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Medicine: Healthcare System

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Healthcare’s Impending Software Revolution

January 11, 2012
inInformation Technology in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

It is clear to me why the healthcare industry has not experienced the same transformation resulting from software innovation that the publishing industry, the music industry and the movie industry have experienced.

After practicing Clinical Endocrinology for 30 years as the founding partner of Endocrine Associates of Dallas P.A. and as President of the American Association of Clinical Endocrinologists, I believe I understand the reasons the healthcare industry has not be able to break through and enjoy the economies of scale offered by the software revolution.  

I have formed these opinions by dealing with local and national hospital administrators, healthcare insurance executives, pharmaceutical executives, healthcare policy wonks and government bureaucrats.

Most of these executives are focused on the wrong customer. Most are too busy trying to solidify their perceived position of power in the healthcare system.

Those executives who understand who the customer is have kept quiet in order to maintain or advance their position in various organizations.

The result is software innovators have been chasing the wrong customer. The result has been greater dysfunction in the healthcare system.

There are also many healthcare system issues making it very difficult to stay focused on the main problem.

I have been fascinated by my son Brad Feld’s insight into the software industry.  His tutoring has helped me learn how to critically think about software development and its transformational potential.

My brother, Charlie Feld, has also helped me through his insight into pattern recognition and the use of information technology to solve the problems of various industries.

I have followed the progress of medical software innovation for the last three decades. I am still far from expert but believe I have a better grasp on the problem than most.

I have a good feel for the potential offered by this software revolution for the practice of medicine and how to use it.

If the software industry understood the physician mentality and understood the real customer, the needed breakthrough could occur.

The result would be a large decrease in the cost of healthcare.

Waste, abuse and overuse would be decreased and the therapeutic effect of the patient physician relationship would be restored.

I believe the medical software is available right now. It has to be manipulated and synthesized as Steve Jobs, Jeff Bezos and Mark Zuckerberg have done in their respective software areas.

Brad is not interested in healthcare system software innovation. He dealt with physicians and dentists when he ran Feld Technologies in 1985 while a student at MIT.

He built an interoffice and intra-office network for my practice Endocrine Associates of Dallas P.A. in 1985.  He hired MIT students to write software with him and Dave Jilk.

The network these kids built was the sturdiest Medical Systems network in Dallas. The network lasted from 1985 until 2002. There are still remnants of this software in the practice today.

When he finished my software project he pledged to himself he would never deal with physicians again. He concluded that they are all a pain.

Not true. Physicians know what they want and need. They have an awesome responsibility for their patients’ lives and privacy.

Secondary stakeholders have frequently taken advantage of the medical profession and its intellectual property. Physician mistrust of secondary stakeholders is monumental. 

Much of the “data collected” from information systems has been used against them even if the data is incorrect or incorrectly interpreted.

Healthcare policy has been formulated on inaccurate data and inaccurate conclusions.

These conclusions have been used to devalue physicians and to destroy the patient physician relationship.

Healthcare software companies are paid by secondary stakeholder to create innovative software. The software companies do not realize that the real customers are patients and physicians. These companies do not understand why they cannot get patients and physicians to cooperate.

When data collected is wrong, incomplete or misunderstood physicians protest. They are ignored. The typical response is that this is the only data available.

Healthcare policy should not be formulated on the bases of false data.

 Is it any wonder that physicians are not interested in cooperating with the powers that be in the healthcare system’s use of inaccurate data?    

The medical transaction must be between the patients and physicians. All of the secondary stakeholders have jumped into the center of this transaction to control the healthcare system. The secondary stakeholders only add value at the edges of the patient physician transaction. 

Our health is our most precious asset. Americans are willing to pay as much as necessary for medical care. They want everything done especially if they are not responsible for paying for it.

If physicians do not think something should be done they can get sued. The knee jerk reaction is to do everything.

Physicians only receive between 5-10% of the healthcare dollars.  

Where is the money going? Secondary stakeholders are ripping off the healthcare system as they undermine and undervalue the patient physician relationship.

Third parties have taken control of the healthcare system. They have assumed responsibility for the healthcare of patients. They are also in the process of dictating access to care. The present increased healthcare costs are unsustainable.

All the secondary stakeholders are like a giant hairball destroying the viability of patient physician relationships.

Innovative software used properly can disassemble the elements of the hairball and drive them to the edges of the healthcare system where they belong.

Proper software innovation can accomplish the goal of decreasing costs and increasing the quality of care by restoring the patient physician relationship.

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

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  • DannyHorowitz • January 12, 2012

    Hi Dr. Feld. I don’t know much about existing healthcare software or endocrinology BUT, what do you think about things like fitbit (Brad/Foundry are investors) Is it possible that this is driving the revolution. Potentially massive collection of personal data will allow me to not just test measure and optimize my health alone, but with the help of an understanding doctor (expert) who is able to use this data to suggest additional tests/diagnoses etc.
    Traditionally, doctors/patients spend little time together so the amount of data doctors have at their disposal is small. These devices allow for doctors to have significantly more data/information about their patients that will hopefully lead to cheaper and better care.
    I’ll bet a lot of really good basic data collected by a device like fitbit and augmented with diet and energy levels can predict a potential thyroid problem. This should be automatically detected by good software/analytics. Then with a high confidence, you, the doctor can order a thyroid test, which will be inexpensive and whose price will go down over time. There is also a need for greater transparency in medical test pricing. Many practices mark up the price of blood tests considerably.
    I guess I’m thinking the revolution will be driven by a) more better cheaper data (i.e. data collected by the patient and not via expensive unnecessary tests and short inefficient expensive doctor visits) and b) more transparency (with everything) and together this will lead to a closer patient/physician relationship, higher quality of care, more money flowing directly from the patient to the physician, knowledge of what the money is for, and possibly the ability to be better quantify the contribution of the doctor.

