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A More Logical Plan Than “Obamacare”

 

Stanley Feld M.D.,FACP,MACE 

I do not think President Obama understands basic healthcare economics. Patients and physicians will always drive spending for healthcare. The government will not be able to control spending centrally.

Forty to sixty cents of every healthcare dollar is spent on administrative costs. CMS claims that Medicare spends only 2.5% on administrative services.  This 2.5% is the cost for CMS to outsource Medicare coverage to the healthcare insurance industry.

The healthcare insurance industry takes 40% to 60% of every healthcare dollar for their administrative fees. The law says they can only take 15% out of every dollar for administrative fees. Eighty five percent of the premium dollar must go to patient care. 

 The problem is the 85% includes many fees that are, in reality, administrative expenses such as certifying physicians for their plans and insurance sales fees among others. There is a profit margin for each of these “expenses.” President Obama has permitted these administrative fees to be included in the 85% category for direct healthcare costs.

Physicians get 15% and hospitals get 20% of every healthcare dollar. Where does the rest of the money go?

Forty percent gets taken off the top by the healthcare insurance industry. A good place to start is by setting up a system that creates competition among the healthcare insurance companies. 

The government always blames physicians for the waste. Physicians and patients drive healthcare expenses. Waste occurs as a result of perverse incentives and middlemen abuse. All the stakeholders are to blame. The healthcare insurance industry generates the most waste. Defensive medicine is the second leading cause of waste. Legislation using common sense could eliminate most of this waste.

"A 2005 report by the National Academy of Engineering and the Institute of Medicine found that 30-40 cents of every dollar spent on health care are spent on costs associated with "overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency. Medicare is especially vulnerable to waste, fraud and abuse.”

Medicare spending must be decreased. The best way to decrease the spending is to provide incentives for seniors to drive the system rather than the system driving seniors.

 “Unfortunately, the debate on Capitol Hill and in the media is too often fueled by partisan fear mongering instead of a thoughtful examination of the facts.” 

No amount of price cutting or central-government dictates will mitigate these problems.

A consumer (seniors) driven healthcare system providing incentives for providers and patients is the only way to fix the system.

Accountable Care Organizations (ACOs) are being proposed and organized to harness the spending of the fee for service systems.

ACOs are systems in which doctors and hospitals team up to offer coordinated care. Both are held accountable for cost and quality in a disguised capitation system. “Quality” is not effectively measured.

 Hospital systems and physicians have long had an adversarial relationship because hospital systems have leveraged its brick and motor value off the intellectual property and mechanical skills of physicians.

More and more physicians are realizing this fact. Physicians are building their own hospitals and outpatient surgical clinics. Physicians are consciously or unconsciously resistant to hospital systems dividing the money and participating in the reimbursement sharing judgments.

Neither group wants to be at risk for “poor outcomes” that might be the patients’ fault.

The incentives to form ACOs are too weak. The regulations are 400 pages too long and complicated.  Physicians do not have the time or money to fully understand the regulations.  “Trust me” does not work anymore.  The major hospital systems have backed out of forming ACOs under the regulations because they put the hospital system at too great a risk.

Paul Ryan’s plan of “premium support” can potentially encourage formation of Accountable Care Organizations The ACOs have to be attractive enough for patients to choose to join them. Hospital systems would have to be successful in organizing them.  Ryan’s plan is a “managed competition model.”  The government would make defined contributions for beneficiaries depending on the beneficiaries’ means. The subsidy would be a total subsidy for the poor and a sliding scale subsidy for others.

Beneficiaries would have a choice from a variety of health plans with no discrimination based on health status or wealth. Standard coverage contracts understandable by ordinary people would be required to make comparisons possible. Internet FAQs would be made available.

Competition for consumer (seniors) business would drive health plans to innovate in ways that would cut waste and improve “quality.” The use of well-designed healthcare insurance exchanges would drastically reduce healthcare insurance company marketing costs. The completion by healthcare insurance companies in effective healthcare insurance exchanges could result in healthcare insurance companies not taking 40% off top as they currently do. The system could be set up so that consumers could buy the insurance across state lines.

