Stanley Feld M.D.,FACP,MACE

I thank my son Brad for writing about my post “Electronic Health Record Part 2”
in “Feld Thoughts.” I was pleased with the many comments that we both received. There are many smart people out there.

I think the difficulty in developing an EHR has been overstated. Most of the software pieces of the ideal electronic health record are currently available.

Few developers have asked the physicians what they need. Fewer developers understand why they encounter such massive physician resistance. Those who have tried to understand the resistance can not get a straight answer.

The reason is many physicians do not know what they need. They have little experience thinking about relational databases. They have difficulty understanding the potential to the increased efficiency of their daily workflow (effective relational databases) in the practice of clinical medicine. Most of the effective information technology in clinical practice has been in financial medical management. Financial outcomes have not been linked to medical practice outcomes in an understandable way.

EMR developers also have had difficulty getting the physician to sit down and listen to them. Physicians are very suspicious of data collection devices. Most of their experience has been with data collection that has been used against them by the facilitator stakeholders (the government, the insurance industry, and the hospitals) to penalize them or reduce fees.

I believe all the pieces of an ideal EHR are now. However, most of the pieces are stand alone silos and are not interconnected. The physician is offered an expensive and unaffordable product that seems to offer little added value to his practice except to eliminate paper. The value to the practice is not translated properly nor could they afford it if it was.

Brad Feld (my son) and my brother Charlie Feld have taught me a lot about information technology and relational databases. We have had many discussions about relational databases. I have studied its potential value to physician practices. In my opinion, few companies understand how the physician thinks and what his needs are. They do not know how to teach the physician to understand the value of an EHR to his practice.

I think the reason is that software developers are oriented toward the hospital as their customer and not the physician. Hospitals have money to spend on capital improvements. Physicians do not want to spend large amounts of money on anything, especially something that they perceive will add little value to their practice. In fact, the EMR might hurt their practice. They hear many horror stories from peers about worthless EMRs. Most effective EHRs are out of the price reach for the average physician or small physician groups. Physicians have heard and seen big organizations like Kaiser Foundation get fooled out of hundreds of millions of dollars. Many have had the same experience in their own hospital.

An Ideal Electronic Health Record can, I believe, be easily synthesized from the current technology in use by other businesses.

The EHR should be leased to the physician and the practice to make it affordable. The EHR should be sold at a penny a the click just as Mastercard’s system is sold to small businesses. The data can be stored on site or off site or both with stout privacy firewalls around each practice.

Many businesses rely on relational databases. Two simple examples are Amazon.com
and Netflix. Amazon tells me what books I would enjoy and Netflix tells me which movies I should order from my order history.

The airlines let me schedule a flight online. Southwest has my online ticket buying reduced to three clicks.

Wal-Mart buys store inventory based on sales. It automatically sets up delivery routes and schedules of thousands of products delivered to thousands of stores based on velocity of individual product sales.

Frito Lay builds potato chips and buys potato futures on the basis of historical experience and timely conditions such as social unrest or sporting events on television. If volume of sales drops in a city, Frito Lay automatically puts the potato chips on sale in that city.

E-trade, Schwab and others make trades online and adjudicate sales at the point of trade. I remember the days when stock prices were caulked up on a blackboard.

Almost every merchant uses Mastercard, Visa or American Express. They settle the price of purchases immediately. Mastercard even questions a charge that is too frequent. I was at a gas station and the pump was acting funny. I stopped pumping gas from that pump and reentered my credit card in another gas station. I was denied access. I also got an instant call from Mastercard asking me if I lost my card. The software picked up an unusual event in the use of the card.

Stores, restaurants and gasoline stations do not have a universal software system. They interface their different software systems with First Data’s system. First Data has been able to flatten out many interfaces so that there is universal processing at First Data’s end.

The banking industry has adopted online banking. I thought the personal banking would the last to adopt. The software company selling to the banking industry has made the interface easy for the personal banking customer. The pain of reconciling the bank statements is gone forever. Customer service encounters are down. Everyone seems happy. The banks net profits have increased and expenses have decreased because labor intensive tasks have decreased. The individual banking institutions do not own the software. They lease the software. They also pay by the click. The software people upgrade and maintain the software with all the appropriate backups and firewalls.

The same can be done with appropriate data based driven legacy medical information systems. However, many of the legacy medical clinics EMRs are not worth much. They are word processing systems and not data processing systems. Those systems will manage to get the paper out of charts and off the shelves. However, you can not learn anything from them to improve a clinical practice.

Most practice management systems have relational data base capability. You can figure out a percentage of Medicare population in the practice. You can also get the names of all the males over 55 years old with diabetes mellitus, impotence, and hypertension.
The EHR I am talking about is the next step. What have we, as physician, done to improve patient care? What has the medical outcome been? What is the price in medical services for the medical outcome? Are there any suggestions available using evidence based medicine for the physician to improve his outcome?

Remember, 80% of the cost of medical care is spent on the complications of chronic disease. How can we learn from the patients record how to reduce these complications without the threat of penalty to the physician.