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President Obama Is Destroying His Theoretical Basis For Obamacare In Order To Win Re- election.

January 4, 2012
inDisinformation and the healthcare system, Medicare, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D., FACP,MACE

I have been speaking to many people about the hazards of Obamacare.

Many well-educated people do not understand the defects in President Obama’s Healthcare Reform law and its potential unintended consequences.

Unfortunately, many congressmen and senators do not understand the consequences of the law either.

Rather than President Obama’s Healthcare Reform law making the medical care system better it is destined to make it worse.

I have explained the reasons for these unintended consequences in past blogs.

Most people have difficulty understanding details of the law because it is poorly covered in the press in our sound bite society.

Only a small percentage of people need medical care at any one time.  To those not needing medical care the healthcare system under President Obama’s law has changed little except for higher healthcare premiums and deductibles.   

The 35-55 year olds are the group that must become aware of the changes that will result from the law. When they will need medical care our healthcare system will likely be decimated. 

Everyone is in agreement that our federal, state and local governments are bankrupt.  Everyone understands our federal government has borrowed and spent the money we should have saved to fund our future healthcare needs.

Additionally, entitlements and administrative inefficiency, waste and fraud will have intensified the problems of overspending.

Paul Krugman believes deficit spending is immaterial. He continues to insist that John Maynard Keynes was right even though he lack evidence for his conclusion. Deficit spending is immaterial until there is no one around to lend the government money.

President Obama keeps saying he is going to decrease healthcare costs with his law. His conclusion is theoretical. His conclusion defies his own government’s CBO and various experts.

President Obama’s conclusions also demonstrate his lack of understanding of the complicated defects that have accumulated over many years of adjusting to defective healthcare policy. 

Increasing bureaucratic structure and government control is at the root of the problems in the healthcare system. Increasing this structure is not the solution to the healthcare system.

President Obama is now backing off some of the draconian aspects of contaminating the theoretical basis of his Healthcare Reform Act.

The Obama administration’s surprise announcement Friday that it planned to give states broad leeway to pick the benefits offered under the federal health care law offers yet another example of a gradualist approach to carrying out its signal domestic policy achievement.

 Obamacare mandates what must be covered under the Federal Health Care Law

• Ambulatory patient services, like doctor’s visits

• Emergency services

• Hospitalization

• Maternity and newborn care

• Mental health and substance abuse services

• Prescription drugs

• Rehabilitative and habilitative services, and specialized social and medical services for people with conditions like autism and cerebral palsy

• Laboratory services

• Preventive and wellness services and chronic disease management

• Pediatric services, including oral and vision care

 

President Obama is choosing to avoid some crucial choices until well after the 2012 elections. Critics accuse the administration of political expediency. The Obama administration insists the decisions have been based on sound policy judgments.

I hope the public is not stupid enough to believe President Obama’s ploy. The public has been duped in the past. I think it is  waking up.

 In passing a good deal of the decision-making to states, the administration has guaranteed that Americans will continue to face a patchwork of state regulations that make coverage uneven and inefficient.

People in Utah and Wyoming, for example, are likely to have more limited access to expensive services now mandated in states like Massachusetts and Maryland. And consumer advocates worry that some states will limit benefits too strictly.

President Obama has taken the guts out of his law just as he previously discontinued the insurance mandate to large organizations in 2011.

 “I think what Congress had in mind was creating a uniform national level of benefits that would be available to everybody,”

President Obama is playing another trick play on the states and the American people. The net result will be more uncertainty, more unintended consequences and more deficit spending.

Let us not be fooled again. Let us wake up!

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

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A Wakeup Call About Individual Freedom

December 18, 2011
inMedicine: Healthcare System, Patients Problems, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

President Obama and congress have made major progress in increasing central power over individual freedoms during President Obama’s tenure in office.  Congress has done it by passing unpopular laws; President Obama has done it issuing unpopular by executive orders.

Two prominent examples are working their way through the governmental system right now.

The first is Obamacare with its many defects. The next congress and President will probably repeal Obamacare. President Obama’s Healthcare Reform Act has already damaged the economy, increased the budget deficit and is destroying the healthcare system.

The Supreme Court will not overturn Obamacare completely. The court is only judging the law on limited issues. The Supreme Court’s decision is going to take at least two years fro the time the bill was passed.

The real issue at stake with President Obama’s Healthcare Reform Act is should the central government have the power to control our lives and our choices.

The states are protesting that the federal government is taking power away from the states.

 Citizens are complaining that the federal government is limiting their rights and freedom of choice.