The Ryan plan does not deal with defensive medicine. States could easily be presented with an ideal tort reform model to adopt or modify. In Texas the model is not ideal but it is effective and would be effective nationally. If a model included a “loser pays” clause it would decrease frivolous law suits and decrease defensive medicine testing dramatically. In most instances physicians do not receive increased compensation for the increase in testing. Therefore the motivation is not testing simply to make more money.

President Obama needs to understand the basics of healthcare economics before he goes on and totally destroys the healthcare system.

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

 

 

 

 

 

 

 

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Medical Care Should Not Be About Politics.

 

Stanley Feld M.D.,FACP,MACE

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

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Let Us Forget Demagoguery And Face Facts!

 

Stanley Feld M.D.,FACP,MACE

I understand that President Obama wants to win the election in 2012. He will do everything in his power to win it.

I understand politicians do everything to spin an issue in their favor to win an election. 

I know that politicians believe many issues are too complicated for Americans to understand. The reason we elect government officials as our surrogates is for them to understand the issues and vote for our vested interest. 

How many congressmen read President Obama’s entire healthcare bill and believe they voted for citizens’ vested interest? I bet the answer is not many.

I have pointed out how President Obama presented the CBO with false assumptions to manipulate budgetary conclusions. Appointed CBO officials and Medicare actuaries find President Obama’s conclusions difficult to believe.  

Finally, a congressman has stood up and said let us look at the facts, America must face where we are headed. It is his responsibility to the American people to explain these facts. Americans are capable of understanding these facts and the consequences of the facts. Paul Ryan believes in the intelligence of the American people.

The trick is to get Americans to listen. I used to worship the New York Times. It was the place to get the facts. It has become biased.

At a recent party politics became a hot topic. The discussion was about the Republicans not having a candidate able to beat President Obama in 2012. People quoted articles from the New York Times and Time Magazine as the ultimate authority.

I was very quite. I was quiet because I could not believe that intelligent people would believe the hogwash they were quoting. President Obama has had a terrible record. Just look at President Obama’s economic policy, foreign policy and healthcare policy. 

Here are a couple of examples in two recent New York Times editorials;

"Rep. Ryan’s Dubious Sales Pitch"

Published: May 29, 2011

"Representative Paul Ryan is rebutting critics of his plan to turn Medicare into a “premium support” program, pointing to two existing programs that he says prove 
his approach would be better for beneficiaries. Don’t believe it."

My immediate reaction looking at the editorial while eating breakfast was, “I got it.” “Paul Ryan’s plan is no good. The media is indeed the message. Forget about critiquing the details. 

The second article was more subtle.

Published: May 28, 2011

Republican leaders in the Senate have spent weeks gleefully deriding the Democrats who run the chamber for not producing a budget proposal in more than two years. It is a classic tactic, designed to deflect attention from their party’s toxic plan to privatize Medicare. 

In the second quote it is a given that the Ryan Plan is toxic. Again, no facts. If the New York Times said so, the Ryan Plan must be toxic. 

No one at the party I mentioned has yet to be affected by President Obama’s policies yet. I am sure they will start paying attention to his policies when his policies affect their life, standard of living, and freedoms.

President Obama is building the infrastructure to affect all of the above. As he is building the infrastructure he and the Democratic Senate are bankrupting the country.

I have not seen tremendous support by the Republicans for Paul Ryan’s budget.

Paul Ryan’s budget does not attack entitlements in the near term. It attacks the government waste President Obama’s own National Commission on Fiscal Responsibility and Reform pointed out.

It is best to hear from Paul Ryan himself. Paul Ryan’s goal is to help Americans become less dependent on government, not more dependent.

Government should make rules that level the playing field for all stakeholders in all areas and then get out of the way. It should enforce the rules equally and fairly. 

To my chagrin only 256 people watched this You Tube announcing the Ryan Plan. In announcing the budget Mr. Ryan points out the path to disaster President Obama is heading us into.  He then goes on to describe the path to prosperity we must take. 

If you want to hear what Paul Ryan really has to say rather than having it editorialized by the New York Times and the traditional media, it is worth watching this You Tube.



 
 

 

The facts are more important than hearsay.

