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Nation’s Health Care Bill Predicted To Double By 2020

August 17, 2011
inHealthcare Insurance Industry, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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 Stanley Feld M.D.,FACP,MACE

Massachusetts has experienced a sixty percent increase in healthcare costs since “Romneycare” was enacted in 2006.  The total cost of medical care in 2005 was $350,100,000. In 2009 the total cost of care had risen to $587,900,000. This represents an annual growth rate of 13.7% per year.

The Medicare Office of the Actuary reported it expects healthcare costs to increase from the $2.6 trillion dollars in 2011 to $4.6 trillion dollars by 2020 under President Obama’s Healthcare Reform Act.

“The Medicare Office of the Actuary estimated that health spending will grow by an average of 5.8 percent a year through 2020, compared to 5.7 percent without the health care overhaul. With that growth, the nation is expected to spend $4.6 trillion on health care in 2020, nearly double the $2.6 trillion spent last year.

I believe the Medicare Office of the Actuary growth rate estimate of healthcare costs is low. Obamacare is about expanding healthcare coverage for the uninsured. It is actually about driving the entire population into a “Public Option” which will be subsidized by the federal government. President Obama’s goal is to have total government control over the healthcare system.

The total rate of growth of healthcare costs will be greater than 5.8% per year. President Obama is not going to be able to decrease costs by insuring at least 30 million more people. Obamacare has done nothing to restrain the healthcare industry’s billing policies. The healthcare industry’s profit will escalate even further as the federal deficit escalates.

President Obama declared that Accountable Care Organizations, Pay4Performance and Electronic Medical Records would reign in costs. I believe this is a pipe dream.  These programs are in the developmental stages and have an excellent chance of failing as the entitlement expands.

President Obama has continued to ignore an important healthcare cost generator.  Defensive medicine generates between $300 billion and $700 billion dollars a year in costs. Tort Reform if done correctly could decrease the cost of defensive medicine to the healthcare system markedly.

“The federal health law, which will expand coverage to 30 million currently uninsured Americans, will have little effect on the nation's rising health spending in the next decade, a government report said today.’

I hope the American people do not let President Obama trick them again with his demagogary. Last week he told us he was going to decrease the federal deficit by 4 trillion dollars in ten years. It is not true because he is going to increase the federal debt by 9 trillion dollars or 4 trillion less than he had planned. Deficit spending continues unabated.

 Everyone has to watch closely. He is bankrupting the country.

 White House Deputy Chief of Staff Nancy-Ann DeParle tells us not to worry. "The bottom line from the report is clear: more Americans will get coverage and save money and health expenditure growth will remain virtually the same,"

 

She stated that the new programs that administration officials said they hope to implement would change the way Medicare and Medicaid pay doctors and hospitals. (ACOs, Pay4Peformance and EMRs). Doctor’s and hospitals are only part of the problem. A bigger part of the problem is the administrative service providers (healthcare insurance industry) expenses, the cost of government bureaucracy, and the increase in defensive medicine

“Meredith Rosenthal, a health economist at Harvard School of Public Health, said it is difficult to predict what impact the health law will have on slowing national health spending.  "Many of the components of the law that are intended to control costs are still in draft form,"

The key to President Obama’s deception to the American people is to distract Americans from connecting the dots. Fifty per cent of employers will drop employer sponsored insurance programs and pay the penalty. Employees will buy insurance through the state insurance exchanges. States are refusing to participate in the insurance exchanges. The federal government is picking the ball up for the states and will have total control over the insurance exchanges.

Baby Boomers are joining the Medicare roles in increasing numbers by the minute. The cost of Medicare will escalate. Seniors are not going to be able to find physicians who accept Medicare because President Obama is going to decrease reimbursement by thirty percent January 1, 2012.

President Obama believes physicians are the problem. He refuses to believe the reality of the dysfunctional healthcare system. All the stakeholders are the problem. Some stakeholders donate more to his reelection than others. He has a strong record of playing favoritism to those that support him.

Americans are waking up to his tricks. The healthcare system has to be reformed. He has the wrong approach. I hope the electorate does not fall for his charm again. 

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

 

 

 

 

  • Janmar Delicana • August 21, 2011

    Dear Dr. Feld,
    It’s a great pleasure to read your blog. I find your post very informative. Thank you for sharing your insights.
    As a reader, I consider your writing to be a great example of a quality and globally competitive output. It would be a great thrill and honor if you could share your genuine ideas and knowledge to our community, Physician Nexus. With this you can gain 1000 physician readers from over 62 countries on Nexus.
    We would love for you to visit our community. It’s free, takes seconds, and is designed for physicians only – completely free of industry bias and commercial interests.
    Best,
    Janmar Delicana
    On behalf of the Physician Nexus Team
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RomneyCare: Does It Work?

August 14, 2011
inMedicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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  Stanley Feld M.D.,FACP,MACE

 In 2010, Massachusetts State Treasurer Timothy P. Cahill, an independent candidate for governor, offered a wide-ranging and scathing criticism of the state’s universal health care law (RomneyCare). “ It is bankrupting Massachusetts and will do the same nationally, if a similar plan is passed in Congress.”

I predicted this result when the RomneyCare was passed in 2006. Mitt Romney can deny the results of his plan all he wants. The results are the results and it is his plan. It was an ill-conceived plan. His plan was the model for Obamacare. The media forgets that the (CMS director) Dr. Don Berwick and his untested “idealism” was the architect of both plans.

