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What Is Wrong With Obamacare? It Won’t Work!

 

Stanley Feld M.D.,FACP,MACE

Obamacare is already proving it is going to fail. By President Obama’s own admission, it will not achieve universal coverage. It will not provide affordable coverage because the healthcare insurance industry is already raising the price on private insurance and the fees it charges the government to administer service for Medicare and Medicaid.

Seniors will notice that their Medicare premiums for Part F has increased starting August 1st. Seniors can also expect premiums for Medicare Part D, Ordinary Medicare and Medicare Advantage to increase on January 1st 2011.

Why would premiums increase? Physician reimbursement has decreased.

There will be an increase in the fee the government pays administrative service providers (healthcare insurance industry) to subsidize Medicare and Medicaid. The reason for these increases will be non- transparent.

To many the name Newt Gingrich is a dirty word. Nonetheless, he is perceptive. In his recent book “Real Change: A Fight for America’s future”, he explains why the current third party payment system for healthcare is inefficient, ineffective and leads to fraud. I will amplify his model in order to point out the dysfunction in the healthcare system and its solution.

He explains why a “buyer-seller model” in healthcare is more efficient than a" “buyer-seller-receiver bureaucratic model”, whether it is a public or private system.

In the third party payer system (buyer-seller-receiver system), the buyer (insurance company, employer or government) receives no direct value for its payment. Its goal is to pay as little as possible. The seller (physicians or hospitals) knows the buyer suspects the seller of greed, and incompetence. The relationship is adversarial.

The receivers (patients) have little concern of cost. They have first dollar coverage. They have no incentive to save money. They have been conditioned to believe the medical care is an entitled service. Patients want more service with more convenience. They have no accountability for their habits. They have no incentive to lose weight or exercise consistently. Obesity leads to chronic disease and its complications. Patients have no incentive to care for their chronic disease.

President Obama’s healthcare reform plan does not provide these incentives. Yet the key to repairing the healthcare system is patients being the keeper of their health and the manager of their disease.

On the other hand, in a buyer-seller system, the buyer (patients) can be given incentive and educated to be a wise buyer of a service (medical care). The buyer (patients) has freedom of choice. Patients decide whether a service is worth the price. They decide whether they want to avoid the cost by taking care of their health.

The sellers (physicians, hospitals, or pharmacies) can choose to sell at the offered price or refuse to sell. The seller has a free choice. The seller’s freedom is not shackled by government regulations. The price is determined by previously negotiated prices. Prices are transparent.

Patients must be made aware of the negotiated prices by the government.

The buyer-seller-receiver bureaucratic model with the government being the buyer in a single party payer will lead to;

1. Fraud, abuse and administrative waste.

2. Lack of individual freedom of patients to choose their medical care.

3. Bureaucratic control of healthcare which undermines personal responsibility for health and medical care.

Fraud, abuse, and administrative waste.

There are many examples of fraud. The easiest examples to comprehend are the occasional physician or physician’s clinic billing for services not performed.

There are examples of hospital systems overbilling Medicare and Medicaid for non-rendered services. These actions seem to have political overtones. It is usually private hospital corporations or management companies and not faith based non-profit hospital systems that are accused of this level of fraud.

Medicare and Medicaid outsource the administrative services to the healthcare insurance industry. There are many examples of the fraud and abuse by the healthcare insurance industry.

The public perceives the largest cost is physician abuse. Physicians are the weakest stakeholder. However, if the government looked closely enough it would find the largest area of fraud and abuse comes from the healthcare insurance industry.

A popular notion in congress is that 40 cents of every healthcare dollar goes for administrative costs to the healthcare insurance industry. I believe this is a low estimate. Some economists have demonstrated that administrative services expenses are 60 cents of every healthcare dollar.

Congress has chosen not to change the accounting rules used by the healthcare insurance industry. These defective accounting regulations lead to the largest area of fraud and abuse. An estimate is $250 billion dollars a year.

The Government Accounting Office estimates that 10% of Medicare and Medicaid spending is lost to fraud and abuse. Ten percent of Medicare and Medicaid cost is $80 billion dollars a year. Over the next decade, the cost would amount to $800 billion dollars if both programs were not expanded. With the entitlements being expanded it could be 2 to 3 trillion dollars over the decade.

I believe if we created a buyer seller system, the fraud and abuse would decrease to less than 1% of healthcare expenditures. Every patient would be a police officer for his own healthcare dollar.

Lack of individual freedom to choose.

Bureaucracy can only function by creating rules and regulations to control the receiver and the seller. This leads to an increase in the number of regulatory agencies. The result is many unenforceable and conflicting rules and regulations. The rules and regulations usually lead to unintended consequences and greater budget deficits.

The receivers’ (patients’) medical needs might be unfulfilled by these rules and regulations.

Americans love the free market and their ability to make choices. We love to be consumers and admire incentives, bargains, and choices. One only has to look at consumer products such as electric products and automobiles. Consumerism drives our economy not centralized bureaucratic control. Healthcare should be driven by consumers and not by the system, which President Obama and Dr. Donald Berwick advocate.

Bureaucratic control of healthcare will undermine personal responsibility for health and health maintenance.

The buyer (the government bureaucracy) pays for the receiver (patient) to receive care from the (physician). The patient is forced into a passive position. The government defines what care the patient can receive. The physician must provide the care the government dictates.

Patients are conditioned to believe that someone besides themselves is responsible for their health and healthcare.

The government should provide the appropriate information and education for the patients to make wise hea
lth decisions. These wise decisions must be encourage by giving patient control and ownership of their own healthcare dollars.

This can be accomplished through the ideal medical savings account.

Patients should make healthcare and medical care decisions for themselves.

Patients must play an active role in the management of their health and disease.

I believe the bureaucratic single party payer system will not Repair the Healthcare System.

