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Medical Care Should Not Be About Politics.

 

Stanley Feld M.D.,FACP,MACE

On May 30,2011, an article was published in the New York Times entitled “As Physicians’ Jobs Change, So Do Their Politics.”

This article has been reproduced multiple times in multiple blogs. The New York Times article leads readers to misleading conclusions based on inaccurate facts.  I felt the story was insignificant and passed it by. After I received a few comments about the story, I decided to critique it.

The author quotes a Maine State Senator who proposed a tort reform bill.

State Senator Lois A. Snowe-Mello offered a bill in February to limit doctors’ liability that she was sure the powerful doctors’ lobby would cheer. Instead, it asked her to shelve the measure.”

“It was like a slap in the face,” said Ms. Snowe-Mello, who describes herself as a conservative Republican. “The doctors in this state are increasingly going left.”

Tort Reform should not be a political issue. It is a medical care issue. I described the Massachusetts Medical Society survey on defensive medicine in the past. By extrapolation of the survey facts between 300 billion and 700 billion dollars is wasted on defensive medicine per year. This does not include the wear and tear of frivolous lawsuits on patients and physicians.

The Maine Medical Association does not have the position quoted by Senator Lois A. 

“We are a coalition of three Maine health care associations collaborating to protect the public’s access to quality care and to restrain the inflation of health care cost. We hope to accomplish what many other states have already done by reforming liability laws so that your physician remains in Maine and the best new doctors continue to come here to practiceVictims of negligence deserve compensation and it not our intention to deny these patients their rights. But the liability system must be restructured to be fare to all.”

The article goes on to say’ Doctors were once overwhelmingly male and usually owned their own practices. They generally favored lower taxes and regularly fought lawyers to restrict patient lawsuits.” 

But doctors are changing. They are abandoning their own practices and taking “salaried jobs” in hospitals, particularly in the North, but increasingly in the South as well. Half of all younger doctors are women, and that share is likely to grow.”

There are no national surveys that track doctors’ political leanings, but as more doctors move from business owner to shift worker, their historic alliance with the Republican Party is weakening from Maine as well as South Dakota, Arizona and Oregon, according to doctors’ advocates in those and other states.”

There are several implications is these few sentences that would lead readers to conclude that;

  1. President Obama is correct in ignoring Tort Reform because as physicians become more “liberal” they side with the plaintiff attorneys’ arguments about the value of litigation. The article ignores the increase in medical care costs resulting from defensive medicine and malpractice insurance.
  2. Physicians who are taking “salaried jobs in hospitals” have no interest in protecting themselves against frivolous lawsuits.  The implication is malpractice is now the hospital’s problem. It implies that defensive medicine will decrease.

(The reference sited under hospitals is inaccurate. It has nothing to do with physicians being salaried by hospitals.) There are many problems and conflicts between physicians and hospital starting to surface (previously discussed) with hospitals buying physicians’ practices and deciding on the value of physicians in the healthcare system.

  1. As more physicians become shift workers rather than owners they are becoming more liberal.

(There is no discussion about why many physicians are joining hospital systems.)

       4. It implies that women are lazy and do not want to own medical practices.

        5.  Since physicians are more liberal they therefore believe “Obamacare “ is    good for America. 

The Maine Medical Association does not believe in any of these implications. Its statements are clear. It understands that physicians are driven out of the state because of the lack of malpractice reform. It has a declining number of physicians practicing in the state and the cost of care is increasing while the quality of care is decreasing.       

Our coalition is seeking to advance medical liability reform to preserve access to physician services, improve the affordability of health care and ensure high quality care in Maine.

Across the country, America’s patients are losing access to care because the nation’s out-of-control legal system is forcing physicians in some areas of the country to retire early, relocate or give up performing high-risk medical procedures. There are now 21 states in a full-blown medical liability crisis — up from 12 in 2002. In crisis states, patients continue to lose access to care. In some states, obstetricians and rural family physicians no longer deliver babies. Meanwhile, high-risk specialists no longer provide trauma care or perform complicated surgical procedures.”

 These statements contradict the accuracy of the article. However, the media is the message. The New York Times represents the traditional media. With its bias it drives this disinformation or misinformation front and center. Readers accept the bias and do not think critically.

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

 

 

 

 

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You Cannot Lead Without A Posse

 

Stanley Feld M.D.,FACP,MACE

Paul Ryan has been one of a few Republicans that has demonstrated the belief in what is right rather than what is politically expedient. I thought the Republican caucus understood his budget plan and were behind it.

Republicans cannot talk about being fiscally responsible and act frightened.  They are acting frightened by  Democratic Party *“Demagoguery

It looks as if Paul Ryan has been left without a posse. The Republicans should be explaining what would happen if the status quo on the Medicare entitlement spending remained. They should be explaining how the Ryan plan will save entitlement from default.

The Democrats are not explaining how Paul Ryan’s Medicare plan will destroy Medicare.

Two important events occurred this week to further scare the Republican caucus from acting responsibly.

The first was the election of a Democrat in a traditional Republican stronghold in upper New York State.  The Democratic candidate used scare tactics saying the Ryan plan and hence the Republicans are going to destroy Medicare.  She never offered an explanation of how it would destroy Medicare. The Ryan plan is designed to save Medicare.

Neither the Republican candidate nor the Republican caucus stepped up to say why this is false. The Republican candidate deserved to lose. The Democrat won by default.

The second event this week was the Ryan Plan, which passed in the House, was defeated in the Senate. Worse is that six Republican Senators voted against the proposal without public explanation.

“Republicans voting against proceeding to the GOP proposal had raised concerns about the Medicare reform or other provisions – Sen. Scott Brown of Massachusetts, Sen. Lisa Murkowski of Alaska and Sens. Susan Collins and Olympia Snowe of Maine. Sen. Rand Paul of Kentucky said the proposal did not make steep enough cuts.”