“We haven’t done anything about driving down costs,” Cahill said. “We haven’t helped small business. We haven’t changed the way we pay for health care and the way we deliver it.”

“The real problem is the sucking sound of money that has been going in to pay for this health care reform,”

Timothy Cahill pointed out that the Obama administration had subsidized the state Of Massachusetts plan so it looked good. All of RomneyCare’s defects were camouflaged.

“And I would argue that we’re being propped up so that the federal government and the Obama administration can drive its healthcare reform plan through Congress.”

Commonwealth Connector, the independent state agency established to help residents find health insurance, has “totally failed” to create competition and connect people with affordable insurance. Cahill pointed out that 68% percent of the residents RomneyCare serves receives subsidies from the state.

Patients do not have ownership in and responsibility for their illness. The state of Massachusetts does. It is logical that there would be a rise in costs and overuse. Romneycare creates another uncontrolled entitlement.

The state's health care reform law dramatically reduced the number of uninsured individuals.  At the same time federal, local and state funding for safety-net hospitals was dramatically reduced. In Massachusetts, the thinking was the uninsured, now insured, would go to private facilities for their healthcare needs.

There would be less need for safety-net facilities. The state of Massachusetts could then save money by decreasing funding for these facilities.

Massachusetts’s survey data showed the opposite. The survey of data between 2005-009 found:

  • The number of patients receiving care at Massachusetts Community Health Clinics (CHC) increased by 31.0%,
  • The share of CHC patients who were uninsured fell from 35.5% to 19.9%.
  • Nonemergency ambulatory care visits to clinics of safety-net hospitals grew twice as fast as visits to non–safety-net hospitals from 2006 to 2009.
  • The number of inpatient admissions was comparable for safety-net and non–safety-net  hospitals.
  • Most safety-net patients reported that they used these facilities because they were convenient (79.3%) and affordable (73.8%).
  • Only 25.2% reported having had problems getting appointment elsewhere.

 Our findings indicate that, although health care reform substantially increased the number of people with health insurance in Massachusetts, the demand for services from safety-net facilities (CHCs and hospitals) also grew, particularly for ambulatory care. 

“CHCs have become an even more important source of primary care, perhaps because of increasing difficulty obtaining care from other primary care physicians' offices.”

 

Surveys are a tool of social science and are not necessarily scientific proofs. They have a tendency to miss important findings within the data.

 The state and federal governments have subsidized 68% of the uninsured. Private physicians’ offices in Massachusetts are overcrowded. The insured now have first dollar coverage. Patients overuse the system by seeking more medical attention raising the costs of care.

In Massachusetts patients have speculated with physicians’ appointment times. Physician appointment times have been sold on the secondary market.

In Massachusetts some insurance reimbursements are so low that physicians do not accept certain insurance policies. Patients then have to go to the safety-net hospitals.

Special reimbursement deals have been made with certain physician groups and hospital systems. The Boston Globe has published these deals in the past.

 The total money spent by the state has increased beyond affordability. The increase is the result of overuse of the healthcare system. Patients have no skin in the game.

Revenue 1 8 11 11

 The losers have been patients, the state and small businesses. The winner is the healthcare insurance industry. 

Americans will see the same results with ObamaCare.

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

 

 

 

 

 

 

 

 

 

 

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Problems With Medicare Part D

July 31, 2011
inHealthcare Insurance Industry, Medicare, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

I have discussed Medicare Part B and Part F in recent blogs. A reader asked about Medicare Part D

 

Dr. Feld 

“Please discuss Medicare Part D, the drug benefit plan available to seniors. It is very complicated and completely confusing to me.

My physician gave me a prescription for Levequin 500 mg once a day for 10 days. The pharmacist told me it would cost me $330 dollars. Medicare Part D would pay an additional $110 dollars for a total of $440 dollars.

 I asked the pharmacist if there was a generic equivalent. The answer was yes. It cost $10 dollars.

 This is unconscionable. It is highway robbery.

Sincerely

a.g.”

 

Several issues are presented in this readers note. It is essential to understand these issues. The issues are an indictment against government “controlled” programs.

On Drugstore.com the price for “Levaquin – 500mg Tablets  is 185.98 for 10 tablets. 

"There is a generic equivalent ; Levofloxacin is a 3rd-generation fluoroquinolone antibiotic, marketed by Ortho-McNeil under the trade name Levaquin in the United States.  Levofloxacin was launched in the Japanese market in 1993". 

The generic version of Levaquin is Levofloxacin. Levofloxacin 500mg tablets cost $51.08 for 30 tablets or $17.08 for 10 tablets. Wal-Mart’s price is less at $20 for 30 tablets. 

Levaquin is marginally more potent than Cipro, which also has a generic equivalent. Wal-Mart’s price for 30 tablets of ciprofloxacin 500mg(generic Cipro) is $20.  

  I am sure the reader’s physician did not know the differences in the prices of the drugs.

The Medicare Part D benefit was created to help senior citizens pay for their medication at affordable prices. If a person has an illness that needs medication that person has to be able to afford the medication. Taking the medication is important to prevent the complications of chronic diseases. It is well established that 90% of the Medicare healthcare dollars are spent on treating the complications of chronic diseases.

Adherence or compliance with prescribed medication is only about 50%. Compliance was lower before Medicare Part D. Many seniors had to make a choice between food and medication. Many seniors still have to make the same choice.

Tzu said 2500 years ago,

“Today’s battles are information battles because information shapes both perception and opinion.  Those who use it to both and attack and defend will win, those who do not will lose”.