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

  • Todd Siler

    Dr. Feld, thanks for adding your insightful notes on this healthcare conundrum and offering some common sense solutions for repairing it. I really appreciate your analyses and recommendations. I’m now curious to read Gingrich’s book, Real Change, and understand his model of a buyer-seller system; in particular, how he envisions getting enough people to buy into it — especially those who don’t have the means to do so. And there are many. Which is one part of this gnarly problem: the economics of health care. The other part is more problematic and personal: the care of our health. The process of convincing people that they must take better physical care of themselves to the best of their abilities — practicing everyday positive habits of body and mind — strikes me as the most complex challenge of all. It requires a life-changing attitude with action; meaning, we must personally change the way we take care of our body and wellbeing, while encouraging others to do the same but in their own way. In fact, we make it easy to fail this personal, “primary healthcare” system, which includes prevention.
    To that point: I was disappointed to hear the newly appointed head of the Medicare and Medicaid programs, Dr. Don Berwick, comment that “one over-demanded service is prevention: annual physicals, screening tests, and other measures that supposedly help catch diseases early.” How can we encourage people to be personally responsible for maintaining their health on the one hand, only to discourage or penalize them from taking preventative actions on the other hand? That doesn’t make sense. Also, why would Dr. Berwick advocate “placing a commitment to excellence—standardization to the best-known method—above clinician autonomy as a rule for care.” Presumably, your primary physician, whose advice you trust and follow, shares this same commitment and applies this standardized methods to maintaining your health.
    Question: How will the healthcare system you’re advocating (which I believe is better in many ways) help those individuals who’ve taken exceptional care of themselves through exercise, wellness practices and prevention—people who’ve accepted all the responsibilities of managing their health—but don’t have the financial means of covering special, urgently needed services? How will the Gingrichcare system help these individuals deal with those unexpected health catastrophes (aneurysms, strokes and heart attacks that occur out-of-nowhere, rare cancers, neurological disorders, and so forth), which neither these patients nor their families can pay for?
    It’s tough to clear one’s mind and mute those signs heralding “The Republican Health Care Plan: Die Quickly,” which Rep. Alan Grayson (D-Fla.) pointed to in his House floor speech. Surely, there’s some grave truth to that.
    As you know, the process of educating and incentivizing people “to be informed buyers of medical services” is propelled by one of our most fundamental human rights: freedom of choice. Sadly, many people shirk the responsibilities that accompany this freedom, either because they dread the hassle-n-headache of thinking critically for themselves in choosing a healthcare plan that may serve them best (but isn’t on the main menu). Or they simply don’t want to take the time to wade through the swamp of confusing literature in seeking a service that’s “worth the price.” Or they don’t have the money to pay for the most basic health insurance. So they’re willing to sack this freedom, leaving the care and maintenance of their lives in the anonymous hands of the medical and healthcare insurance experts. This amounts to that buyer-seller-receiver bureaucratic model you’ve probed here, which puts the government in the driver’s seat of one’s life rather than the back seat (or, as the Libertarian’s would prefer, in the trunk!)
    As the Republicans see the situation: Obamacare is driving us all in one bus with an “oversize load” on a one-way highway that has no exits to alternative routes. From their perspective, our nation is being steered toward a single party payer system.
    As the Democrats see it: There’s more than one bus. And these buses are traveling along different routes. From their perspective, Gingrichcare will likely pass “The Phantom Tollbooth” on a narrow road that leads to “an unfinished bridge-to-nowhere.” Why do they see it this way, and believe what they see? They’re in a helicopter following these buses from above!
    All attempts at light humor aside: I’m not sanguine about the future of a healthcare system that’s designed to work-for-all and that provides universal coverage in a fiscally sound way. I’m skeptical not because I believe it’s impossible to realize these ideals, but because the act of keeping this system healthy and fit requires a majority of Americans to be ‘the keeper of their health and the manager of their disease.’ You’d think that most people would resonate with that proposition, rather than fight it or do the “unthinkable”: mindlessly entrust that some kind, benevolent third party payment system will always care for them like children in need. Clearly, there are millions of citizens who don’t understand what’s at stake for them or their families, and couldn’t be bothered to learn as long as their lives aren’t inconvenienced by some personal health crisis. Of course, nothing seems to instantly engage people to learn-for-their-lives than some startling crisis. Suddenly, we’re no longer indifferent about taking responsibility for our own health and wellness. In such times of crisis, we’re inclined not to leave all important health-related decisions up to the experts who supposedly “know what’s best for us” when, in many instances, they don’t.
    The upshot is that neither Obamacare nor Gingrichcare will succeed, if people don’t want to learn to take care of themselves, and don’t want to make that lifelong commitment to do so. And for all the reasons you’ve earmarked here, among them: “The receivers (patients) have little concern of cost [for healthcare services]. They have first dollar coverage. They have no incentive to save money. They have been conditioned to believe the medical care is an entitled service. Patients want more service with more convenience. They have no accountability for their habits. They have no incentive to lose weight or exercise consistently. Obesity leads to chronic disease and its complications. Patients have no incentive to care for their chronic disease.”
    All this needs to change. The faster, the better. But the mechanisms for changing things needs to change, too — along with the incentives and rewards for changing, together with the penalties for not.

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Is This The Change We Want?

Stanley Feld M.D.,FACP,MACE

This week Senate Republicans demanded to hear from Dr. Don Berwick, the physician President Barack Obama appointed during the July 4th Senate recess to run the Medicare and Medicaid programs.

Dr. Berwick took office last week.

“Republicans on the Finance Committee, which has jurisdiction over the post, say that not holding a hearing with Berwick would “result in circumventing the open public review that should take place for a nomination of such importance” and “casts a shadow over his legitimacy and authority to serve as administrator during a critical time for CMS.”

President Obama did an end around on Finance Committee Chairman Max Baucus (D-Mont.). Senator Baucus said he was troubled that Dr. Berwick did not have a confirmation hearing.

Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power and protects Montanans and all Americans by ensuring that crucial questions are asked of the nominee – and answered,”

After Dr. Berwick was installed in office, Senator Baucus said, “fully expects" new Medicare chief Donald Berwick to testify before the panel "in the near future."

 

Does President Obama have enough respect for the Senate or the American people to honor Senator Baucus’ request?

Why all the fuss?

There are two reasons:

1. “Dr. Berwick’s ideas on the design and purpose of the U.S. system of medicine aren’t merely about "change." They would be revolutionary.”