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

 

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You Cannot Lead Without A Posse

 

Stanley Feld M.D.,FACP,MACE

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

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

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

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

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

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

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

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

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

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

Reid
  

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

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

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

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

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

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

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

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

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

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

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

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

Paul Ryan needs a posse!!

 



 

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

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Organized Medicine Is Out Of Touch With Practicing Physicians.

 

Stanley Feld M.D.,FACP,MACE

There is a widespread discrepancy between the opinions of organized medical group leaders in the American Medical Association (AMA), the American Academy of Family Physicians (AAFP), the American College of Physicians (ACP), and  practicing physicians.  AMA, AAFP, and ACP are part of organized medicine.

These organizations supported the healthcare reform law in 2010 and continue to support the legislation. I believe they have taken this position because they want a seat at the table as implementation of the legislation moves forward. President Obama has not paid attention them so far and there is little evidence that he will in the future.

In March of 2010, Speaker of the House Nancy Pelosi famously said, "We have to pass the [health care] bill so that you can find out what is in it."  

Most physicians are starting to realize the implications of President Obama’s Healthcare Reform Act (ACA) (Obamacare). They are terrified about the implications for the practice of medicine.

Organized medicine is still not disenchanted with President Obama’s Healthcare Reform Act. Charles Cutler, MD, chair of the ACP Board of Governors said recently,  "The medical community recognizes that so much of the ACA is good."

Dr. Cutler is out of touch with the thinking of the practicing community. It is important for the public to know what practicing physicians are thinking.

In a January 2011 poll of practicing physicians conducted by Thomson/Reuters and HCPlexus. “Seventy-eight percent of physicians said the ACA (Obamacare) would negatively affect their profession, 74% predicted that the law would make physician reimbursement less fair, and 58% believed it would hurt patients care.”

President Obama’s healthcare team does not want to recognize that the shortage of primary care physicians become worse as a result of Obamacare. The Healthcare Reform Act makes no attempt to decrease the present shortage. Sixteen million new enrollees in Medicaid will not be able to find a physician.

A recent membership survey by the Texas Medical Association (TMA)  of Texas physicians reports that “59% of Texas physicians have an unfavorable opinion of Obamacare. Texas physicians described their feelings as disappointed (78%), anxious (74%), and confused and angry (62%).

A nationwide survey conducted by The Physicians Foundation last fall produced the same negative results.

Physician disapproval of President Obama’s Healthcare Reform Act is consistent among all medical and surgical specialties. Practicing physicians know it cannot work. 

The Thomson/Reuters and HCPlexus survey showed that only 11% of primary care physicians thought Obamacare would have a positive impact on their profession. Only 14% of pediatricians and psychiatrists were optimistic. The optimism for success among cardiologists and surgeons was at 3% and 4%, respectively.

Organized medicine should at least try to hear what practicing physicians thinking.

Forty-eight percent of the  general public disapproves of President Obama’s healthcare plan. I believe it will equal the disapproval ratings of physicians once the public experiences the full impact of this terrible law.  

President Obama has tried to maintain public support by increasing benefits in the first two years of implementation of Obamacare before the 2012 elections. After 2012 the impact will be felt. It will be too late by then. The infrastructure will be built and money will be wasted. In 2013 and 2014 there will be increased taxes, decreased access to healthcare and decreased choice of care as a result of the Healthcare Reform Act.

President Obama promised a bonus to primary care physicians. The reality is the bonus is insignificant. I suspect with a 29.5% decrease in reimbursement scheduled to go into effect on January 1,2012. It will not only offset the bonus but decrease reimbursement significantly.  

President Obama promised organized medicine a “Doc Fix.” Most believe the promise is bogus in light of the budget pressures.

No one is talking about the upcoming debate to make participation in Medicare a condition for renewal of medical licensure. President Obama is going to create a larger physician shortage than already exists with this move. 

Accountable Care Organizations(ACOs) introduces another avenue of uncertainty. The process for providers to qualify for ACO status is costly. ACOs are going to increase the cost of healthcare rather than decrease the costs. ACOs will put physicians at risk for patient outcomes. Physicians will be penalized if outcomes are poor. Physicians know that clinical and financial outcomes not only depend on their care of patients but also the patients care of themselves. Few physicians are interested in assuming the patients’ responsibility for this risk. ACOs will fail.   