The healthcare insurance industry controls the data for both employers and the government. It is the administrative service provider for both employers and government.  It is no surprise that it is the winner. The losers are patients and the government.

United Healthcare will pay AARP $4 billion dollars over seven years to be the only provider of AARP’s Medicare Part D plan.

Does anyone think United Healthcare does this if they thought they would lose money?  Part D is supposed to be a plan subsiding drug benefits for seniors. The government is supposed to set premiums for all seniors regardless of health risk.

Last year United HealthCare’s net income from Medicare Part D was over $1 billion dollars. United Healthcare expects this net income to increase in the future as more baby boomers qualify for Medicare Part D coverage using AARP’s exclusive United Healthcare Part D plan.

 Despite all the profit from Medicare Part D in 2008 the premium for seniors increased from $25 to $28 per month per senior in 2009. The premium started at $14 per month per senior 2006. In 2011 the premium has increased to $41 per senior per month. Medicare Part D’s premiums are paid for with after tax dollars.  United HealthCare’s profit from Part D has grown even higher.

Dennis Kucinich said. "It’s clear that they didn’t want me upsetting their multi-billion dollar applecart,"

"The health care plans of the invited candidates preserve and promote the interests of for-profit insurance and pharmaceutical companies at the expense of tens of millions of everyday Americans who either can’t afford coverage or are being over-charged for the inadequate coverage they struggle to afford."

I believe the government’s intentions were good. However, after vested interests manipulated the rules and regulations, Medicare Part D has turned out to be less effective and more costly than anticipated for both seniors and the government.

The government and seniors are being ripped off by the healthcare insurance industry. The government is doing nothing about it.

Medicare Part D premium provides coverage until prescription costs reach $2830. After $2830 the patient pays 100% of the drug cost until his out of pocket expenses reach $4550. Thereafter, the patient pays 5% of the drug costs and the government subsidies the remainder.

The co-pays before patients reach the “donut hole” varies depending on the drug and the healthcare carrier. Co-pays for generic drugs are $4. Co-pays for healthcare insurance carriers preferred  branded drugs are $25.  Co-pays for healthcare insurance company’s non-preferred drugs are $54 or more. This is the reason for the $330 dollars co-pay in the readers note.

The total costs are added to the amount credited toward patients “donut hole” even though the patient paid the co-pay.

It is confusing for intelligent people. Just image how confusing it must be for an 85 year old with some disabilities and limited income.

Consumers can buy a month supply for a generic drugs at Wal-Mart for $4 cash without a charge being made to their donut hole. Some healthcare insurance companies charge $20-40 dollars toward the donut for a $4 generic drug. The insurance company pays nothing for the drug because the consumer already paid the $4. None of these maneuvers are transparent. The healthcare insurance company controls the data.

Despite all of these co-pays and insurance premiums, the government spends $51 billion dollars a year subsiding Medicare Part D.

Something is wrong. It must be money wasted by the CMS bureaucracy, faulty CMS oversight of the healthcare insurance industry or non-transparent pricing by the healthcare insurance industry.

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

 

 

 

 

 

 

 

 

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More On Medicare Part B’s Hidden Tax Increases

July 27, 2011
inMedicare, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP MACE

Medicare Part B is not cheap!

In addition to the increase in premiums for Medicare Part B, there are additional hidden costs. These hidden costs for care could be viewed as a hidden tax.  These costs have been increasing yearly.

The government’s cost to fulfill its obligations to the Medicare entitlement program has increased yearly. The Medicare premium increases have not covered the government’s increased costs. The government has increased seniors’ Medicare deductible in order to cover some of its expense.

At the same time, the government has blamed the increased costs on increasing physicians’ fees. Physicians have not been able to increase their fees for several years.

Physicians are the most disorganized and least represented of all the healthcare stakeholders. They are the easiest to attack. Physicians’ reimbursements have, in fact, consistently been decreased.   

An increasing number of physicians are opting out of accepting Medicare. Patients pay physicians directly. The patient then submits the bill to Medicare. Medicare reimburses patients directly.

Physicians are under no obligation to accept Medicare’s allowable fee schedule when they do not accept Medicare. Physicians’ fees are generally higher than Medicare’s allowable fee. The full fee represents a further increase in the cost of Medicare coverage.

If physicians accept Medicare, they are required by law to accept Medicare’s allowable fee.

Many physicians have stopped accepting new Medicare patients. This has intensified the physician shortage for seniors. It has also resulted in decreasing access to care.    

I received a note from a reader asking me why he had to pay $182 dollars to his internist for an office visit and an x-ray. He has Medicare Part B and Medicare Part F (Medigap) insurance. He thought this coverage would pay the entire fee. He paid cash and eventually received $2.24 from Medicare.

He stated he did not have to pay anything for a previous visit.  

I asked him to send me the Medicare explanation of benefits(EOB). It   made no sense.

In studying the explanation of benefits several things became clear.

1. His internist stopped participating in Medicare.

 2.He did not tell this to the patient.

3. The internist told the patient that the $182 covered his annual Medicare deductible.

The description of Part B coverage in the Medicare manual is as follows;

“Part B: (covers Medicare eligible physician services, outpatient hospital services, certain home health services, durable medical equipment)

  • $162.00 per year. (Note: You pay 20% of the Medicare-approved amount for services after you meet the $162.00 deductible.)

Additional information about the Medicare premiums, deductibles, and coinsurance rates for 2011 is available in the November 4, 2010 Fact Sheet titled, "Medicare Premiums, Deductibles for 2011" on the www.cms.gov website.”