2. “One may agree with these views or not, but for the president to tell the American people they have to simply accept this through anything as flaccid as a recess appointment is beyond outrageous. It isn’t acceptable.”

 

Problem solving has three components;

a. Goals

b. Philosophy

c. Mechanisms.

All three must be kept in mind when evaluating decisions. There is no question that the mechanical aspects of healthcare and medical care must be changed in order to have a more cost effective, affordable system. I have discussed all of the areas of waste and abuse in the healthcare system previously. Many of these areas are not addressed in President Obama’s healthcare legislation.

Increasing the bureaucracy without developing a system of individual responsibility, individual choice, and individual accountability has not worked historically.

Yet Dr. Berwick’s many public statements reflect a new system that denies these freedoms and subjugates the individual’s freedom of choice to collective government decisions.

I am amazed at how few people are aware of the Dr. Berwick issue. I am again publishing his statements as Daniel Henniger did in order to bring more attention to the issue.

Excerpts are from past speeches and articles by Dr. Berwick:

"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."

"You cap your health care budget, and you make the political and economic choices you need to make to keep affordability within reach."

"Please don’t put your faith in market forces. It’s a popular idea: that Adam Smith’s invisible hand would do a better job of designing care than leaders with plans can."

"Indeed, the Holy Grail of universal coverage in the United States may remain out of reach unless, through rational collective action overriding some individual self-interest, we can reduce per capita costs."

"It may therefore be necessary to set a legislative target for the growth of spending at 1.5 percentage points below currently projected increases and to grant the federal government the authority to reduce updates in Medicare fees if the target is exceeded."

"About 8% of GDP is plenty for ‘best known’ care."

"A progressive policy regime will control and rationalize financing—control supply."

"The unaided human mind, and the acts of the individual, cannot assure excellence. Health care is a system, and its performance is a systemic property."

"Health care is a common good—single payer, speaking and buying for the common good."

"And it’s important also to make health a human right because the main health determinants are not health care but sanitation, nutrition, housing, social justice, employment, and the like."

"Hence, those working in health care delivery may be faced with situations in which it seems that the best course is to manipulate the flawed system for the benefit of a specific patient or segment of the population, rather than to work to improve the delivery of care for all. Such manipulation produces more flaws, and the downward spiral continues."

"For-profit, entrepreneurial providers of medical imaging, renal dialysis, and outpatient surgery, for example, may find their business opportunities constrained."

"One over-demanded service is prevention: annual physicals, screening tests, and other measures that supposedly help catch diseases early."

"I would place a commitment to excellence—standardization to the best-known method—above clinician autonomy as a rule for care."

"Health care has taken a century to learn how badly we need the best of Frederick Taylor [the father of scientific management]. If we can’t standardize appropriate parts of our processes to absolute reliability, we cannot approach perfection."

"Young doctors and nurses should emerge from training understanding the values of standardization and the risks of too great an emphasis on individual autonomy."

"Political leaders in the Labour Government have become more enamored of the use of market forces and choice as an engine for change, rather than planned, centrally coordinated technical support."

"The U.K has people in charge of its health care—people with the clear duty and much of the authority to take on the challenge of changing the system as a whole. The U.S. does not."

Is this what the American people want? If so, that is America’s choice. Americans must be given that choice with a televised transparent confirmation hearing.

Barack Obama cannot deny Americans the understanding of Dr. Berwick’s positions. Thankfully, Senator Baucus has spoken out.

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

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A Call To Action !!!!

 

Stanley Feld M.D.,FACP,MACE

President Obama has pulled another trick on the American public. He appointed nominee Donald Berwick as Director of the Center for Medicare and Medicaid Services during the Senate’s recess July 4th. He avoided a confirmation hearing. The American people did not have the opportunity to hear Dr. Berwick philosophy and his plans for Medicare. 

President Obama avoided a Senate committee hearing because he did not want his healthcare proposals debated again so close to the November elections.

The traditional media did not cover Dr. Berwick’s views. The appointment was the most significant news story of the week. The New York Times Week in Review did not have a story about the appointment or a discussion of Dr. Berwick’s philosophy.

President Obama did not want the public to learn Dr. Berwick’s views and the impact his views could have on their medical care.

In this blog I am going to post Dr. Berwick’s public views as they appear on You Tube. It is important that all senior hear Dr. Berwick’s views from him and their potential impact.

In this Call To Action, I am asking readers to send this post to all the seniors they know. I ask those seniors to send this post to all the seniors they know. I hope the process will become viral. Seniors must understand the potential impact this appointment will have on their healthcare coverage and their freedom of choice.

The post will also provide information for seniors to make an informed decision on how to vote in the November elections.

The AMA endorsed Dr. Berwick. However, the AMA represents only 12% of the 750,000 physicians in the United States. AARP is supposed to represent seniors. It has received 4 billion dollars from United Healthcare and other healthcare insurance companies and has made a business out of the brand that is supposed to represent seniors.

The traditional sources of information have let us down once more. It is up to all citizens to speak out with their vote.

 

 

 

 

There are some of the Dr. Berwick’s statements. We are giving power to government to control our healthcare system. Seniors must understand the implications of President Obama’s philosophy to them and their healthcare as they get older.

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

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Another Trick Play By President Obama

 

Stanley Feld M.D.,FACP,MACE

President Obama has used one trick after another to get his healthcare reform bill passed. He has also used many tricks to put control of the healthcare system in the hands of the executive branch of government. The Secretary of Health and Human Service has the power to make healthcare policy without congressional oversight.

The Secretary of Health and Human Services can delegate her powers to whomever she chooses. I was astonished that neither congress nor the Republicans made a fuss about President Obama usurping congressional power.

President Obama is moving further away from respecting the will of the people. It is clear that the majority of Americans oppose most aspects of President Obama’s healthcare plan. They do not like the implications of government control over the entire healthcare system, the specter of a public option, a single party payer,or rationing of healthcare.

Americans despise the implication of the loss of freedom to choose. They feel deceived by President Obama’s statements that if you like your physician or your healthcare plan you may keep it. In reality, this was a false promise.