The burden of mandated insurance is a clear attack on the states’ sovereignty and budgets. It is also a clear attack on individuals’ freedom to choose. I believe it is unconstitutional. It will be a few years before the Supreme Court rules on the issue. Mandated insurance only increases the uncertainty and ability to maintaining a medical practice.

Just as the federal government is supposed to be a government by the people for the people and not ignore the will of the people, organized medicine should not ignore the will of its constituents.

 

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

 

 

 

 

 

 

 

 

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    Repairing the Healthcare System: Organized Medicine Is Out Of Touch With Practicing Physicians.

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It Will Not Work!

 

 

Stanley Feld M.D.,FACP, MACE

“The media is the message.” It does not matter if the policy has failed previously.  All that is important is the effectiveness of the policy’s presentation and its ability to manipulate the polls. 

The government’s purpose is to work for the people who elected it. It does not seem to be working that way at present. Bureaucrats create rules or regulations as they interpret the laws made by congress and the president. Regulations are controlled by the administration’s ideology. Many times the regulations in one area nullify the intended effect in another area.  

Regulations and bureaucracy inhibit the use of common sense in policy making for the benefit of the people.

The people did not have an outlet to express their opinions or frustrations until blogging came into its own seven years ago.  

Americans do not like President Obama’s healthcare reform act. They also do not like Dr. Don Berwick’s apparent disrespect for their intelligence and his infatuation with the British healthcare system.

“I am romantic about the NHS (British National Health Service); I love it. All I need to do to rediscover the romance is to look at health care in my own country.”

 Dr. Berwick’s comments about redistribution of wealth and taking freedom of choice is scorned by many Americans.
 

“Dr. Berwick complained the American health system runs in the ‘darkness of private enterprise,’ unlike Britain’s ‘politically accountable system.’ The NHS is ‘universal, accessible, excellent, and free at the point of care – a health system that is, at its core, like the world we wish we had: generous, hopeful, confident, joyous, and just’; America’s health system is ‘toxic,’ ‘fragmented,’ because of its dependence on consumer choice. He told his UK audience: ‘I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do.’”

The NHS is failing. Prime Minister Cameron has declared he will change the system. The British healthcare system has resulted in long waits for treatment and rationing of treatment.  If past experience is any indication, generic drugs and expert commissions have done little to lower healthcare costs.

“As the United States prepares to introduce the massive new health-care program known as Obamacare, Britain’s Conservative Prime Minister David Cameron said on Monday that he plans to significantly reform his country’s state-run health-care system due to the program’s massive cost and lackluster performance”. 

Theodore Dalrymple wrote a critique of the British Healthcare system in the Wall Street Journal on April 16, 2011. Theodore Dalrymple is the pen name of  Anthony Daniels, an English physician.  

He is echoing the sentiments of many practicing physicians in Britain.

Dr. Anthony Daniels’ perception contradicts Dr. Don Berwick’s perception. One of them is wrong.  My bet is Dr. Berwick is wrong. 

Dr. Daniels’ practical experiences are:

“1. All attempts to reduce bureaucracy increase it, and the same goes for cost. Such, at any rate, has been my experience of the British health care system.”

“2. In Britain we have been prescribing generics for years; I cannot remember a time when I personally did not. Our National Institute for Clinical Excellence (NICE) has done cost-benefit analyses of drugs and procedures, often very sensibly, for years. But despite its best efforts, our system has been highly inventive in finding other ways of wasting immense quantities of public money.

I suspect this is a result of the administrative costs associated with the increased government bureaucracy and regulations.

“3. Don Berwick wants to move from a fee-for-service system, which gives doctors an incentive to perform expensive and doubtfully effective procedures, to one in which doctors are rewarded for preventing diseases that are so expensive to treat.”

“4. On paper, prevention always seems much cheaper than cure. Health-care economists prove it very elegantly and convincingly over and over again.”

“5. Unfortunately, the world always proves to be more complex and refractory than the theories of even the best economists”.