The patient also had Medigap (Medicare Part F). Part F covers Medicare Part B deductibles and the 20% co-pay of Medicare allowable charges. It also covers Skilled Nursing facilities allowable charges and Medicare Part A deductible plus 20% of the co-pay for Part A. Part A covers hospitalization.

“Medicare Supplement Plan F covers:

  • Basic benefits including 
    • Hospitalization: pays Part A coinsurance plus coverage for 365 additional days after Medicare benefits end
    • Medical Expenses: pays Part B coinsurance – generally 20 percent of Medicare-approved expenses – or copayments for hospital outpatient services
    • Blood: pays for the first three pints of blood each year
    • Hospice care: pays Part A coinsurance

 

In addition to the basic benefits, Plan F also provides coverage for: 

  • Skilled nursing facility care
  • Medicare Part A deductible for hospitalization
  • Medicare Part B deductible for medical and hospital outpatient expenses
  • Medicare Part B excess charges (This is the difference between what a doctor or provider charges and the amount Medicare will pay up to Medicare's limiting amount)
  • Travel-abroad medical emergency help

If this patient went to a physician that accepted Medicare, he would have been fully insured. In this case the physician did not accept Medicare. The physician omitted attaching the patients Medicare Part F coverage information in submitting Medicare Part B form for the patient.

By not accepting Medicare, physicians are allowed to collect their entire fee from patients. The physician billed the patient $182.86. Medicare allowed $164.78.

The patient’s Medicare deductible for 2011 is $162. Therefore Medicare paid the patient $2.78 for a total of 164.78. Physicians are permitted to “balance bill” when not accepting Medicare.

His physician can collect and keep the additional $28.08. If he accepted Medicare, it would be against the law to collect and keep the extra $28.08.

As Medicare continues to reduce physicians’ reimbursement, physicians, who in the past accepted Medicare, are dropping out and directly billing patients.

If this patient’s Medicare Part F information were attached to the Medicare Part B bill, Medicare would have sent the allowable fee explanation of benefits to the Medicare Part F carrier. The Medicare Part F carrier would have sent the allowable fee for his deductible of $162 to the patient.  

In 1999 the yearly deductible was $100. It increased to $110 in 2003, $124 in 2006, $131 in 2007, $135 in 2008, $133.50 in 2009 and $162 in 2010.

Additionally, Medicare Part F premiums have increased each year. It is not sensible to be without Medicare Part F coverage.

Patients must be aware of the coverage details. They must learn how to read the explanation of benefits (EOBs). They must make sure they are not overcharged or mischarged.

Part A, hospital coverage, is even more complex and confusing.  Many overcharges can be found when studying the EOBs.   

Medicare coverage is not cheap.

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

 

 

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Where Is The Transparency and Accountability In Obamacare?

July 10, 2011
inHealthcare Insurance Industry, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D., FACP,MACE

President Obama where is your promise about transparency and accountability in Obamacare?

A major problem in the healthcare system is the lack of transparency and accountability. It has been unchecked for a very long time.

Both primary and secondary stakeholders act in their self-interest. These stakeholders have had ample opportunity to be non-transparent and non-accountable. All the stakeholders have abused the healthcare system. 

I hit a nerve with my last blog “Patients And Physicians Must Control Costs”. Multiple readers responded with the usual comments:

“Patients are not smart enough to handle their own healthcare dollars.”

“Your basic idea makes sense, but in reality I doubt that a patient knows enough to make intelligent medical/financial decisions, because there are too many unknowns and variables.”

“Physicians over use the fee for service system in order to make more money.”

“If a physician tells a patient that there is only a 1/10,000 chance that an MRI will yield something useful, if the patient doesn’t have to pay for it, the patient wants the MRI. 

 Patients (consumers) must be taught and motivated to manage their own healthcare dollars. Patients’ choice can create competition among physicians and other stakeholders for the consumers’ benefit. Consumers can force the entire healthcare industry to be transparent and accountable with the appropriate government support. 

In 2011 with an ever-evolving consumer oriented Internet few consumers would  buy appliances or electronic gadgets without reviewing the many comparative reviews by experts and consumer peers on the Internet. 

If consumers feel their plumber is ripping them off, they would join Angie's List to find a new plumber. Angie's List has forced transparency and accountability on plumbers in order for them to stay in business. Angie’s List has empowered consumers.  Consumers who do not care about being ripped off can continue to use those non-transparent non-accountable plumbers.

The hotel and restaurant business has experienced the same with consumer driven Internet sites such as Trip Advisor and Open Table. Many other B-C Internet sites have empowered consumers to make choices for their advantage. 

This is called free market forces. It can happen in medicine. It must happen in medicine. It is not wishful thinking.

Americans do not want politicians and bureaucrats to make their healthcare decisions for them. 

President Obama and Dr. Don Berwick are not interested in market forces or in respecting congresses constitutional responsibility. They are interested in dictating healthcare policy by executive order. One such executive order has recently created a political storm in congress.  

“Democrats and Republicans are joining to oppose one of the most important features of President Obama’s new deficit reduction plan, a powerful independent board (independent Physicians Advisory Board) that could make sweeping cuts in the growth of Medicare spending.

"Last week, in his speech on deficit reduction, Mr. Obama said he wanted to beef up the board’s cost-cutting powers in unspecified ways should the growth of Medicare spending exceed certain goals."

President Obama’s goal is to have an unelected commission make healthcare decisions for the electorate without the check and balance of the electorate or congress. 

