The people running the business or government pursue their vested interest. The difference between businesses and government is businesses work to make as big a profit as possible. Government, depending on the political party in power, pursues fulfillment of its ideology.  

 Since 1942 and the Economic Stabilization Act of President Roosevelt the market place for medical care has been distorted. In 1946 healthcare insurance was introduced. At that time the interaction between the primary stakeholders, physicians and patients, started to be destroyed by secondary stakeholders.

The cost of healthcare has progressively increased since the government passed the Medicare and Medicaid in 1965. Costs increased further in 1980 when the government said we couldn’t keep paying these increasing costs and instituted price controls for Medicare and Medicaid.

This led to cost shifting of the difference to the private healthcare insurance sector.  Businesses providing healthcare insurance for their employees accepted the resulting premiums associated with cost shifting until 1985. At that time they said, “stop.”

The healthcare insurance industry asked corporations what percentage of your gross revenue could you afford for healthcare insurance benefits. The healthcare premiums were 18% of gross revenue.

 The corporate answer was they could afford up to 12% of gross revenue. The healthcare insurance industry’s response was, no problem.

HMO pricing became the most economical option for corporate employers. HMO fixed healthcare cost for corporations and healthcare insurers.

HMOs shifted the risk to physicians and hospitals. HMOs failed because physicians and hospital did not know how to assess risk. They accepted risk initially because they were afraid to lose patients.

 Hillarycare failed to become law because of the potential for patient abuse, restrictions of access to care, rationing of care and loss of freedom of choice. Patients did not want the government to dictate their medical decisions.

 Obamacare was passed by a Democrat controlled congress with a very liberal ideology.

  Many congressmen did not read the entire document or debate the potential unintended consequences.

  The difference in ideology between liberal and conservative is easy to understand.

 “Liberals believe that health care is treated as a market commodity today but should not be, and conservatives think that health care is not treated as a market commodity but should be.”

 The healthcare system is not a true marketplace. The healthcare marketplace has been continuously distorted by government regulations and adjusted regulations since Medicare passage in 1965.

 All the stakeholders have distorted the market even further by adjusting to government regulations in order to purse their vested interest.

If real repair of the healthcare system is to occur a real marketplace has to be created. Obamacare is another adjustment in an already distorted marketplace. Obamacare is accelerating the dysfunction in the healthcare system until it implodes and results in increasing costs not savings.  

 The healthcare insurance industry controls costs. Many Democratic healthcare policy experts have ignored the facts. The healthcare insurance industry’s goal is to maximize its profit. It takes 30% of the healthcare dollars off the top.

The healthcare insurance industry should not be in control of the economics of the healthcare system.

 Consumers should be in control of their medical care decisions and the money they spend for those decisions.

Personal medical care decisions should not be left to the munificence of the government. The government has never done anything efficiently.  

 Private and Medicare insurance has kept control of medical decisions out of consumers’ hands.  Consumers purchase healthcare insurance individually or from Medicare. Consumers also can receive healthcare insurance from their employers as a job benefit.

 The healthcare insurer directs consumers to use physicians and hospital in its network. The insurer negotiates reimbursement rates for the insured with hospitals and physicians.

Consumers are given little or no information about the comparative cost or quality of any particular doctor or hospital.  Consumers go to a doctor in their network.

Physicians do a history and physical exam and order tests and procedures on patients’ behalf.  When the test and procedures come back physicians prescribe the appropriate medication after a follow-up visit.

The healthcare insurance company reimburses physicians.

  Patients receive a copy of the bill from the insurer with patient portion of the co-pay. The explanations of benefits are impossible to interpret.

This is not a marketplace transaction. Patients have no control over the reimbursement. Patients and physicians have little incentive to restrain overuse of the healthcare system. They have no incentive to even scrutinize the bill. Patients’ have no incentive to control costs.

The use of healthcare services is divorced from marketplace forces that constantly assess cost benefit ratios.  Neither physicians nor patients have incentive to get the best care at the lowest price with the best quality.

As healthcare costs increase each year the source of the increase remains opaque. The increasing costs are made to appear to be the result of patients’ and physicians’ overuse of the healthcare system.

The increase in cost could be the result of the healthcare insurance industry and the pharmaceutical industry’s increased profits.

All stakeholders pursue their vested interests. The only way to align vested interests is to have consumers be responsible for thei health and healthcare dollars.

Only then will a true market place exist. Entitlements and price controls do not work. The cost of healthcare will skyrocket with Obamacare and create a larger budget deficit.

 

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

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    Repairing the Healthcare System: The Healthcare System vs. The Medical Care System

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Hospital System Monopolies And ACOs

Stanley Feld M.D.,FACP,MACE

I have been a constant critic of Accountable Care Organizations. I have said they cannot work to the benefit of patients and physicians because of the difficulty of organizing them and the subsequent unintended consequences. ACOs will increase the costs to the government and healthcare insurance industry to provide the administrative services.

