Stanley Feld M.D., FACP, MACE Menu

Medicine: Healthcare System

Permalink:

The Main Reason Behind Rising Medical Costs

Stanley Feld M.D.,FACP,MACE

 

President Obama and progressive Democrats such as John Kerry and Barney Frank wanted the healthcare system to become a single party payer system. Their problem was that they could not get enough votes in the house or senate.

https://youtu.be/f3BS4C9el98

 

 

https://youtu.be/-522hcm3woA

 

 

This goal for a single party payer by the progressives and Democrats must not be forgotten as the Trump administration tries to make a serious attempt to repair the healthcare system.

The Democrats and progressive will try to block this attempt at every turn.

All the stakeholders have played an important role in distorting the healthcare system  including the government, the healthcare insurance industry, the pharmaceutical industry, the hospital systems, the physicians and patients.

A starting salary for a starting hospital administrator is $250,000 a year. A starting salary for a pediatrician is $90,000 a year. Top hospital administrators are paid between five (5) million and fifteen (15) million dollars a year. Mature pediatricians make $150,000 to $200,000 a year.

Which professional adds more value to medical care? Physicians add more value to the medical care system. Hospital administrators do not understand why physicians resent them.

Physicians also resent hospital systems ripping off consumers with $50 aspirins and $100 sleeping pillows. Consumers who care about the cost of healthcare do not understand why the government and insurance companies let hospital systems charge these obscene prices.

Most physicians do not pay attention to these costs until they are patients.

All of the stakeholders except the government and patients try to optimize the amount of money they take out of the system. Surgeons are much further ahead of primary care physicians in figuring out their value to the healthcare system.

As a result of advances in technology, physicians figured out that 70-80% of the work-ups done requiring hospitalization 30 years ago could be done as outpatient care.

The brick and mortar value of hospital facilities has decreased.

As soon as hospitals realized this they started to build ambulatory surgical care facilities and outpatient clinics.  Hospital system procedures are more expensive than free standing outpatient ambulatory surgical care facilities.

http://stanfeld.com/hospital-mergers-dont-work/

Hospital administrators somehow convinced the government that if they formed hospital systems and merged hospitals in an area they would increase their efficiency and they could decrease costs.

At the same time the management of private practices became complicated as a result of government regulations. Expensive electronic medical records were required but did   not work as advertised. Overhead increased while reimbursement decreased.

Many physicians became disgusted managing their complicated private practices. Some physicians quit practicing early.

The hospital systems offered to buy private practices for a “reasonable cash price”, provide an electronic medical record, do the billing and management of the practice and hire and pay full time employees.

Hospital systems usually paid physicians under contract the same take home pay they had for two years. After the two-year contract expired the hospital systems offered new contracts depending on a physician’s productivity or fired the physician. Physicians had no say in the matter.

Physicians and surgeons signing with the hospital system did not consider the criteria to be used for determining salary after their contract expired .

This hospital arrangement seemed attractive to many primary care physicians and some surgeons. The growth of hospital owned physicians increased from 20% to 70% of physicians in a region.

Organized medicine, the AMA and physician specialty groups, did little to warn or educate physicians of these unforeseen consequences.

Hospital systems did their best to isolate private practicing physicians from using their hospital facilities.

The only private practice physicians who were not marginalized by the hospital systems were physicians who were needed by the hospital system for the services they performed. As soon as the hospital systems were able to hire physicians to cover those services the private practice physicians were marginalized.

Large hospitals systems are making deals with insurers that squelch competitive hospitals.

President Obama’s plan was to allow hospital systems to hide prices from consumers and corporations. The goal was to discourage use of less-expensive rivals. This tactic would force the less-expensive competition to join the regional hospital systems as affiliates.

 At first hospital systems did not grasp the ultimate significance of enlarging hospital systems. They figured merging hospitals would increase efficiency and decrease the cost of medical care.

They also thought owning physician practices would decrease their reliance on in-patient hospital billings and their brick and mortar structures.

During the Obama years there was a tremendous increase in building growth on the campus of most hospital systems.

I never understood the hospital building growth. More building meant more hospital administrators and more overhead. I thought the government must have created some economic incentive for hospital systems to build more buildings on campus.  I could not find the  incentives given to hospital systems.

As hospital systems merged all the hospitals in a region the hospital systems realized they had a monopoly on not only hospital services but also physician services.

They could negotiate with healthcare insurance companies from strength.

Initially the healthcare insurance companies were in control of the costs and services that were available. The healthcare insurance companies lost their control over cost to the regional hospital systems.

Dominant hospital systems use an array of secret contract terms to protect their turf and block efforts to curb health-care costs. As part of these deals, hospitals can demand insurers include them in every plan and discourage use of less-expensive rivals. Other terms allow hospitals to mask prices from consumers, limit audits of claims, add extra fees and block efforts to exclude health-care providers based on quality or cost.”

There are hundreds of regional hospital system giants throughout the United States. In many cities there are two or three giant hospital systems. It is difficult for independents to negotiate contracts in these cities.

The Wall Street Journal has identified dozens of contracts with terms that limit how insurers design plans, involving operators such as NewYork-Presbyterian, Johns Hopkins Medicine in Maryland, the 10-hospital OhioHealth system and Aurora Health Care, a major system in the Milwaukee market. National hospital operator HCA Healthcare Inc. also has restrictions in insurer contracts in certain markets.”

This is a very big deal.

The goal of the government should be to lower the price of healthcare to all of its citizens including seniors, workers who get insurance from their employers and people who do not have employer sponsored healthcare.

The Obama administration did nothing about stopping hospital system monopolies. In fact, it encouraged them.

“Certain hospital systems are able to command advantageous terms because they have grown through years of deal-making, shifting the balance of power between hospitals and insurers. In 2010, the year the Affordable Care Act passed, the annual number of hospital mergers shot up 40% to 59, and the number of deals has remained above 60 every year since, according to IrvingLevin Associates, a research firm that tracks health-care transactions.”

The Obama administration did nothing about it because the distortion in pricing is going to lead to collapse of the private segment of our healthcare system. Once the private segment of the healthcare system collapses a progressive government hungry to have power and control over the populous will install a single party payer system.