What have I taught the patient? How much of what I taught him did he learn?
What is his adherence to prescribed medication?

How could a physician measure adherence to prescription with an EHR? The entire informational technology infrastructure is available. It can be automated. It is waiting for an entrepreneur to put it all together. When I give six months prescription, the patient only gets a thirty day supply from the pharmacy. This is a little scam the CVS’s of the world in conjunction with the insurance company exercise. Why? If your co-pay is $10 for a generic drug, CVS might charge a total price of $14. You paid $10 and your insurance company pays $4. For a six month supply your insurance company would pay $24 and you would pay $60. If they gave you the six month supply of medication I ordered you would pay a co-pay of $10 and the insurance company would pay $74. I would say that is a pretty neat drug benefit for the insurance company.

If I, as the prescribing physician, demanded that the CVSs of the world notify me by email each time the prescription is refilled, each notification could go directly into the patients EMR. On the patient’s next visit, I would know whether the patient refilled his medications appropriately. Patients have told me they refilled the medication when in fact the pharmacy had not seen the patient in the previous 4 months.

As an example such a patient would not be able to properly control his blood pressure. Uncontrolled blood pressure can lead to stroke or heart attack. Both are a complication of the underlying vascular disease that causes hypertension. Appropriate control of the blood pressure can reduce the possibility of stroke or heart attack by 50%.

Simply understanding and controlling compliance can save lives and reduce the cost of medical care. Can this process be automated with present day technology? Of course it can. It could help us be better physicians and give better service to our patients without it affecting our daily workflow.

I do not think it should take forever to have a universal web based EHR. It can be as rapid as CD’s replaced vinyl records. It takes an understanding of the physicians mentality, the physicians needs and the physician workflow. I will present many concrete examples of quality care improvement across all five parts of the EHR in the future.

Stanley Feld M.D.,FACP,MACE

An effective Electronic Health Record must consist of five components

Electronic Medical Records
Personal health records (PHR)
Continuity of Care Record (CCR)
Electronic health record (EHR)
Financial Management Record

In order to have a fully functional Electronic Health Record, all of the components of the EHR have to be integrated and in a relational data base format. This is the only way we are going to be able to determine if certain approaches to disease management in a clinical practice setting have positive medical outcomes and positive financial outcomes (reduce the cost of care for chronic disease).

The interoperability of all components of the EHR is the key to a successful EHR
In the United States, the development of standards for EHR interoperability is at the forefront of the national health care agenda. I believe without interoperable EHRs, practicing physicians, pharmacies and hospitals cannot share patient information properly. Without an interoperable EHR we can not evaluate medical outcomes and financial outcomes effectively. Therefore, interoperability is essential if the EHR is going to help reduce the cost of care.

I explained how you can create your own instant Personal Health Record last month. I believe it is important that we, as patients, assume this responsibility now. We need to start getting our physicians used to our needs.

Every examination and every test done on you by your physician or a physician you are referred to belong to you. You or your insurance company paid for the test or the examination. You paid the physician to interpret the test. The test results should be in your possession. You could move to another city, change physicians, your physician could retire, or close his practice. If so, an important piece of your medical data could be lost forever. It should be your responsibility to maintain your data base.

Ideally, if your physician had an EMR he could electronically transfer your test result data and his interpretation to your PMR. He then has a copy and you have a copy. Both copies could be web based and well encrypted for privacy.

The Continuity of Care (CCR) part of the EHR should also be interconnected with both the EMR and PMR. The CCR should be the core data set of the patients disease record. In should contain a summary of the patient’s medical problems, treatment, medications, response to medications, and issues of care(compliance, adverse reaction to medications and treatment).

The CCR is the perfect place for the interactive section of the medical record. It can be used to teach the patients how become a “Professor of their Chronic Disease.”

If we think about Diabetes Mellitus as the chronic disease in point, the CCR should become a customized Diabetic Education Center. A newly diagnosed diabetic should have formal teaching about Diabetes in a Diabetes Education Center. After those initial encounters, depending on the patient’s learning skills, modules can be customized online by the physician to improve that patient’s skills in self-management. (See AACE guideline for Intensive Self Management of Diabetes Mellitus: A System of Intensive Diabetes Self Management. Obviously, this effort should not be uncompensated or undercompensated as it is presently. With an MSA the patient would be making the decision and not the insurance company who is interested in paying as little short term money as possible despite the long term benefit.

The continuing education piece of the CCR could feed back information interactively to both the physician and patient on the course of the chronic disease. It could continually monitor the patient’s response to treatment and changes in the self-management of the illness. The CCR could be customized with suggestions for the patient on how to improve self-management of the chronic disease to increase the quality of care and decrease the complication rate. Tim Wolters of Collective Intellect is trying to figure this out.

The immediate response of physicians is that such a system would cost too much. They also think integrated systems like this could never become universal in our chaotic healthcare system.