“6. For a long time, a physician was paid a capitation fee: He received a certain amount per patient per year from the NHS, irrespective of what the doctor did for the patient or how many times a year the patient was seen.  The physician could not increase his income except by private practice.”

“7. Needless to say, private practice was most extensive in the better-off areas, so that the system ended up reproducing the very social divisions in health care that it was designed to abolish.”

“8. In the poorer areas, doctors had no incentive—at any rate, no financial incentive—to improve their practice. It was rather the reverse. The worse the facilities they offered, the higher their income.”

“9. In the 1990s, Family doctors began to be paid to undertake preventive measures. The experts hoped that this would save money because the cost of preventing diseases would be more than offset by the savings from not having to treat the diseases that they prevented.”

“The costs of prevention were decidedly real, while the savings were inclined to be imaginary.”

a.     “The bureaucratic costs of setting and monitoring health-improvement targets—which were often highly arbitrary—were far greater than anticipated, bureaucracies having an inherent tendency to increase in size and spending power.”

b.    “Many doctors started to be paid for procedures that they were already doing for no charge, like taking their patients' blood pressure.”

c.     “Screening procedures turned out to be highly equivocal in their efficacy.”

d.     “Thus the overall benefit was much less than anticipated.”

e.     “Some of the more common ills that had been targeted, such as strokes and heart attacks, were in marked decline anyway because of increase in effective technology.”

f.      “Worse, much of the expenditure on the treatment of disease proved intractable.”

g.     “Technology inexorably increased costs; and even if the health of the population improved rapidly”

h.     “The increased proportion of older people in the population meant that the proportion of people ill with expensive chronic diseases increased.”

i.      “Procedures such as hip replacement have gone from being relatively new-fangled and exotic to being routine, precisely at a time when there are more people than ever who can benefit from them.”

j.      “ Osteoarthritis is no doubt hastened by obesity, but no medical means has yet been found for the prevention of that particular condition.”

“It is true that in Britain we have had our own peculiar reasons for the spectacular rise in the cost of our health-care system.”

“The British system is now capable of absorbing infinite amounts of money with minimal benefit to the health of the population, though with great benefit to the pocketbooks of those who work in it.”

“It is an occupational hazard for politicians to think that they and their ilk know best.”

“I have seen a hundred schemes of cost reduction.”

“ I have never seen any reduction in costs, or at least any that lasted more than a few months. I can't remember a single health minister who did not promise more efficiency at less cost, or a single one who actually managed to achieve it.”

“The long-term solution, I imagine, is the same for health care as it is for pensions: to pay for it with the income generated by dedicated savings accounts, which can be transferred to the next generation after death.”  

President Obama is setting up a healthcare system in America that has been proven not to work in Britain. The healthcare reform act should be reconsidered.

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

 

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It Is Easy To Forget

 

Stanley Feld M.D.,FACP,MACE

President Obama’s healthcare reform act is a little over one year old.

It is easy to forget the negative components and unintended consequences of the bad legislation. It will not solve our healthcare systems problems. It is making the problems worse. 

America is facing a tremendous budget deficit. There are many causes for the deficit. The Medicare and Medicaid entitlement programs are two of the principle causes of the mounting deficit.

President Obama’s goal is to provide universal healthcare coverage at an affordable price with an increase in quality. The healthcare reform act is going to change the payment structure without changing incentives for consumers of healthcare.

The result will be a disaster for everyone.

John Fleming is an M.D. and a member of congress. He wrote a note to his constituents revealing how the President Obama’s healthcare reform act has failed to deliver on costs, premiums, spending and preserving American’s existing healthcare coverage. He wants to repeal the healthcare reform law.

 

Several of the law’s initial provisions have taken effect. The effects of newer provisions are being anticipated. This anticipation has created havoc. Waivers granted to unions have generated cries of favoritism. The law’s initial provisions have already resulted in American families and businesses facing higher costs, economic uncertainty, and loss of their current healthcare insurance coverage. 

None of these effects has been helpful to our fragile economic state. 

Dr. Fleming has listed some of the issues and unintended consequences that will cause President Obama’s healthcare reform act to fail.