President Obama nominated Dr. Donald Berwick to be Director of Center of Medicare and Medicaid Services (CMS). Dr. Berwick dedicated his life to healthcare policy. His ideas are “progressive” ideas. I disagree with many of his ideas. I also believe the congress and the American public should have been exposed to these ideas through the usual Senate confirmation process.

The Senate did not schedule the confirmation hearings because the nomination paperwork had not been completed.

During the July 4th recess, President Obama simply appointed Dr. Berwick as Director of CMS. I believe President Obama made this recess appointment to avoid a Senate debate on his choice.

Circumventing Senate confirmation to appoint the new Medicare chief is part of the same political willfulness that inflicted ObamaCare on the country despite the objections of most voters.”

Democrat Max Baucus, the Senate Finance Chairman, issued a statement critical of this end-around. Finally, an important Democratic Senator has reacted to President Obama’s usurping congressional power.

“Mr. Baucus hadn’t scheduled hearings because the nomination paperwork wasn’t even finished 11 weeks after Dr. Berwick was named.”

The obvious question is was the administration stalling to make the appointment without proper debate and vetting during the July 4th recess?

President Obama claims that the Republicans were impeding the appointment "for political purposes."

It is obvious that President Obama wanted to avoid restarting the healthcare debate in an election season.

Dr. Berwick’s opinions agree with President Obama’s philosophy on healthcare reform. The direct appointment avoids reigniting the philosophical disagreements with Republicans.

Dr. Berwick’s philosophy is expressed in his 1996 book “New Rules” and in position papers of the Institute of Healthcare Improvement.

A primary function of health regulation is to “constrain decentralized, individual decision making and to weigh public welfare against the choices of private consumers.”

This sounds like socialized medicine to me. It sounds like a restriction of freedom of physicians to use clinical judgment and consumers freedom of choice.

He believes that "protocols, guidelines, and algorithms for care," with the common underlying notion that someone knows or can discover the ‘best way’ to carry out a task to reach a decision, and that improvement in medical care can come from standardizing processes and behaviors and demanding conformity.

It sounds like government control of the practice of medicine and patient choice. Sometimes there is not a single way to treat patients. Rationing should be determined by freedom of the individual to choose and not a central authority.

“In a now-notorious interview last year Dr. Berwick said, "The decision is not whether or not we will ration care—the decision is whether we will ration with our eyes open."

Since the federal government is running out of money, the bureaucracy will determine what is the best treatment at the cheapest price.

“Dr. Berwick personal view is the "public welfare" should have the power to trump the mere "choices of private consumers."

Dr. Berwick is also a believer in the value of the defective Dartmouth Atlas conclusions.

Dr. Donald Berwick, nominated by President Obama to run Medicare, called it the most important research of its kind in the last quarter-century.”

Dr. Donald Berwick deserves a proper vetting because of the power he will wield. President Obama has pulled another t
rick play on the American public. He should not be permitted to get away with it.

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

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The Games President Obama Is Playing with Medicare Medical Claims Data

 

Stanley Feld M.D.,FACP,MACE

Government spending for Medicare in its present form is unsustainable. Medicare premiums for many seniors are not cheap. Medicare premiums are determined by means testing. The determination includes all income sources such as capital gains, interest income, annuities and pension distributions. Some seniors are paying more than $15,000 a year in after tax dollars for full Medicare coverage. .

President Obama’s goal is universal affordable insurance coverage with increased quality of medical care.

His philosophy is to have the federal government have complete control of the healthcare system.

The weakest stakeholders in the healthcare system are patients and physicians. President Obama cannot control the healthcare insurance industry. He is dependent on the healthcare insurance industry for administrative services. The healthcare insurance industry, plaintiff attorneys and Big Pharma control too much lobby money.

A system of government control of physicians and patients is destined to fail because President Obama is restricting freedom of choice. He is not fixing the problems that caused the dysfunction in the healthcare system. The Massachusetts healthcare reform system has been the perfect example of uncontrolled costs and failure to provide universal coverage and higher quality of care.

One mechanism President Obama is using to achieve his goals in the framework of his philosophy is the proof provided by “medical claims data”.

Medical claims data is worthless in my view. The conclusions from medical claims data have been used against physicians even though it does not provide an accurate view of the quality of medical care. The data does not include risk assessment of patients’ illness or the effect of the physician patient relationship and disease.

Medical claims data does not measure the role of patients’ responsibility for their medical care.

Medical claims data does accurately evaluate the value a physicians’ quality of care.

Healthcare experts concede that even though medical claims data does not provide an accurate picture of the truth it is the best data we have. These experts should try to develop a system that measures the truth before defective policy destined to fail is developed.

I have never understood this logic. It is used as evidence in social science, political science and clinical science. It is extremely easy to reach false conclusions and make the wrong decisions.

Even though the conclusions drawn from medical claims data are mostly inaccurate they are accepted by President Obama and his healthcare team to formulate healthcare policy. Why? The conclusions of the data verify his philosophy.

“In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group Dartmouth Atlas of Health Care at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.”

Peter Orszag, the president’s budget director has used the Dartmouth Group data to proclaim that perhaps $700 billion a year of wasteful spending — “does nothing to improve patient health but subjects you and me to tests and procedures that aren’t necessary and are potentially harmful,”

“Mr. Orszag even displayed maps produced by Dartmouth researchers that appeared to show where the waste in the system could be found. Beige meant hospitals and regions that offered good, efficient care; chocolate meant bad and inefficient”.

It is difficult to understand what makes Peter Orszag a medical care expert. The Dartmouth medical claims data is quoted without considering that maybe the $700 billion dollars a year is spent on defensive medicine that President Obama refuses to consider.

The Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care. How this conclusion is reached is confusing to me. The Dartmouth researchers themselves acknowledged their medical claims data measure the varying costs of care in the government’s Medicare program and does not include the entire healthcare system. The Dartmouth group has also proclaimed that the data does not measure the quality of care.

Quality medical care has not be defined adequately to date.

“For all anyone knows, patients could be dying in far greater numbers in hospitals in the lower cost regions than hospitals in the higher cost regions, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better.”