Horrifying to me was the smirk on Harry Reid’s face as he pretended to be the savior of middle class seniors. Nothing could be further from the truth.

Reid
  

The truth is Medicare is unsustainable in its present state. There hasn’t been an economist or government agency that has disagreed. President Obama has ignored these predications in forcing the passage of his Healthcare Reform Act. Medicare will collapse and disappear.  There will be restricted access to care and rationed care.

Seniors must be empowered to be responsible for their own healthcare either independently or by the government. Consumers must drive a market driven healthcare system.  

Seniors can control the onset of the complications of their chronic disease. They can do it with early behavioral changes such as stopping smoking, stopping alcoholic intake, losing weight, exercising regularly and adhering to medical treatment regimes. The government cannot legislate changes in behavior. It can motivate and incentivize behavioral change.  

"Their Republican, radical proposal would end Medicare as we know it," said Sen. Patty Murray (D-Wash.), the chairwoman of the party's campaign committee. "We're not going to stop talking about this in states across the country."  

It is not funny. There is agreement that Medicare is not fiscally sound. Senator Patty Murray is saying Democrats do not want a fiscally unsound Medicare program to be changed.

Senator Patty Murray is saying in effect, Democrats, are going to beat the Republicans in 2012 because we are going to support this ongoing unsound Medicare program until it will bankrupt America.

Isn’t this an insult to the intelligence of the American people.  Democrats must really think Americans are stupid.

President Obama wants to win reelection. Obamacare is unpopular. He could lose on this issue alone. He is cleverly trying to distract Americans from his unpopular program and make Paul Ryan’s plan unpopular. He has no facts about any defects in Ryan’s plan. He is using scare tactics.

Paul Ryan has a different view. He thinks Americans are smart. Americans want an opportunity to be responsible for themselves. They do not trust government to make their healthcare decisions.

I believe Americans can understand complicated facts. The government has an obligation to today’s seniors and future seniors to put Medicare on a sound financial footing.

Paul Ryan’s You Tube of May 25th says it all. I know the American people can understand it. I hope the traditional media gives him and other Republican an opportunity to explain his plan.

I hope Republican politicians are not frightened away by the spin misters and their influence on polls.

Paul Ryan needs a posse!!

 



 

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

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Accountable Care Organizations Will Fail !

 

Stanley Feld M.D.,FACP,MACE

The more I study ACOs the worse they look. Dr. Berwick’s goal is redistribution of wealth. This is exactly what ACOs are going to do. Patients, taxpayers and physicians are going to get the short end of the distribution.

Hospital systems are spending a ton of money trying to form ACOs. They are going to lose big. I have concentrated on the obvious defects and difficulties in forming ACOs in the past. Here are some more traps.

I don’t think anyone has considered the following,

  1. Which consumers will ACOs treat?

Only Medicare patients are included in the ACO program for now. Medicaid and private insurance patients are not included. Medicaid will have a severe physician shortage with increasing enrollees. The result will be greater cost shifting in the private sector. The private sector will disappear. 

     2. How many Medicare patients will be covered?

“ACOs will only care for 1.5-4 million beneficiaries” As of 2001 there were 35 million Medicare seniors and 5 million persons on Medicare disability. The number is estimated to grow the 72 million by 2030.

      3. How will the government decide on reimbursement to the individual ACOs?

Unknown. There have already been indications that the government will individualize ACO reimbursement.

     4. What are the criteria to determine under utilizing or over utilizing ACOs? 

Unknown. Under utilizers are supposed to share the difference 50 /50 or 60/40 with the government and over utilizers will pay the government the difference.

Different ACOs approved can develop different models of organization and payment structures for care as long as it meets the budget and quality goals the government determines.

The government’s thinking is that decentralized accountability and leadership with (monetary) sticks and carrots are likely to produce better results for the whole country than central government rules without the ability to enforce the rules. 

 ACOs which incur too high a utilization or which do not meet the quality targets, may have to forgo reimbursements completely (see patients for nothing) or even pay CMS money back. CMS has placed its emphasis on ACOs beating the reimbursement goals. The government would then share the savings with the ACO. In either case the government wins.

A frightening thought is ACOs can become too big to fail. It would necessitate another government bailout. You can be sure within 456 pages of the rules there are many unintended consequences. There are also ways to beat the system that will be discovered in the future. 

Once again, CMS, HHS and President Obama are trying to fool us with numbers.

CMS hopes that ACOs could save it $170-960 million over three years.” The Medicare and Medicaid budget for three years is $1.8 trillion with Medicare consuming most of the money. The “cost savings” represent only 0.01%- 0.05% of the Medicare budget.  This is a tiny savings.

Can anyone be impressed with the potential cost savings? One should be impressed with how the savings is presented by the administration and how much bureaucracy it will take to set up and implement the system.

The performance measurements (or standardized “metrics”) have not been defined for ACOs. Performance measurements discussed so far have been process measurements. Process measurements do not necessarily lead to better medical or financial outcomes. These process measurements are just a surrogate that assumes better outcomes.

The fact that if an ACO or its physicians do four HbA1c tests per year for the management of Diabetes Mellitus, it does not mean that the medical and financial outcomes will improve. This defect in process measurements applies to many chronic diseases.  The management of chronic diseases and their complication account for 80% of the healthcare dollars spent. 

ACOs must have a minimum size of 5,000 “ Medicare ensured lives”. This is not possible with small practices. The net margin is too small for Medicare to overload a small group practice with 5,00 Medicare patients at present rates of reimbursement. Reimbursement is projected to become even smaller.

CMS has already picked the groups (identified by Dr. Don Berwick’s Institute for Healthcare Improvement) who will qualify for ACOs. They are supposedly low cost/high quality groups. The goal is to create ACOs with integrated healthcare systems who salary physicians. Physicians in those organizations are supposedly used to working closely together. There should be an emphasis on primary care physicians.  The government will then let the hospital systems and physicians fight over dividing the government reimbursement.