As proven over and over again, a single party payer system does not work. The government has to outsource all of the infrastructure to administrative services. The government does not control the administrative services overhead. Also, the government does not want to develop another uncontrolled and inefficient bureaucracy like the VA Healthcare System.

A single party payer system will lead to increases in unsustainable deficits and decreasing healthcare services.

It will take many years for the public to recognize that a universal single party payer system is inefficient. The government will hide the system’s inefficiency from the public.

The government should make common sense rules, enforce those rules and get out of  the healthcare administration business.

Medicare and Medicaid costs have not been recognized by the general public yet.

The VA inefficiency and lack of service by the VA Healthcare System has been recognized in the last two years by the general public. The government has assured the public that the VA Healthcare System is improving.

The insurance industry is trying to fight back.

“No hospital system should be able to exercise market power to demand contract agreements that prevent more competitively priced networks,” said Cigna’s chief medical officer, Alan Muney, in a written statement provided by the company.

The Trump administration is aware of all of these problems. President Trump is trying to figure out a way of negotiating a deal with all the providers who are taking advantage of consumers and the government. His administration’s actions have been delayed by the slow death of Obamacare.

If Obamacare was repealed last year I am sure the topic of hospital monopolies would be a hot topic of debate today.

President Trump is presently attacking the middlemen who have made drug prices so obscene. This is a big problem and an easier target.

“The effect of contracts between hospital systems and insurers can be difficult to see directly because negotiations are secret. The contract details, including pricing, typically aren’t disclosed even to insurers’ clients—the employers and consumers who ultimately bear the cost.”

Hospital contracts forbids healthcare insurance companies to cover many procedures that can be performed as outpatient services outside the hospital environment. I have listed some of the price differences between the more expensive outpatient hospital care facilities and the independent ambulatory care facilities.

There are many examples of how hospital systems rip off consumers and increase the cost of healthcare insurance for all including employers, individuals and the government. It is also decreasing the access to care for all.

If the government is really looking for a system that would work it should look at my Ideal Medical Saving Accounts are Democratic.

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



Copywrite 2006-2018

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

Hospital Mergers Don’t Work

Stanley Feld M.D.,FACP,MACE

This article appeared in Kevin M.D. several weeks ago. The article has some valid points. However, it misses the vital reasons hospital mergers are not working.

“In 2010, there were 66 hospital mergers in this country. Since the Affordable Care Act went into effect, the rate of hospital consolidation has increased by 70 percent.

By creating incentives for physicians and health providers to coordinate under accountable care organizations (ACOs), the ACA hindered the ability of regulators to block hospital mergers while incentivizing hospital consolidation.”

The government published reason for encouraging hospital mergers was to increase hospital efficiency and decrease healthcare costs.

I have said over and over again that the real goal of Obamacare was to have total control over the healthcare system. This control could be accomplished by controlling all the providers.

Hospitals realized that physicians controlled the utilization of hospital facilities. As knowledge and technology improved more and more diagnosis and treatment could be performed on an outpatient basis.

All the hospitals had to offer was a brick and mortar facility. Hospitals tried to stop physicians, before Obamacare, from developing their own outpatient facilities. The hospitals lobbied the government to require certificate of need for advanced outpatient technology (MRI, CAT scans, Outpatient Surgical facilities, and laboratories).

It did not work.

Obamacare provided incentives for hospitals to merge and consolidate into hospital systems.

Obamacare also provided incentives for hospital systems to create Accountable Care Organizations (ACOs). I have written about ACOs destiny to fail ad nauseum.

The government’s pretext was that hospital consolidation into hospital systems would increase efficiency with resultant decreases in hospital care costs.

The real reason was to get hospitals to hire physicians. At that point they would lower reimbursement on both. Hospitals and physicians would be totally dependent on the government.

“There is a growing body of evidence that hospital mergers lead to higher prices for consumers, employers, insurance and the government.”

 

The result is opposite the stated goal and was totally predictable.

 

“It is imperative to educate patients and lawmakers as to how the consolidation of hospitals and medical practices raise costs, decrease access, eliminate jobs and, ultimately, reduce care quality as a result.”

The development of hospital systems led to the expansion of administrative personnel which in turn led to increased administrative salaries and costs. Administrative costs are not government controlled. They are part of the overinflated hospital overhead.

In some cases, the government increased hospital systems’ subsidies because of increased administrative costs.

It did not lead to greater compensation to physicians they hired. Yet the hospital system was totally dependent on staff physicians for revenue production.

Physicians tended to work hard when they owned their own practice. Now that their salary was guaranteed they tended not to work 12-hour days.

Initially, hospital systems paid physicians on the basis of physicians’ previous productivity in their private practice. Additionally, physicians were given a payout for their practice. The payout was never the real value of their practice.

Hospital systems calculated the physicians’ productivity because the hospital system hired all the full-time employees. The hospital systems’ computer systems were also used in the calculation of productivity and overhead.

Hospital systems controlled the overhead and the books. A lot of the time the calculation was inaccurate. This was the result of two fees collected from the government and the insurance companies. One was a technical fee that belonged to the hospital system. The other was a professional fee for the physician.

At times, the professional fees were not collected and the physician groups could not figure out the discrepancy.

There had been a long-standing mistrust by physicians toward hospitals prior to Obamacare. The errors in calculations resulted in greater mistrust by physicians toward hospitals.

If a physician was not producing according to the hospital system’s calculation the physician, at the end of a usual two-year contract, was let go. This created more mistrust and suspicion among physicians toward hospital systems.

It has also caused physicians who anticipated this stranglehold by hospital systems to become concierge physicians or open outpatient clinics of their own.

This has caused hospital systems to provide concierge physicians of their own as well as hospital outpatient ambulatory surgical care clinics. The problem is that the free-standing physician owned ambulatory surgical care clinics (ASC) are more efficient and cheaper than the inpatient hospital care and the hospital’s own outpatient ambulatory surgical care clinics (HOPD). Some privately own ASC are cheaper than the increasing deductibles patients with private insurance have to pay using their insurance.

Below are some examples of Ambulatory Care Surgical Center fees as opposed to Hospital Owned Outpatient Surgical fees.