Yet President Obama is leaning heavily on the Dartmouth group’s “data to fulfill his goals in the framework of his philosophy.

“President Obama said it would ask the Institute of Medicine, a nongovernment advisory group, to consider ways of putting the Dartmouth findings into action by setting payment rates that would punish inefficient hospitals and reward efficient ones”.

What are other potential defects are in The Dartmouth Atlas of Healthcare data?

  1. The principal argument behind Dartmouth’s research is that doctors in the Upper Midwest offer consistently better and cheaper care than their counterparts in the South and in big cities, and if Southern and urban doctors would be less greedy and act more like ones in Minnesota, the country would be both healthier and wealthier.
  2. But the real difference in costs between, say, Houston and Bismarck, N.D., may result less from how doctors work than from how patients live. Houstonians may simply be sicker and poorer than their Bismarck counterparts. Also, nurses in Houston tend to be paid more than those in North Dakota because the cost of living is higher in Houston. Neither patients’ health nor differences in prices are fully considered by the Dartmouth Atlas.
  3. The Dartmouth Group hospital rankings do not take into account care that prolongs or improves lives. “If one hospital spends a lot on five patients and manages to keep four of them alive, while another spends less on each but all five die, the hospital that saved p
    atients could rank lower because Dartmouth compares only costs before death.”
  4. David Cutler, a professor of economics at Harvard, likens it to failing to account for inflation when looking at gross domestic product. “Nobody in their right mind would talk about G.D.P. growth without adjusting for prices,” he said.
  5. One example of extrapolation of the data was when Dr. Fisher, in testimony before Congress last year, summarized his and others’ work by asking, “Why are access and quality worse in high-spending regions?”

Many studies have shown no link, either way, between spending and quality. Quality is not being measured by the Dartmouth group by its own admission.

  1. “There is little evidence to support the widely held view, shaped by the Dartmouth researchers, that the nation’s best hospitals tend to be among the least expensive.”

“In interviews, Dr. Fisher and Mr. Skinner acknowledged that there was no proven link between greater spending and worse health outcomes.

“ And Dr. Fisher acknowledged the apparent inconsistency between his statements in interviews with The New York Times and those made elsewhere, saying that he was sometimes less careful in discussing his team’s research than he should be.”

“In any case, the more-is-worse message has resonated with insurers, whose foundations now help to finance the Dartmouth Atlas.”

The take away point is patients, physicians and hospitals will suffer from the advertised implications of the Dartmouth Atlas’ data. President Obama is using this data to achieve his philosophical goal. The goal is total government control of the healthcare system.

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

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President Obama Has Kicked A Sleeping Pit Bull

 

Stanley Feld M.D.,FACP,MACE

More and more physicians are beginning to realize the effect President Obama’s healthcare reform law is going to have on their practices and on their physician patient relationships. They do not like it.

Recently, Daniel Palestrant, MD Founder & CEO of Sermo, Inc. wrote an excellent summary of what is causing physicians to be galvanized in their opposition to the healthcare reform law.

Sermo has 115,000 practicing physicians in its online community. Sermo is revolutionizing the way physicians communicate across the United States. It’s where practicing US physicians—spanning 68 specialties and all 50 states—communicate on difficult cases and exchange observations and views about drugs, devices and clinical cases, clinical issues and healthcare reform.

Sermo has been named to Fast Company Magazine’s list of the world’s most innovative companies. Sermo, through its surveys’ on healthcare reform, is rapidly replacing the AMA as the voice of the practicing physicians.

Dr. Palestrant put together a list of the most important issues that seem to be causing practicing physicians to speak out:

1. Turns Out Legislators Want Physicians To Be Employees After All

“Very quietly, the State of Massachusetts has started the process of linking a physician’s eligibility for medical license to their participation in the state’s public access program.” clip_image002

This critical development is necessary for President Obama’s healthcare reform. It eliminates physicians’ freedom. President Obama’s healthcare law is similar to the Massachusetts healthcare reform. Massachusetts healthcare reform did not attack the root causes of healthcare inflation.

This step is necessary to force physicians to participate in government programs against their will.

Physician Comment

“If any plan is tied to licensure just keep practicing without a license.

They can’t throw everyone in jail unless they make room by putting the druggies on the street.

The public would be on our side in a minute……IF we continue to practice. If we close our doors because we fear government reprisal, we lose the patients because they’ll never get the real message, and we lose to the government.

Hang together or we’ll surely hang separately, someone once said?”

Physician Comment

“Strike, for the love of Gad and the sake of all physicians in the country! The Massahatchet Massacre should not be allowed to succeed.”

Physician Comment

“I am not optimistic about my future here in Massachusetts. I am really considering my options for an exit out of this state. Main concern is where to go……is the grass greener and what practice model to involve myself with?”

Physician Comment

“If you can stand the heat, pack your guns and try Texas. Land of the free and home of the brave!

There’s no future for Docs in Massa-useless!”

“For the country it is the perhaps the clearest evidence yet what could be the unintended consequences of this reform effort and an alarming move towards socialism.”

2. Physicians WERE Right About the cost of Tort Reform

The timing around the recent Congressional Budget Office "revelation" that tort reform would in fact lead to "at least" $50 Billion in cost savings over 10 years, rather than originally estimated $5 Billion.

The CBO is still way off. I suggest President Obama and the CBO read the Massachusetts Medical Society survey on defensive medicine and malpractice reform. My calculated cost is closer to $700 billion per year. A popular number quoted by some is $300 billion per year.

Defensive medicine is the cause of excessive testing. Only tort reform will solve the problem.

“ Sermo physicians had listed tort-malpractice reform as a number one priority back in May, when the Physician’s Appeal was launched.”

President Obama should listen to his medical care providers (Physicians). 

3.Recognition that the AMA’s Support was "Purchased"

Physicians have finally realized that the AMA’s support of President Obama’s healthcare reform effort was less about physician advocacy and more about the AMA protecting its own financial interests. We all recognize the deals President Obama makes to “convince” organizations to support his efforts. 