Government has proven over and over again its ability to make complicated mistakes. These mistakes result from bloated bureaucracies and conflicting bureaucratic missions.

Additionally the government outsources administrative services to the healthcare insurance industry. Administrative services fees are constantly increasing because of waste, inefficiency, and mark-ups.

Hospital systems have been merging for 15 years. In the process they are attempting to buy physicians practice and provide a salary for physicians.

 Hospitals are brick and mortar structures. They are not the future of medical care. Hospitals, now hospital systems, had to change their business plan because more and more patients are being treated out of the hospital.

Outpatient clinics, diagnostic imaging centers, chemistry laboratories and ambulatory surgical centers have shifted income from hospitals to physician owned outpatient clinics.

Hospital systems goal has been to buy physicians’ practices and ancillary care facilities. Hospital systems’ consultants have concluded that they would be in a better position to negotiate price if they owned the physicians infrastructure regardless of the cost and pay physicians a salary.

The published reason given for this action is to provide better and integrated medical care within their hospital system. The real reason is to capture the revenue lost to outpatient facilities and profit from physicians’ productivity. Physicians are realizing they are being taken advantage of and are demanding their fair share of their own productivity.

 The Federal Trade Commission is supposed to have the authority to challenge monopolistic hospital mergers to protect consumers.

 

In 1996, the FTC amended its policies on health care mergers. The new policy encouraged hospital systems to merge by providing safe harbor to competing hospital systems when the hospital system could prove their hospital could achieve sufficient clinical integration.

 

The definition of sufficient integration was very loose and ill defined. The government thought it could save money by having all the fees under one roof. The FTC encouraged healthcare system monopolies in order to achieve more efficient and integrated care. It did not realize it would bite them in the leg someday.

It has always been a mystery to me how the government came to this conclusion. Suddenly the government has realized that the monopolies have turned on it and are in a position to demand more reimbursement. 

J. Frank Rosch the FTC Commissioner said,

 “I thought that the 1996 amendments…were the biggest loophole in the antitrust laws I had seen,”

 “Subsequent Advisory Opinions issued by Commission staff…were about as clear as mud.” 

Dr. Donald Berwick and President Obama claim that Accountable Care Organizations are the cure to our rising healthcare costs. A gigantic and expensive bureaucratic system has been constructed by CMS to regulate these new ACOs.  ACO’s promote further consolidation and mergers of physicians and hospital systems.

“The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”

Remember the government outsources all of the administrative services to the healthcare insurance industry. I have shown how the healthcare insurance industry has taken 30 to 50% of every Medicare healthcare dollar to the disadvantage of the taxpayer and seniors. 

Large merged hospital systems have in turn taken advantage of their size to take advantage of the healthcare insurance industry.

The healthcare insurance industry has taken advantage of the government in pricing administrative services.

Finally, the government has taken advantage of seniors by increasing Medicare premiums, increasing deductibles and decreasing benefits..

“ The final ACO guidelines, says Rosch, are “extraordinarily generous to providers,” and will constrain the FTC’s ability to block exploitative provider mergers.”

The Congressional Budget Office, much to the dismay of Obamacare’s advocates, did not think ACO’s would save much money in ten years.

 The CBO projected that the Medicare ACO initiative would save $5.3 billion over ten years.

 “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”

 This supposed savings amounts to eight-hundredths of one percent of Medicare’s spending over the projected ten years.

People have a tendency not to do the arithmetic when present with what sounds like a big number.              

 “Against the very meager prospects for cost savings,” Rosch concludes, “there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.

Middle-class Americans are already struggling with the burdens of the rising cost of health insurance. The potential ACO policy blunder is not to be taken lightly.

 Obamacare’s failure will skyrocket our federal debt. The lack of consideration of the dysfunctional dynamics of the healthcare system will result in unintended consequences that will create greater dysfunction and higher costs.  

Obamacare and ACOs will end up making health care even less affordable and accessible.

Maybe that is President Obama’s goal.

 

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

Please send the blog to a friend 

 

 

 

 

 

 

 

 

 

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Fixing Medicare

Stanley Feld M.D.,FACP, MACE

As we have seen, Dr. Ezekiel Emanuel’s misconceptions of the true drivers of medical costs are not fact based. President Obama and his administration do not have a clue about how to fix Medicare.

 

Dr. Emanuel and Dr. Berwick have created a system that Americans did not want and do not like. Dr. Berwick’s replacement was his assistant. She, in all probability, thinks the same way he does. It is likely there will be no improvement in fixing Medicare.

Accountable Care Organizations are a long way from being organized effectively and efficiently. Organizations which would be most likely to develop ACO’s are not signing on. The reasons are obvious. Obamacare provides inadequate incentives to join with great risks.