This conflict has existed throughout American history. America has struggled with the challenge of the balance of power between federal control, states rights and individual rights.

President Obama is a strong advocate of central control. In the process he is trampling states rights and individual freedoms.  He has bypassed congress and by executive order conferred absolute power to administrative appointees.

If the federal government can require people to purchase health insurance, what else can the government force Americans to do?  The government will be able to compel citizens to do any number of things by decree.

President Obama has ignored this basic issue.  Has congress and the executive branch overstepped their constitutional authority?

His administrations’ lawyers have had a difficult time providing a coherent response to the question in court appearances around the country.

Judge Laurence H. Silverman said, “Let’s go right to what is your most difficult problem,”

 “What limiting principle do you articulate?” If Congress may require people to purchase health insurance, what else can it force them to buy? Where do you draw the line?

Would it be unconstitutional, to require people to buy broccoli?

Beth S. Brinkmann, the administration’s lawyer said, “No,” then “It depends.”

Judge Silverman asked the next logical question,

 “Could people making more than $500,000 a year be required to buy cars from General Motors to keep it in business?

Beth Brinkman’s response was “I would have to know much more about the empirical findings,”

Judge Brett M. Kavanaugh asked,

“How about mandatory retirement accounts replacing Social Security?”

Ms. Brinkmann replied. “It would depend.”

None of these ridiculous responses were published in the traditional media at the time of the testimony. The administration’s lawyers are trying to define its views of the limits of government power. The have not provided constitutional justification for their views.

 “They have said, for instance, that laws authorized by the Constitution’s commerce clause must be economic in nature, must concern interstate commerce and must address national problems.”

I do not think this should be done at the expense of states’ rights and individual freedoms.

The reason President Obama’s Healthcare law requires an individual mandate to purchase healthcare insurance is because Obamacare is not actuarially sound. It might work if everyone pays into the premium pool.

Rather than repairing the healthcare system and its inefficiencies President Obama is adding more revenue to a failing system by mandating everyone to pay into something they do not want. 

In reality, Medicare has failed economically even though seniors are satisfied with the insurance.

Medicare Part A mandates everyone to pay into the system through payroll taxes.  The reason the government had gotten away with the Part A mandate is because Americans had the right to opt out of Medicare Part B.

Another hollow argument President Obama’s lawyers have used is that the health care market is unique.

The administration’s lawyers have suggested,

 “Questions about constitutional limits can miss the point. The only question actually before the courts, they said, is whether the particular law under review was within Congress’s authority. Other cases, they said, can be decided as they arise.”

There are many unintended consequence of Obamacare already. Hopefully, the Supreme Court judges will understand these implications of these unintended consequences. Most important is the precedent the law set for other cases.

In 1995, when the court struck down a federal law that prohibited people from carrying firearms in school zones, Chief Justice William H. Rehnquist wrote that “we pause to consider the implications of the government’s arguments” in defending the law — that stopping activities that could lead to violent crime relates to interstate commerce because it affects “national productivity.”

Under that reasoning, Chief Justice Rehnquist wrote, “It is difficult to perceive any limitation on federal power,” adding that “if we were to accept the government’s arguments, we are hard pressed to posit any activity by an individual that Congress is without power to regulate.”

Many judges are reluctant to issue rulings without some sense of what their consequences will be in other cases.

The outcry about Obamacare has been loud and clear.  Our constitutional government should be government for the people by the people.

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

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The Healthcare System vs. The Medical Care System

December 14, 2011
inHealthcare Insurance Industry, Medicaid, Medicare, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

The difference between the healthcare system and the medical care system is very clear to me. The stakeholders in the healthcare system are patients, physicians, government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies. 

 Government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies are secondary stakeholders in the healthcare system.

 The primary stakeholders are patients and physicians. They also comprise the medical care system. Without the primary stakeholders there would be no need for a healthcare system.

 The secondary stakeholders have long ago taken over the healthcare system. All businesses and the government deal with the hand they are dealt using their best judgment. The people running the business or government pursue their vested interest. The difference between businesses and government is businesses work to make as big a profit as possible. Government, depending on the political party in power, pursues fulfillment of its ideology.  

 Since 1942 and the Economic Stabilization Act of President Roosevelt the market place for medical care has been distorted. In 1946 healthcare insurance was introduced. At that time the interaction between the primary stakeholders, physicians and patients, started to be destroyed by secondary stakeholders.

The cost of healthcare has progressively increased since the government passed the Medicare and Medicaid in 1965. Costs increased further in 1980 when the government said we couldn’t keep paying these increasing costs and instituted price controls for Medicare and Medicaid.

This led to cost shifting of the difference to the private healthcare insurance sector.  Businesses providing healthcare insurance for their employees accepted the resulting premiums associated with cost shifting until 1985. At that time they said, “stop.”

The healthcare insurance industry asked corporations what percentage of your gross revenue could you afford for healthcare insurance benefits. The healthcare premiums were 18% of gross revenue.

 The corporate answer was they could afford up to 12% of gross revenue. The healthcare insurance industry’s response was, no problem.

HMO pricing became the most economical option for corporate employers. HMO fixed healthcare cost for corporations and healthcare insurers.

