The Obama administration keeps making the same mistakes in its attempt to execute effectively.

New programs are being started in order to fix Obamacare’s errors. As each new program interacts with other programs the pathway to success gets more convoluted. As this happens Obamacare’s failure accelerates.

Meanwhile President Obama keeps telling us that Obamacare is very successful. He tells us his legacy healthcare program is here to stay.

The problem is the public is not buying Obamacare’s claimed success anymore .

The public has no idea how much Obamacare has cost so far. Obamacare has not decreased the number of uninsured Americans capable of affording insurance. It has increased the number of people insured with Medicaid. It did it by decreasing the Medicaid eligibility requirements. Those who became eligible for Medicaid cannot find a doctor.

The cost of healthcare insurance has increased more than 20%. The administration promised to decrease family insurance rates by $2500 a year.

Consumers have less access to quality care. In fact, the definition of quality care is inaccurate.

The development of Accountable Care Organizations has not gone well.

Healthcare insurance companies are dropping out of Obamacare because participation in Obamacare’s health insurance exchanges is not financially viabile.

The government has not adhered to its financial commitment to the health insurance industry in order to have them participate in the health insurance exchanges.

President Obama, HHS, and CMS want to introduce a new initiative in order to help make Obamacare viable. The initiative is full of bad ideas. It is destined to fail.

The new initiative will shift the risk from the healthcare insurance industry and government to physicians participating in the initiative.

HMOs tried to do the same thing in the nineteen eighties (1980).

Physicians cannot control patient behavior. Patient behavior and compliance is the responsibility of patients themselves.

The Obama administration is learning that government cannot control or dictate physicians’ behavior in order to control costs.

President Obama’s administration cannot control costs when the carrot is a reimbursement system that looks like it should be profitable. Physicians have no way of measuring if the new reimbursement system will be profitable.

Physicians should not be in the insurance business. It is the healthcare insurance industry that should be in the healthcare insurance business.

The Comprehensive Primary Care Plus initiative has two parts.

Track 1: CMS plans to pay a monthly fee for practices to provide specific services. The fee will be in addition to the fee-for-service payments under the Medicare Physician Fee Schedule for care.

At the moment the Medicare reimbursement schedule for primary care physicians is too low for physicians to make a reasonable living. Physicians’ overhead is increasing.

The goal is to pay large practices a management fee to force their primary care physicians to comply with the rules CMS wants enforced.

CMS will try to shift the managed care burden from itself and the insurance companies to the physician groups.

CMS will try to do this initially with 5,000 primary care groups of physicians containing 20,000 physicians or and average of 4 primary care physicians in each group in 20 different regions of the U.S.

“CMS is trying to transform and improve how primary care is delivered and reimbursed.”

The implication here is that all the Obamacare initiatives to date have failed to improve how primary care is delivered and reimbursed.

Providers currently perform a service and then submit a claim to Medicare for payment.

Track 2: CMS will pay primary care practices a monthly care management fee.

Additionally the practices will receive upfront comprehensive primary care payments and a reduced Medicare fee-for-service payment for evaluation and management services.

CMS said that; “This hybrid payment design will allow greater flexibility in how practices deliver care outside of the traditional face-to-face encounter.”

The example given by CMS was;” practices might offer telemedicine visits or simply provide longer office visits for patients with complex needs.’

This is a totally meaningless example. It should make the primary care practices chosen suspicious of the government’s intentions immediately.

Practices in both tracks will receive upfront incentive payments that “they (the physicians) might have to repay if they do not perform well on quality and utilization metrics.”

 This is the CMS stick will use to get the individual practices to comply with government regulations on measures quality and utilization. Physician might have to repay the government if they do not comply with government regulations.

Many of these measurements are defective.

In CMS’s zeal to computerize quality and utilization it misses the point of how individual patients feel they should be treated.

CMS is also shifting the responsibility for cost outcomes onto physicians in the program. It ignores the fact that patients’ responsibility and compliance with recommended medical care is an important determinant of medical and financial outcomes.

 “ The CMS initially will pay primary care practices $15 per beneficiary per month for care management under Track 1 and an average of $28 a month under Track 2 to support enhanced, coordinated services on behalf of Medicare fee-for-service beneficiaries.”