I think it could become universal with the proper visionary intervention and leadership. Rather than selling a complete software system to physicians, a clever software company would simply have the complete EHR in a web based format on the internet. Instead of charging the physician fifty (50) to eighty (80) thousand dollars per physician, the physician and the patient would pay to use the system by the click. The physician would not bear the burden of the initial capital expenditure and ongoing support costs of the EHR. He would have the ideal EHR with free upgrades.

Patients would not feel a burden of cost to access their record either because they would be billed by the click. The advantage would be an integrated communication system. The system would have the advantage of being data formatted, interconnected and relational with medical and financial outcomes.

PMR and EMR must be synchronized to other components of the EHR. A vital connection would be with the Financial Management Record. There is no reason in a price transparent, consumer driven healthcare system where the consumers own their healthcare dollar that the consumer can not make the instant decision about the charges. The insurance claim is generated at point of service and integrated with the service. The patient makes the decision to pay the bill by credit card, just as the consumer does in during a typical store purchase. The bill is adjudicated instantly by credit card and deducted from the patient’s Medical Saving Trust Account.

The physician’s office has saved the expense of filing a claim, waiting for the claim to get adjudicated and then receiving payment three months later. The new electronic system (EHR) eliminates the $150 billon dollars of administrative waste in the healthcare system.

Why hasn’t someone in the insurance industry thought of this? Maybe they make too much money from being inefficient and having administrative waste.
Paul Krugman (New York Times February 16,2007) says it beautifully in the article entitled “ The Health Care Racket”

I have pointed out previously why hospitals do not want to change the faulty DRG system. It could be Insurance companies do not want to eliminate administrative waste because they and their subsidiaries’ profit from this waste.

Physicians who bought ineffective EMR’s might not want to put them aside for an effective system However, a powerful incentive could be instant adjudication of payment of claims by the patient.
It is going to take leadership and innovation plus the demand from the people, to create a much need paradigm shift from the way the healthcare system does business presently.

Stanley Feld M.D.,FACP,MACE

The $2.1 billion is at the low end of a 1000 bed hospital’s total revenue. Bed fees are even higher than the $12,000/day average for cardiac patients with complications. This is called DRG creep. The hospitals have also managed to get the patients out of the hospital under the DRG cap. If not, they seem to find a way to extend the DRG cap. The cap means that certain illnesses are paid a flat fee and given number of hospital days. Let us say a DRG for an illness payment is $24,000 ($6,000/day for 4 day hospital stay). If the patient is in the hospital for six days the hospital gets the same $24,000. If the patient is in for three days they get $24,000. You can see why the hospital’s motto is get them out fast.

We are unable to know the hospital’s actual overhead. If we did, we could to find out what the hospital’s actual costs are. We could then calculate the hospital’s profit. These numbers are totally opaque.

Most hospitals are non profit hospitals. They can not post a profit at the end of the year? Therefore, they have to pour the extra money into something. Executive salaries and capital expenditures are a prime avenue for getting rid of their profit. A key question is how is the hospital’s overhead calculated? Maybe reducing costs to the consumer would be a good idea?
If a hospital makes capital expenditures with the capital they have to spend each year they receive added cash incentives. If a hospital has a house staff or nursing school there is sizable bonus received from Medicare for the professional training programs.

I received this comment from a knowledgeable follower of my blog

“Stan

Richard Dickey M.D. ,FACE”

If you would suddenly became ill and have to go to an emergency room, because you need help immediately, you can not shop for a hospital on the internet. You are stuck. Shouldn’t there be some rules that reflect the cost and value of the hospital service? If your life is saved, the fee charged is priceless if you had some way of paying for it.

The solution is not price controls or a single party payer. The solution is price transparency, and the creation of a price competitive environment among hospitals.

President Bush’s approval rating is at an all time low because of the Iraq war. However, his medical advisors understand the healthcare systems problems. He has called for price transparency. Congress, under the influence of vested interests, stopped him. He called for DRG reform on the basis of hospitals’ cost and not charges. Again congressional outcry influenced by vested interest stopped the process. I have a feeling Mark McClellan M.D., Director of CMS, quit because of the delay in DRG reform.

President Bush has been able to get through some insurance reform. The deductible limit on a Health Savings Accounts have been raised for an individual is now $5250 and 10,500 for a family. However, the HSAs are constructed in favor of the insurance industry and not the patient. They still do not have a community rating system in place. The insurance industry fought with 4 years of lobbying to stop a Medical Saving Account in favor of the patient.

This year President Bush proposed tax deduction of up to $15,000 per family to by insurance. Yesterday he told hospitals not to press their luck about prices and charges.

I know the President and his people know all the issues necessary for true reform and the repair of the healthcare system. They simply can not accomplish true reform piecemeal. The piecemeal approach to the entire needs for effective healthcare reform to occur is inot understandable to the goal of reform to the public, media or congress. Piecemeal reform will also get distorted by the vested interests (facilitator stakeholders) during the legislative delays.