HMOs shifted the risk to physicians and hospitals. HMOs failed because physicians and hospital did not know how to assess risk. They accepted risk initially because they were afraid to lose patients.

 Hillarycare failed to become law because of the potential for patient abuse, restrictions of access to care, rationing of care and loss of freedom of choice. Patients did not want the government to dictate their medical decisions.

 Obamacare was passed by a Democrat controlled congress with a very liberal ideology.

  Many congressmen did not read the entire document or debate the potential unintended consequences.

  The difference in ideology between liberal and conservative is easy to understand.

 “Liberals believe that health care is treated as a market commodity today but should not be, and conservatives think that health care is not treated as a market commodity but should be.”

 The healthcare system is not a true marketplace. The healthcare marketplace has been continuously distorted by government regulations and adjusted regulations since Medicare passage in 1965.

 All the stakeholders have distorted the market even further by adjusting to government regulations in order to purse their vested interest.

If real repair of the healthcare system is to occur a real marketplace has to be created. Obamacare is another adjustment in an already distorted marketplace. Obamacare is accelerating the dysfunction in the healthcare system until it implodes and results in increasing costs not savings.  

 The healthcare insurance industry controls costs. Many Democratic healthcare policy experts have ignored the facts. The healthcare insurance industry’s goal is to maximize its profit. It takes 30% of the healthcare dollars off the top.

The healthcare insurance industry should not be in control of the economics of the healthcare system.

 Consumers should be in control of their medical care decisions and the money they spend for those decisions.

Personal medical care decisions should not be left to the munificence of the government. The government has never done anything efficiently.  

 Private and Medicare insurance has kept control of medical decisions out of consumers’ hands.  Consumers purchase healthcare insurance individually or from Medicare. Consumers also can receive healthcare insurance from their employers as a job benefit.

 The healthcare insurer directs consumers to use physicians and hospital in its network. The insurer negotiates reimbursement rates for the insured with hospitals and physicians.

Consumers are given little or no information about the comparative cost or quality of any particular doctor or hospital.  Consumers go to a doctor in their network.

Physicians do a history and physical exam and order tests and procedures on patients’ behalf.  When the test and procedures come back physicians prescribe the appropriate medication after a follow-up visit.

The healthcare insurance company reimburses physicians.

  Patients receive a copy of the bill from the insurer with patient portion of the co-pay. The explanations of benefits are impossible to interpret.

This is not a marketplace transaction. Patients have no control over the reimbursement. Patients and physicians have little incentive to restrain overuse of the healthcare system. They have no incentive to even scrutinize the bill. Patients’ have no incentive to control costs.

The use of healthcare services is divorced from marketplace forces that constantly assess cost benefit ratios.  Neither physicians nor patients have incentive to get the best care at the lowest price with the best quality.

As healthcare costs increase each year the source of the increase remains opaque. The increasing costs are made to appear to be the result of patients’ and physicians’ overuse of the healthcare system.

The increase in cost could be the result of the healthcare insurance industry and the pharmaceutical industry’s increased profits.

All stakeholders pursue their vested interests. The only way to align vested interests is to have consumers be responsible for thei health and healthcare dollars.

Only then will a true market place exist. Entitlements and price controls do not work. The cost of healthcare will skyrocket with Obamacare and create a larger budget deficit.

 

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

Please send the blog to a friend 

 

 

 

 

 

  • difference between medicare and medicaid • February 5, 2013

    difference between medicare and medicaid

    Repairing the Healthcare System: The Healthcare System vs. The Medical Care System

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Hospital System Monopolies And ACOs

December 7, 2011
inHealthcare Insurance Industry, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

I have been a constant critic of Accountable Care Organizations. I have said they cannot work to the benefit of patients and physicians because of the difficulty of organizing them and the subsequent unintended consequences. ACOs will increase the costs to the government and healthcare insurance industry to provide the administrative services.

Government has proven over and over again its ability to make complicated mistakes. These mistakes result from bloated bureaucracies and conflicting bureaucratic missions.

Additionally the government outsources administrative services to the healthcare insurance industry. Administrative services fees are constantly increasing because of waste, inefficiency, and mark-ups.

Hospital systems have been merging for 15 years. In the process they are attempting to buy physicians practice and provide a salary for physicians.

 Hospitals are brick and mortar structures. They are not the future of medical care. Hospitals, now hospital systems, had to change their business plan because more and more patients are being treated out of the hospital.

Outpatient clinics, diagnostic imaging centers, chemistry laboratories and ambulatory surgical centers have shifted income from hospitals to physician owned outpatient clinics.

Hospital systems goal has been to buy physicians’ practices and ancillary care facilities. Hospital systems’ consultants have concluded that they would be in a better position to negotiate price if they owned the physicians infrastructure regardless of the cost and pay physicians a salary.

The published reason given for this action is to provide better and integrated medical care within their hospital system. The real reason is to capture the revenue lost to outpatient facilities and profit from physicians’ productivity. Physicians are realizing they are being taken advantage of and are demanding their fair share of their own productivity.

 The Federal Trade Commission is supposed to have the authority to challenge monopolistic hospital mergers to protect consumers.

 

In 1996, the FTC amended its policies on health care mergers. The new policy encouraged hospital systems to merge by providing safe harbor to competing hospital systems when the hospital system could prove their hospital could achieve sufficient clinical integration.