 ACOs are not for everyone. If the ACO is fragmented, with weak physician leadership and high usage of independent specialists, it will difficult to have a high-performing ACO. Even if an ACO is low cost and high quality it will be difficult to be profitable as reimbursement is decreased. If Medicaid is added to the scheme hospital systems will fail

The only advantage is that the ACO might be too big to fail. The government will be forced to bail them out.

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

 

 

 

 

 

 

 

  • Dan

    I think that the ACOs are designed to fail and here is why. ACOs are similar to the PPOs of the 1980s and 90s in which physician groups were formed to “accept risk” from the insurance companies with the hope of a monetary reward and many went bankrupt. Accepting risk makes the physician group whether a PPO or ACO the defacto insurance company. The reason they fail is because the physician can not be both the patient advocate and the insurance company denier of care. If the physician group(ACO) denies care they will be sued and go bankrupt. If the ACO doesn’t deny care they will be penalized for overspending and also go bankrupt.
    When they go bankrupt the government will bail them out, but will take over all their assets, nationalizing the system a piece at a time. A private system will then not be allowed or able to reconstitute. That in my humble opinion is the end game.

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Let Us Review The Healthcare Reform Act

Stanley Feld M.D.,FACP,MACE

Nancy Pelosi said we must pass President Obama’s Healthcare Reform Law in “order to find out what is in it”.During the past year Americans have started to understand some of the implications of the bill.

To

 

Last year President Obama forced his bill through Congress. He issued an arbitrary deadline to the Democratic controlled House and Senate for passage of his health-care legislation. Democrats voted for a bill that was deeply flawed. In order to pass the bill he had to make some backroom deals. He also made lots of false promises .

Americans are calling for:

  1. Defunding of the 256 new agencies formed by President Obama. The budget deficit and the recent GAO report of thousands of agency duplications are encouraging defunding.
  2. Repealing and replacing the Affordable Care Act with better alternative.

As the problems with President Obama’s Healthcare Reform Act become apparent Americans, Republican congressional representatives, state and local government are realizing the defects in this deeply flawed bill.

1. More than half the states (28) are challenging the law in court, saying that it violates the constitutional rights of their citizens and the sovereignty of the states.

2. A Senate Finance and House Energy and Commerce Committees study found states face at least $118 billion increase in their state deficits over the next 10 years because of President Obama’s Healthcare Reform Act. I believe this is an underestimate.

3. Over 1,000 waivers to allow select companies, unions, and states to escape the law, at least temporarily.

4. Experts have shown the law will cause the cost of care to increase faster than it would without the law. The Congressional Budget Office expects the price of a family policy in the individual market will be $2,100 higher by 2016 than it would have been had the law not passed.

5. Even with SCHIP it is now impossible to buy child-only health insurance because onerous new rules imposed by many states.

6. Seniors are presently at risk of losing access to physicians and their medical care. As the Medicare deductible goes up ($162) and Medicare Part F becomes more expensive seniors cannot afford Medicare premiums and deductibles.

7. Medicare actuaries say that the cuts built into the law will force as many as 40% of providers to eventually stop seeing Medicare patients or go bankrupt.

8. Employers are increasing deductibles or eliminating healthcare insurance as a benefit leaving many uninsured.

9. Healthcare insurance companies are leaving the market for insuring individuals.

10. Many thousands became unemployed in the last few years. They have lost their healthcare coverage.

11. Douglas Holtz-Eakin estimates a cost explosion for President Obama’s Healthcare Reform Act as employers opt to drop coverage and send their workers to the new, federally subsidized health exchanges for coverage.

12. The estimate is that the Healthcare Reform Act will drive up the cost of Medicare by $1 trillion or more in the first 10 years.

13. Employers will lose their ability to deduct healthcare insurance as an expense.

14. President Obama has used tricks to increase tax revenue. He is increasing taxes or decreasing tax credits. These increases are not well advertised.

15. In 2013, the threshold for taking medical deductions increase to 10 percent of adjusted gross income, from 7.5 percent.

16. In 2014, a new $2,500 limit kicks in for flexible spending accounts making them less desirable.

17. The Medicare payroll tax has been increased by including investment income. This includes capital gains, dividends, interest, annuities, rents, and royalties. It does not apply to distributions from retirement plans or interest from municipal bonds.

18. In 2013, there will be an additional tax on net investment income of 3.8% to help pay for the Healthcare Reform Act.

19. In order to pay for the increase cost of healthcare home sales will be included as a capital gains. The existing exclusion of $500,000 ($250,000 for single filers) still applies. This means a home-selling couple would not experience a tax unless the profit was more than $500,000 and their income was more than $250,000. This provision is essentially a tax on the rich to fund the Healthcare Reform Act.

20. The new law increases the Medicare hospital insurance tax, to 2.35 percent from 1.45 percent, on employees.

21. Providing a 1099 form for services over $600 has been rejected and is in the process of being repealed.

22. The tanning bed tax of 10% is in force represent a tax to increase funding for the Healthcare Reform Act.

I know I missed some of the consequences of President Obama’s Healthcare Reform Act. However, I thought it would be important to list as many as I could think of and put them in one article.

It would have been nice if Nancy Pelosi told the American people what was in the bill before she rammed it through the House of Representatives.

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

  • Dante

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Health Care and Federal and State Deficits

Stanley Feld M.D.,FACP

Published: December 11, 2010

The basic truth is Federal and State deficits cannot be fixed unless spending for Medicare and Medicaid is decreased. President Obama’s Healthcare Reform Act‘s bureaucratic complexity of will increase the cost of the healthcare system without increasing the quality of healthcare.

New schemes such as Accountable Care Organizations will fail as did the Health Maintenance Organizations of the 1980’s and 1990’s.

None of our political leaders are interested in facing the real reasons for the escalating healthcare costs.

This year Medicare, Medicaid and SCHIP will account for more than 20 percent of all federal spending. These entitlements cost more than Social Security or National Defense.