Medicare has not hesitated to reduce physician fees. They will be reduced 5% again this year. Medicare is presently regulating the price it is paying the physicians. The government’s tactic seems to be to beat up the guy you can beat up the easiest.

Congressman Pete Stark has said all physicians game the system. They have to be stopped. Congressman Stark’s view is far from correct. However, if you instinctively know you have a product or service that is needed, and other stakeholders are taking undo advantage of a dysfunctional system, some feel they might as well try to get their share.

However, when Mark McCellan M.D. discovered that 90% of the healthcare dollar was spent on the complications of chronic disease. His goal was to improve chronic disease management to reduce complications.

The government declared in the Federal Register it was going to reduce the payment for Bone Mineral Density by 70% over the next four years. The medical profession made a feeble attempt to stop the reduction. A Bone Mineral Density can diagnose early osteoporosis. Early treatment can prevent future osteoporotic fractures.

When the government tried to change the DRG system to reflect the actual hospital cost of service as opposed to charges, Congressman came out the woodwork to delay and stop the process.

How come? The political system has nothing to do with common sense and logic. It is driven by the most effective vested interests.

Who should have the most important vested interests? We are supposed to have a government run by the people for the people and not the best lobbying group. People need to step up and speak out!! Eventually, the wisdom of the democratic process and the peoples’ interest will prevail. We do not have the time to wait. We must speak up now!

Stanley Feld M.D.,FACP,MACE

Val Jones M.D. Senior Medical Director of Revolution Health in her Voice of Reason Blog post entitled “Hospital Adminstrators’ Salaries Draining The System” was more vitriolic than I was about Paul Levy’s defense of his one million dollar plus Hospital administrator CEO salary.

In her post she said
“Well, this conversation from the blogosphere gets my blood boiling, I can tell you! In a recent blog post about the ugly under belly of hospitals, I discussed how administrator salaries decrease hospital resources. Dr. Stanley Feld’s excellent blog post digs even deeper:”

In her post “Why Hospitals Are So Ugly” she said, “So one day I called the chair of the department of interior design at Parsons School of Design and asked whether she might send her students to my hospital to consider how to improve our situation.”
“I found out much later that our acting CEO was making about ½ million dollars per year in salary at the time. All the while the poor patients had to recover in a grim void of sensory stimulation.
Several months later the Parsons students made a presentation to our hospital’s executive team, and this was met with great enthusiasm. We all thought that we were on the verge of an exciting breakthrough for patient wellness. But alas, in the end not a single design suggestion was implemented as our administrators told us that there was no money available for environmental improvements.”
There is ugliness in hospitals – and it runs deeper than the white walls. As with many sectors, money is the deciding factor regarding whether or not something gets done. I think that hospitals should take a hard look at their white walls, and the white linings of their executive pockets and ask themselves whom they were built to serve.”

Many physicians have experienced false hope and false promises from hospital administrators. Val Jones M.D. hit the nail on the head. It is all about money! A big part of the healthcare system’s dysfunction “runs deeper than the white walls” in the hospitals. The healthcare system’s dysfunction originates in the board room of administrative meetings, the synergism of hospitals with the insurance industry(see Dr. David Westbrock’s comment at the bottom of the link)
and a faulty DRG system.

A faulty DRG system that hospital administrators have learned to exploit over the past 23 years.
The patients are simply pawns in the money game. Paul Levy gets an incentive bonus on revenue generated from this faulty system. There are many ways to optimize DRG payments from private insurance, Medicare and Mediciad. All you have to do is hire the right consultant to teach you how to do it.

The loser is the patient. The biggest losers is the patient without health insurance because he is responsible for the retail price and society as a whole.

DRG payments for Massachusetts are totally opaque. The only state I could find that publishes DRG charges was Wisconsin. It is fascinating to explore the hospital charges for various illnesses. I picked a hospital in Milwaukee and choose coronary angiography and cardiac bypass surgery as examples of charges. The report also presents payments from the insurance industry, Medicare and Medicaid. These charges are hospital charges and do not reflect hospital costs.

It is true sticker shock. It is an explicit examples of how hospitals charge and what they get paid. The hospitals collect 71% from private insurance, 39% from Medicare and 27% from Medicaid. I was told in a personal communication that a hospital can make a very nice profit with Medicaid payment for Obstetrical care service if efficient care us delivered. A bed generating $12,000 a day on average, is not a bad business.

The hospital charges for sub-specialty procedures are even more. Disease complications (risk weighting) increases charges further.

Let us assume at the low end the average payment is $6,000 a day per bed according to the Wisconsin DRG price information. The bed revenue in 365 days is $2,190,000 per year. A 1,000 bed hospital would generate revenue of $2,190,000,000 (2.19 billion dollars) a year. What is the hospital’s real overhead? Just try to find out! Have you ever wondered how almost every hospital in the country can afford to expand? Does Paul Levy deserve a performance bonus? How much are other secondary administrators earning? What kind of incentive bonuses are they getting? How does that add value to the patient-physician relationship? We have a big problem!