 ASC – $1250 ($500 out of pocket)

HOPD: $4250 ($1000 out of pocket)

Echocardiogram:

ASC $500 ($200 out of pocket)

HOPD: $4250 ($1250 out of pocket)

Arthroscopy of Knee:

ASC – $3600 ($1070 out of pocket)

HOPD: $13,000 ($3900 out of pocket)

Hernia Repair:

ASC – $2500 ($750 out of pocket)

HOPD: $19,000 ($5700 out of pocket)”

There has been a dramatic increase in hospitals gobbling up independent providers and becoming powerful regional monopolies. These monopolies raise prices not decrease prices.

“According to a 2012 study by the Robert Wood Johnson Foundation, “the magnitude of price increases when hospitals merge in concentrated markets is typically quite large, most exceeding 20 percent.”

 

Forbes’ Avvik Roy of Forbes said, a presentation  in 2012.

You have to get at the errors in public policies which drive the hospitals to merge.” He concluded that government must do more to fight consolidation among hospitals.”

The underlying theme is that President Obama wanted Obamacare to fail so it can be replaced by a single party payer system that has been pushed by progressives since 1935. Obamacare is moribund despite claims by Democrats. They refuse to face the fact that socialism does not work even thought it is a feel-good concept.

“A recent paper authored by Northwestern’s Leemore Dafny, Columbia’s Kate Ho, and Harvard’s Robin Lee provides some definitive proof that when hospitals consolidate, prices increase substantially. The effect is made worse directly in proportion to proximity of the merging hospitals. “If you are doing it because you think in the long run it will serve your community well, you should think twice,” Dafny said.”

Hospital systems are consolidating because they think it is in their vested interests to consolidate. They are falling right into President Obama’s trap. Hospital systems do not control productivity. Physicians control productivity.

A study published by the National Bureau of Economic Research, conducted by Zack Cooper of Yale University, Stuart Craig of the University of Pennsylvania, Martin Gaynor of Carnegie Mellon and John Van Reenen of the London School of Economics, sheds light on the real cost of reduced competition among hospitals: hospital prices are 15.3 % higher when a hospital had no competition compared in markets with four or more hospitals, amounting to a cost difference of up to $2000 per admission. Hospital prices are 6.4% higher in markets with two hospitals and those with three are 4.8 % more expensive when compared to markets with four hospitals.”

The American Hospital Association has been aggressive in criticizing those reports. It has funded a couple of critical reports  defending mergers and consolidations. The American Hospital Association doesn’t understand the progressives’ trap either.

It is backfiring already as hospital systems are saying they are losing money. The government is cutting reimbursement, the insurance companies are raising insurance rates and increased deductibles are unaffordable.  Consumers are experiencing a decreased access to care.

None of the policy makers are focused on the right problems because they want a single party payer system in order to gain total control over the healthcare system. Progressive have no interests in the cost of care, the need to raise taxes or the delivery of efficient care.

America is going to experience an economic disaster as it has been experienced in Canada, England and many other countries in the world.

Consumers are continuing to take it on the chin in other countries because 80% are not sick at any one time. Consumers in other countries feel secure with the guaranteed coverage even if it increases their taxes and decreases access to care.

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



Copywrite 2006-2018

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

Single Party Payer System Backfires On Great Britain

Stanley Feld M.D.,FACP,MACE

Last year the Great British single party payer system, The National Health Service, backfired.

It occurred just at the time Americans were being suckered into instituting a single party payer system by its progressive politicians..

Winston Churchill was right when he said,“You can always count on Americans to do the right thing—after they’ve tried everything else.”

I hope some of our leaders are listening.

President Obama appointed Dr. Donald Berwick Director of the Center for Medicare and Medicaid Services, during the Senate’s recess July 4th2010 in order to avoid a senate confirmation hearing. The American people did not have the opportunity to hear Dr. Berwick’s philosophy on healthcare reform and his plans for Medicare.

Dr. Don Berwick touted Britain’s National Health Serviceas the America’s ultimate healthcare role model.

Dr. Berwick had some good ideas and many very bad ideas.

President Obama had other ideas. His ideas were not about repairing the healthcare system. His goal for healthcare reform was having the federal government control the entire healthcare system.

President Obama and Dr. Berwick portrayed physicians and patients as the villains in healthcare dysfunction. It is easy to blame the physicians and the patients because both have some blame in the dysfunction.

The main villains are the healthcare insurance industry, the drug companies, the government, and the lack of malpractice reform.

In 2009 the new British coalition government declared the National Health Service a fiscal failure.

The new coalition government had proposed a reorganization of its National Health Serviceand proposed reorganzation.

After 62 years, the British government’s present goal is to decentralize its healthcare system. The goal does not include decentralizing medical decision making. The system continues to put restraints on consumers’ medical spending. The government believes consumers are not smart enough to make their own medical decisions.

 

Baroness Hale had previously written the following for the British High Court, the U.K.’s equivalent of the U.S. Supreme Court:

“Decision-makers must look at [the patient’s] welfare … the nature of the medical treatment in question, … they [decision makers] must try and put themselves in the place of the individual patient.”

“The patient is not the decision-maker.”

The British Healthcare Service has an organization called NICE. Nice is a perfect bureaucratic name for “the National Institute for Clinical Excellence.” NICE sounds nice. Its function is not very nice.

According to the NHS Constitution, “You have the right to drugs and treatments that have been recommended by NICE.”The National Institute for Clinical Excellence is an agency that “advises” the government whether to authorize payments or withhold them for treatments deemed “not cost effective.”

Britain’s National Health Servicehas continually changed over the 62 years. Various British administrations have searched for the formula to deliver high quality care at an affordable price.

Unfortunately,Britain is making another complicated mistake.

The United States is making the same mistake as it marches toward a single party payer system. The mistake is the lack of respect for the intelligence and will of consumers. The mistake is not permitting consumers to be financially and emotionally responsible for their own medical care decisions.

The British incident is chilling. The British High Court recently ruled against parents’ wishes in defense of the National Health Services.

The high court’s decision is the result of British consumers giving total control of the healthcare system to its central government.

The British government believes that the people are not smart enough or responsible enough to figure out how to take care of themselves.