The entitlements are being expanded inefficiently by President Obama’s healthcare reform act.

By 2035 federal health care spending is projected to account for almost 40 percent of the federal budget. At the current rate of increase in Medicare eligible aging population, a rising Medicaid population and the rising healthcare costs the federal government will collapse under its own weight.

Two bipartisan commissions have issued recommendations to sharply reduce annual deficits, in part through bold changes — some sound, others dubious — in the way health care is paid for.”

The White House commission, headed by Erskine Bowles and Alan Simpson, proposes ways to decrease entitlement spending for Medicare and Medicaid by nearly $400 billion dollars between 2012 and 2020.

A second commission, an independent panel headed by Pete Domenici and Alice Rivlin, has suggested savings of $137 billion dollars by 2020 by Medicare cost-sharing.

Both commissions have some good suggestions. Many of the ideas of both commissions are wrong.

The real reasons for escalating healthcare costs are;

  1. The grotesque profits of the healthcare insurance industry as a result of the federal government outsourcing the administrative services for Medicare and Medicaid. (See 40 billion dollar per year growth)
  2. The lack of states limiting premium rate increases for the healthcare insurance industry.
  3. The absence of promoting rate competition among healthcare insurance companies.
  4. The extremely high cost (estimated 300 billion to 750 billion dollars a year) for defensive medicine as a result of President Obama’s refusal to deal with effective tort reform.
  5. The lack of incentives for consumers to maintain their health. The obesity epidemic represents one example where incentives are lacking.
  6. The lack of effective public education that would teach people the principles of health maintenance.
  7. Discourage confusing media coverage of clinical research studies. The media is interested in the sensational contradictions inherent in serious clinical research.
  8. These contradictions are supported by the publication of shabby clinical research in medical journals and other publications.
  9. The lack of effective public service announcements about health.
  10. The lack of consumer incentives for maintaining good health and utilizing medical services wisely.
  11. The ideal Medical Savings Account would solve many of these problems instantly.
  12. Few healthcare policy makers think consumers are smart enough to understand how to use the ideal Medical Saving Account effectively. Therefore health policy “experts” dismiss Medical Saving Accounts.
  13. Medical Savings Accounts are different than President Obama’s restricted health savings account.

Both commissions are promoting the same ideas of redistribution of wealth and cost shifting. Both increase the cost to those that can afford it. Neither commission deals with consumer incentives.

President Obama’s healthcare reform act does not deal with consumer incentives. It deals with government control and consumer dependence on regulations.

All of the ideas of the commissions are cost containment ideas, not health promoting ideas.

Both commissions shift much of the burden of insurance coverage from the federal budget to individuals or to the states.

The commissions’ recommendations are the typical political shell game. They produce no real reduction in the cost of health care. They are a political ploy because they make the federal deficit look better while not doing a thing to repair the healthcare system..

One suggestion is to require wealthier older people to pay more for Medicare coverage and more of the cost for their own health care. Medicare already uses means testing to set the Medicare premium. The means testing is calculated using IRS tax returns. The distributions of IRA funds are taxed twice. Medicare costs more in after-tax dollars than ordinary group insurance for many seniors.

The problem is that means testing doesn’t work to reduce the deficit. Half of all Medicare beneficiaries live on low incomes and pay minimal premiums. Cost-shifting will undermine the health or financial security of senior Americans of modest means. Beneficiaries might have to pay hundreds or even thousands of dollars in additional out of pocket expenses.

The Domenici-Rivlin commission is advocating ending employer pre-tax exemption for healthcare coverage. This will increase federal revenue and lower the deficit. It will also increase taxes and decrease discretionary income. The result will be a decrease in consumer spending. A decrease in consumer spending will hurt the economy. Ultimately it will increase the federal deficit and decrease our standard of living.

It is time for common senses and sound economic thinking to Repair the Healthcare System.

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

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President Obama And The Sustainable Growth (SGR) Formula For Medicare Reimbursement

Stanley Feld M.D.,FACP,MACE

President Obama promised the AMA he would fix the defective Medicare Sustainable Growth Rate formula for calculating Medicare reimbursement to physicians. As a result of that promise the AMA supported President Obama’s healthcare reform bill.

The AMA made a big mistake supporting President Obama’s healthcare reform bill. It was as if the AMA did not evaluate the bill’s obvious unintended consequences for both patients and physicians.

The AMA lost support from not only 85% of physicians that are not members of the AMA but also from the 15% of physicians that are members.

The SGR formula makes no sense. Medicare has reduced physician reimbursement to physicians as physicians’ expenses have increased. A 21.2% decrease in reimbursement will result in physicians losing money seeing Medicare patients.

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It is stupid to lose money seeing patients. President Obama’s unintended consequence will be physicians will stop seeing Medicare patients. Physicians cannot make up the loss by increasing the volume of patients seen.

Most physicians are decreasing expenses by installing electronic medical records. The available EMRs are not fully functional. The capital expenditure is too high for most physicians. They cannot afford an electronic medical record even with President Obama’s subsidy.

A New York Times article explains the conventional wisdoms. However, there is little proof that the conventional wisdom is correct.

 

There will likely be no real solution until the American health care system moves away from unfettered fee-for-service payments that encourage doctors to perform unnecessary and costly tests and procedures and pays them instead for better management of a patient’s care over time.”

My interpretation is physicians should get paid a salary by the government as the single party payer.

The media ignores the fact that most physicians do not get paid for the unnecessary and costly procedures.

Hospital systems and national laboratories do the tests and receive the reimbursement. The majority of physicians are single practitioners. Family Physicians and Internists cannot afford the equipment necessary to do testing in office. It is against the law for physicians to bill for testing done outside their office.

Physicians might order multiple tests that could be considered unnecessary by some. They order these tests as part of the defense against malpractice suits. Malpractice reform has been totally ignored by President Obama’s healthcare reform bill.