Representative Allyson Y. Schwartz, a Pennsylvania Democrat prominent on health care issues, said: “It’s our constitutional duty, as members of Congress, to take responsibility for Medicare and not turn decisions over to a board. Abdicating this responsibility, whether to insurance companies or to an unelected commission, undermines our ability to represent our constituents, including seniors and the disabled.”

President Obama doesn’t care. He is going to ignore the protests from both Democrats and Republicans.

Congress has given him the authority to do what he thinks best with its passage of his healthcare reform act.

Britain is turning away from the National Health Service and its Independent Physicians Advisory Board called the National Institute for Clinical Excellence (NICE). It has not saved money.   

Both Democrats and Republican have realized they have given President Obama too much power. 

 Because Britain is an entirely socialized medical system, NICE wields power over the health care options of all residents of Great Britain.  IPAB, initially, will make decisions regarding only the government-administered programs of Medicare and Medicaid. 

Americans have more freedom of choice at the moment. This freedom will disappear if President Obama gets his way.

 NICE is "health cost watchdog" that assesses everything medical, from new technologies to drugs and clinical procedures, and issues guidelines for their use by the NHS. These guidelines include criteria by which certain patients will be made ineligible for both routine and life-saving procedures. The method is known as Comparative Effectiveness Research and Evidence-Based Decision Making. 

“Our insurance companies weigh costs as well, but there is a difference. If your insurance company denies access to a procedure you feel you need, you have recourse through the company's own appeals process and, if need be, the judicial system. Both parties to the dispute have incentive to reach an accord: the patient wants to get well, and the insurance company's wants to avoid subverting its profit motive through legal action, which says nothing of the bruising a lawsuit lays upon its commercial image.

When you are denied a test or procedure in the British system, you get to ask them to reconsider…and then you are invited to go pound sand.” 

To President Obama this advisory board is the first step in his non-transparent quest for complete control of the healthcare system by the executive branch of government.

How many of you ever have reviewed a hospital bill or doctors bill after Medicare or private insurance have paid? How many of you have concluded that the bills are incomprehensible?  

Physicians, just as patients, receive EOB (explanation of benefits). Physicians’ EOBs are equally as incomprehensible.  

Physicians, hospitals, insurance companies, and pharmaceutical companies must be accountable for their charges and treatment recommendations. 

Why should a cancer treatment cost $37,000 per treatment? How much money did Medicare or Aetna pay that provider for that $37,000 treatment? How much did the provider pay to the pharmaceutical company for the medication? What should the true cost of the medication be? How much did the provider mark up the charges to the patient?

It is easy to remember the $45 dollar aspirin charges by hospitals.  What was the mark ups along the way? Are there providers in the area that charge less and get comparable results?

An Independent Physicians Advisory Board could do all the research for consumers (patients). It could help patients decide on the value of the treatment. It could allow for consumer input as does Trip Advisor and others.

All the information should be available to consumer on the Internet by either the   government agency or a private organization. 

There should also be an effective appeals process for the provider. 

 Consumers should make their own choices and not be forced to be dependent on the government for their healthcare choices.

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

 

 

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Patients and Physicians Must Control Health Care Costs

July 6, 2011
inConsumer Driven Health Care, Healthcare Insurance Industry, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

The primary stakeholders in the healthcare system are patients and physicians. The incentives for patients and physicians to save money are non existent. The secondary stakeholders have taken advantage of non existent incentives to create a healthcare system that generates ever increasing costs.

Patients and physicians are the only stakeholders that can control costs. They initiate the use of the healthcare system’s resources. 

Healthcare costs for medical procedures such as an MRI or CT scan have been found to vary by as much as 683% in the same town, depending on which physicians patients choose, according to a study by Change: Healthcare.

The implication is that individual physicians are responsible for the differences. Most physicians do not own MRIs, CAT scanners or PET scanners. Secondary stakeholders own the equipment. They price the procedures and profit from the equipment, not the physicians.

"There's been a barrage of studies that show differences from region to region," said Christopher Parks, founder of Change:healthcare. "That makes sense — California's more expensive than Alabama. But this 683% is within a 20-mile radius in your own town." 

This finding illustrates several dysfunctional issues in the healthcare system.  President Obama’s Healthcare Reform Act is causing these issues to surface as secondary stakeholders are beginning to adjust to the upcoming changes.

For a pelvic CT scan, they found that within one town in the Southwest, a person could pay as little as $230 for the procedure, or as a much as $1,800. For a brain MRI in a town in the Northeast, a person could pay $1,540 — or $3,500. 

The social contract in medicine is between patients and physicians.  Patients should choose physicians and physicians should care for the patients the best they can with integrated healthcare team approaches. Physicians should be the captains of this team approach. 

Patients should be at the center of medical care and be educated to make wise medical decisions.

Physicians should be the coaches and advisors to patients on how to make wise decisions and attain better health.

In the beginning, patients’ employers provided first dollar healthcare insurance coverage. Patients were not at any financial risk. There was no need for patients to care about medical costs. The healthcare costs were their employer’s problem. 

Healthcare insurance companies enjoyed this setup. The more they paid out in benefits the higher they could raise the insurance premiums. Premium increases resulted in higher profits. It worked until employers said stop.

The insurance companies take 40-60 cents out of every healthcare dollar. Medicare and Medicaid outsource administrative services to the healthcare insurance industry. The healthcare insurance industry also takes 40 to 60 cents out of every Medicare and Medicaid dollar.