The British thinking is not dissimilar to the thinking of the Obama administration and Dr. Donald Berwick.

The basic conflict is over who is ultimately in charge of medical decision making. Government control of medical decision making is not limited to Great Britain’s single-payer structure.

In all government run health-care systems, whether in Australia, Canada, or even here in the United States under Obamacare, government increasingly makes final medical decisions, not patients in consultation with their doctors.

NICE is an agency that “advises” the government whether to authorize payments or withhold them for treatments deemed “not cost effective.”

“Consumers have the right to do what they or their doctor thinks best medically as long as your decision does not override the decision NICE decides is cost effective for the government.”

Britain has nevertheless experienced increasing costs and demand as quality and access to care has decreased.

What is missing from the British system?

All government has to do is make the right rules, empower consumers with their own money, level the playing field among stakeholders and get out of the way.

I think Americans understand that building bigger and bigger bureaucracies never solves social problems. They make the problems more complicated and more costly to fix.

Americans did not fully understand two recent single party payer events that occurred in Britain. This was partly because the American media did not cover the story’s significance adequately.

Perhaps the American media did not understand the story’s significance to the American debate in reference to a single party payer healthcare system.

First Charlie Gard and now Alfie Evans. These are two 23 month old babies who, though verbally silent, still gave clarion warnings to proponents of single-payer health care: The government — not my parents — is in charge of my life.”

Charlie Gard was born in August 2015 with a rare genetic disorder that carried a poor long-term prognosis.

“In July 2017, little Charlie was just 23 months of age and on a ventilator. Over the objections of his parents, British doctors decided to withdraw life-sustaining care.”

“According to British Courts, the National Health Service (NHS), the country’s single-payer system, is the ultimate medical decision maker — not the family. Ventilator support was withdrawn and Charlie died.”

Less than a year later another 23 month old child hit the British headlines. Alfie Evans was a comatose child whose NHS doctors said his condition was hopeless. His physicians felt he could not survive without ventilating life support. They wanted to terminate his life support.

His parents wanted to transfer their child to Rome’s Bambino Gesu Pediatric Hospital for further care. The Italian Hospital was willing to take him.

The British High Court ruled against the parents’ wishes, leaving Alfie’s fate to the NHS. As Justice-Baroness Hale wrote in Aintree v James: “we [referring to patients] cannot always have what we want.” On April 28, 2018,Alfie’s ventilatory support withdrawn.

Alfie did not die when artifical ventilation was withdrawn. He died because of inadaquate I.V. nutrition.He was able to breath on his own. His physicians were wrong.

NICE is the model on which the Independent Payment Advisory Board (IPAB) was created under the Affordable Care Act.The Independent Payment Advisory Board, or IPAB, was to be a fifteen member agency which was to have the explicit task of achieving specified savings in Medicare without affecting coverage or quality. The system creating IPAB granted IPAB the authority to make changes to the Medicare program with the Congress being given the power to overrule the agency’s decisions through supermajority vote.

The Bipartisan Budget Act of 2018repealed IPAB before it could take effect.[1

 In my opinion it should not be the government or the court that decides about who should live or die. It should be the patient or the patient’s family who decides with the advice of the patient’s physicians and clergy.

The institution the patient is being cared in should not be responsible for the bill.

Consider the question “who’s in charge?” from two perspectives: that of the American public and that of physicians.

Americans prize their freedom above all else. When the government makes medical decisions against the patient’s wishes, it directly infringes on personal freedom. It is doubtful that Americans would support a single-payer system if they understood what they have to give up in exchange for the promise of government supplied health care. Americans would be giving up freedom of choice.

http://stanfeld.com/?s=single+party+payer+system

 

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

 All Rights Reserved © 2006 – 2018 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

More Single Party Payer Noise

Stanley Feld M.D., FACP,MACE

Democrats have tried to pass a single party payer healthcare system since 1935. Slowly, but surely, the American population has been indoctrinated into believing that a single party payer system run by the government is the best healthcare system to have.

Americans have been filled with disinformation about the wild successes of single party payer systems in the rest of the world.

The economics of these single party payer systems are seldom discussed in a coherent way. Americans have no idea of the economic burden a single party payer system places on the budget of countries that have such a system.

The fact that these governments continue to raise taxes to pay for their single party payer system while decreasing their citizens’ access to care is hardly ever discussed. Only the favorable statistics that fit the progressive narrative are published.

In Norway the income tax rate is 50%. This is mostly because of its universal single party payer healthcare system. Norwegians seem happy with the system. If they get sick they have nothing to worry about. Their health care is free.

The Canadian healthcare system is unsustainable.

Canada spends 50% of its GNP on healthcare. All of the provinces are experiencing massive deficits due to additional healthcare costs.”

“Canadians who are healthy and do not need to interact with the system are happy and feel secure that their healthcare needs will be serviced without cost. Nothing is free.”

“The United States consumes only 18.5% of our GDP on healthcare. This percentage is rising as access to care is decreasing.”

The Frazer Reportis very specific on the cost of healthcare in Canada although the government is not very transparent.

Each province is having a difficult time figuring out how to fix its healthcare system. Many Canadians are convinced that a single party payer system is not the answer but cannot politically eliminate it.

The fact is nothing is free and only 20% of the population interacts with the healthcare system at any one time. People who are not sick think the single party payer system in great. They are happy they have no anxiety about the cost of healthcare if they get sick.

In Britain taxpayers are unhappy with the National Health Services. Consumers recognize the bureaucratic waste in their healthcare system. They suffer from decreased access to care. Wait times for health care and surgery are ridiculously long.

The private healthcare market is flourishing in Britain for those who can afford it. 

The British healthcare system is unsustainable. The British government has not been able to fix the expensive National Health Service.

America has a single party payer system for Medicare, Medicaid, SCHIP and the VA system.

Seniors love Medicare. Most seniors could not afford to get medical treatment if there was not the Medicare System. Policy wonks and Democrats refuse to recognize that in 1965 after Medicare was enacted, healthcare prices exploded. Most economist agree, as a result of Medicare, the cost of healthcare in America has continued to increase yearly for all Americans.

