Stanley Feld M.D.,FACP,MACE

“The Bush administration proposed on Thursday to crack down on the aggressive marketing of private Medicare insurance plans by outlawing unsolicited visits and telephone calls to beneficiaries, regulating commissions paid to sales agents and increasing the fines that could be imposed on insurers.”

If Medicare insurance coverage loses money why would an insurance company go after the Medicare business?

My answer is that Medicare doesn’t loss money. The government losses money by paying the healthcare insurance industry high fees to administer Medicare. I believe these fees are non discoverable in the context of the billing and reimbursement process.

Medicare Advantage is the private Medicare Plans sold by the healthcare insurance industry. The healthcare insurance industry has used high-pressure sales tactics led some people to sign up for unsuitable Medicare policies.

The government does not have the authority or manpower to regulate marketing of Medicare Advantage coverage. The Bush administration’s view is “states should not have the authority to regulate the marketing” of private Medicare plans. Doesn’t the Bush administration position on state authority sound smart?
It is a good thing we have freedom of speech and the press in America. It is a good thing we have the right to have political action groups. Political action groups have the ability to educate citizens and increase awareness about problems we face.

Paul Precht, policy director of the Medicare Rights Center, a group that counsels beneficiaries, said: “We need Congress to give the states a greater role in enforcement. The federal government does not have the manpower.”

The problems are door-to-door marketing of private Medicare plans, outright solicitations in parking lots as well as solicitations at free lunches.

The America’s Health Insurance Plans always welcomes new proposals and rules but say the proposals or rules goes too far.

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group, said she welcomed the proposals, though they go further than the industry had recommended in a few areas like cold calls.

The healthcare insurance industry has been marketing Medicare Advantage Plans by offering food and faulty healthcare coverage through misleading advertising. There will be no more “Have Lunch on Us!” fliers.
However, the fines proposed are less than the financial benefit derived by the healthcare insurance industry. The fines will probably not be a deterrent to abuse because of the government will be unable to enforce the rules.

Another important abuse is policy switching. Insurance agents’ commissions increase by policy switching.
The responsibility of the government is to educate the buyer to beware. The responsibility of the buyer is to beware of the tactics and abuse of the healthcare insurance industry.

Many carriers now pay higher commissions in the first year. Some pay only for the first year, with no commission in later years. This creates a “financial incentive for agents to encourage beneficiaries to change plans each year,” the administration said.

A $200 fee in addition to your Medicare premium payment increase the total cost of healthcare coverage. Medicare Advantage plans are healthcare plans offer patients private insurance. However, it appear that the coverage is not much different than traditional Medicare insurance. The government relinquishes most of its control over the reimbursement payment system to the healthcare insurance industry.

The National Association of Healthcare Underwriters issue the same “yes,but” statements as the America’s Health Insurance Plans.

Jessica F. Waltman, a vice president of the National Association of Health Underwriters, which represents agents and brokers, said, “We agree that insurers should eliminate financial incentives for agents to make quick sales and shift beneficiaries from one plan to another without regard to their health care needs.”
But, Ms. Waltman added, small differences in commissions in the first and subsequent years may be justified.

Uwe Reinhardt said physicians receive 20% of healthcare expenditures and 50% of that 20% goes for overhead.

Where does the other 80% go? When healthcare policy makers speak of healthcare reform they should remember that 80% of the Medicare dollars are used to pay the private healthcare insurance companies administrative fees and hospital charges. The majority of the money is not spent to pay physicians.  They should think twice before destroying the infrastructure that delivers medical care (physicians) to our senior citizens by constantly decreasing physicians’ reimbursement. The healthcare policy makers should concentrate on how to reduce 80% of the Medicare dollars spent on other non value added services.

Stanley Feld M.D.,FACP,MACE

US Secretary of Health and Human Services Michael Levitt said Medicare is lurching toward disaster. Secretary Levitt has studied the problem for eight years. He has tried to introduce some innovative policies along with some poor policies. It seems as if only the poor policies survive.

“ Medicare is lurching toward disaster and it is too late for the Bush Administration and Congress to do anything about it, U.S. Health and Human Services Secretary Michael Leavitt said on Tuesday.”