 

1.  In 19 states parents can no longer buy child-only insurance policies as a result of the law.

2.  30 states suing to block the law from taking effect, or requesting waivers from its requirements

3.  51 percent of American workers who will lose their current health coverage by 2013, according to the Administration’s own estimates.

4. A $2,100 increase in individual insurance premiums due to Obama care, according to the Congressional Budget Office.

5. $2,500 premium reduction promised by candidate Obama “by the end of my first term as President” will not occur. 

6.  7,400,000 reduction in Medicare Advantage enrollment as a result of Obamacare, resulting in a loss of choice for seniors and millions of beneficiaries losing their current health plan.

7. $118,000,000,000 in new costs imposed on states to implement Obamacare's budgetary costs that will lead to reduced services for other state programs like education or to higher state taxes

8. $310,800,000,000 projected increase in health costs due to Obamacare, according to the independent Medicare Trustee.

This list is only the tip of the iceberg. There are many effects of the legislation that will add waste and increase cost to the healthcare system.

It is hard to keep track of these effects. Painful consequences are “easy to forget” as President Obama’s spin machine keeps telling us how wonderful his healthcare reform act will be for America.

The massive bureaucracy being formed with all its waste and paperwork is discounted by the administration.

1.   1,270 for new bureaucrats requested by the Internal Revenue Service to implement the law this year

2.   6,578 pages of new regulations issued implementing Obamacare through March 14, 2011

2. 800,000 reduction in the American labor force due to Obamacare provisions that “will effectively increase marginal tax rates, which will also discourage work,” according to the CBO

3. 2,624,720 total individuals in 1,040 plans granted waivers thus far exempting them from the law’s insurance mandates; nearly half of whom participate in union plans

4. 40,000,000 firms subject to the health law’s new 1099 reporting requirements, which the National Federation of Independent Business called a “tremendous new paperwork compliance burden actuary", who called its promise of lower costs “false, more so than true”

5. $552,200,000,000 is the amount of higher taxes Americans will pay if Obama care remains in place, which will be imposed on all Americans in varying degrees.

6. A  $1,390,000,000,000 increase in federal spending on new entitlements during fiscal years 2012-2021 according to the CBO, a 48 percent increase from an earlier estimate

Dr. Fleming’s  DIAGNOSIS:

 The new health care reform law is the prime example of how the Democrats’ tax hikes, spending spree, and heavy-handed government policies are hurting our economy and making it harder for small businesses to create jobs. 

 

 Removing these barriers will provide the businesses that create new jobs with the certainty they need to hire new employees and get our economy back on track. I remain committed to reducing healthcare costs by providing access and choices for every American, protecting the patient-doctor relationship, and keeping the government out of the exam room.  I will work aggressively in Congress to repeal what I firmly believe to be an onerous and unconstitutional health care reform law and support market-based solutions to our health care needs.
Sincerely, 


JOHN FLEMING, M.D.
Member of Congress

Bravo Dr. John Fleming. More congressmen should be repeating the facts about President Obama’s undeclared waste and hidden taxes. It is hard for the public to remember all the facts.

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

 

 

  • Jo edwards

    I am a RN. I am disgusted in those who support the Health care reform law.

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Why Will Accountable Care Organizations (ACOs) Fail?

 

Stanley Feld M.D.,FACP,MACE


In an ideal world ACOs should work. There is no evidence that  untested and complex organizational structure of ACOs developed by Dr. Don Berwick (head of CMS) will improve quality of care and reduce costs

ACOs are supposed to provide financial incentives to health care organizations to reduce costs and improve quality. There are too many defects in the ACOs infrastructure to improve the financial and medical outcomes.

At a conceptual level, the incentive for ACOs would be to increase efficiency and avoid overuse and duplication of services, resources, and facilities. In this model, ACO members would share the savings resulting from the increased coordination of care.

I have said over and over again that excessive administrative fees and ineffective management of chronic disease is the main source of waste in the healthcare system. ACOs do not deal with these main drivers of costs.

The only stakeholders who can demand that this waste be eliminated are consumers/patients. Patients must control their healthcare dollars.  They will make sure there are competitive prices and will not permit duplication of services.

ACOs are not a market-based system. They do not put patients at the center of their medical care or permit them to choose their medical care. The government controls the healthcare dollars and is at the center of patients’ medical care decisions directly and indirectly.