 I believe the only way to fix Medicare is by developing a healthcare system that permits consumers, not the government, to drive their own medical care choices. Consumers must be responsible for their health and choice of medical care. They must also have control of their healthcare dollars and be educated and incentivized to use those healthcare dollars wisely.  

 To quote Milton Friedman, “There ain't not such thing as a free lunch.”

It will take educated, motivated and incentivized consumers to reduce the costs of Medicare in order for the program to be sustainable in the future.

It is likely that central government control over individual healthcare and medical care choices will create a bigger mess. It will also impinge on individual freedoms.

 Ensuring that Medicare provides quality health care coverage to millions of older and disabled Americans is essential in a compassionate society. How this can be accomplished is the question.

Seniors have been deceived into believing that they have prepaid their retirement healthcare insurance during their working years. They are realizing that they have been deceived by many administrations.

  “Medicare is nothing less than a lifeline for 49 million older and disabled Americans.”

 “It is also hugely costly. The federal government spent about $477 billion in net Medicare outlays in fiscal year 2011 — 13 percent of its total federal  spending. By 2021, it is projected to spend $864 billion — or 16 percent of the total budget — according to figures derived by the Kaiser Family Foundation. That rate of growth is not sustainable indefinitely.”

 Where did the Social Security and Medicare taxes paid by Americans disappear to? The government collected those taxes and then lent them to the government treasury to maintain U.S. solvency. Now the government is insolvent. It cannot pay back the trust funds as Social Security and Medicare payments decrease and the number of eligible Social Security and Medicare recipients increase.

 President Obama’s administration and its bureaucrats are ignoring the real problems in Medicare.

 They think consumers are too stupid to look after themselves and their own money. It is essential to President Obama’s ideology that the central government control consumers’ choice, consumers’ medical decisions and the money consumers paid into the Medicare system.

The federal government has not done a very good job of managing the money consumers, now seniors, have paid into Social Security and Medicare all these years.

Politicians refuse to understand the sources of waste in the healthcare system. This was made painfully obvious as expressed by Dr. Emanuel. All the stakeholders (patients, physicians, hospital systems, healthcare insurance companies, pharmaceutical companies and the government) have contributed to the waste in the healthcare system.

The biggest villain has been the healthcare insurance industry. The next biggest villain has been the federal and state governments for letting the healthcare insurance industry get away with what they are getting away with.

 Healthcare policy experts refuse to understand that the government is not the administrative services provider for the Medicare program. The government outsources all the administrative services to the healthcare insurance industry.

 The government pays over 20% of each healthcare dollar plus a bid price to the healthcare insurance industry’s regional vendor.

 Most of the vendors that administer Medicare and Medicaid are subsidiaries of the major healthcare insurers. They change their name to the disguised subsidiaries because some of the state government exposed the major companies for the abuses the healthcare insurance companies imposed on patients and physicians.

The politicians’ and bureaucrats’ goal is to maintain power. Their decisions are based on maintaining their power or leveraging their ideology to maintain or obtain that power through the next election cycle.

 They are not concerned with the health and welfare of citizens.

  President Obama proves this daily by running for reelection rather than running the country

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

Please send the blog to a friend 

 

 

 

  • Medicare America

    Thanks for this article. Quite sensible.

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Our Sound Bite Society. Cain vs. Gingrich Debate

 

Stanley Feld M.D.,FACP,MACE

 I missed the Cain vs. Gingrich debate on November 5th because it was not well publicized by the traditional media. I watched the debate on the Internet on November 9th

All I have heard from President Obama’s special joint session of congress speech is you must pass this jobs bill right away. I did not hear any solutions to America’s complicated structural problems.

  

There is little mention that his American Jobs Act is a $450 billion dollar stimulus package adding to the previous one trillion dollar stimulus package that did not work. President Obama also said it will not cost the American public a dime.

 On the other hand, Herman Cain and Newt Gingrich had a riveting 81 minutes debate discussing in detail what should be done about Medicare, Social Security, Medicaid, and jobs.

 It was a truly remarkable debate. The three minutes response limitation on the candidates was suspended in the first three minutes.

Clear, concise and detailed explanations of each candidate’s positions were given. Both candidates were entertaining and serious. They treated Americans as intelligent humans who can make decisions for themselves once they understand the issues.

 Their goal was to educate the people.

This Internet video is very worthwhile watching. It explains, why in their opinion, central government solutions have not worked. They explain what has worked in the past and what needs to be done to solve America’s problems.

  

All the traditional media said about the debate in the press is Gingrich won. There was no discussion of the details of the debate.

There was not one “got ya” question or response during the debate.

  In my opinion neither candidate won the debate. The viewing American public won. Please watch this debate. It will not be a waste of time.