Congress has ignored the basic defects in the Medicare system that has caused this explosion. Over the years a few brave congressmen have made attempts to correct these structural defects.

The Democrat and Republican establishment have ignored these congressmen.

The political establishment has made feeble attempts to control costs through ineffective regulations. The bureaucracy has grown and the healthcare system has become more costly and inefficient.

The reduction in reimbursement to physicians has resulted in the tremendous increase in concierge medicine. This explosion in concierge medicine has decreased access to medical care in many cities in the U.S.

The result is an increase in cost and greater opportunity for abuse by the insurance industry, the pharmaceutical industry, hospitals and healthcare providers. The government has imposed more control over the individual’s ability to make his or her own healthcare decisions.

Medicaid has experienced the same increasing costs. It also created a shortage of physicians because of low reimbursement. Obamacare has expanded Medicaid. This has decreased the availability of medical care for Medicaid patients.

President Obama’s law (Obamacare) increased the number of Medicaid recipients but did not cure the reasons for the lack of providers. Many clever Medicaid providers have figured out how to exploit Medicaid rules only to suffer from government investigations and penalties in the long run.

The VA system is the purest example of sheer failure. Not only are the patients unhappy but also the providing administrative bureaucracy is riddled with inefficiency, corruption and waste.

The inefficiency, corruption and waste have not been able to be fixed by many notable private sector executives the government has hired to fix it. They have all ultimately resigned or were fired.

The VA system’s single party payer system remains an incurable failure.

These examples are proof that a single party payer system is unsustainable and not economically feasible. The government continues to make the same mistakes over and over again.

Are these mistakes intentional? Perhaps.

The government’s goals are to gain power and have control over the population. If its goals were to have an efficient and effective healthcare system, it would provide the resources to permit all consumers to drive the healthcare system. It would create a system that would motivate consumers to be responsible for their healthcare.

What is happening now?

The healthcare policy ideologists are using the New York Times as their propaganda vehicle to promote a single party payer system.

The article, Back to the Health Policy Drawing Board” may be intellectually simulating to readers of the Sunday Times. However, many of its details are untrue.

After one casually reads the article on a pleasant Sunday morning it would seem much simpler to have a single party healthcare system controlled by the government than the chaotic system that presently exist. The New York Times article is promoting Medicare for all.

Medicare currently is a single party payer system whosecost is out of control. America cannot continue to print money forever.

America’s politicians are ignoring this fact in order to gain more power.

 

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



Copywrite 2006-2018

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

The Healthcare System Needs Disruption

Stanley Feld M.D.,FACP,MACE

The announcement that Amazon.com, JP Morgan Chase and Berkshire Hathaway are forming a non-profit company to try to improve the American healthcare system caused some ripples in the stock market.

The mere specter of its disruptive potential was enough to send some investors scurrying away from large payer providers like UnitedHealth, Aetna and Humana.

The reason for the panic is obvious. These large insurance companies have been ripping off the healthcare system for decades. They have had their fortunes improved with Obamacare and its regulations. They are afraid they are going to lose their stronghold.

The three innovations, Jeff Bezos, Warren Buffet and Jamie Diamond are disruptors that might destroy UnitedHealth, Aetna, and Humana’s kingdom.

Mitch McConnell has supposedly taken Repeal of Obamacare off the agenda for 2018.

I believe Mitch McConnell doesn’t know what to do about Obamacare. He is hoping that it fails on its own. He has passed the budget that will force the government to cover the tremendous financial short falls the defectives in the structure of Obamacare is going to precipitate.

Only then will the public hear about Obamacare’s effect on America’s budget deficit.

The American taxpayer will be force to continue to fund this failed program.

Obamacare has failed because of its structure. It encourages over use of the healthcare system by sick people. It does not encourage consumers to be responsible for their health and healthcare dollars.

The Democrats and the Republican establishment have failed the American consumer again.

Bravo to three of America’s premier disruptors Jeff Bezos, Warren Buffet and Jamie Diamond.

If they bother to understand the elements of medical care and the reasons for the healthcare systems dysfunction they have a chance for success.

If they follow the previous attempts to repair the healthcare system by the government, healthcare insurance industry and hospital systems they will fail miserably just as these other institutions have failed.

“The industry certainly offers plenty of opportunities for reinvention, of course. Healthcare in the United States is expensive, and its quality varies wildly.” says Christopher Rowe, managing director at Korn Ferry.

Jeff Bezos has the best shot at reducing drug price significantly. The government cannot negotiate prices. The private carriers through drug benefit plans do a little better.

The military and the VA system do 30 to 75% better than Medicare Part D and the private sector.

Jeff Bezos knows how to market via the Internet. With the large cadre of consumer employees of Jeff Bezos Warren Buffet and Jamie Diamond, Mr. Bezos can probably negotiate the drug prices down by at least 50%. I’ll bet he can negotiate drug prices almost as low as the VA system and also provide the pharmaceutical companies an increase in reimbursement for their drugs.

Mr. Bezos usually eliminates most of the middlemen. He will be able to offer the medication at a 40 or 50% lower price than Medicare Part D and the private benefit managers and still make a sizable profit while providing a better quality of service.

He knows the customer is the consumer.

When it comes to the delivery of medical care and the use of technology in the delivery of medical care, I am not sure Bezos, Buffet and Diamond know who the real customers are.

I am not sure they know how to get around the stronghold the healthcare insurance industry, the federal government and the hospital systems have over the control of healthcare.

Many other corporations have tried to break the stronghold and have failed.

I will try to tell Jeff Bezos, Warren Buffet and Jamie Diamond what they have to do in my next blog.

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

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

 Changing The Rules: It Is Just The Beginning

 Stanley Feld M.D.,FACP, MACE

A proposal to cut Medicaid payments to some insurers with excessive reserves stirs concern from healthcare insurers.

Progressive politicians refuse to believe that entitlement programs like Medicaid are not viable. Politicians should be looking at creative ways to structure the Medicaid form of insurance for both physicians and patients.

https://www.politico.com/states/new-york/albany/story/2018/01/22/proposal-to-cut-medicaid-payments-to-some-insurers-with-excessive-reserves-stirs-concern-206875

I have not written a blog lately because both the Democrats and the establishment Republicans in both the house and the senate disillusion me. Neither house or senate members are interested in being creative.