Until there is significant malpractice reform defensive medicine and the resulting “unnecessary testing” will not disappear. The use of appropriate data can alert the government and the healthcare insurance industry when a physician abuses the system.

The excuse of over testing does not warrant a reduction in reimbursement to Family Physicians and Internists. Doctors cannot afford to see Medicare and Medicaid patients at a loss.

It is obvious that there will be a physician shortage, long waiting periods to see a physician and rationing of care. I will discuss the complexity of the issue in detail shortly.

Family physicians and internists only have time and intellectual property to sell. The Medicare fee schedule recognizes prevention. However, Medicare does not reimburse for prevention, telephone calls or emails. President Obama talks a good game but has done nothing to correct SGR.

The “sustainable growth rate” (SGR) formula was enacted in 1997. Policy wonks concluded it was a way to restrain Medicare spending. I do not think the Policy wonks intended the consequences. The SGR set annual limits for the total amount of money to be paid in the traditional Medicare program. It also included allowances for inflation in the cost of operating a medical practice, for growth in the elderly population, and even a little extra money to pay for increases in the volume and complexity of services performed. It sounded reasonable.

The blue represents physicians’ increased in billings. The red represent application of the SGR formula. In 2007- 2009 Congress waived application of the SGR.

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The fatal flaw in the formula was that it had no way to limit the array of services doctors provided or distinguish between valuable and needless treatments.”

“If doctors in the aggregate billings drove Medicare expenditures above the limit set by SGR, the SGR formula called for fees in the following year to be reduced.”

That aggregate punishment was not enough to persuade individual doctors to change behavior.”

Off course it would not change behavior. The threat of a malpractice trumps a punitive monetary penalty. It is not wise to create a punitive environment for any workers. It encourages bad behavior. Why can’t the government find the specific individuals it claims abuse the system and deal with them? The SGR is defective and needs changing. It needs to be changed along with the rules in the malpractice system.

Congress has waived the SGR formula since 2007 after physicians screamed for help. Congress did not suspend the proposed cuts. The accumulation of the yearly suspended cuts resulted in the 21.2% reduction in reimbursement this year.

I said physicians would stop seeing Medicare patients at a loss. This would hurt seniors’ access to medical care.

President Obama ignored the call for help until June 12th. He has had one and one half years to proclaim his support for eliminating the faulty SGR formula. He used the 21.2% reduction to calculate the deficit reduction effect of his healthcare reform bill.

Republicans are screaming that President Obama is spending money like a drunken sailor. Republicans decided to put their foot down. SGR was the wrong issue to put their foot down on. President Obama placed the blame on the Republicans in his weekly radio address.

 

 

This year, a majority of Congress is willing to prevent a pay cut of 21% — a pay cut that would undoubtedly force some doctors to stop seeing Medicare patients altogether. But this time, some Senate Republicans may even block a vote on this issue. After years of voting to defer these cuts, the other party is now willing to walk away from the needs of our doctors and our seniors.”

President Obama knew Democrats did not have the votes to eliminate the SGR formula when President Obama made his grandstanding radio announcement. The suspension of SGR failed to pass. Physicians are now going to see a 21.2% reduction in Medicare
reimbursement. The AMA’s deal with President Obama did not work. It was never going to work.

The American public should be getting tired of President Obama’s games. Barney Frank and John Kerry summed up the strategy that had been developed by the Democrats long ago. No one listened. Listen again.

Now President Obama doesn’t need congressional approval to get a single party payer system. He will do it by administrative regulation.

I do not think President Obama has thought out the unintended consequences. The burden to the American public will be huge .

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

  • stanleyfeldmdmace

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Healthcare Reform Should Be About Motivating Self-Responsibility Not Dependence

Stanley Feld M.D,FACP,MACE

Last week I heard a lecture about Accountable Care Organizations by a physician leader working for one of the major hospital systems.

His discussion made me realize that large physician organizations and hospitals are spending lots of time solving problems of quality medical care. In my opinion quality medical care has not been adequately defined.

A working definition right now is to decrease hospital stays, efficient medical care for a disease at lower cost, avoidance of medical errors in the hospital, and avoidance of hospital acquired infections.

These are important goals. They must be attached to monetary incentives. Many of these problems can be solved now. The solution demands the development of processes of care. An important question is how much money will process improvement save? I estimate that this process improvement could save an estimated 7 to 10% of the healthcare dollar.

The real question should be focused on how to repair the healthcare system by decreasing costs while improving the health of Americans.

This problem is not only about hospitals and medical practices reimbursement. It is about problems created by all the stakeholders. It is about aligning all the stakeholders’ incentives. The solutions to the healthcare system’s dysfunction must be initiated at the same time. You cannot try to fix one problem because it will result in a problem getting worse in another area.

The key to the solutions is to incentivize consumers of healthcare to control their health and be in charge of their healthcare dollars. Consumers can force secondary stakeholders to adjust swiftly to their demands and make them compete for consumers’ healthcare dollars.

Consumers must have incentive. They should be able to keep anything they do not spend of the first $7500 dollars of healthcare coverage. In our present healthcare system consumers do not control their healthcare dollars. They get first dollar coverage with variable deductible expenses. If the deductible is too high they will avoid necessary care and medications.

Society should not want that to happen because patients will get sicker and cost more to treat. Third party payers control the healthcare dollar. This control has contributed to increase the cost of healthcare. .

Some claim the only incentive consumers (patients) should need is to maintain their health. This claim has turned out not to be true.

Where do all the healthcare dollars go?

1. 65% of each healthcare dollar goes to the healthcare insurance industry for overhead for administrative services and insurance reserves whether it is private or government insurance.

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2. Only 35% of the healthcare dollar is actually spent on medical care.

3. 80% of the healthcare dollars spent for medical care is spent by 20% of the people.

4. Most of those 20% have chronic diseases.

5. 80% of those dollars are spent on the complications of their chronic diseases.