How was this fee per patient payment per month determined?

It seems impossible to judge the cost of a panel of patients. It should not be the physician’s responsibility to determine or accept this value.

Physicians disliked HMOs in the 1980’s because they could not price the patients at risk value. Healthcare insurance companies should be pricing the risk.

We have seen that insurance companies cannot price risk. President Obama set up risk corridor reinsurance programs in Obamacare to cover the risk in order to attract healthcare insurance companies’ participation.

The government then reneged on paying the health insurance company for their risk. The government only paid 12% of its commitment.

Why should physicians be responsible for the risk?

A healthcare system must be setup so that patients are responsible for their own health and healthcare dollars.

Patients’ healthcare risks should not be passed on to physicians.

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

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

I apologize for spending so much time on the failure of the Obamacare Co-Ops. It is worth emphasizing because this is an example the common denominator of the many other Obamacare failures.

A reader asked me to list the 12 states that closed down and declared bankruptcy before 2016 enrollment leaving 700,000 consumers without insurance coverage.

In my last blog on Co-Ops I did not mentioned the name of the 12 states Co-Ops that went bankrupt. These state Co-Ops defaulted on their federal loans. The federal taxpayers loss was $1.2 billion dollars.

I did not list them because I predicted that all 22 state Co-Ops would go bankrupt by the end of 2016. Taxpayer’s will lose at least $2.5 billion dollars in loans for a program destined to fail from the start.

CMS has said it will regain most of the money and but has not explained how it will recover the loan losses. There were multiple reasons for the Co-Op failures.

An important reason is the disastrous business plans. The Obama administration hired Deloitte to evaluate each state’s loan application. Deloitte’s advice concerning the applications deficiencies was ignored by CMS and the HHS.

The point is the Co-Ops are ill conceived, as many of the Obamacare “innovations” are ill conceived. Once the ideology is approved the Obama administration ignores the advice from expensive hired consultants.

Deloitte Consulting evaluated the viability of the state Co-Ops by evaluating their loan applications and business plans. Deloitte expressed concerns about the now defunct 13 Co-Ops. According to the study from Republicans on the Senate Permanent Subcommittee on Investigations, the Department of Health and Human Service and CMS ignored Deloitte’s warnings.

1. “HHS instructed Deloitte to evaluate the proposed budgets for completeness as well as “reasonableness and cost effectiveness.” The Department told Deloitte to review the pro forma financial statements for completeness, clarity of assumptions, and consistency with each Co-OP’s business plan.

          In its review, Deloitte identified numerous problems ranging from comparatively minor issues, such as omitting needed expenses, to more significant concerns, like presenting an   unreasonable budget.”

      2. In addition to inconsistencies, Deloitte noted that many of the Co-Ops’ budgets appeared to be unreasonable or did not align with the states own financial projections.”

 This is typical of many bureaucracies in government agencies.

3. Deloitte also expressed skepticism about the risk-taking and unreasonable assumptions reflected in some of the Co-Ops’ financial projections.

       4. “Each CO-OP loan applicant was required to “identify its management team, explain their qualifications and experience, and submit an organizational chart and detailed position descriptions, including the qualifications required for each position.

      5.Based on its review of this portion of the CO-OP’s business plans, Deloitte consultants expressed concern over key leadership position gaps or thin industry expertise for all of the 12 failed Co-Ops.”

This observation, by Deloitte alone, should have disqualified the state Co-op from obtaining a federal loan.

The devil is always in the details. The details are so voluminous than few dig in to find the defects. The goal is only to have the paperwork done.

Deloitte had many negative comments. The loans were made despite the negative comments by the Obama administration.

Some state CO-Ops did not even list the senior management team.

6.“These failed co-ops were a costly experiment gone wrong, and real people got hurt, including the more than 700,000 Americans who lost their health plans,” Sen. Rob Portman, chairman of the subcommittee, said today at a hearing on the co-ops.”

How many more Obamacare programs are constructed to fail?

Can taxpayers trust the government to control its medical care with a single party payer system when a single portion of Obamacare is so poorly constructed and consultants ignored?

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

All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE