Stanley Feld M.D.,FACP,MACE

State constitutions require states to have a balanced budget. Most states have accumulated large budget deficits.

When President Obama promises to redistribute wealth he means it. His plans are to take federal money and bail out states. He has already bailed out Massachusetts. He gave the state $8 billion dollars for its healthcare plan.

California is on the verge of bankruptcy. California has not shown an intention to become fiscally responsible. I assume California is certain President Obama will bail it out. However, President Obama has a little problem. The U.S. has a large budget deficit. The new congress will be in no mood to fund the state deficits. The U.S. is going to have difficulty attracting creditors unless it becomes fiscally responsible.

Medicaid expenses are a big burden on the states. In some states’ Medicaid consumes 40% of their budget. States cannot become fiscally responsible while carrying their Medicaid burden.

President Obama plans to put 60% of the uninsured citizens into state Medicaid programs. At the same time, he is decreasing state allocated funds for Medicaid. The math makes no sense.

Last week Arizona’s Medicaid stopped paying for transplants. Some states have cut Medicaid payments to doctors, paid bills late and trimmed benefits such as insulin pumps, obesity surgery and hospice care. In California, dentists pull teeth that could be saved because Medicaid doesn’t pay for root canals.

President Obama’s healthcare reform plan is causing a rationing of medical care even before it goes into effect.

“Across the country, state lawmakers have taken harsh actions to try to rein in the budget-busting costs of the health care program that serves 58 million poor and disabled Americans.”

“Some states face multibillion-dollar deficits. Federal stimulus money for Medicaid is soon to evaporate. And Medicaid enrollment has never been higher because of job losses.”

Medicaid has become a monster and is eating up the budget in many states.

“In Illinois, Medicaid sucks up more money than elementary, secondary and higher education combined”.

President Obama’s economic stimulus package increased the federal share of Medicaid money temporarily. The economic stimulus money runs out at the end of June 2011. The federal government will go back to paying half the costs of Medical instead of the 60 to 70 percent it pays with the economic stimulus money.

At the same time President Obama’s healthcare reform law requires states not to change the rules on who’s eligible to receive Medicaid. States can no longer act independently to determine Medicaid’s eligibility requirements.

President Obama’s healthcare reform act has created rules such as these. These rules are part of the reason states are suing the federal government. The states claim President Obama’s healthcare reform act is an infringement on states’ rights. This infringement on states’ rights has broader implications of the power of the federal government over the states. This was not the intent of the constitution.

This week President Obama’s healthcare reform act had experienced a judicial setback. A Virginia judge declared the healthcare reform act unconstitutional.

Hopefully the new congress will be as aggressive as the States have been in order to protect individual freedoms and the rights of states as intended by the constitution.

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

Stanley Feld M.D.,FACP,MACE

It is almost impossible for the average voter to figure out what is really going on in Washington, DC. Politicians are shifty. The internet and blogging has made it a little easier to figure out. .

President Obama has received more criticism than any other president because he is shiftier than most other presidents have been.

It is getting harder to know what is going on because political strategy opposing taxpayers’ interests is formulated in secret.

It intensifies as the traditional media provides cover because of its bias. We miss traditional media sloppiness because we live in a sound bite society.

President Obama promised the AMA he would wipe out the accumulating decrease in physician reimbursement. The 23% is a result of yearly congressional postponements.

President Obama counted the savings resulting from this decrease in physician reimbursement in his cost estimated. He also promised the AMA a permanent fix to the Medicare payment formula. The AMA supported President Obama’s healthcare reform act because of this promise.

President Obama also promised that he would not sign a health-care bill that “adds one dime to our deficits, either now or in the future, period.”

The deficit neutral promise was never plausible. The Democrats’ strategy was to make President Obama’s healthcare reform plan “deficit neutral” by moving the $250 billion dollars in physician reimbursement off the healthcare reform act’s accounting books.

The House of Representatives’ passage of H.R. 3961 wiped out the accumulated Sustainable Growth Rate (SGR) debt off the books. The problem was the Senate had to pass the bill also. The Senate did not buy the trick.