6. Some claim there is 40% waste in the healthcare system due to uncoordinated care and duplication of care.

7. Much of the excess testing is due to the fear of malpractice claims and the practice of defensive medicine.

Let us follow the healthcare dollars with consumers being in control of their healthcare dollar.

If a moderate size company of 67 employees were willing to pay $15,000 dollars per employee for healthcare insurance it would cost $1,000,000 dollars. If the employer did not provide healthcare insurance the government penalty ($2,000 per employee) would be $134,000 dollars. This would represent a savings to this moderate sized company of $866,000 dollars per year. It would be the logical path to take. The formula I propose will work for the individual buying insurance.

Assume employers were willing to buy healthcare insurance for their employees. They would put $7,500 per year in a trust for each employee. The employee would be responsible for his healthcare dollars. The fees would be pre-negotiated fees by the government as the healthcare insurance industry does presently with physicians and hospitals. Hospitals and physicians might even want to compete among each other for the consumers’ dollars.

If the employee did not spend all the healthcare dollars in a year the remaining dollars would go into his retirement fund. It would not be used for future medical care.

A new equation for driving healthcare costs would be born.

There would not be a 65% overhead for administrative services for the first $7500 dollars because the healthcare insurance industry would not be administering the first $7500 dollars. The savings would be $4875 dollars.

Patients and physicians would have an additional $4875 dollars working toward direct medical care. The 65% overhead for administrative services for the remaining $7,500 of high deductible coverage could remain the same. The high deductible insurance would provide first dollar coverage after $7,500. The risk to the healthcare insurance industry would be less and so its insurance reserves could be less.

The government pays the same amount for administrative services to the healthcare insurance industry. The government could use the same formula for Medicare and Medicaid.

Consumers would have a monetary incentive to decrease their risk of getting sick (preventing obesity and increasing exercise). If consumers drove the healthcare system the consumption of snack foods and fast foods would decrease with proper education. Those fast food companies would be forced to sell healthy food to stay in business. Consumer would be driven by monetary incentives to stay healthy.

The onset of chronic disease would decrease. The complications of chronic disease would also decrease.

If a patient had a chronic disease at the onset of this new system and controlled their disease well in order to avoid acute and chronic complications of the chronic disease the healthcare system could reward them with a bonus at the end of the year. They would avoid costly hospitalizations.

Consumers would demand and pay to be properly educated to avoid complications of their chronic disease

An added benefit is that there would be less doctor visits and hospitalizations. This would increase healthcare capacity. It would enable the country to provide care for the entire population rather that force the healthcare system to abs
orb additional patients and create shortages resulting in rationing and decreasing access to care.

When people are motive by monetary incentives they are innovative. Innovation stimulates efficiency and decreases costs. It is important to have consumers be responsible for themselves and not dependent on the government.

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

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The Electronic Medical Record (EMR) Stimulus Fiasco: Part 2

Stanley Feld M.D.,FACP,MACE

President Obama is counting on electronic health records (EMR) to help modernize the nation’s dysfunctional health care system, improve the quality of care and reduce its cost. He should understand the real costs of an EMR. The cost of disruption of the work flow, the issue of incompatibility and connectivity with other EMRs, and the costs of maintenance, service and software upgrades are all important barriers not taken into account in his stimulus package. If President Obama must think that throwing money at the conversion to electronic medical records (EMR) is going to work, he is wrong. He is using the wrong route.

“His stimulus package will provide $19 billion over the next two years to promote the adoption and use of health information technology, and he has pledged to spend some $50 billion in all over five years.”

Both hospitals and physicians offices have been slow to adopt EMR’s. Most physicians would love to have EMR’s to decrease paperwork and medical errors. However, many practices have legacy EMR systems that do not provide functionality necessary. These practices are struggling with the notion to reinvest in a new EMR as their reimbursement is decreasing, cost flow is ebbing, and physician income is decreasing

“PwC estimates that the average three-physician practice can expect to invest between $173,750 and $296,000 over two years to purchase and maintain an EHR system. “

A three man ophthalmology practice was quoted $65,000 per physician plus service and maintenance. The final figure was $95,000 per physician. The EMR is fairly functional. It would not qualify for a rebate from the stimulus package.

The physicians initially complained about the disruption in their work flow. After three months they started to accommodate to the change in work flow. Now they feel they need an upgrade to add functionality. The physicians are now concerned about the maintenance and service charge per year.

“Individual physicians, not practices, can receive up to a total of $44,000 each for adopting certified EHRs.”

President Obama’s subsidy is helpful but many physicians still cannot afford the upfront cost.

“Hospital systems main impediment is money. Many hospitals simply do not have the capital to buy systems that can cost $20 million to $200 million, especially when so many are struggling to remain solvent. Hospitals also worry about high maintenance costs, an uncertain payoff on their investment, and a lack of staff with adequate technical expertise.”

There is a perverse outcome to installation of an EMR. Physicians and hospital systems may realize some return on their EHR investment. The primary returns on the physicians’ and hospital systems’ investment is expected to mostly accrue to private and public payers.

“The federal government estimates that the conversion to digital records will save $12 billion in healthcare spending over 10 years.”

The federal government saving twelve billion dollars over 10 years is a small return on a $50 billion dollar investment. The investment risk is compounded by the uncertainty of implementation of a fully functional EMR.

The survey also found that:

  • 82% of hospital CIOs have already cut IT spending budgets in 2009 by an average of 10%, with one in 10 making more drastic cuts of greater than 30%.
  • 66% of CIOs say they expect to be asked to make further cuts in IT spending before the end of 2009.

It is not difficult to understand that hospitals want to cut costs. They are reporting cash flow and profit margin problems. The government cannot afford Medicare and Medicaid in its present form. President Obama’s plan is to expand both Medicare and Medicaid while decreasing patient coverage and provider reimbursement. Premiums for Medicare and deductibles have been increasing steadily.

  • 64% of CIOs agreed that it is impossible to balance demand with the need to cut costs.
  • One-half of CIOs with more than 500 beds say that federal funding is "crucial" to their ability to implement EHRs.