In anticipation of a reduction in government reimbursement for Medicare and Medicaid, the healthcare insurance industry has raised private insurance premiums, decreased covered illnesses, increased deductibles and increased co-pays.  

The Healthcare insurance industry is also moving toward  "reference-based pricing."

These changes have increased the liability of consumers for out of pocket expenses as opposed to having first dollar coverage. 

Medicare has different allowable fees for procedures in different regions. Medicare pays 80% of the allowable fee after a patient meets his deductible. Providers are only allowed to bill patients 20%.  By law balanced billing is illegal. It does not matter what providers charge for a procedure. Providers cannot bill patients for the balance of beyond the allowable fee. The Medicare fee is the most the provider can receive for a procedure.

“The Medicare Balanced Billing Program works to protect Medicare beneficiaries from being billed by healthcare practitioners for amounts beyond those approved by Medicare. The program investigates and takes action against those practitioner who violate the law.

Many providers are refusing to accept Medicare payment as Medicare reimbursement decreases. These providers can charge patients their fee. It is the patient’s responsibility to know if providers accept Medicare reimbursement. If providers do not accept Medicare, patients should understand their liability for the fee. Patients are liable for the total bill.   

Providers also contract with private healthcare companies. Some providers try to get the highest fee possible for the procedure. Private insurance companies pay different amounts depending on their need to build physician networks. This results in the wide spread in price in the same area. When providers are under contract with private insurers they cannot collect more than the contract price for a procedure. 

"It was eye-opening," said Howard McClure, CEO of Change:healthcare.

McClure said health plans are moving toward "reference-based pricing," in which they look at the average price of a procedure for a region, then say that's all they'll reimburse. But if a patient does not know how much a procedure costs, he or she gets stuck with the remainder of the bill if it goes above that average price.

"It helps the small business," McClure said, "but the consumer's left out in the cold."

Healthcare insurance coverage is changing with “reference-based pricing.”  Consumers are getting stuck with the retail price for procedures. The healthcare industry is using this to keep premiums down for business and compete for employer business.

Only consumers owning their healthcare dollars can stop this. President Obama cannot unless he controls the entire system and dictates prices. It never works because people figure out how to get around restrictions.     

Patients are led to believe that physicians are sending patients to higher priced providers for procedures because physicians will make more money.

Most physicians do not know the prices patients are charged for referred procedures.

Most physicians do not own MRIs, CAT scans or Pet Scanners. It is against the law to receive kickbacks.

It is essential that providers make their fee transparent to all providers and consumers.  Then consumers can choose wisely and create price competition.

Consumers must drive this process to create competitive pricing. Third party payment does not work.

 Consumer driven healthcare using the ideal Medical Saving Account will make it happen. It is the only model that makes economic sense.

 Consumers would start caring about the price of services when making healthcare decisions.

The challenge is to teach consumers to change their mentality toward healthcare costs and force providers through competition to be accountable for these costs.   

This will never happen under President Obama’s administration.  His goal is to empower the government and not consumers. Under President Obama’s administration the healthcare system will become more dysfunctional and further increase the deficit to unsustainable levels.

 

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

 

 

 

 

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Mayo Clinic Rejects Accountable Care Organization(ACO) Provisions

June 15, 2011
inMedicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

 

The sooner President Obama’s Healthcare Reform Act (Obamacare) is repealed the faster we will be able to get on with healthcare reform that will work for all stakeholders. President Obama was figured that 30 existing and successful integrated medical care organizations would be in the first group of clinics to join and be included in his Accountable Care Organization (ACO) system of care.

ACOs are a critical part of Obamacare’s goal to provide affordable, universal and quality healthcare. ACOs are really HMO’s on steroids. ACOs are supposed to be better versions of HMO’s.  The public and physicians despised HMO’s because of its control over patient choice and access to care.  President Obama thinks Medicare will save over $500 billion dollars a year with ACOs.  Unfortunately for President Obama, neither the CBO nor the Medicare actuaries believe it.

So far at least 4 of President Obama’s premier integrated healthcare organizations have withdrawn from applying for ACO status. The stage 2 ACO regulations produced by CMS and CMS’s chief Dr. Don Berwick make clear President Obama’s intentions to control medical care and shift the risk of care to hospital systems and physicians.

Each organization has withdrawn with a slightly different excuse. It looks are if no one is going to show up at President Obama’s party.  

 “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.

Dr. Douglas Wood, Mayo's chairman of health care policy and research said Mayo "is not going to participate in a Medicare accountable care organization under the circumstances proposed."

Mayo Clinic’s public reasons as expressed by Dr. Wood are;

 

  1. Mayo does not want to significantly change what it believes is an efficient, patient-friendly program. President Obama has used Mayo’s program as an model.
  2. The gap between Mayo's way of staying accountable and the government's regulations may prove too wide to bridge.

3. Mayo objects to the government's demand that patients be included on oversight boards to judge performance. Mayo doesn't do that now and is not eager to change. Dr. Wood said, "You don't have to have a [patient] on the board to make [treatment] patient-centered,"

4. The Mayo Clinic’s lawyers decided that the antitrust rules that are part of the ACO proposal would be violated. Mayo already provides most of the health care in most of Minnesota's rural counties. Dr. Wood believes it could not operate ACOs in those areas without violating the proposed regulations.

5. The Mayo Clinic objects to the way the government plans to measure effectiveness and quality of medical care. The effectiveness measures proposed by the government include such things as 30-day mortality statistics and the number of diabetes treatments.