He said the next administration will have to act to stop rising costs and get control of the $400 billion federal health insurance plan for the elderly, which now covers 44 million people.

$400 billion dollars is twice the cost of the war in Iraq. This amount only partially covers 44 million senior citizens. There are deductibles and co-pays. The insurance premium for Medicare is almost as expensive as private insurance for persons collecting retirement plan money. Medicare is an entitlement that should not be expanded to 300 million people. Do the math. The cost would be $2,727,272,727,273 dollars a year and rising, in addition to the premiums and co- pay citizens would be paying.

"Higher and higher costs are being borne by fewer and fewer people. Sooner or later, this formula implodes,"
Leavitt said in a speech to the right-leaning Heritage Foundation and American Enterprise Institute think-tanks.

It doesn’t matter if he was talking to a right or left leaning organization. It takes a blind man to see the wheels are coming off and no one is doing anything about it. All it takes is a little common sense to know something creative has to be done.

There are many innovative changes that can be made easily. One would be an emphasis on effective chronic disease management. Another would be effective malpractice reform in each state to decrease the need for physicians to practice costly defensive medicine.

A national health plan run by the government would do is stifle innovation and run up the cost. If we compound the healthcare problem by adding all U.S. citizens to a government paid for and directed single party payer system we will accelerate disaster.

“There is serious danger here," he added. "Medicare is drifting towards disaster."
"It troubles me that this matter is not receiving more attention in the presidential candidates' discussions. The next president will have to deal with this in significant part," he said.

Doesn’t Secretary Levitt know the presidential candidates do not understand the issues, the problems, the potential solutions? He should speak out. The solutions are easy if all the stakeholders’ incentives are aligned. The recognition of patients as the primary stakeholder is critical. The needs of the physicians as medical care providers have to be understood. The needs of secondary stakeholders have to be modified and adjusted.

Stanley Feld M.D.,FACP,MACE

Whatever happens with this particular program, Medicare says it wants to keep experimenting. “We’re not giving up on this stuff,” said Mr. Kuhn, the Medicare deputy. “We definitely want these programs to work.”

Mr. Kuhn is referring to Medicare’s $350 million dollar disease management program that has failed. I hope Mr. Kuhn is realizing that the chronic disease management programs must be systems of care directed by physicians in order to succeed. The systems have to be patient centered with the physician being the captain of the care team.

“Medicare is doing exactly what we should want Medicare to do — to test different life forms of disease management and see what works best,” said Dr. Arnold Milstein, the chief physician for Mercer Health and Benefits, a consulting firm. But, he said, “This particular form of disease management is not looking promising.”

Dr. Milstein works for a health benefits consulting firm. He makes no judgment on the defects in the study.

“Medicare is already exploring other ideas, like the development of so-called “medical homes,where a doctor with a team of other professionals oversees a patient’s care. A few doctors’ groups involved in a separate Medicare experiment have reported some success in saving the government money by more actively managing their patients’ care.”

The concept of “medical homes” is a variant of “Focused Factories”. Focused Factories have been championed by Regina Herzlinger at least 15 years ago as a plan to modernize medical care.

I believe the concept of “medical homes” will work. It is physician directed system focused on becoming expert in the care of one disease with a team of physician extenders. The patient is at the center of the management team. I can not find the design of the study Medicare is doing. “Medical Homes” was developed by the American Association of Medical Colleges. (AAMC).

The problem with the American Association of Medical Colleges performing the study is most patients are taken care of by physicians that are not in an academic setting. The system must be tested utilizing practicing physicians in a real world setting.

Twelve years ago I present the concept of AACECare as a system of intensive diabetes self management. It is a system of care with the patient being at the center of the diabetes management team and the Clinical Endocrinologist being the captain of the team that includes nurses, dieticians, and psychologists.

Family Practitioners have to be taught how to develop this system of care in their practices. There are not enough Clinical Endocrinologists to care for all the diabetics in the country. The Family Practitioners see most of the diabetics. In order to have any impact on cost of care they have to be engaged in the system of care.

“Many of the companies involved in the failed program say the experiment was flawed in the way it was designed and that Medicare has failed to work with them to make the program a success.”