I will discuss one piece of the solution next time.

.

Stanley Feld M.D.,FACP,MACE

Paul Levy CEO of Beth Israel Hospital writes a blog called” Running a Hospital”. He has tried to justify his salary after the Boston Globe published his salary of over 1 million dollars per year.

Mr. Levy’s statement is a worthwhile read. He is justifying his salary on the basis of revenue generated, and donations received. He is also comparing his job to the jobs of CEOs of large corporations that make more than he does. His justification a well articulated as are most of the comments both positive and negative.

It is bizarre to me to read this kind of thinking at a time when most agree the healthcare system is broken.

Some feel it is about to implode. Paul Levy has figured out how to have his institution survive in a broken healthcare system. I cannot understand how he would have the guts to brag about how much he is worth rather than do something to help fix the broken system. He could hire more nurses. He could provide preventative management care to the community to decrease the incidence of the complications of chronic disease.

Remember, the complications of chronic disease cost the healthcare system 80% of the healthcare dollars spent. Effective disease management using evidence based medicine can decrease the complication rate by at least 50%. The net savings to the healthcare system would be 40% or more.

What about the patients who can not afford insurance? What about the opacity of hospital prices charged for services? Remember Denise’s letter to Kinky Friedman and her problem with hospital pricing? What about the overcharging of hospitals through a faulty DRG system? What about the constant shortage of nurses because of low salaries?

What about the continuing decreases in payments to physicians by Medicare and the insurance industry?

Linda Halderman M.D. wrote an essay entitled “How Much is Your Doctor Worth?”. It is also worth reading. The subtitle should be, “How Much is Your Doctor paid?” The answer after the long essay is $59.50 for this complicated office visit. Dr. Halderman would only have to see 168,067 patients in one year or 744 patients a day to generate a gross revenue of $1,000,000 before expenses.

What is more valuable to the healthcare system? A CEO’s salary based on revenue generated incentives and fund raising or good quality medical care?

Family Practitioners and Internists are struggling to survive.

Some have experienced that their overhead is greater than their revenue. Some have had to hold two jobs. The American College of Physicians published a White Paper declaring that the specialty of Internal Medicine is in grave danger. Patients cannot afford their medication. If they do not take their medication they will accumulate more and more complications of chronic diseases. Complications of chronic disease are good for the hospitals’ bottom line. This should result in more revenue for Paul Levy’s hospital. By his reasoning he will be entitled to a greater performance bonus at the end of the year.

Dr. Donald Seldin, the legendary Chief of Internal Medicine at University of Texas, Southwestern Medical School imbedded in our brains, when we were residents of Internal Medicine, that the practice of medicine is a princely profession. We, as physicians, have the privilege of caring for the sick. Hospital administrators, as facilitator stakeholders, should feel the same obligation. They have an obligation to the community to make medical care available and affordable. The mission should not be to enhance the hospitals’ bottom line in order to increase the performance bonus of the CEO.

Remember hospitals such as Beth Israel Hospital in Boston are tax exempt community hospitals because they have this community obligation. These tax subsides and others tax subsides are opaque to the public. However, the public pays for these subsides. They contribute to the hospitals bottom line and Mr. Levy’s bonus.

Kevin,MD Medical webblog (A wonderful medical blog) picked up Paul Levy’s blog. Mary Lu, a fellow hospital administrator, commented in Kevin’s blog a sentiment expressed many people.

“Kevin, this guy gets the brass ones award for being so forthcoming– It will be interesting to follow how this affects his perception of himself. As a fellow administrator, who is paid a hell of a lot less, I can only wonder what in the hell possessed him to write this. But… it’s going to be interesting!
# posted by Mary Lu : 6:11 AM”

I think you can start seeing what medical care system, the healthcare system, and the American public is up against. Single party payer will simply result in more abuse to healthcare delivery. l

The solution would be easy if we can force the political system to respond with common sense. The logical response does not happen often in our political system.

Patients have to take charge of the system now!! The patients must control their healthcare dollar with the Ideal Medical Saving Account System. I believe this is the only way we can set up a price competitive system.

The politicians will not do it on their own. The political system can do it with pressure from you, the people, on your State Governments.

We have a lot of work to do. First, we must understand the issues.

Stanley Feld M.D., FACP, MACE

The solution should be pretty clear to all following my blog. I advocate the American way! I believe a consumer market driven system with government making rules for the benefit of all members of the society. When one stakeholder takes advantage of another stakeholder to the harm of the other stakeholder the government has to intercede.

Richard Swersey Columbia College Class of 1959 has a college degree in the ability to think! He also has a post graduate mining degree and masters of business administration. He wrote “You referenced Adam Smith in your blog on dirty coal plants. People need to be reminded that: (1) there is a large section of “Wealth of Nations” entitled “The Role of the Sovereign”. Even Adam Smith recognized that the market can’t do everything; and (2) there has never been a time in recorded history where commerce (or markets, or industry) was totally free of government intervention.”