The Mayo Clinic believes that the way CMS proposes to measure quality will be ineffective. They will only waste money without improving outcomes.

"They don't get you close to measuring health," Wood maintained. "The simplest measure for consumers is: How effectively did the organization keep me functioning?

    6. Mayo Clinic also objects to the CMS’ way of assigning patients to ACOs.

Mayo is confident in its current approach to accountable care. It has asked CMS "to take an entirely different approach to implementation of ACOs in the country." Mayo wants the government to contract directly with groups that are already providing accountable care programs.

"We're not looking to intentionally give [health care reform] a black eye," Wood said. "We're working to implement accountable care."

President Obama’s healthcare team has stated that they are not going to be influenced by Mayo’s practical demands. They will decide on the correct course based on their theoretical ideology. 

Elliott Fisher, director of population health and policy at Dartmouth Institute in New Hampshire as spokesman for the administration said,

"Every affected stakeholder said it's not good enough yet," Fisher said. "This is how the process is supposed to work."

Dr. Fisher is statement is meaningless and non-committal.  

 Michael E. Chernew, PhD is a Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. He is a disciple of Dr. Donald Berwick and a member of the Medicare Payment Advisory Commission (MedPAC), which is an independent agency established to advise the U.S. Congress on issues affecting the Medicare program. He is also a member of the Institute of Medicine’s Committee on Determination of Essential Health Benefits.

 He said in response to Mayo’s announcement, "I don't think the success or failure hinges on one participant."

Mayo’s Clinic decision was the correct one. CMS wants to control every aspect of medical practice. It wants to shift the risk of care to the providers and control the criteria to judge providers. It is a no win situation for providers. “Cooperative” providers are finally starting to understand the trap President Obama has set.

The best way to win a war is not to show up.

 

 

 

 

 

  • shopping clothes online • October 4, 2013

    It’s fantastic that you are getting ideas from this piece of writing as well as from our dialogue made at this time.

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Paul Ryan Will “End Medicare As We Know It

June 12, 2011
inDisinformation and the healthcare system, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

 

The battle cry of the Democratic Party in its opposition to Paul Ryan’s Medicare plan is “It Will End Medicare As We Know It.” 

If you are told a lie enough times it becomes the truth.

Paul Ryan’s plan will not end Medicare, as we know it for people over 55 years old. I do not know how many times Mr. Ryan Has to repeat his point.

Paul Ryan’s plan is not going to push grandma off the cliff.

President Obama’s Healthcare Reform Act and the Democratic Party have already “Ended Medicare As We Know It” in 2011. The changes in Medicare will only get greater when fully implemented in 2014.

How has “Medicare Ended As We Know It” under President Obama?

1.    President Obama’s Healthcare Reform Act cut $145 billion over 10 years from Medicare Advantage. The cuts start in 2012, at first slow and then build up yearly. Insurers are going to shift the burden of payment from government to beneficiaries in the form of fewer services and higher out-of-pocket costs. Insurers will then stop offering Medicare Advantage coverage.

In April, President Obama used another trick political move to appease seniors who have Medicare Advantage coverage. He is going to give a  $6.7 billion dollar bonus to above average Medicare Advantage plans. The bonus is only 4.6% of the total Medicare Advantage cut and will only be good until 2015. I wonder when he is going to realize that seniors are not stupid and another trick will not work to gain political favor. 

2.    Medicare deductibles have increased as has the cost of base premiums and means tested premiums for Medicare Part B. Medigap premiums have also increased. Nevertheless, the most recent Medicare trustees’ report declared the system is going be bankrupt in thirteen years, five years earlier than predicted last year. They have used the term unsustainable.         

3.     Tim Geithner explained  the reason the alarming update was the result of "technical changes in the economic assumptions underlying the projections."  "We were counting on our economic policies actually working”.                                                                                              

Richard Foster the Medicare actuary said this would happen before we saw the failure of President Obama’s economic policies.

Paul Krugman wrote an article entitled “ Medicare Is Sustainable In Its Current Form”. He then goes on to describe sustainable in its current form.

4.     “Medicare American-style is very open-ended, reluctant to say no to paying for medically dubious procedures, and also fails to make use of its pricing power over drugs and other items.”  Paul Krugman is saying government should say no to paying for government defined dubious procedure. The Democrats made that mistake in paying for “dubious procedures” with the Medicare entitlement program at the onset. Patients should decide on “dubious procedures” with government input and not government.

5.  "So Medicare will have to start saying no; it will have to provide incentives to move away from fee for service, and so on and so forth." My interpretation of this statement is government will have to start restricting access to care, interpret the value of care and pay providers a lump sum rather than fee for service for their services to patients.

6.     "But such changes would not mean a fundamental change in the way Medicare works". I do not get it. Paul Krugman’s statement means it changes Medicare as we know it, doesn’t it? Doesn’t Accountable Care Organizations mean it changes Medicare as we know it?

President Obama, America’s seniors are not stupid.

7.     "So this business about Medicare in its present form being unsustainable sounds wise but is actually a stupid slogan. The solution to the future of Medicare is Medicare should be smarter, less open-ended, but recognizably the same program.”  Republican politicians did not introduce the term unsustainable. The Congressional Budget Office and Medicare Actuaries and the Medicare Trustees introduced the term before Paul Ryan’s plan existed. Paul Krugman is incorrect.

The difference in philosophy between Republicans and Democrats is clear. Both sides are proposing to "end Medicare as we know it."  President Obama has done it already.