Majority Leader Harry Reid explained the maneuver away at a press conference.

“All we’re doing is wiping the slate clean by adjusting the baseline to what is current policy.”

Senate Democrats strategy was to vote on a stand-alone bill that strips the SGR formula out of President Obama’s healthcare reform bill. The government then makes an unfunded addition to the increase deficit created.

President Obama has made serial promises that cannot be honored. Rather than include the pricey $247 billion plan known on Capitol Hill as the “doc fix” as part of ObamaCare, they’ll instead make this a separate contribution to the deficit, without compensating tax increases or spending cuts.”

Wiping the slate is right.”

The Senate voted again to postpone the automatic, accumulating 23% cut in Medicare physician payments, but only through New Year’s Day. A house vote rapidly complied.

Democrats left a permanent fix out of the final ObamaCare bill in order to keep the official price tag below $1 trillion.

Democrats planned to pass the $250 billion "doc fix" later in a separate bill, but somehow they never got around to it. Even liberals cannot always conjure up a quarter-trillion dollars on demand.

Many Democrats wanted the fix "paid for" with other spending cuts, real or invented.

President Obama deceived the AMA about the doc fix. President Obama is now deceiving voters about how he will pay for the fix.

Maybe President Obama should concentrate on fixing the healthcare system by doing a few simple things like increasing patient responsibility, decreasing the healthcare insurance industry’s abuse of the system by loading benefit expenses and institute malpractice reform to decrease defensive medicine. He should put patients in control of their healthcare dollars rather than making them more dependent on government and building a bigger bureaucracy.

Instead, he is concentrating on destroying the medical care work force.

I received this note today that says it all about government taking care of us.

Below is a note by a young physician to President Obama. His short two-paragraph letter to the White House accurately puts the blame on a "Culture Crisis" instead of a "Health Care Crisis.” It is worth a quick read: 

Dear Mr. President: 
During my shift in the Emergency Room last night, I had the pleasure of evaluating a patient whose smile revealed an expensive shiny gold tooth, whose body was adorned with a wide assortment of elaborate and costly tattoos, who wore a very expensive brand of tennis shoes and who chatted on a new cellular telephone equipped with a popular R&B ringtone. 
While glancing over her patient chart, I happened to notice that her payer status was listed as "Medicaid"! During my examination of her, the patient informed me that she smokes more than one costly pack of cigarettes every day and somehow still has money to buy pretzels and beer. 
And, you and our Congress expect me to pay for this woman’s health care? I contend that our nation’s "health care crisis" is not the result of a shortage of quality hospitals, doctors, or nurses.  Rather, it is the result of a "crisis of culture", a culture in which it is perfectly acceptable to spend money on luxuries and vices while refusing to take care of one’s self or, heaven forbid, purchase health insurance.  It is a culture based in the irresponsible credo that "I can do whatever I want to because someone else will always take care of me.” 
Once you fix this "culture crisis" that rewards irresponsibility and dependency, you will be amazed at how quickly our nation’s health care difficulties will disappear. 
Respectfully, 
xxxxx, MD 

There you have it.

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

Stanley Feld M.D. FACP MACE

The healthcare insurance industry did great with President Obama/Kathleen Sebelius’ new regulation to apply administrative expenses to benefit expenses.

You could never tell reading the disinformation published by the traditional media. The reports were confusing and not informative.

In my last blog I reported that the healthcare insurance industry is trying to influence the regulations for expenses to be counted as benefit expenses for the healthcare industry . The benefit expenses are subtracted from the premium revenue before the 80% medical loss ratio is calculated.

The expenses the industry wanted included are;

1. The cost of verifying the credentials of doctors in its networks.
2. The cost of ferreting out fraud such as catching physicians over testing patients or doing unnecessary operations.
3. The cost of programs that keep people who have diabetes out of emergency rooms.
4. The sales commissions paid to insurance agents.
5. Taxes paid on investments.
6. Taxes paid on premium income.