 

The definition of sufficient integration was very loose and ill defined. The government thought it could save money by having all the fees under one roof. The FTC encouraged healthcare system monopolies in order to achieve more efficient and integrated care. It did not realize it would bite them in the leg someday.

It has always been a mystery to me how the government came to this conclusion. Suddenly the government has realized that the monopolies have turned on it and are in a position to demand more reimbursement. 

J. Frank Rosch the FTC Commissioner said,

 “I thought that the 1996 amendments…were the biggest loophole in the antitrust laws I had seen,”

 “Subsequent Advisory Opinions issued by Commission staff…were about as clear as mud.” 

Dr. Donald Berwick and President Obama claim that Accountable Care Organizations are the cure to our rising healthcare costs. A gigantic and expensive bureaucratic system has been constructed by CMS to regulate these new ACOs.  ACO’s promote further consolidation and mergers of physicians and hospital systems.

“The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care—precisely the opposite of its goal.”

Remember the government outsources all of the administrative services to the healthcare insurance industry. I have shown how the healthcare insurance industry has taken 30 to 50% of every Medicare healthcare dollar to the disadvantage of the taxpayer and seniors. 

Large merged hospital systems have in turn taken advantage of their size to take advantage of the healthcare insurance industry.

The healthcare insurance industry has taken advantage of the government in pricing administrative services.

Finally, the government has taken advantage of seniors by increasing Medicare premiums, increasing deductibles and decreasing benefits..

“ The final ACO guidelines, says Rosch, are “extraordinarily generous to providers,” and will constrain the FTC’s ability to block exploitative provider mergers.”

The Congressional Budget Office, much to the dismay of Obamacare’s advocates, did not think ACO’s would save much money in ten years.

 The CBO projected that the Medicare ACO initiative would save $5.3 billion over ten years.

 “In other words,” Rosch points out, “the savings to Medicare from the ACO program are no more than a rounding error. Yet even the CBO’s modest cost savings projections are likely overstated.”

 This supposed savings amounts to eight-hundredths of one percent of Medicare’s spending over the projected ten years.

People have a tendency not to do the arithmetic when present with what sounds like a big number.              

 “Against the very meager prospects for cost savings,” Rosch concludes, “there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.

Middle-class Americans are already struggling with the burdens of the rising cost of health insurance. The potential ACO policy blunder is not to be taken lightly.

 Obamacare’s failure will skyrocket our federal debt. The lack of consideration of the dysfunctional dynamics of the healthcare system will result in unintended consequences that will create greater dysfunction and higher costs.  

Obamacare and ACOs will end up making health care even less affordable and accessible.

Maybe that is President Obama’s goal.

 

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

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  • physical therapist salary • December 13, 2011

    By some weird arithmetic, the more life stuffs itself into the valley, the more spaces it creates for further life.

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Disinformation Compliments Of The New York Times

November 13, 2011
inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP,MACE

 If you want to have an accurate opinion you should have accurate facts.

 Lately, the New York Times has been publishing opinion articles, in the name of truth, by experts who give opinions based on inaccurate facts.

The danger is that government policy based on those opinions is wrong and will lead to unintended consequences.

 Ezekiel Emanuel M.D. published such an article in his weekly opinionator blog on November 3rd,2011.   

I will review the facts used by Dr. Emanuel to form his opinion.

“Everyone — conservative and liberal — agrees that $2.6 trillion a year is too much to spend on health care, and that we have to cut costs. But they don’t agree on who is to blame or what is to be done.”

I agree.

 He proposes an artificial threshold of significant costs saving in order to form a policy.

 “ A useful threshold for savings is 1 percent of costs, which comes to $26 billion a year. Anything less is simply not meaningful.”

This number is random. It permits him to dismiss problems that cost the healthcare system less than $26 billion dollars a year.

 Health care spending in the United States typically increases by about $100 billion per year. Cutting a billion here or there from something that large is undetectable is meaningless. In health care, you have to be talking about tens of billions of dollars before you are talking about real money.

 He defines the divide between conservatives’ and liberals’ opinions.

He states that conservatives are concerned about the cost of tort reform. Liberals are concerned about the profits of the healthcare insurance industry and drug industry.  Using the wrong data to prove his point he concludes that these issues are simply a distraction from the real efforts of controlling healthcare costs.

 Nothing could be further from the truth.

Today, I will concentrate on examining his evidence against the need for tort reform.

 “ Conservatives favorite fix is to reform medical malpractice by limiting noneconomic damages, statutes of limitation and lawyers’ fees. In its favor is the fact that doctors’ fear of medical malpractice lawsuits is legitimate.

According to a recent study in the New England Journal of Medicine, about 7.4 percent of doctors get sued each year. By age 65, even those in “low risk specialties” like pediatrics and dermatology face a 75 percent chance of being sued.

His argument continues by saying,

 It’s no wonder doctors order M.R.I.’s for routine headaches and monthly ultrasounds for normal pregnancies, despite these procedures not being required or recommended by professional guidelines.

His second argument against tort reform is the Congressional Budget Office 2009 scoring of the cost impact of tort reform.