Neither body knows how medicine works.

These politicians have no interest in doing what is best for the people who elected them. They are only interested in maintaining power and extending their power over the people they govern.

The result will be to decrease to quality of care to patients forever.

In the meantime there have been news stories on how different corporate organization and big businesses are trying to take over medicine.

Many readers have noticed that emergency clinics are popping up in every city and town.

I believe these emergency clinics centers are in reality real estate plays waiting for so that big corporations, like Aetna; to buy them out in order to expand their plans to take over medical care.

It feels similar to the proliferation of small banks in the 1980’s. These new small banks’ plan was to grow and be bought out at a premium by larger banks in order to enlarge the sale premium.

When the defective program (Medicaid) is a failure one should learn from that failure. One should not continue to try fixes to the program (Medicaid) when each fix creates greater dysfunction.

One should institute another plan that might work. However, government officials continuously apply an additional patch that leads to more unintentional consequences.

This week New York State governor Andrew Cuomo put another patch on its failed Medicaid system. I predict this patch will lead to more unintended consequences. The result will be to make Medicaid coverage worse for its New York State’s Medicaid recipients.

Governor’s Cuomo’s initial mistake was expanding Medicaid at President Obama’s request. He then compounded the mistake by subsequently allowing illegal immigrants in the state to receive Medicaid coverage.

It is not wise to take a financially failed system and expand it. It is much better to change the system.

Now Governor Andrew Cuomo’s budget is proposing to cut Medicaid payments to certain health insurance companies with excess reserves, a move that is alarming insurers because of its intent and its ambiguity.

“The proposal, part of the $168.2 billion executive budget released last week, says that any Medicaid managed care or long-term care Health Maintenance Organization that has excess reserves across all lines of business would be subject to a prospective cut in Medicaid rates.”

 Why would an insurance company want to participate in these programs?

The immediate unintended consequence is that the insurance company that found a defect in the payment schedule for HMO’s and managed care would leave the Medicaid market.

The second unintended consequence is it would discourage companies from having incentive to make a profit.

“Under current law, all Health Maintenance Organizations are subject to minimum reserve requirements,” said Erin Silk, a spokeswoman for the Department of Health. “This policy will provide the commissioner with the discretion to make rate adjustments to plans holding reserves in excess of the statutory requirements for reasons that cannot be explained or justified.”

The state did not project any savings from this proposal.”

The state cannot run Medicaid without insurance companies being the administrative service providers. It is the same old story. This comes on top of a proposed fourteen percent tax on for-profit insurers as well as the state receiving a cut of the proceeds when a nonprofit insurer converts to a for-profit insurer as a result of the new tax law.

Governor Coumo wants this additional money because he thinks the insurance industry is going to have a windfall from President Trump’s new tax law. He figures the state will collect $640 million dollars more as a result of this move.

“There were 3 million New Yorkers enrolled in these types of plans in 2014, according to a report from the United Hospital Fund.”

The insurance industry gave the usual illogical reason for opposing Cuomo’s proposals.

These insurance companies are there to make money. They are not going to let Coumo out of his commitment. I believe they will walk away from providing administrative services for the states Medicaid insurance coverage.

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

Please have a friend subscribe

Subscribe in NewsGator Online

Subscribe in Bloglines

Enter your email address:

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

It Is Getting Worse

Stanley Feld M.D.,FACP,MACE

Charles Gabe’s graph of enrollment as of 12/9/2017 was published with only six days of open enrollment left.

There are only 5,894,342 confirmed enrollees. There is no indication of how many enrollees paid the first month’s premium. The low-ball estimate was 7.2 million.

Of those enrolled only 3,604,44 were enrolled in President Obama’s Health Insurance Exchanges to buy healthcare insurance.

2,289,902 were enrolled in Medicaid. The number of illegal immigrants in that number is unknown.

December 15th is the deadline for enrollment in 42 states. Eight states have already extended the deadline.

Image1
Image1

This is an extremely disappointing outcome for Democrats who refuse to believe Obamacare has failed. Last year the Democrats and President Obama were bragging that Obamacare provided healthcare insurance for 20 million people.

The problem was that 13 million of those 20 million were enrolled in Medicaid and of the 9 million who bought insurance through the health insurance exchange many did not complete their premium payment for the whole year.

The government subsidized eighty-five percent of those people who bought healthcare insurance through the health insurance exchanges.

Organized medicine has not provided leadership for the medical and surgical community or its patients.

In turn medical professional feel powerless. I believe the profession is about to give up on trying to influence positive change in the healthcare system for its benefit and its patients benefit.

A reader, D.F. M.D., responded to my last blog writing;

“That nothing much is happening in Washington re: healthcare reform may be one of the largest blessings our country has seen this year.”

It might be a blessing because the politicians do not have a clue as to what can be done to repair the healthcare system.

Politicians are not interested in listening to physicians or patients. The people that stand to lose the most in this dilemma are patients.

D.F., M.D. goes on,

 “ We are agreed that our congress hasn’t done much, but there are other activities afoot that will almost certainly be game changers and they are largely un-noticed when it comes to their impact on healthcare services.”

his is very true. When President Trump was running for president he kept declaring that the “government” made the worse deals for the American people with NAFTA, Iran nuclear deal, and the pacific trade deal. He essentially called President Obama and congress stupid.

Now congress is asking big business to help them out of the healthcare mess. The pending take over of medicine by big business is going to destroy medical care in America while they are claiming to save the healthcare system.

D.F. MD writes

“The CVS/Aetna merger, and today’s announcement that United Healthcare is buying DaVita, a healthcare group with over 300 sites of service to add to it’s Optum, segment, with 1,100 care sites of various sorts, not to mention US Oncology, owned by McKesson, that sees about 14-15% of patients with cancer in the US.”

The corporate take over of medical care is growing daily. Without physicians and patients there would not be a need for a healthcare system. Physicians have voluntarily given up their intellectual property and freedom to use their own clinical judgment to the will of corporations.