All these expenses are administrative expenses in my view. These expenses could create a competitive advantage to an individual company. If these expenses are permitted as benefit expenses, resources available for direct medical care would decrease from eighty cents to sixty cents.

Last week Kathryn Sebelius published a fact sheet outlining the details of the new healthcare insurance regulations. The new regulations are clearly to the advantage of the healthcare insurance industry.

President Obama declared;

“Today, many insurance companies spend a substantial portion of consumers’ premium dollars on administrative costs and profits, including executive salaries, overhead, and marketing.  Thanks to the regulations , consumers will receive more value for their premium dollar because insurance companies will be required to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement.   If they don’t, the insurance companies will be required to provide a rebate to their customers starting in 2012.”

We saw previously that WellPoint had a Medical Loss ratio of 83% including the six expenses as benefit expenses.

The National Association of Insurance Commissioners (NAIC) was charged to develop uniform definitions and methodologies for calculating insurance companies’ medical loss ratios. The commission was to consider input from all stakeholders. The healthcare insurance industry made 160 comments. Consumer protection groups made only 30 comments.

These regulation will make the healthcare insurance marketplace to be more transparent and make it easier for consumers to purchase plans that provide better value for their money.

This last statement is fiction according to the details in the fact sheet. The healthcare insurance industry won. There was nothing in the traditional media explaining the significance of the regulations.

I will outline the categories in the new regulations. I will describe the defects in detail in the future. President Obama has made another complicated mistake that will destroy the medical care system.

1. Establishing Greater Transparency and Accountability

This information will provide consumers with meaningful information on how their premium dollars are spent, clearly accounting for how much money goes toward actual medical care and activities to improve health care quality.

Right off the bat, the government has permitted the healthcare insurance industry to count activities it categorizes as improving healthcare quality as a benefit expense decreasing the funds available to direct medical care.

2. Ensuring Americans Receive Value for their Premium Dollar

This is an unsubstantiated statement.

3. Providing Rebates to Consumers

Insurance companies that are not meeting the medical loss ratio standard will be required to provide rebates to their consumers.

This will not happen because the healthcare insurance industry still has a high percentage of overhead as a benefit expense counte toward the medical loss ratio.

4. Insurer Reporting Requirements

Beginning in 2011, insurance companies that issue policies to individuals, small employers, and large employers will have to report the following information in each State it does business:

· Total earned premiums;

· Total reimbursement for clinical services;

· Total spending on activities to improve quality; and

· Total spending on all other non-claims costs excluding federal and State taxes and fees.

Unacceptable expenses are not defined.

5. Activities That Improve Health Care Quality

· Following NAIC recommendations, this regulation specifies a comprehensive set of “quality improving activities” that allows for future innovations and may be counted toward the 80 or 85 percent standard

There it is. The healthcare insurance industry can count bogus profit activity in the benefit expenses counted against premium dollars to be spent for healthcare. This is the place of obscene salaries.

6. Timing of Reporting and Rebates

· The first report, containing calendar year 2011 data, will be due in 2012

· Insurers will be required to make the first round of rebates to consumers by August 2012 based on their 2011 medical loss ratio. 

· Expatriate and mini-med plans that report separately will be required to report data to the Secretary on an accelerated basis.

The delay in reporting provides time for modifications of the regulations to the advantage of the healthcare industry

Treatment of Taxes in the Rebate Calculation

• The regulation will allow insurers to deduct federal and State taxes that apply to health insurance coverage from an insurer’s premium revenue when calculating its medical loss ratio. 
• In the case of non-profit plans, assessments they are required to pay in lieu of taxes may be deducted.

The healthcare insurance industry was able to maintain most of its non-value added expenses to its benefit expense column.

The healthcare insurance industry won. Consumers lost and were once more deceived by President Obama.

There were also multiple accommodations made to the healthcare insurance industry in the name of the consumer.

Accommodations to Ensure Continued Access to Coverage by Consumers

Accommodations to Avoid Market Destabilization

President Obama faked us out once again. The press coverage sounded as if the healthcare insurance industry would not be in a position to take advantage of consumers anymore.

I predict consumers will be very upset with the results.

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