“In 2009, the Congressional Budget Office did a comprehensive assessment of the potential cost savings from medical malpractice reforms.

Its conclusions: A package that included a $250,000 cap on noneconomic damages, a $500,000 cap on punitive damages and a one-year statute of limitations for claims by adults would save about $11 billion a year — 40 percent from reduced malpractice premiums and the rest in the form of fewer defensive procedures like M.R.I.’s.

 Dr. Emanuel concluded that $11 billion dollars a year savings is insignificant because it is a cost saving below $26 billion dollars a year. He contends tort reform is a distraction from real efforts to control healthcare costs and should be ignored. The CBO scoring information has lead Dr. Emanuel to an inaccurate opinion.

The CBO did not score all the necessary data to arrive at the accurate cost savings from tort reform.  

 

 “A full accounting of medical malpractice reforms shows the benefits would be $242 billion a year.”

 

The CBO assessment is a gross underestimate of the potential cost savings. President Obama and the Democrats provided the CBO with scoring data. The data given was intended to give cover to congressional Democrats who say malpractice-liability costs are trifling.

The truth is a full accounting reveals that more than 10 percent of America's health expenditures per year are spend on tort liability and defensive medicine.

The percentage of healthcare costs is even greater when the Massachusetts Medical Society survey is taken into account. The amount spent for defensive medicine can be extrapolated to actual costs from this survey.  

I have written a series of blogs analyzing the impact Massachusetts Medical Society’s survey. The extrapolated costs turn out to be about $700 billion dollars a year. The real cost of defensive medicine is somewhere between $242 and $700 billion dollars a year.

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2009/04/president-obama-if-you-really-want-to-reduce-healthcare-costs-effectively-reform-the-medical-malpractice-tort-system-part-2.html

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2009/04/president-obama-if-you-really-want-to-reduce-healthcare-costs-effectively-reform-the-medical-malpractice-tort-system-part.html

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2009/04/president-obama-if-you-really-want-to-reduce-healthcare-costs-effectively-reform-the-medical-malpractice-tort-system-par.html

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2009/04/president-obama-if-you-really-want-to-reduce-healthcare-costs-effectively-reform-the-medical-malpractice-tort-system-part-2.html

 In 2008 damage awards alone for medical malpractice claims reached $5.9 billion dollars.  The total of medical tort costs was $16 billion for legal costs, underwriting costs and administrative expenses. From 1986 the average jury award was $100,000. In 2006 the average award increased to $637,000. No one knows what the award value is for cases settled out of court.

Each year, 25% of practicing physicians are sued. 90% of physician sued are found innocent. The average defense cost is $100,000. This cost is not included in the CBO scoring

The fear of lawsuits causes most doctors to practice "defensive medicine" as the interviews of Massachusetts physicians points out.  The result is unnecessary testing, referrals, and procedures to protect themselves from allegations of medical negligence.  

A recent survey of doctors published in the Journal of the American Medical Association found that 93% of physicians admit to practicing defensive medicine. A 2008 survey by the Massachusetts Medical Society found that about 25 % of medical procedures are defensive in nature.

This waste results in increased healthcare insurance premiums. The premium increases result in an increase of at least 3 million uninsured people per year. When these uninsured people get sick they avoid going to a physician. This results in a decrease in  work productivity. It is estimated that the annual decrease in productivity is more than $40 billion dollars a year.

In states where tort reform has been instituted by placing caps on so-called non-economic damages, the malpractice costs have decreased 39%. This drop in costs is a result of decreased malpractice suits. The decrease is economically bad for the plaintiff attorneys. Annual malpractice premiums have gone down at least 13%. In fact, the medical malpractice business for plaintiff attorneys has about dried up in Texas.

As a result of tort reform in Texas, more than 16,500 physicians have moved to the state from non-tort reform states. More than 430,000 additional Texas have healthcare insurance as a result of the tort reforms according to the Perryman group.

  Senate Majority Leader Harry Reid, a Nevada Democrat, claims: "The whole premise of a medical malpractice 'crisis' is unfounded." Harry Reid listens to Dr. Ezekiel Emanuel’s opinion.

The influence of the disinformation is terrifying. Inaccurate opinions by influential people will never lead to a functional, affordable healthcare system.

 The disinformation concerning healthcare insurance company profits and drug company profits will be discussed shortly.

The New York Times needs a fact checker.

In my view it is irresponsible of President Obama and his advisors to distort the truth with disinformation.

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

Please send the blog to a friend 

 

 

 

 

 

 

 

 

 

 

  • Private Investigator NYC • November 22, 2011

    Reading a long and full of information article like this one are still one of the best way to improve knowledge.

  • EMR • November 27, 2011

    I dont think anyone really knows all of the information, bills, side notes and loop holes in these bills. No one really knows the whole story.

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Our Sound Bite Society. Cain vs. Gingrich Debate

November 9, 2011
inInformation Technology in Healthcare, Innovations in Healthcare, Medicaid, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System
• Leave a comment

 

Stanley Feld M.D.,FACP,MACE

 I missed the Cain vs. Gingrich debate on November 5th because it was not well publicized by the traditional media. I watched the debate on the Internet on November 9th. 