Paul Ryan and the Republicans are offering solutions to give individuals more control over their healthcare decisions. Paul Krugman and the Democrats are suggesting and implementing changes to give the government more control over individuals and their healthcare decisions.

Americans must understand the problems Medicare faces. They must see through the Democrats’ demagoguery.    

I believe my position is a libertarian position if labels are needed.  Only the consumer will solve our healthcare systems problems. Government must empower consumers to make choices about their health and healthcare. The government must give consumers control of there healthcare dollars. If the government did this it would generate competition for among stakeholders for consumers healthcare dollars. These actions would cleanse the dysfunction of the healthcare system rapidly.

 

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

 

 

 

  • Senior Planning NJ • June 26, 2011

    Interesting article, it really makes someone think. I always like to read thought provoking articles about things like this. Keep the great posts coming. Thanks again for sharing it with us.

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A More Logical Plan Than “Obamacare”

June 8, 2011
inConsumer Driven Health Care, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

 

Stanley Feld M.D.,FACP,MACE 

I do not think President Obama understands basic healthcare economics. Patients and physicians will always drive spending for healthcare. The government will not be able to control spending centrally.

Forty to sixty cents of every healthcare dollar is spent on administrative costs. CMS claims that Medicare spends only 2.5% on administrative services.  This 2.5% is the cost for CMS to outsource Medicare coverage to the healthcare insurance industry.

The healthcare insurance industry takes 40% to 60% of every healthcare dollar for their administrative fees. The law says they can only take 15% out of every dollar for administrative fees. Eighty five percent of the premium dollar must go to patient care. 

 The problem is the 85% includes many fees that are, in reality, administrative expenses such as certifying physicians for their plans and insurance sales fees among others. There is a profit margin for each of these “expenses.” President Obama has permitted these administrative fees to be included in the 85% category for direct healthcare costs.

Physicians get 15% and hospitals get 20% of every healthcare dollar. Where does the rest of the money go?

Forty percent gets taken off the top by the healthcare insurance industry. A good place to start is by setting up a system that creates competition among the healthcare insurance companies. 

The government always blames physicians for the waste. Physicians and patients drive healthcare expenses. Waste occurs as a result of perverse incentives and middlemen abuse. All the stakeholders are to blame. The healthcare insurance industry generates the most waste. Defensive medicine is the second leading cause of waste. Legislation using common sense could eliminate most of this waste.

"A 2005 report by the National Academy of Engineering and the Institute of Medicine found that 30-40 cents of every dollar spent on health care are spent on costs associated with "overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency. Medicare is especially vulnerable to waste, fraud and abuse.”

Medicare spending must be decreased. The best way to decrease the spending is to provide incentives for seniors to drive the system rather than the system driving seniors.

 “Unfortunately, the debate on Capitol Hill and in the media is too often fueled by partisan fear mongering instead of a thoughtful examination of the facts.” 

No amount of price cutting or central-government dictates will mitigate these problems.

A consumer (seniors) driven healthcare system providing incentives for providers and patients is the only way to fix the system.

Accountable Care Organizations (ACOs) are being proposed and organized to harness the spending of the fee for service systems.

ACOs are systems in which doctors and hospitals team up to offer coordinated care. Both are held accountable for cost and quality in a disguised capitation system. “Quality” is not effectively measured.

 Hospital systems and physicians have long had an adversarial relationship because hospital systems have leveraged its brick and motor value off the intellectual property and mechanical skills of physicians.

More and more physicians are realizing this fact. Physicians are building their own hospitals and outpatient surgical clinics. Physicians are consciously or unconsciously resistant to hospital systems dividing the money and participating in the reimbursement sharing judgments.

Neither group wants to be at risk for “poor outcomes” that might be the patients’ fault.

The incentives to form ACOs are too weak. The regulations are 400 pages too long and complicated.  Physicians do not have the time or money to fully understand the regulations.  “Trust me” does not work anymore.  The major hospital systems have backed out of forming ACOs under the regulations because they put the hospital system at too great a risk.

Paul Ryan’s plan of “premium support” can potentially encourage formation of Accountable Care Organizations The ACOs have to be attractive enough for patients to choose to join them. Hospital systems would have to be successful in organizing them.  Ryan’s plan is a “managed competition model.”  The government would make defined contributions for beneficiaries depending on the beneficiaries’ means. The subsidy would be a total subsidy for the poor and a sliding scale subsidy for others.

Beneficiaries would have a choice from a variety of health plans with no discrimination based on health status or wealth. Standard coverage contracts understandable by ordinary people would be required to make comparisons possible. Internet FAQs would be made available.

Competition for consumer (seniors) business would drive health plans to innovate in ways that would cut waste and improve “quality.” The use of well-designed healthcare insurance exchanges would drastically reduce healthcare insurance company marketing costs. The completion by healthcare insurance companies in effective healthcare insurance exchanges could result in healthcare insurance companies not taking 40% off top as they currently do. The system could be set up so that consumers could buy the insurance across state lines.

The Ryan plan does not deal with defensive medicine. States could easily be presented with an ideal tort reform model to adopt or modify. In Texas the model is not ideal but it is effective and would be effective nationally. If a model included a “loser pays” clause it would decrease frivolous law suits and decrease defensive medicine testing dramatically. In most instances physicians do not receive increased compensation for the increase in testing. Therefore the motivation is not testing simply to make more money.

President Obama needs to understand the basics of healthcare economics before he goes on and totally destroys the healthcare system.

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

 

 

 

 

 

 

 

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