The stimulus formula for subsidizing hospital systems is a function of the hospital system’s volume of Medicare and Medicaid patients. With government reimbursement decreasing, hospital systems are reinventing themselves to attract paying customers. They are developing high productivity profit centers such as back centers, cardiovascular centers, and gastric bypass centers. Hospital systems “lose money” on acute illnesses. Hospital systems are trying to move away from their dependence of Medicare and Medicaid patients.

It should be obvious that President Obama’s EMR stimulus plan has not been well thought out.

The American Medical Association seems to be on the right track. It is clear to me that someone is listening to me.

“The American Medical Association is developing a Web-based service offering doctors electronic prescribing, up-to-date reference material and other resources.

The idea is to make it easier for physicians to adopt technology President Obama is promoting for health care reform, to streamline their workload, and improve patient care.”

“Doctors will be able to use it to access numerous electronic medical services, including the latest science on diseases, and electronic health records, said Dr. Joseph Heyman, chairman of the AMA’s board.”

http://news.yahoo.com/s/ap/20090422/ap_on_bi_ge/us_med_ama_electronic_health_1

There are no details available yet. It is encouraging that the AMA is trying to be proactive.

President Obama, this is not rocket science. If you put a totally functioning electronic medical record in the cloud in the next few months, the most it should cost the government (taxpayer) is about 5 billion dollars.

The software could be serviced and upgraded at no cost to the providers of healthcare services. The taxpayers return on the dollar would be at least three times that amount in the first year if the providers paid by the click. Payment by the click would not be a burden to physicians or hospital systems.

Physicians and hospital systems would instantly have a fully functioning EMR. The government could use the same business plan credit card companies use. It could even set up an auto pay system.

President Obama, I hope you read this and arrive at an "ah ha" moment and change the route you are taking to convert medicine to an electronic information system.

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

  • Electronic Medical Records

    patients should keep copies of their electronic medical records thorugh services like ours.
    This way, they will be in control and it could actually reduce their health care bills.

  • Stephen Holland, MD

    Those two comments look like paid advertisements. I encourage my patients to put their records on a usb thumb drive and take it with them. This is great for college kids. BTW, all my records are kept as PDF’s. so it is trivial to put the records on the patient’s thumb drive.

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President Obama Don’t Confuse Us With Illogical Thinking.

 

Stanley Feld M.D.,FACP,MACE

Medicare and Medicaid flunk the Institute of Medicine’s criteria defining an effective healthcare plan.

The President’s $634 billion "down payment" on health care reform in his proposed budget depends on raising taxes and saving money largely through administrative payment changes in existing entitlement programs. That is not exactly fundamental reform.”

John Goodman’s analysis of Nicholas Kristof New York Times editorial is perfect. He starts off by saying: I have observed before that when people start talking about health care their I.Q. tends to fall about 15 points.”

“The same error in reasoning appears in almost every speech on health care given by Barack Obama and by just about everybody else on the political left as well.”

I am not interested in partisanship. I am only interested in logical problem solving. If a plan for medical treatment makes sense and has good clinical evidence to prove a positive outcome, I am for it. The same applies to solving social and economic problems.

President Obama’s healthcare team is in the process of formulating a plan that is not logical . The healthcare plan has not succeeded in the past and will fail at a greater cost to taxpayers and society.

John Goodman has outlined the logic used by Nicholas Kristof and the administration to justify the validity of the administration’s healthcare reform plan.

Classic syllogisms are taught to every high school student ;

All men are mortal

Socrates is a man

Therefore Socrates is mortal

John Goodman points out the syllogism used about by Nicolas Kristoff and the administration:

“Major Premise:

The United States spends twice as much per person on health care as Canada and most European countries and has worse outcomes.

Minor Premise:

Spending twice as much in return for less is bad.

Conclusion:

We should tax the rich and spend even more on health care.

Whoa! Something’s wrong here.”

You bet there is something wrong. It is not logical. The proposed solution of taxing the rich does not follow expanding failed programs (Medicare and Medicaid).

President Obama’s healthcare reform proposal;

1. Down Payment or Unknown Costs

President Barack Obama’s budget sets aside $634 billion over 10 years in a health care reserve fund, which is earmarked for the enactment of unspecified policies intended to bring down costs and expand coverage but its true costs are still unknown..

The congressional budget office’s estimates are much higher.

2. Key Provisions in the Health Care Budget

Higher Taxes. The President is proposing tax increases on those making over $250,000 annually. This revenue is projected to finance approximately half of the projected health care spending, an estimated $318 billion.

The President’s healthcare team is proposing to throw money at a broken system and use the tax increases to pay for it. The result will be a further increases in future taxes. President Obama should be developing a healthcare system that will provide incentives to the primary stakeholder (consumers) and promote innovative thinking and behavior by the other primary stakeholder (physicians) to promote efficiency and decrease costs.

His plan does not initiate real change in the healthcare system. The government will still outsource administrative services to the healthcare insurance industry. The healthcare insurance industry will still control the healthcare dollar.

3. Medicare Private Plan Payment Changes.

4. Medicare Prescription Drug Premiums.

Under this proposal, higher-income seniors would pay higher premiums than lower-income seniors for Medicare Part D prescription drug coverage.

Medicare Part D is presently too expensive. Its premiums have tripled in the last two years. Medicare Part D has benefited the healthcare insurance industry. The healthcare insurance industry’s net profit is $5 billion dollars per  year. Only 20% of Medicare patients participate.

5. Medicaid Prescription Drug Payment.

6. Medicare Payment Changes.

“Systemic delivery reforms, such as "pay for performance" (where physician and hospital reimbursement are tied to compliance with government practice guidelines), are intended to result in securing better value for dollars.”

Similar “reforms” have lead to providers adjusting by gaming the system. Centralized medical decision making in Washington will lead to political manipulation of the system by healthcare lobbyists. It does not repair the healthcare system.