All I have heard from President Obama’s special joint session of congress speech is you must pass this jobs bill right away. I did not hear any solutions to America’s complicated structural problems.

  

There is little mention that his American Jobs Act is a $450 billion dollar stimulus package adding to the previous one trillion dollar stimulus package that did not work. President Obama also said it will not cost the American public a dime.

 On the other hand, Herman Cain and Newt Gingrich had a riveting 81 minutes debate discussing in detail what should be done about Medicare, Social Security, Medicaid, and jobs.

 It was a truly remarkable debate. The three minutes response limitation on the candidates was suspended in the first three minutes.

Clear, concise and detailed explanations of each candidate’s positions were given. Both candidates were entertaining and serious. They treated Americans as intelligent humans who can make decisions for themselves once they understand the issues.

 Their goal was to educate the people.

This Internet video is very worthwhile watching. It explains, why in their opinion, central government solutions have not worked. They explain what has worked in the past and what needs to be done to solve America’s problems.

  

All the traditional media said about the debate in the press is Gingrich won. There was no discussion of the details of the debate.

There was not one “got ya” question or response during the debate.

  In my opinion neither candidate won the debate. The viewing American public won. Please watch this debate. It will not be a waste of time.

 Our nation needs more of these frank discussions to educate the public about the problems we have and potential solutions to the problems.

 

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

 

  • EMR • November 22, 2011

    the new bill is huge and a lot of factors need to be considered before anyone can make an intelligent decision. Too bad noone fully knows the whole bill

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Infringement On Privacy Keeps Popping Up With Obamacare

November 6, 2011
inHealthcare Insurance Industry, Medicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

 I suggest those of you who enjoy reading the Federal Register to read the proposed rule: “ Patient Protection and Affordable Care Act; Standards Related to Reinsurance, Risk Corridors and Risk Adjustment, Volume 76, page 41930. Proposed rule docket ID is HHS-OS-2011-0022”

http://www.gpo.gov/fdsys/pkg/FR-2011-07-15/pdf/2011-17609.pdf)

  President Obama’s healthcare reform act is proposing to collect healthcare claims data on all Americans. The federal government already owns the claims data on Medicare and Medicaid recipients.

Now President Obama wants the claims data on all private insured and non-insured consumers. His reason is to stratify risk for the healthcare insurance industry.

Every consumer would pay the same healthcare insurance premium through the state exchanges whether he was a high risk or low risk patient.

If patients incurred high healthcare costs because they were a high-risk patients, the government would subsidize the healthcare insurance company if the cost was greater than the fixed premium.

 Presumably the government would subsidize the healthcare insurance company so it would not lose money. It would also tighten the government’s control over the healthcare insurance industry and its profits. These regulations have not been written yet.

What is wrong with that? Consumers are again left out of the loop. An unelected bureaucrat is making our healthcare decisions. If the potential consequences were followed to the end, private insurance and a freedom of choice to have no insurance coverage would be eliminated.

 Everyone would be required to have to have healthcare insurance through the state healthcare insurance exchanges.  In reality it is a backdoor mandate.

“In a proposed rule from Secretary Kathleen Sebelius and the Department of Health and Human Services (HHS), the federal government is demanding insurance companies submit detailed health care information about their patients.”

The healthcare insurance industry is being asked to provide proprietary information to government. The healthcare industry claims that providing this information will undermine its competitiveness.

It forces the healthcare insurance industry to become more transparent while the proposal claims to protect the healthcare insurance industry from risk.

“Obama and Sebelius made such a big deal about Americans being able to keep the coverage they have under ObamaCare; with these provisions, such private insurance may cease to exist if insurers are required to divulge their business models.”

There are several obvious dangers of this action. The first danger is from the healthcare insurance industry’s point of view. Another danger is from the healthcare system’s point of view. The third danger is from the consumer’s point of view.

The federal government is not capable of providing the administrative services necessary for healthcare coverage. The government outsources the administrative services for Medicare and Medicaid.

Those administrative service fees are in the 20-30% range to the federal government presently. Those hidden fees are creating unsustainable healthcare costs for the federal government.   

If the government tried to lower those fees, the healthcare insurance industry would walk away from the healthcare system. The healthcare system would collapse.

 The Federal Register includes three proposals for collecting the claims data on every American.

  1. A “centralized approach” wherein insurers’ data go directly to Washington.
  2. An “intermediate state-level approach” in which insurers give the information to the 50 states.
  3. A “distributed approach” in which health insurance companies crunch the numbers according to federal bureaucrat edict.

 “ There are major problems with any one of these three “options.” First is the obvious breach of patient confidentiality. The federal government does not exactly have a stellar track record when it comes to managing private information about its citizens.”

“Why should we trust that the federal government would somehow keep all patient records confidential?”

Each option provides government bureaucrats access to the health records of every American. 

President Obama’s trap for consumers is obvious. If a business loses or gives up or sells confidential data a victim can fire or sue a health insurance company. The power of the market can also punish a private sector provider.

If a government bureaucrat losses or gives up your confidential information to another federal agency or other private individuals, the individuals affected could not get the unionized bureaucrat fired even if they could find out who was responsible bureaucrat providing the information.