Now the eight companies are blaming Medicare for its own faulty design of the $350 million study. I could have told Medicare it would not have worked before it spent a dime.

“We haven’t proven anything,” said Dr. Jeffrey L. Kang, a former Medicare official who is now the chief medical officer for the insurer Cigna.”

“The companies say Medicare signed up patients who were much sicker than they had expected.”

All patients with Type 2 Diabetes Mellitus are very sick. They usually have the disease for eight years before it is discovered and are on the way to develpoing chronic complications.

“The companies also say Medicare failed to make good on its promise to give them timely information about the use of prescription drugs, for example, or lab results that would have allowed them to help direct the patients’ care.”

Medicare is not the medical doctor. Nurse help desks are not a direct extension of a physicians medical care team. They are not going to get patients attention as a physician office team can. The participating companies are now in a defensive mode.

“We overestimated the real desire expressed by the organization,” said Ben R. Leedle Jr., the chief executive of Healthways, who has been an outspoken critic of Medicare.
“Mr. Leedle says that Healthways will probably be able to demonstrate savings from at least some of its Medicare efforts, although the company also says it is projecting a loss on the experiment because it may have to pay back federal fees.”

On the other hand Medicare claims that it worked with the companies.

“For its part, Medicare said that it had worked extensively with the companies to address their concerns and that its final analysis would take into account how sick the patients initially were.”

The blame game has started. This exercise will last the better part of a year and become politicized. An experiment with chronic disease management designed and executed correctly will prove that it works and saves money. If it is done incorrectly it will not save money.

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

Stanley Feld M.D.,FACP,MACE

“An ambitious three-year experiment to see whether the Medicare system could prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes has suggested that such an approach may cost more than it saves.”

In our sound bite society this first paragraph can nullify the potential benefits and cost savings of focused factories and chronic disease management. Nothing could be further from the truth.

Social science experiments invariably suffer from design flaws. They are not double blind controlled studies with comparable treatment and placebo groups. This study compounds a potential error when the study centers are not applying comparable treatment protocols. The faulty methodology invariably leads to faulty and erroneous statistical conclusions. The study was intended to show positive results for the hypothesis. The hypothesis to be proven was that disease management decreases the cost of care.

I have stated in the past that the patient must be the driver of the care and the professor of his disease. Nurse driven call centers detached from patients physicians are not going to accomplish the goal of making the patient the “professor of his disease”. The study groups’ nurses call centers do not use similar protocols. The results of all the centers are usually lumped together. Is one center better than the other in reducing the cost of care? Are the patients well educated? Do the educated patients avoid the costly complications of the disease? Is a three year study long enough to determine if diabetes management works? Were the patients who incurred complications of disease the sickest at the onset of the study? Were patients risk weighed so that comparable groups under intensive glucose control were studied and compared to the same patients that had uncontrolled glucose levels? What was the duration of the disease in patients who were the most expensive to treat?

Additional characteristics of the patients need to be compared and separated. All the people in the study were over 65 years old. However, was there a difference in interest to learn among patients? Did this make a difference in complications? What was the compliance rate with intensive treatment? How long did each patient have his Diabetes Mellitus? How effective were patients at in losing weight? How effective were they in exercising? How many became disease management experts?
None of these questions were answered within the study. The data might be present. The conclusion is not correct until the study is done properly.

“The test borrowed a practice long available through private health plans. Nurses periodically place phone calls to patients to check whether they are taking their drugs and seeing the right doctors. The idea is that keeping people healthier can help patients avoid costly complications.”

Private health plans have tried nurse directed help desks in the past. The healthcare insurance companies never made nurses call centers an extension of the physicians care. Nurse’s help desks were imposed on the physicians care. This is not my definition of disease management. The patients have to be engaged in self management. They have to be motivated to prevent the complications of their disease. Patients at different stages of their disease are going to have different outcomes. Patients in the later stages of a chronic disease are going to have worse outcomes than patients at the early stage of a chronic disease. Patients with long term diabetes are at greater risk for complication of the disease.

“After paying eight outside companies about $360 million since mid-2005 to try to improve such patients’ health, Medicare is still trying to figure out whether the companies were able to keep people healthier. But the preliminary data indicate that the government is unlikely to save money.”