I made the same point in the blog on the TXU proposed dirty coal plants. Adam Smith’s treatise also applies to the healthcare system. The function of government is to promote civility (civil right) for the benefit of all and not to build bureaucracies that can not possibly work effectively.

Dick is absolutely correct. The function of government in a democracy should be to function for the people by the people. The operative words are for the people and not to the disadvantage of the people.

Entrepreneurship and obtaining a competitive advantage is the engine that drives innovation in America. Our problem in medicine right now is some the facilitator stakeholders have large vested interests they need to protect. They are very busy protecting their vested interest by various political means. Unfortunately government is not acting for the benefit of the people. The advantaged stakeholders are so short sighted that they can not see that the system they are protecting is falling apart right in front of their eyes. In fact, it is about to blow up. We, the primary stakeholders (patients and physicians) can not see what does not hurt us. We are waiting for the Katrina effect. The mentality of what we can not see can not hurt us has to stop. We have to act know and demand change.

In my view price transparency and the consumer (patient) being in control of their own healthcare dollar can go a long way to transform medical services into a competitive market place.
Some of the insurance companies are talking a good game. Aetna has feigned price transparency in Cincinnati. They published only the price of the top thirty procedures for customers that bought HSAs. This is good start but never expanded to my knowledge. I called this blog Another Smoke Screen.

Wal-Mart made an innovative advance with its generic drug initiative. They are charging $4 for a thirty day supply of generic drugs. They have 340 drugs in the formulary. Physicians feel comfortable using some generic drugs. They also want to help their patients. Patients can also demand generic drugs. Most physicians will use generic drugs if there is not a clear cut difference between the generic and brand name medication.

Wal-Mart can not keep the drugs in stock. They also can not keep people out of the store. Wal-Mart is not losing money on the drugs either. The result will be an increase in net profit to Wal-Mart and a consumer driven market benefit for the patient. It will also force brand name drugs to come down in price. Wal-Mat’s initiative will created a clear market driven economy for buying drugs.

Who needs Medicare Part D and its $10 co pay along with its ominous $2200 doughnut? Wal-Mart is also setting up competitive price wars among CVS, Walgreens Rite Aid. Wal-Mart has good chance of winning because it has the mentality to engage in these kinds of innovative programs. The CVSs will get there as it works its way through their hierarchical bureaucracy. The end result will probably be too little too late for CVS.

The most of the uninsured who could buy insurance have had no choice but to not buy insurance.
They have chosen take their chances. When they get sick someone has to pay or not get paid. This is the point. It gets painful and costly for all the stakeholders. The Canadian model of Universal Health Care with a single party payer does not work. The costs rise, access to care is restricted and patients die.

The main question is how do we fix the problems. We have to exercise some common sense. We need to be equitable. The vested interest empires (facilitator stakeholders) have to start to understand that our most precious possession is our health and not their profit. A healthy nation is a strong the nation. They have to stop fight the Repair of the Healthcare System.

Price transparency, reform DRG on cost and not charges are very important. We must stop the bonus to hospitals or insurance companies for supposed cost overruns at the end of the year. We must provide incentive for disease management training to all patients with chronic disease. We must make the patient responsible for their healthcare and healthcare dollar in a price transparent environment. We must motivate the patient to care for their chronic disease by rewarding prevention of complications of disease.

We must eliminate hospital and insurance company administrative waste. We must neutralize defensive medical practice by malpractice reform. We must revolutionize the adjudication of claims system to a system of instant payment.

We must provide and institute an EHR universally that can measure outcomes. The outcomes we must measure are the medical outcomes. The medical outcomes must be relational to the financial outcomes and patient and physician input as to the value of the outcome.

We need to start getting serious about all of these issues in unison. We have to concentrate on the cost of complications of chronic disease. We must create financial incentives for preventative services. We have to teach the patient the “Professor of their Chronic Disease”.
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2006/06/do_complication.html

We must motivate the patients to be responsible for their chronic care. If they are not they will have a financial loss as well as a medical loss. We must put the patients in control of their healthcare dollar. I believe if we did all of this our healthcare system would not be in trouble. All of this can be accomplished with the Ideal Medical Savings Account. The structure of the current HSA system will not accomplish all of these key initiatives

If the government wanted to subsidize something it would be the purchase of the ideal medical savings accounts for all the uninsured who could not afford to buy insurance. This would eliminate all the waste in Medicaid. The concept of universal healthcare with the government as a single party payer is a sham because it does not address any of these important initiatives.

Stanley Feld M.D.,FACP,MACE

President Bush made a weak proposal to reform the healthcare system in his State of the Union address. When his administration tried to reform the over inflated DRG system from hospital charges to hospital cost the lobbying groups force the administration to back off. Price transparency is another area the administration tried to get support. This too was not acted upon. The knee jerk reaction from his tax credit proposal resulted in the following cascade of response.

The three most prominent Democratic presidential candidates all have declared their intention to move the country toward universal health-care coverage.