Imagine a Wikileaks-sized disclosure of every American’s health histories. The results could be devastating – embarrassing – even Orwellian.

With its extensive rule-making decrees, ObamaCare has been an exercise in creating authority out of thin air at the expense of individuals’ rights, freedoms, and liberties.

Providing the federal government the ability to spy on, review, and approve individuals’ private patient-doctor interactions is an abuse of power and a challenge to every American’s liberty Where is the ACLU on this issue?

In an attempt to do the right thing, President Obama and HHS ends up restricting our freedoms, individual rights and liberty.

I hate to be cynical. Perhaps President Obama’s goal is the have centralized control over Americans and restrict our freedoms, individual rights and liberty. .

Obamacare is looking more and more like this is the goal.

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

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Class Act (Community Living Assistance Services and Supports) Has Been Shutdown

November 2, 2011
inMedicaid, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP, MACE

The CLASS Act was another ill-conceived part of President Obama’s healthcare reform act. President Obama and HHS (Health and Human Services) realized that this social entitlement program was going to be another entitlement disaster.  CLASS would have cost the taxpayers an additional $75 billion per year when it was passed on the condition of being budget neutral.

 CLASS was discontinued before it could join other entrenched government entitlement programs that are unsustainable. 

 CLASS quietly became an amendment to President Obama’s healthcare reform act. There was little discussion about CLASS when the Democrats in congress passed President Obama’s healthcare reform act. There was little discussion until Kathleen Sibelius’ announcement to discontinue CLASS.  

 She said;

 “ the administration was shutting down Class. After 19 months of research and consultation, “we have not identified a way to make Class work at this time.”

There has been little discussion about CLASS since her announcement.

CLASS was slipped into Obamacare as a legacy of to Senator Edward M. Kennedy. It establishes the first national system of long-term care insurance.

  1. It was voluntary;
  2. It was to pay a cash benefit that each recipient could decide how to use.
  3. It could not disqualify participants with pre-existing disabilities or charge them more.
  4. It had to pay for itself without relying on taxpayer dollars.
  5. It was to provide long-term care for the elderly and disabled.
  6. The program is not meant to shoulder the whole cost of long-term care, for either the elderly or younger people with disabilities, but it could make a great difference to strapped families.
  7. It would typically cover home care, assisted living, adult daycare, nursing home, and Alzheimer’s facilities for those who needed it,
  8. There would have been no apparent age or time limits for benefits.
  9. No underwriting in the selection of beneficiaries.                                                                                                                                                                                 

CLASS was designed to collect “premiums” during employees’ working years and spend the money immediately.

 When the obligations came due, the program would have been forced to seek a taxpayer bailout. “This is called redistribution of wealth.”

Medicare benefits typically pay for nursing home and home care coverage typically only for relatively short -term recovery (21 days) from an acute illness.

Medicare beneficiaries who need long term care beyond their benefits but don’t have private supplemental long term care insurance must pay out of pocket.

CLASS would pay recipients $50 a day for in-home care assistant to help with cooking, cleaning, and bathing.  This sounds cheap. However it would cost the government over $18,000 a year per person.

There are no signup restrictions and no increased premiums based on overall health and age at the time of signup.

The vast majority of the voluntary participants would be the sickest and most in need of long term care. There is no way that a voluntary program could be budget neutral.  

CLASS like Medicare would have few restrictions on the amount and types of care that beneficiaries receive.

Advocates for “health care is a right” are stuck with the dilemma what to do with a severely demented 99 year old nursing home patient with terminal cancer. Should that patient receive the same life extending care as a 65 year old with no medical problems?

This is a moral and legal dilemma that society must face. Patients and their family should make that decision. 

It is immoral for a group of bureaucrats to decide on treatment for the individual. It is equally questionable to have physicians decide to withhold treatment

It is one of the reasons patients should own their healthcare dollars and be responsible for how they spend them. Patients and their families should have some skin in the game.

The government could provide some of the healthcare dollars for those who qualify.

If those dollars are not spent at the end of the year, patients and their family would keep them. This would provide incentive to make logical decisions about the consumption of medical care.

There is no evidence that nursing home care or home assistance care or assisted living or adult day care increase life expectancy. These services provide comfort for the elderly and their children.

Rather than providing complete medical care for the elderly in the hope of extending life, less expensive ways can be devised to provide comfort other than warehouseing the elderly in nursing homes.

CLASS would have provided minimal financial assistance in providing comfort to the infirmed elderly. With mounting budget deficits America cannot even afford minimal help.

Basically CLASS was an insurance plan without any of the rational limits and restrictions that real insurance companies use to prevent themselves from going bankrupt.                                                                                                                                                                                                                                                   President Obama’s CLASS Act could never work. After the government spent $75 billion dollars a year on a tax neutral plan, he would say “OOPS”. America would enjoy the luxury of another money draining entitlement program.  

The “healthcare insurance” paradigm for providing healthcare to the elderly must be changed. Patients must be motivated to be responsible for their own care.

President Obama has tried to keep the conversation about discontinuing CLASS, another entitlement program, to a minimum.

The realization of the failure of CLASS should be used to think about healthcare coverage from a different perspective rather than letting our politicians making the same mistakes over and over again.    

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

 

 

 

 

 

 

 

 

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