The fact that the AMA receives the bulk of their $300MM in revenue, not from its physician members, but from insurance companies and hospitals, through a "special" arrangement with the government to provide CPT billing codes seems to be further eroding the claim that physicians in fact support the current reform efforts, not to mention the AMA’s legitimacy.

Physician Comment

“I think things will continue to get worse until we take a stand. The problem is that currently so many physicians are in the dark and have no idea what is coming. I do not think they will be ready to take a stand until it is too late.”

Physician Comment

“Life seems hard now. I am resentful and feel contempt for the political processes that are occurring now. I feel trapped. Sermo has been good. Feedback has great. But still our profession has no powerful organization that stand for us and that is what we need.”

 

2. Market Forces Will Be Felt By Patients

Physicians are starting to take the necessary steps to maintain their own financial viability and autonomy. Patient access to healthcare resources will decrease as a result of these steps.

Most physicians have tried to serve their patients well. The healthcare system is dysfunctional. Both patients and physicians have been abused. When a person is sick they want the best care. The dysfunction and new government regulation will destroy medical care rather than improve medical care in America.

Physician Comment

“The majority of our brethren are clueless. They are being let like calves to slaughter.”

Physician Comment

“I can’t wait until the 40 million uninsured start showing up in the ER (Emergency Room) after ins
urance reform, when they can’t get in to see their PCP(Primary Care Physician). It’s going to get ugly.”

Ultimately, this strain will re-unite patients and physicians and start to squeeze out the countless interlocutors who created much of the inefficiencies in our healthcare system.  That being said, it will be a tough couple of years for patients, especially senior citizens and those with lower income, as their access to physicians is increasingly jeopardized.

Dr. Palestrant doesn’t think physicians are going to remain victims much longer. The comments on Sermo confirm his observation. Physicians are getting angry and depressed.

“Where organizations and associations have largely failed physicians, the doctor’s drive to stay in business so they can continue to treat their patients will force them to make some hard decision, and gradually allow market forces to accomplish what advocacy never could.”

Physicians want a reasonable income, a good patient physician relationship and freedom to practice without bureaucratic restraints. They also want continuing medical education to improve their practices. They do not want government surveillance.

Physician Comment

Right now I am just devastated by the changes.

The end of consult codes is very devastating for endocrinologists. If I was done paying off my student loans, I would not feel as bad.

That’s my only debt! I have lived so frugally in order to save and invest and be debt free and because I want a great education for my child.

So all of the sacrifices that I have made mean nothing now. I delayed fertility for my profession. Thank God I have a beautiful 2 year old son, but he will be an only son because I recently lost a baby after 3 weeks in the NICU (he was born premature at 28 weeks b/c/o placenta abruption).

I keep thinking that if I had chosen another profession and had children before the age of 35 that may not have been the case.

For my sacrifice, I feel like the envy of the ignorant public fueling the greediness and power hunger of politicians. Politicians are out to destroy our profession, our prestige, our hard work.

As you can see, I am in a very negative state of mind. I’m glad to have read something that has a positive outlook.

The medical profession needs hope. President Barack Obama is not representing that hope.

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

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It Is Time To Reboot

Stanley Feld M.D. ,FACP, MACE

President Obama is trying to make changes in many areas. He is making changes in the healthcare system, the financial system, the system producing energy, the system we use to protect the environment.

During his Presidential campaign he promised us change. He never told us the details of this change. Many people voted for him because they felt we needed change. They were right, America needed to repair its many defective systems.

Sixty years of revising government regulations and government growth plus the cold war and four other wars have created dysfunctional systems in many areas.

Many have complained that the growth of government and its bureaucracy has resulted in so much complexity and expense that government doesn’t work. Some have written books suggesting how to fix government so it works

In formulating a solution to the problems one needs to outline three approaches;

1. A concept of the goal

2. A philosophy to apply to the concept.

3. A mechanism to reach the goal.

I believe President Obama and his administration have the three approaches in mind. Some would disagree with one of the elements of President Obama’s three approaches. Some would not agree with any of the elements.

The scope of my blog is deal with how President Obama is dealing with the Repair of the Healthcare system.

Conceptually, President Obama has the right idea. He wants to provide universal coverage at an affordable cost and increase the quality of care. I do not believe anyone would disagree with the concept.

The disagreement comes with the philosophy and mechanics.

President Obama’s philosophy is mixture of economics and modern socialism. In their pure form both are intellectually compelling. In practice history has proven that neither work as they are theoretically supposed to work. President Obama’s stimulus package has proven it.

 

Keynesian economics advocates a mixed economy—predominantly private sector, but with a large role of government and public sector—and served as the economic model during the latter part of the Great Depression, World War II, and the post-war economic expansion (1945–1973), though it lost some influence following the stagflation of the 1970s. The advent of the global financial crisis in 2007 has caused a resurgence in Keynesian thought. Barack Obama and other world leaders have used Keynesian economics to justify government stimulus programs for their economies.[2]

When combined with modern socialism it distorts Keynesian success even further

Socialism is an economic and political theory based on public ownership or common ownership and cooperative management of the means of production and allocation of resources.

In a socialist economic system, production is carried out by a public association of producers to directly produce use-values (instead of exchange-values), through coordinated planning of investment decisions, distribution of surplus, and the use of the means of production

Contemporary social democrats propose selective nationalization of key national industries in mixed economies, while maintaining private ownership of capital and private business enterprise. They also promote tax-funded welfare programs.

President Obama is in the process of taking over several industries in order to save our economy. Those industries are not stimulating the economy because they are trying to repay the government and take their industries back. This creates more unemployment and worsens the recession. The creation of larger entitlement programs will result in increased taxes further decreasing consumer spending and deepening the unemployment.

The government with large deficits at the beginning of President Obama’s term of office has doubled it in the last year and a half.

 

Friedrich Hayek is a Vienna-born, Nobel Prize-winning economist largely forgotten by mainstream economists. Friedrich Hayek championed four important ideas in the 1930’s and 1940’s. His philosophy was a foil to John Maynard Keynes’ philosophy.