America is in the early stages of this phenomenon. Medical care is becoming a commodity. Physicians and patients have given up the thought of a personal relationship embodied in the physician patient relationship. Good medical care (in my opinion) is predicated on the patient physician relationship because much morbidity and negative emotional responses to treatment can vanish with an effective patient physician relationship.

Truly, corporate medicine, once outlawed in many states, (for good reason) is on track to become the biggest player in healthcare.  Add to that the report that 60% of physicians are now employed by hospitals, which is in some ways creating a body of spokespersons for healthcare that has not been seen before.”

The result is massive Medicare and Medicaid cost overruns that are not approved by congress. The Democrats are trying hard to blame the costs overruns and Obamacare’s failure on President Trump without good reason.

However, the media is the message and the media is on President Obama and the Democrats side.

D.F., MD continues,

“I have always believed that the medical profession though organized medicine has been remiss by maintaining a low profile where change is concerned, either in the development of programs or the creation and passing of legislation.”

Edward Annis M.D. a former president of the AMA was organized medicine leaders who lead the fight to outlaw corporate take over of the healthcare system and the takeover of medical practice. Dr. Annis wrote an excellent book called Code Blue in 1993.

A reviewer,  Frank J. Primich M.D. in 1994 wrote;

“Code Blue takes its name from the most common term used by hospital public address systems to signify cardiac arrest.

The announcement sends an assortment of specially trained personnel scurrying to the designated site. Modern techniques and technology, when given the timely opportunity, have been highly successful in restoring life.”

“The protagonist in Dr. Annis’s book is the private practice of medicine, which has been declared dead by some of its adversaries. Resuscitation requires an understanding of what has gone wrong, and what can be done about it.”

Dr. Annis was right on target. No one involved in organized medicine has taken this stand presently.

The reviewer goes on;

“In every field, there is an internal rating system. Ed Annis is the acknowledged superstar of those of us who have pleaded the cause of fee-for-service medical practice and maintenance of the traditional doctor-patient relationship.”

All of the healthcare policy wonks and congress people ignore the importance of the physician patient relationship. When they get sick and do not have a patient physician relationship they yearn for one.

“The same time span has seen a steady encroachment into the process from a variety of third parties, particularly government.”

“The concept of socialized medicine, discredited elsewhere in the world, has been introduced, through gradualism, to the point where we are now, in effect, semi- socialized. The current proposals for national health care threaten to push us beyond the point of no return.”

These quotes were taken from the article written in 1994 at the peak of the Hillary-care debate. Wilbur Mills started the socialized medicine debate in America in 1935.

D.F. MD note goes on to say,

“Now they are increasingly tied to large business entities one sort or another.”

 Soon, advocates for patients with no financial axe to grind may end up being only us old retired docs, some of whom have retired because of “improvements” like the electronic medical records which have managed to make their developers rich while not doing all that much to enhance patient care. Unfortunately the old docs lack organization, money, and voice.”

Organized medicine has not provided leadership to help patients understand that when large corporations take over the infrastructure of medicine medical care will be totally commoditized and the important physician patient relationship will be lost forever.

 “Then there are the CBO projections https://www.cbo.gov/publication/53090 which are sometimes wide of the mark, but which the liberal media trumpet as the gospel in projecting the effect on patient care is certain healthcare reforms are enacted and implemented.”

 “The result of all that is that almost anything that is proffered as change is shouted down by one interest group or another, often by people who don’t have much of a clue re: what they are protesting about.”

DF, MD

The only thing that can turn this trend around is patients and a consumer driven healthcare system along with some organized medicine leadership.

   

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

Please have a friend subscribe

 

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

Is Anyone Confused Or Convinced?

Stanley Feld M.D.,FACP, MACE

Obamacare has failed. You wouldn’t know it by the massive misrepresentation by the mainstream media.

The mainstream impression is that registration during the open enrollment period for 2018 ending December 15,2017 is doing well.

I have not written a blog in about a month because there has been nothing to write about.

I have laid out my ideas about what is necessary to repair the healthcare system. It is all about personal responsibility and physician/patient relationships for both acute and chronic diseases.

It is the only way to control costs and decrease waste in the healthcare system.

Frankly, I am saddened that our representatives in congress don’t give a damn about the costs to the American people.

They simply want Americans to be dependent on government. The government wants to control Americans rather than Americans controlling the government.

Both the Republican and Democratic establishment have been brain dead on how to effectively repair our healthcare system.

Republicans had seven years to figure out an efficient system. The have controlled the house for two terms. They have controlled the senate for one term.

Then they failed. Almost 100 bills passed the house. any passed both houses and were vetoed by President Obama.

Why couldn’t they send one of those bills to President Trump?

Tom Price M.D. had some ideas on how to repair the healthcare system. However he was disposed of by claims of misuse of government funds.

There has been little published since the Republican establishment failed it its effort to repeal and replace Obamacare in November 2017.

It is unclear to me whether the Republican effort failed because it was a step in the wrong direction or the Republican establishment hates Donald Trump.

In any case the Democratic establishment is trying to blame Donald Trump for the Obamacare failure.

They claim it is Donald Trump’s fault the healthcare insurance industry is not being paid the unauthorized supplement President Obama promised but could not pay. He could not find the money.

It is the House of Representative that authorizes expenditures. The cost of those promised subsidies that were unauthorized was 88% short of the healthcare insurance industry’s claims.

The Obamacare cost overruns were gigantic. It must be remembered that the Health Insurance Exchanges only provided insurance for less than 10 million people in the individual healthcare market.

Many factors added to the cost overruns including subsidizes of over $15,000 dollars a year for these premiums in the individual market. The 2018 subsides will be over $20,000.

The healthcare system has become such a partisan issue that the truth about Obamacare’s failure is not the point anymore.

It seems that the Republican establishment is not any smarter than the Democrat establishment in trying to repair the system.

The end of the open enrollment period for 2018 is supposed to be December 15, 2017.

I posted two graphs in this post. One represents enrollment until 11/25/2017 and the second represents enrollment until 12/2/2017.

They bring out several points about Obamacare’s failure.

Seven states of the 39 states have already extended their open enrollment period. California has extended open enrollment until 1/31/2018.

On 11/25/2017 confirmed but not paid enrollment was only 2,660,938 with only 2,277,079 through Healthcare.gov and 383,859 for Medicaid.