 Our nation needs more of these frank discussions to educate the public about the problems we have and potential solutions to the problems.

 

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

 

  • EMR

    the new bill is huge and a lot of factors need to be considered before anyone can make an intelligent decision. Too bad noone fully knows the whole bill

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Class Act (Community Living Assistance Services and Supports) Has Been Shutdown

Stanley Feld M.D.,FACP, MACE

The CLASS Act was another ill-conceived part of President Obama’s healthcare reform act. President Obama and HHS (Health and Human Services) realized that this social entitlement program was going to be another entitlement disaster.  CLASS would have cost the taxpayers an additional $75 billion per year when it was passed on the condition of being budget neutral.

 CLASS was discontinued before it could join other entrenched government entitlement programs that are unsustainable. 

 CLASS quietly became an amendment to President Obama’s healthcare reform act. There was little discussion about CLASS when the Democrats in congress passed President Obama’s healthcare reform act. There was little discussion until Kathleen Sibelius’ announcement to discontinue CLASS.  

 She said;

  the administration was shutting down Class. After 19 months of research and consultation, “we have not identified a way to make Class work at this time.”

There has been little discussion about CLASS since her announcement.

CLASS was slipped into Obamacare as a legacy of to Senator Edward M. Kennedy. It establishes the first national system of long-term care insurance.

  1. It was voluntary;
  2. It was to pay a cash benefit that each recipient could decide how to use.
  3. It could not disqualify participants with pre-existing disabilities or charge them more.
  4. It had to pay for itself without relying on taxpayer dollars.
  5. It was to provide long-term care for the elderly and disabled.
  6. The program is not meant to shoulder the whole cost of long-term care, for either the elderly or younger people with disabilities, but it could make a great difference to strapped families.
  7. It would typically cover home care, assisted living, adult daycare, nursing home, and Alzheimer’s facilities for those who needed it,
  8. There would have been no apparent age or time limits for benefits.
  9. No underwriting in the selection of beneficiaries.                                                                                                                                                                                 

CLASS was designed to collect “premiums” during employees’ working years and spend the money immediately.

 When the obligations came due, the program would have been forced to seek a taxpayer bailout. “This is called redistribution of wealth.”

Medicare benefits typically pay for nursing home and home care coverage typically only for relatively short -term recovery (21 days) from an acute illness.

Medicare beneficiaries who need long term care beyond their benefits but don’t have private supplemental long term care insurance must pay out of pocket.

CLASS would pay recipients $50 a day for in-home care assistant to help with cooking, cleaning, and bathing.  This sounds cheap. However it would cost the government over $18,000 a year per person.

There are no signup restrictions and no increased premiums based on overall health and age at the time of signup.

The vast majority of the voluntary participants would be the sickest and most in need of long term care. There is no way that a voluntary program could be budget neutral.  

CLASS like Medicare would have few restrictions on the amount and types of care that beneficiaries receive.

Advocates for “health care is a right” are stuck with the dilemma what to do with a severely demented 99 year old nursing home patient with terminal cancer. Should that patient receive the same life extending care as a 65 year old with no medical problems?

This is a moral and legal dilemma that society must face. Patients and their family should make that decision. 

It is immoral for a group of bureaucrats to decide on treatment for the individual. It is equally questionable to have physicians decide to withhold treatment

It is one of the reasons patients should own their healthcare dollars and be responsible for how they spend them. Patients and their families should have some skin in the game.

The government could provide some of the healthcare dollars for those who qualify.

If those dollars are not spent at the end of the year, patients and their family would keep them. This would provide incentive to make logical decisions about the consumption of medical care.

There is no evidence that nursing home care or home assistance care or assisted living or adult day care increase life expectancy. These services provide comfort for the elderly and their children.

Rather than providing complete medical care for the elderly in the hope of extending life, less expensive ways can be devised to provide comfort other than warehouseing the elderly in nursing homes.

CLASS would have provided minimal financial assistance in providing comfort to the infirmed elderly. With mounting budget deficits America cannot even afford minimal help.

Basically CLASS was an insurance plan without any of the rational limits and restrictions that real insurance companies use to prevent themselves from going bankrupt.                                                                                                                                                                                                                                                   President Obama’s CLASS Act could never work. After the government spent $75 billion dollars a year on a tax neutral plan, he would say “OOPS”. America would enjoy the luxury of another money draining entitlement program.  

The “healthcare insurance” paradigm for providing healthcare to the elderly must be changed. Patients must be motivated to be responsible for their own care.

President Obama has tried to keep the conversation about discontinuing CLASS, another entitlement program, to a minimum.

The realization of the failure of CLASS should be used to think about healthcare coverage from a different perspective rather than letting our politicians making the same mistakes over and over again.    

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

 

 

 

 

 

 

 

 

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