When Federal Reserve Chairman Ben Bernanke zealously expanded the Fed’s balance sheet, he was surely remembering Milton Friedman’s indictment of the Fed’s inaction in the 1930s. On the fiscal side, Keynes was also suddenly in vogue again. The stimulus package was passed with much talk of Keynesian multipliers and boosting aggregate demand.”

 

Hayek ideas in his book "The Road to Serfdom" are being highlighted now that President Obama’s stimulus package has barely dented the unemployment rate and government spending and deficits are soaring.

 

Budget office director Doug Elmendorf warned;

Under all but the rosiest economic scenarios, significant changes in tax or spending policy, or both may be needed to control the long-term debt and avert a crisis.”

“The federal debt will reach 62 percent of the nation’s economic output this year – the highest level since shortly after World War II

 

  1. Hayek believed that the economy was simply too complex for the government to attempt to manage its ups and downs. He argued that economist John Maynard Keynes’s recommendation that government spend money to allay an economic downturn could actually make the downturn worse, as well as lead to an inflation problem later.
  2. Hayek highlighted the government and the Federal Reserve’s role in the business cycle. It should not artificially lower rates that could result in inflating a bubble such as the housing bubble distorting other investment decisions. “Current monetary policy postpones the adjustments needed to heal the housing market.”
  3. Hayek contends, “Political freedom and economic freedom are inextricably intertwined. In a centrally planned economy, the state inevitably infringes on what we do, what we enjoy, and where we live. When the state has the final say on the economy, the political opposition needs the permission of the state to act, speak and write. Economic control becomes political control.”
  4. Even when the state tries to steer only part of the economy in the name of the "public good," the power of the state corrupts those who wield that power.

“Hayek pointed out that powerful bureaucracies don’t attract angels—they attract people who enjoy running the lives of others. They tend to take care of their friends before taking care of others. And they find increasing that power attractive. Crony capitalism shouldn’t be confused with the real thing.”

  1. The fourth timely idea of Hayek’s: “By increasing the size of government, government leaves fewer resources for the rest of us to direct through our own decisions.

President Obama has expanded federal control of health care. He is on his way to making physicians indentured servants.

He would like to do the same with the energy market. The government owns Fannie and Freddie and controls the mortgage market.

The government is in control of GM, Chrysler and many banks. America is headed straight for the fiscal wall. President Obama better make a right turn before it is too late.

Mechanics

The mechanism used to pass the healthcare reform bill is deplorable. President Obama used back room deals in his proclaimed transparent administration. He dropped the public option only to have it slip in by default.

President Obama is not doing anything to repair the healthcare system. He is adding layer upon layer of bureaucracy to the disadvantage of patients and physicians who are the primary stakeholders.

The CBO reevaluated the cost of defensive medicine at $50 billion dollars a year. It is still a long way from the real cost of about $750 billion dollars. President Obama believes the cost is insignificant.

None of President Obama’s healthcare reforms get at the major problems in the healthcare system. America will not be able to afford another entitlement program.

President Obama will not accomplish his goals of universal coverage at an affordable price with increased quality.

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

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President Obama And The Sustainable Growth (SGR) Formula For Medicare Reimbursement

Stanley Feld M.D.,FACP,MACE

President Obama promised the AMA he would fix the defective Medicare Sustainable Growth Rate formula for calculating Medicare reimbursement to physicians. As a result of that promise the AMA supported President Obama’s healthcare reform bill.

The AMA made a big mistake supporting President Obama’s healthcare reform bill. It was as if the AMA did not evaluate the bill’s obvious unintended consequences for both patients and physicians.

The AMA lost support from not only 85% of physicians that are not members of the AMA but also from the 15% of physicians that are members.

The SGR formula makes no sense. Medicare has reduced physician reimbursement to physicians as physicians’ expenses have increased. A 21.2% decrease in reimbursement will result in physicians losing money seeing Medicare patients.

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It is stupid to lose money seeing patients. President Obama’s unintended consequence will be physicians will stop seeing Medicare patients. Physicians cannot make up the loss by increasing the volume of patients seen.

Most physicians are decreasing expenses by installing electronic medical records. The available EMRs are not fully functional. The capital expenditure is too high for most physicians. They cannot afford an electronic medical record even with President Obama’s subsidy.

A New York Times article explains the conventional wisdoms. However, there is little proof that the conventional wisdom is correct.

 

There will likely be no real solution until the American health care system moves away from unfettered fee-for-service payments that encourage doctors to perform unnecessary and costly tests and procedures and pays them instead for better management of a patient’s care over time.”

My interpretation is physicians should get paid a salary by the government as the single party payer.

The media ignores the fact that most physicians do not get paid for the unnecessary and costly procedures.

Hospital systems and national laboratories do the tests and receive the reimbursement. The majority of physicians are single practitioners. Family Physicians and Internists cannot afford the equipment necessary to do testing in office. It is against the law for physicians to bill for testing done outside their office.

Physicians might order multiple tests that could be considered unnecessary by some. They order these tests as part of the defense against malpractice suits. Malpractice reform has been totally ignored by President Obama’s healthcare reform bill.

Until there is significant malpractice reform defensive medicine and the resulting “unnecessary testing” will not disappear. The use of appropriate data can alert the government and the healthcare insurance industry when a physician abuses the system.

The excuse of over testing does not warrant a reduction in reimbursement to Family Physicians and Internists. Doctors cannot afford to see Medicare and Medicaid patients at a loss.

It is obvious that there will be a physician shortage, long waiting periods to see a physician and rationing of care. I will discuss the complexity of the issue in detail shortly.

Family physicians and internists only have time and intellectual property to sell. The Medicare fee schedule recognizes prevention. However, Medicare does not reimburse for prevention, telephone calls or emails. President Obama talks a good game but has done nothing to correct SGR.

The “sustainable growth rate” (SGR) formula was enacted in 1997. Policy wonks concluded it was a way to restrain Medicare spending. I do not think the Policy wonks intended the consequences. The SGR set annual limits for the total amount of money to be paid in the traditional Medicare program. It also included allowances for inflation in the cost of operating a medical practice, for growth in the elderly population, and even a little extra money to pay for increases in the volume and complexity of services performed. It sounded reasonable.