Open enrollment projected for 11/25/2017 was 4.2 million with 2.6 million through Healtcare.gov. and 1.6 million through Medicaid.

These projected numbers were revised upward during the summer of 2017 to 4.6 million with 2.8 million through Healthcare.gov and1.8 million through Medicaid.

This represents a 500,000 person enrollment short fall for healthcare.gov. It also must be remember that 85% of the people enrolling through healthcare.gov have preexisting illnesses and are subsidized by the government.

  Chart 1 3 8

The open enrollment numbers look worse on December 2, 2017 although there is not a word of it in the mainstream media.

On 12/2/2017 confirmed but not paid enrollment was 3,491,164 with only 2,751,260 through Healthcare.gov and 709,904 for Medicaid.

Open enrollment projected for 12/2/2017 was 5.1 million with 3.5 million through Healtcare.gov. and 1.6 million through Medicaid.

These projected numbers were revised upward during the summer of 2017 to 5.8 million with 4 million through Healthcare.gov and1.8 million through Medicaid.

This represents a 1,248,840 (4,000,000-2,751,260= 1,248,840) person short fall for healthcare.gov with 13 days to go for the open enrollment period.

Chart 2

It is difficult seeing these numbers by casually studying these charts.

Obamacare is an unmitigated failure. Democrats want to throw more money at it.

Republicans do not know what to do.

I suggest they look at my blog entitled The Ideal Medical Saving Accounts are democratic.

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

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.

Permalink:

Consumers Need To Take Back Their Medical Care And Healthcare Dollars

Stanley Feld M.D.,FACP,MACE

A consumer driven healthcare system is the solution to the dysfunctional and unaffordable healthcare system that americans are presently experiencing.

President Trump wants to create the conditions for consumers to take responsibility for their medical care and their healthcare dollars.

The negative noise in the mainstream media should be ignored.

The Obamacare health insurance exchanges have failed. The Democrats and establishment Republicans should realize that the health insurance exchange plan was a defective system that it can not be repaired with patches and more money.

President Trump has signed an executive order to permit private associations to sell insurance. There are many associations that a person could belong too. Consumers could shop for the right association at the right price.

Democrats are behaving as if associations are a foreign enemy.

UnitedHealth has contracted with AARP (an association) to sell Medicare supplemental insurance. UnitedHealth sells this insurance across state lines.

USAA has contracted with Humana to sell Medicare supplemental insurance and Medicare Drug coverage.

There are many supplemental plans that consumers can choose from in these associations. These plans are sold across state lines and are competitive.

The government has to change the tax law to treat individual healthcare insurance plans bought through the associations to be paid for with pre-tax dollars just as the employer sponsored group plans do.

However, associations selling healthcare insurance are only the first step in empowering consumers.

A well-known retired physician (DEF M.D.) sent me his view on what consumers need to be aware of to survive any healthcare system. He calls it

“My Three Rules For Survival”

Remember my three rules for survival:

1) Stay the hell away from doctors.

They always either want to do something or prescribe something, and all too frequently do both.

A large part of this physician reflex is their need to practive defensive medicine. Physicians are afraid they might miss something and get sued.

Major tort reform is necessary in most states. Defensive medicine accounts for $250 billion to $700 billion dollars in unnecessary expenses each year.

I have outlined the steps necessary to remedy the malpractice (tort) crisis and its resulting overuse of testing and medication.

If anyone in President Trump’s administration wants to review the issue in full click on this link.

http://stanfeld.com/?s=Tort+reform

Nobody confronts the reality you mentioned , people are too fat, they drink too much and smoke, AND they don’t even think about the importance of, and benefits from, exercise.

 I started a war on obesity many years ago. Public officials and poly wonks have ignored my suggestions.

It would be worthwhile to read my post about obesity.

http://stanfeld.com/?s=war+on+obesity

The cost to all of us (including them) of all this denial of personal responsibility is huge!  We need to find ways to get people to focus on taking care of themselves, or to create cost incentives that will encourage them to do so.

While you are in this reading mood you should check out my pleas for the importance of patient responsibility.

ttp://stanfeld.com/?s=patient+responsibility

We simply cannot continue on the path we are on. I don’t recall ever seeing a patient on a “scooter”, and many in wheelchairs that are obese, and only getting fatter and fatter over time.

     2) Take as little medicine as you can.

Pharmaceutical manufacturers are continuing to drive up the cost of their products and are making enormous profits as a result.  Data is available re: the necessity of people getting medicines that they don’t really need, especially if taken long term on an ongoing basis.

To that, one can add the cost of unnecessary procedures that often leave patients worse off than they were before.  Direct to the public advertising of prescription medications creates demand that is often unaccompanied by benefit.

More and more current information regarding side effects and late effects of medications need to be provided, and not just put into the “fine print” on the package stuffers.

     3) Stay out of hospitals.

 They are dangerous places, with a high prevalence of patient injuries and deaths due to various sorts of medical errors that occur all too frequently, despite a host of quality improvement projects that are well-intended, but would be better in terms of effectiveness if they were made public on a regular basis.

 Scott Atlas makes good arguments for encouraging patients to “price shop” for services they must have.  To that information should be appended information about outcomes of what is proposed, which could, over time, become both hospital-specific and physician-specific.

I have expanded on Scott Atlas’ Wall Street Journal article in my last blog.

http://stanfeld.com/the-plan-to-empower-consumers-of-healthcare/

Most doctors and most hospitals have not much of a clue as to the outcomes of the services they provide their patients.

And, that is probably plenty for today.  DEF”

Consumers need to be educated to become aware of the many pitfalls involved in their new responsibility.

The educational process can be accomplished with online information and chat sessions. The government could provide the education necessary.

Consumers also need financial incentives to be encouraged to be responsible for their care and their healthcare dollars

This can be accomplished with my ideal medical saving accounts.

http://stanfeld.com/?s=ideal+medical+savings+accounts

Then and only then can we have a consumer driven healthcare system that will lower the cost of healthcare.

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

 All Rights Reserved © 2006 – 2017 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

Please have a friend subscribe

  • Thanks for leaving a comment, please keep it clean. HTML allowed is strong, code and a href.