There is not a single physicians practice in the group report nor a single physician involved in the study design. The healthcare industry somehow convinced Medicare that it does not need physicians to take care of patients with diabetes mellitus. It simply needs industry designated healthcare providers to run nurse call centers.

“The eight selected Medicare Health Support Organizations (MHSOs) are well known in the industry and vary in size, complexity, and organizational focus. Some focus primarily on the provision of care management services, while others provide a broader range of services (including commercial insurance products, information systems, etc.”

Patients with Diabetes Mellitus need medical care and not commoditized healthcare. The patient physician relationship is critical. The physician has to be the manager of a chronic disease team with the patient being the player and the physician extenders being an extension of the physicians care. This model of nurse directed health desk has not worked in the past and can not work now.

“Each MHS program has a nurse-based health coaching and health support program; however, the MHSOs vary in how they implement the various components of their model. While all MHS interventions involve a telephonic nurse component, only five of the MHSOs are actively engaged in serving an institutionally based population.”

If the experiment is set up incorrectly the results are meaningless and a waste of money. The fighting over where it worked, whether the government gave the study enough time and whether the results are valid have begun.

No matter how much time the government gives the study it will fail. The study was doomed to failure before it started. It does not mean the concept of disease management is a failure.

Did the study prove that disease management is ineffective? I do not think so. It simply proved that the design of the study was defective? If 90% of the healthcare dollar is spent on the complications of chronic disease, the healthcare system must figure out an effective way to decrease the complications. This is where the money is!

The concept of disease management is in jeopardy because the media is the message and the message of the study is wrong.

Physicians were not involved in this disease management project. One of these days the government is going to realize that medical care is different than healthcare. Physicians provide medical care not healthcare. Medical care should be driven by physicians, not corporations and its executives.

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

Stanley Feld M.D.,FACP,MACE

John Goodman published a summary of Present Value of Unfunded liabilities the government has for Social Security, Medicare Part A, B and D. The $34 trillion dollars I previously mentioned was not far off. This figure does not include the increased liability if the government takes over the healthcare system and is the single party payer.

John Goodman pointed out the Social Security and Medicare Trustees report was announced during Spring Break and would be released when congress was in recess.

“ On Good Friday (when most people were off, including most reporters) the Administration announced that the following Tuesday during Spring Break (when Congress was in recess and everyone’s attention was focused elsewhere) the Social Security/Medicare Trustees annual report would be released.”

“ Apparently someone isn’t anxious for you to pay close attention to this year’s report. The table below may explain why. The federal government has promised more than $100 trillion in benefits over and above expected taxes and premium payments!”

PRESENT VALUE OF UNFUNDED LIABILITIES
Program 75-Year Infinite Horizon
Social Security $ 6.6 trillion $15.8 trillion
Medicare Part A $12.7 trillion $34.7 trillion
Medicare Part B $15.7 trillion $34.0 trillion
Medicare Part D $7.9 trillion $17.2 trillion
Total Medicare $36.3 trillion $85.9 trillion
Total Medicare and Social Security $42.9 trillion $101.7 trillion

*These calculations ignore the existence of the trust fund, estimated at a little more than $2 trillion.
Source: Social Security/Medicare Trustees Reports 2008

How could a presidential candidate believe he or she could possibly afford to provide Medicare like insurance to all citizens when they cannot afford to provide it for the seniors they have an obligation to?

Why don’t they start listening to physicians? They should study blogs physicians write. They would get a pretty good idea of what is going on at ground level. A good place to start is KevinPo’s blog.
Dr. Po picks up a lot.

Rather than the presidential candidates creating false hope about improving the healthcare system, they should study human nature, human goals and what motivates people to be responsible for themselves. They should study what would give patient incentive to save their healthcare dollars. A clue would be to study my Ideal Medical Saving Account.

If we continue heading down the present path and add yet another unmanageable entitlement program we will be in bigger trouble. There will be a shortage of physicians, limited access to care and no money to pay anyone. I do not think the Federal Reserve Bank can print enough money to cover the dysfunctional entitlement program.

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