The government can not presently deal with Medicare and cost overruns how are they going to deal with the cost overrun inevitable with Universal Health Care. Anyone ever think about what the words universal healthcare means in a free and affluent society? What form does it take? How is it funded? What does it mean?

Sen. Barack Obama (D-Ill.) committed on Thursday to providing health-care coverage for every American within six years.

”I am absolutely determined that by the end of the first term of the next president, we should have universal health care in this country. There’s no reason we shouldn’t have that,” Obama said in a speech to Families USA, a liberal health advocacy group.”

The meaningless sound bite “universal healthcare” is going to be a big issue in next Presidential campaign. I sense neither the politicians or the public knows what the term means or what the consequences will be to the healthcare system.

“Former Sen. John Edwards of North Carolina declared in announcing his presidential campaign in December that he would back universal health care, even if it required expanding the federal budget deficit.”

“And Sen. Hillary Rodham Clinton (D-N.Y.), who as first lady spearheaded the Clinton administration’s ill-fated plan, also has made health-care coverage for all a central theme—highlighting her commitment by appearing at a community health-care center last weekend, the day after announcing she was forming an exploratory committee.”

Has anyone asked practicing physician and patients what their needs are to make the healthcare system effective, functional and efficient? Not yet! I also do not expect it to happen anytime soon.

”One of the goals that I will be presenting . . . is health insurance for every child and universal health care for every American,” Clinton said on Sunday. “That’s a very major part of my campaign.”

This is a good sound bite in “our sound bite society”. However, it is a meaningless statement.
“We expect that it’s going to play a bigger role than it ever did,” said the Democratic adviser, who declined to be otherwise identified.

Republican Governors have jumped in and offered their plans to provide insurance for everyone. . The plans are a good try. The defects in their plans are causing reaction already. No one has addressed the real problems of distorted charges, distorted insurance premiums, and incentives for preventing the complications of chronic disease. No one has addressed the issue of putting the patient in control of their own healthcare dollar in a market that is priced correctly with equality for all.

“Several Republican governors also have recently embraced the goal of health-care coverage for all.

Former Massachusetts Gov. Mitt Romney, who is expected to be a GOP presidential candidate, signed legislation requiring all state residents to get health insurance by July 1 or face a tax penalty, with the state subsidizing insurance for lower-income residents.

The conditions of insurance are being fought over as we speak.

California Republican Gov. Arnold Schwarzenegger kicked off his second term this month with a call to assure health care for all state residents.

The Repair of the Healthcare System is really in the control of the state governments. Those governments issue licenses to practice medicine, insure patients, and open hospitals in their own states. They can set the conditions for these licenses. However, I have only seen conditions set for the benefit of the insurance industry and hospitals, and not for the patients benefit. Only the patient can create a competitive market place that will control prices.

The president, meanwhile, this week offered a health-care plan of his own, (hardly a health plan) aimed at helping more Americans obtain health insurance. Bush spoke Thursday about his proposal at a conference outside Kansas City, Mo.

I agree. When are we going to learn that you can not enforce price controls? When are we going to learn that we can not control behavior or morality unless we have the correct rules and incentives? It sounds good but it does not work. Market forces and competition are the driving forces for reducing waste and inflated prices.

Is anyone listening to what has been proven a thousand times over? It does not sound like it to me.

Butler, who has studied America’s health-care system for 30 years, said he supports universal coverage, but that the current system would require a drastic overhaul and that the “costs would be staggering.” An estimated 47 million Americans have no health insurance.

To adopt a universal plan is “technically enormously difficult,” Aaron said, and would have to take into account that the U.S. has a highly diverse population and a highly diverse health-care system. It would require passage of several pieces of legislation that could take years to get through Congress, he said.

”I am not sure that even a new president and a new Congress can work through those devilish details” in the next presidential term and pass a universal plan, he said. Still, he said, if the supporters of a national plan avoid the mistakes of the Clinton administration, “they’ve got a shot.”

Will any of the above proposed solutions by politicians work?
My answer in no!! If we can not control prices with Medicare, how are we going to control prices with universal health insurance?

Stanley Feld M.D.,FACP,MACE

A few days before President Bush’s state of the Union address David Philips wrote in the Minneapolis-St Paul Star Tribune

Minnesota hospitals: Rising red ink

“The sudden, steep rise in the number of patients who can’t pay their bills is causing budgeting nightmares for hospitals.

It’s led to staff layoffs in some cases, slower hiring in others and scrimping on low-tech supplies, hospital administrators say. What’s more, insurers get charged more to make up for the losses, leading to higher premiums for everyone else.”

It is bad for the hospitals’ bottom line to care for the uninsured and not get paid. The salaries of 1 million plus annually must be paid to hospital administrators.

Thirty million of the 46.7 million uninsured could buy insurance if the price was reasonable. However, they are buying for health insurance with after tax dollars. Their premiums are also high because the uninsured as an individual does not have the negotiating power of big corporate buyers of health insurance. They also do not have other advantages of group insurance. Insurance companies must accept all members of a group even if they have a preexisting illness. Presently, a 50 year old individual male with hypertension and hypercholesterolemia would not be qualified to buy health insurance.