In order to truly repair the healthcare system a system of incentives for patients and physicians must be created. There is no question that the processes of care for chronic diseases must be improved. More importantly, the medical and financial outcomes must be measured and not the process changes.

In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix.”  

ACOs are merely the latest in a long history of unsuccessful health policy innovations. Since the 1970s, Congress and successive administrations have tried a number of tactics to control rising health care costs.  The tactics tried have been:  

  1. Payments for diagnostic related groups of services, or DRGs.
  2. Health maintenance organizations (HMOs).
  3. Preferred provider organizations (PPOs). 

They all failed. Consumers reacted negatively to the care provided. Healthcare costs continued to rise. ACOs are being promoted as the new structure that will address the lack of success of the past tactics.

Under Obamacare, the Secretary of the Department of Health and Human Services (HHS) is charged with developing a method to assign Medicare beneficiaries to ACOs.”

“ Because the statute is unclear about the resolution of many vital issues, the crucial details will be supplied and refined by federal regulators—as is the case for so many other provisions of the new health law.” 

Congress has relinquished its power to the unelected portion of the executive branch of government to construct a system that will reduce the rising costs.

ACOs create a new organizational structure to remedy problems inherent in the existing healthcare system.  The complexity of the structure of ACOs will result in the same or similar types of unintended consequences that led to earlier failures. 

There will be consolidation of providers. ACOs will result in increased costs rather than decreased costs.  It might decrease duplication of testing. The resulting savings will be small. There is no evidence that ACOs will provide improved medical and financial outcomes. I believe it is Dr. Berwick’s naïve wish that it will improve medical and financial outcomes. 

The are at least 7 key deficiencies with ACOs

  1. ACOs do not empower consumers to be responsible for their own medical care.  Healthcare should be consumer driven with consumers controlling their healthcare dollars. They will then make informed choices about their care and insurance coverage.

      2.ACOs create artificial incentives to improve quality and provider performance. Consumer driven           healthcare creates real incentives to promote price completion. Competitors are constantly           working to improve their products, attract consumers, and ultimately increase market share.  

Consumers have no part in driving that competition in an ACO system.

           3.Most physicians are reluctant to assume accountability for patient outcomes.  Physicians                           recognize that much of the outcome is directly under the consumer/patient behavioral control.

            4. ACOs remove the patient/consumer from being responsible or accountable for their medical                   care. ACOs undermine any attempt to create a truly accountable healthcare system that can                   drive down costs.

            5.ACO do not encourage provider accountability even though it seems that provider buy-in would            be integral to an ACO’s success with its shared savings incentive.  Many physicians believe the                  share savings incentive is bogus. 

            Providers continue to be paid for each service they perform until the government provided funds             run out. There are also grave uncertainties and practical complications of distributing production             and savings between the hospital system and physicians.

             6. ACOs create an unfair competitive advantage for large organizations that are hospital                 centric. Eligibility requirements are vague and ambiguous. The eligibility requirements                 suggest that larger organizations have an unspoken eligibility advantage.

                This is the reason hospital systems are trying to form ACOs. Hospital systems think they will                 make money. I think they will fail. Hospital systems will lose a lot of money. They will fight                 with their physicians over the distribution of government reimbursement. The cost of hospital                 care will then increase. The consumer will lose.

                7. Groups of independent practitioners as well as other types of small and mid-sized practices                     may lack the infrastructure, Internet technology, or other resources needed to qualify for                     ACO eligibility. They will be forced to join hospital systems. Hospital systems have a                     history of taking advantage of physicians and their skills and intellectual property. More                     tensions will be created. Hospital systems’ ACOs will crumble. The cost of medical care                     will continue to increase further.

I have presented some common sense observations. Common sense does not seem to prevail in the difficult world of repairing the healthcare system.

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

 

 

 

 

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Accountable Care Organizations Will Fail !

 

Stanley Feld M.D.,FACP,MACE

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

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

I don’t think anyone has considered the following,

  1. Which consumers will ACOs treat?

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

     2. How many Medicare patients will be covered?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

 

 

 

  • Dan

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

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