 

7. Medicaid Family Planning.

8. Prescription Drug Re-Importation.

President Obama’s healthcare plan does little to empower the patient. It does little to change our healthcare system’s flawed public and private payment system. The power to manipulate the system’s payment remains in the healthcare insurance industry’s hands. Its appeal is to the populist notion to “soak the rich” to help the poor. It does not add value to individual freedom of choice and ability to secure valuable healthcare. It does not repair the healthcare system.

If President Obama really wanted to repair the healthcare system he would place control and decision making for healthcare needs in the hands of the consumers and their families.

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

 
  • jacksmith

    Finally, the time has arrived to fix Americas Healthcare crisis, and Americas healthcare nightmare. Hundreds of thousands of you are killed needlessly every year by your healthcare delivery system in a rush to profit. And because of a rush to profit Hundreds of thousands more of you are needlessly dying from treatable illness that people in other developed and civilized countries don’t DIE! from. Rich, middle class, and poor alike. Insured, and uninsured. Men, women, children, and babies.
    Additionally, thousands more of you are driven into financial ruin, and bankruptcy just because you, or one of your loved ones got sick or injured. And all of this is happening at a time when America spends twice as much of it’s GDP (Gross Domestic Productivity) on health care than any other country in the developed world. Individual Americans spend about ten times as much on health care as any other people in the developed world. This is a CRIME AGAINST HUMANITY. AND IT MUST END!
    But before we can truly fix this healthcare crisis and disgrace, everyone needs to clearly understand what the problem is. And everyone needs to clearly understand the real enormity of the problem. The problem is that HEALTHCARE AND MEDICAL DELIVERY IN AMERICA IS SEVERELY CORRUPTED AND COMPROMISED BY GREED! AND THE PRIVATE FOR PROFIT MOTIVE. And it is corrupted, and compromised IN EVERY ASPECT, AND EVERY PLACE OF HEALTHCARE AND MEDICAL DELIVERY. Unfortunately for all Americans, compromised healthcare ALWAYS results in needless suffering, injury, disability, and or death. Which is exactly what is happening now in America in shocking numbers.
    Health care is NOT! a private for profit business. Healthcare is an essential public service. Like police, and fire. And healthcare is also a human right! PRIVATE FOR PROFIT HEALTHCARE IS AN OXYMORON, AND AN IMMORAL AND UNETHICAL PERVERSION OF HEALTHCARE AND HUMAN RIGHTS.
    So how do we fix this healthcare disgrace? I believe the fix for Americas healthcare disaster is essentially the same thing that every other developed country in the World has essentially done. “NOT FOR PROFIT, TAX PAYER SUPPORTED, SINGLE PAYER, AUTOMATIC, FREE UNIVERSAL HEALTHCARE FOR ALL. Essentially HR676 (enhanced, and expanded medicare for all). Just like every other CIVILIZED! country in the developed World has. There is no other way to truly fix and reform our current disastrous healthcare delivery system.
    All Universal health care systems work best when everyone participates. But I know that the healthcare lobby, and some politicians will try and undermine “Not For Profit, Tax payer supported, Single payer, Automatic, Free Universal Healthcare for all” by falsely claiming that it will limit your choice, and require you to participate.
    So, I propose that everyone be included in the national plan unless they choose to opt out. If you opt out and need medical care the national plan will insure your provider that they will be reimbursed under the rules for members in the national plan. But those who opted out, and their insurer will be responsible for the FULL! cost to the national plan for providing your care if you or your private insurer fails to reimburse the provider or the national plan in a timely manor to at least the standards of the national plan.
    Including reporting you to credit agencies, withholding of taxes, leans, and garnishment of wages for unpaid medical bills. Just like you have now under private for profit healthcare, and private for profit health insurance.
    Further, people who opted out will be required to provide proof of financial responsibility for future illness or be required to participate in the national plan. And everyone with children will be required to participate in the national plan. Or provide proof of insurance coverage on each child to the standards of the national plan. It will be against the law to report anyone in the national plan to a credit agency for unpaid medical bills.
    Frankly, only a dope would want to opt out of the national plan and opt to keep our current disastrous private for profit medical, and insurance plans. But they will be free to choose. The most important thing is that the vast majority of Americans that want the protection, benefits, and higher quality of a universal national plan have that choice.
    You see, one of the most important aspects of a universal healthcare system is easy access, and patient protection. This is accomplished by having a single payer without a conflict of interest in patient care. And by having a payer who has the power to enforce minimum standards of excellence in healthcare delivery for everyone in the plan. This is much of what Medicare does now for senors. “Aeger Primo” (The patient comes first). Unfortunately in our healthcare system the patient comes last. We are just a peace of meat to them. Cash cows to be slaughtered for profit.
    So this is IT! my fellow Americans, My fellow human beings, My fellow World Citizens. And my fellow Cyber Warriors. 🙂 The time has come. D day. H hour. HEALTHCARE REFORM THIS YEAR! Let no one stand in our way. Contact your representative and tell them you want “Not For Profit, Tax Payer Supported, Single Payer, Automatic, Free Universal healthcare for all. And tell them you want that choice now. Tell them you want President Obama’s budget passed without delay. President Obama’s budget is brilliant. And exactly what is needed now.
    President Obama, and his allies will need all the support you can give them. The healthcare lobby will try to take out his people if they can, like they did with Tom Daschle and Nancy Killefer. And they will try to neutralize President Obama’s popularity, and political power. Or they will try to take him down someway. Don’t stand for it. If they attack him. Go after them ten times harder and remove them from office. We had an election. And you the people chose President Obama’s leadership, and change agenda. Let no one in government disrespect the will of the American people and remain in office.
    Let’s get this healthcare reform done now my fellow Americans. This year. Take no prisoners.
    God Bless All Of You
    Jack Smith — Working Class 🙂
    http://jacksmithworkingclass.blogspot.com/
    (http://jacksmithworkingclass.blogspot.com/)

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