President Bush proposed to level the tax playing field for the uninsured and self employed.. The pre-tax health insurance premiums are essential for any significant reform. However, his proposal is misguided. He has ignored other essential aspects of the disadvantaged uninsured. He has created a monetary advantage to hospitals and the insurance industry. More people will be insured and more money will be made. He has not dealt with fixing the runaway price structure of DRGs for hospitals, price transparency, community rated insurance premiums, or indiviual negotiating power. The consumer is only minimally empowered by his proposal. I am disappointed in the President. I know he knows better.

“The President’s plan would give a $7,500 tax break to individuals and a $15,000 tax break to families who either buy their own health insurance or receive it through their employer.”

Grace-Marie Turner a leading authority on Consumer Driven Health Care has fought hard for this tax reform proposal. It is vital to provide the uninsured and self employed uninsured with the same advantages as the corporate group insurance plans recieve. She was very pleased with President Bush’s proposal. However, I feel the attempt is only one required regulation in a healthcare system that requires all encompassing structural reforms for the advantage of the primary stakeholders.

Grace-Marie Turner: “And isn’t moderating the escalation of health costs the goal? This would help even more.

As I explained in a talk to the American Benefits Council in 2005:
• There would be some relief in sight for employers, giving them and their employees an incentive to bargain for better value.
• Employers would be more likely to stay in the game if the open-ended tax preferences were limited and they could gain a new tool to control costs.
• And the uninsured would benefit from new revenue for tax credits to help them purchase coverage.

We think this is important enough that we actually produced a book about it called Empowering Health Care Consumers through Tax Reform.
A tax cap would be the right thing to do.

Most of the politicians running for office have jumped in with an opinion. It is clear to me we need some thoughtful leadership right now. None of the politicians sound as if they understand the healthcare problem. They seem to be searching for sound bites. It sounds like they simply want to get elected or reelected. The situation is a smart entrepreneurs’ opportunity of a lifetime.

Stanley Feld M.D.,FACP,MACE

The Presidential election is just 18 month away. During every political season interesting things happen in America. On January 19th the WSJ had an article entitled “Health-Insurance Gap Surges as Political Issue.”

“Suddenly, the long-festering issue of providing health coverage to the one in six Americans who lack it seems to have leapt to the top of the national to-do list.” The Journal reviewed all various politicians’ proposals to repair the system.”

.” However, “[t]here’s nothing approaching a consensus on what to do.” Some see “the current turmoil and dissatisfaction with job-linked insurance as hastening a single-payer national system,” while others “would let individuals shop for health care much as they do for other things.” Meanwhile, a “third camp, borrowing from what’s going on at the state level, essentially would widen existing sources of health insurance — government, employers and individual policies — so that they cover everyone.”

President Bush had distinct proposals in his State of the Union. The lead article in the NY Times did not report all his proposals. President Bush’s entire proposal was defective in that it gave lip service to price transparency. A system without price transparency is a system that does not generate competition. I feel his outline was too brief and the implications incomprehensible to the average citizen. It may have been incomprehensible to the average congressman and senator.

“In effect, the president is proposing a new standard deduction for health insurance — $15,000 for families and $7,500 for individuals. That would mean lower taxes for more than 100 million Americans with employer-provided coverage worth less than the standard deduction, Mr. Bush said. But it would raise taxes for about 30 million people with more expensive plans, unless they switched to less costly alternatives, White House officials said.”


Does everyone understand the above??

“Mr. Bush said the tax proposal was an effort to “level the playing field” between Americans buying insurance on their own and those who get it through their employers.”
“For the millions of other Americans who have no health insurance at all, this deduction would help put a basic private health insurance plan within their reach,” he said. “Changing the tax code is a vital and necessary step to making health care affordable for more Americans.”

The ability to deduct health insurance premiums by the uninsured is vital to solving the uninsured problem. However, it is only one initiative in a dysfunctional healthcare system. The system needs many sound structural changes introduced simultaneously to be repaired to a truly market driven competitive system.

A little step here and a little step there will only make the system more dysfunctional. These small steps will only be to the advantage of the insurance industry and hospitals. The cost of care will go up with more money in the system. CEOs of insurance companies will get richer while access to care and quality of care will go down.

“Democrats, labor unions and some consumer advocates said the proposal would shake the foundations of the nation’s health insurance system, still largely built around the workplace.”

This quoted statement shows me the profound lack of understanding of the problem the healthcare system faces.

This is precisely the reason that the consumer and not our government needs to lead the change.

The patient needs to control his own healthcare dollar in a totally price transparent environment. Some entrepreneur or some financial services organization is going to provide this option to the consumer. The result will be the all that financial gains through inefficiency and rising premiums will be toppled. I have in mind some entrepreneurs who I think could do it.