The blue represents physicians’ increased in billings. The red represent application of the SGR formula. In 2007- 2009 Congress waived application of the SGR.

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The fatal flaw in the formula was that it had no way to limit the array of services doctors provided or distinguish between valuable and needless treatments.”

“If doctors in the aggregate billings drove Medicare expenditures above the limit set by SGR, the SGR formula called for fees in the following year to be reduced.”

That aggregate punishment was not enough to persuade individual doctors to change behavior.”

Off course it would not change behavior. The threat of a malpractice trumps a punitive monetary penalty. It is not wise to create a punitive environment for any workers. It encourages bad behavior. Why can’t the government find the specific individuals it claims abuse the system and deal with them? The SGR is defective and needs changing. It needs to be changed along with the rules in the malpractice system.

Congress has waived the SGR formula since 2007 after physicians screamed for help. Congress did not suspend the proposed cuts. The accumulation of the yearly suspended cuts resulted in the 21.2% reduction in reimbursement this year.

I said physicians would stop seeing Medicare patients at a loss. This would hurt seniors’ access to medical care.

President Obama ignored the call for help until June 12th. He has had one and one half years to proclaim his support for eliminating the faulty SGR formula. He used the 21.2% reduction to calculate the deficit reduction effect of his healthcare reform bill.

Republicans are screaming that President Obama is spending money like a drunken sailor. Republicans decided to put their foot down. SGR was the wrong issue to put their foot down on. President Obama placed the blame on the Republicans in his weekly radio address.

 

 

This year, a majority of Congress is willing to prevent a pay cut of 21% — a pay cut that would undoubtedly force some doctors to stop seeing Medicare patients altogether. But this time, some Senate Republicans may even block a vote on this issue. After years of voting to defer these cuts, the other party is now willing to walk away from the needs of our doctors and our seniors.”

President Obama knew Democrats did not have the votes to eliminate the SGR formula when President Obama made his grandstanding radio announcement. The suspension of SGR failed to pass. Physicians are now going to see a 21.2% reduction in Medicare
reimbursement. The AMA’s deal with President Obama did not work. It was never going to work.

The American public should be getting tired of President Obama’s games. Barney Frank and John Kerry summed up the strategy that had been developed by the Democrats long ago. No one listened. Listen again.

Now President Obama doesn’t need congressional approval to get a single party payer system. He will do it by administrative regulation.

I do not think President Obama has thought out the unintended consequences. The burden to the American public will be huge .

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

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“If You Like Your Insurance You Can Keep It. Period!” President Barack Obama

Stanley Feld M.D.,FACP,MACE

Here we go again. On Friday June 11, 2010 at 4.30 pm internal administration documents were leaked. The documents reveal that up to 51% of employers may have to relinquish their current health care coverage because of ObamaCare. President Obama promised us that if we like our insurance we can keep. (See 3.46 minutes of the following You Tube.}

This is getting to be a habit with this administration.

Late in the afternoon on Fridays is a convenient time to leak information. No one will notice the information. The leaks’ impact will be old news by Monday morning.

The administration claims it did not know how it leaked. It is only a draft of the regulations created by Kathleen Sebalius Secretary of HHS. President Obama’s healthcare bill gives her the authority to write the regulations.

“The "midrange estimate is that 66% of small employer plans and 45% of large employer plans will relinquish their grandfathered status by the end of 2013," according to the document.

In the worst-case scenario, 69% of employers — 80% of smaller firms — would lose that status, exposing them to far more provisions under the new health law.”

The report was part of a joint project of the Departments of Health and Human Services, Labor and the IRS. The final report will be 118 pages. The report examined the effects ObamaCare’s regulations will have on existing, or "grandfathered," employer-based health care plans.

President Obama pledged it would have no effect on the healthcare insurance you have now. He did not say anything about modifications to present plans.

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This is another trick play by President Obama. The Republicans have been caught flatfooted once again. The healthcare reform bill allows President Obama and the Secretary of Health and Human Services to interpret broad provisions in the bill any way they want.

The President has said that a single party payer system works in other countries. It can work in America. His goal is to work his way toward a single party payer.

People have accused President Obama of wanting to eliminate private insurance. He said “we can keep our insurance if we like our present insurance.”

It turns out with these new regulations that we cannot keep our healthcare insurance plan if our employers modify the provisions in our plan. Americans will be forced to buy healthcare insurance from President Obama’s health insurance exchanges.

The health insurance exchange is supposed to provide affordable healthcare insurance. The healthcare insurance will be purchased with after-tax dollars.

The problem is cost controls will be regulated by the government. The program will fail to control costs just it has failed to control cost and improve service in Massachusetts.

President Obama has also said if something does not work we will adjust the system. Here comes the Public Option. However, the government and the states cannot afford to pay for healthcare insurance.

What are the conditions that eliminate your retaining your present healthcare insurance?

* The plan eliminates benefits related to diagnosis or treatment of a particular condition.

* The plan increases the percentage of a cost-sharing requirement (such as co-insurance) above the level at which it was on March 23, 2010.

* The plan increases the fixed amount of cost sharing such as deductibles or out-of-pocket limits by a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points.

* The plan increases co-payments as a total percentage measured from March 23, 2010, that is more than the sum of medical inflation plus 15 percentage points or medical inflation plus $5.

* The employer’s share of the premium decreases more than 5 percentage points below what the share was on March 23, 2010.

The regulations are a done deal. Employers modify healthcare insurance plans every year. It is cheaper to pay a $2,000 per employee penalty than $15,000 a year per employee healthcare insurance premium.

A White House official said, “This is a draft document, and we will be releasing the final regulation when it is complete. The president made a promise to the American people that if they liked their health care plan, they can keep it. The regulation, when finalized, will uphold that promise."

Jonathan Alter in his book “The Promise” which is about President Obama’s first year in office quotes him on healthcare. “President Obama said to a group of Single Party Payer advocates that “they had to deal with the world as it is and not wanted it to be.”

President Obama is dealing with the world as he is working his way toward how he wants it to be. A government controlled world.

The next step is a single party payer.

Consumers will not have freedom of choice or free access to care.

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

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