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Obamacare Is Increasing Health Savings Account Participation

Stanley Feld M.D.,FACP,MACE

Patients’ responsibility for their health and their healthcare dollars is one of the most important elements in a functioning and cost effective healthcare system.

Despite the fact that my ideal medical savings account (MSAs) would be more effective than health savings accounts (HSAs) in encouraging patient responsibility for their health and healthcare dollars, health savings accounts are flourishing because of Obamacare is costly and has taken freedom of choice away from individuals.

Devenir is a HSA Mutual Fund that accepts and invests HSA trust contributions and invests those contributions. Devenir just published a study that showed that:

1. As of June 30, 2015, the number of HSAs had climbed 23% from the previous year to 14.5 million.”

  “2. Account balances jumped 25% to approximately $28.4 billion over the same time period.”

In 2010 the year Obamacare was passed, there were 5.7 million HSAs with balances totaling $7.7 billion.

The Obamacare bronze plan is the least expensive federal health insurance exchange plan. Its coverage is poor and it has a high deductible that most people cannot afford.

The premium and deductible are only good for patients with pre-existing illnesses that have no other place to purchase insurance. That is the reason the demographic for enrollees from healthcare.gov is so poor.

The government is loosening the noose on HSAs even though it is still restrictive.

“For the 2016 tax year, you can make a deductible HSA contribution of as much as $3,350 if you have qualifying high-deductible self-only coverage or as much as $6,750 if you have qualifying high-deductible family coverage. If you are age 55 or older as of the end of 2016, the maximum deductible contribution goes up by $1,000.

For 2015, the contribution caps are the same, except the maximum deductible contribution for family coverage is $6,650. These amounts are increased by $1,000 if you were 55 or older as of December 31, 2015. You have until April 18, 2016, to make an HSA contribution for the 2015 tax year.”

You must have a qualifying high-deductible health insurance policy — and no other general health coverage — to be eligible for this HSA contribution privilege. For 2015 and 2016, a high-deductible policy is defined as one with a deductible of at least $1,300 for self-only coverage or $2,600 for family coverage.

For 2016, qualifying high-deductible policies can have out-of-pocket maximums of as much as $6,550 for self-only coverage and $13,100 for family coverage. For 2015, these amounts are $6,450 and $12,900, respectively.

If you are eligible to make an HSA contribution for a tax year, the deadline is April 15 of the following year (adjusted for weekends and holidays) to open an account and make a contribution for the earlier year.”

The government has increased the maximum deductible in 2015 and continues to increase in 2016.

For the 2016 tax year, you can make a deductible HSA contribution of as much as $3,350 if you have qualifying high-deductible self-only coverage or as much as $6,750 if you have qualifying high-deductible family coverage.

“ If you are age 55 or older as of the end of 2016, the maximum deductible contribution goes up by $1,000.”

More large companies are Increasingly offering workers high deductible health saving account. However, the employee is responsible for the high deductible and most of the plans are 70/30 coverage after the deductible is reached up to a maximum of $10,000.

Most large and small employers can afford to pay all or some of the high deductible and buy reinsurance for first dollar coverage beyond the deductible.

Both large employers and small employers are offering their employees health savings accounts. The full insurance premiums have become so high that employers are shifting the burden to employees by having the employee pay the deductible and the employer paying the reinsurance.

UnitedHealth has about 40 individual high deductible plans with 70/30 copays over the limit of the deductible. The maximum out of pocket cost is $10,000. The premium for a young married couple without kids is from $125 to $350 per month depending oo the deductible chosen. The premium increases with the number of children.

A great advantage to these plans now is that UnitedHealth has already negotiated the physicians’ and hospitals’ fees for you. The uninsured would pay retail price for the same services.

The cost to small to large companies is relatively difficult to find in an online search.

Most companies are self-insured and would not fall under the rigid coverage rules of Obamacare. The company can decide on the amount of the deductible they would pay for the employee.

The point of all this is health saving accounts are not as good as my ideal medical saving account. HSA’s do not provide enough incentive for employees or individuals to manage their health or healthcare dollars wisely as an MSA would.

A large defect in Obamacare is patients do not have incentive to be wise shoppers of their healthcare. They have restricted choice. They have little incentive to stay healthy because they have an entitlement program available that will take care of their expenses. There is no financial incentive for them to try and reduce the cost of healthcare.

If the consumers managed their health and healthcare dollars well the cost of healthcare would drop because the complications of chronic diseases would decrease to at least 50%.

If Republicans are looking for an alternative plan to the liberals’ and progressives’ inevitable march to a singe party payer system most of the infrastructure is already in place.

Only small modifications to the HSAs have to be made by the congress and the President and America would be on its way to a free market healthcare system.

This alternative healthcare system would align all of the stakeholders incentives including the government’s incentives, if the Obama administration did not want to increase its power by having more control over its people and its people’s freedom of choice.

My ideal Medical Saving Accounts would be democratic and cover everyone.

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Obamacare Is In Big Trouble!

Stanley Feld M.D.,FACP,MACE

There are so many parts of Obamacare that are failing it would be impossible to describe each failure in a single blog..

President Obama and his administration keeps telling the American people that Obamacare is working great. It is here to stay.

I cannot believe Americans believe him. I cannot believe he thinks Obamacare is doing great.

It could be true that everything is going great for him if he wants Obamacare to fail and cause hardship for millions of Americans.

At that point Americans would beg President Obama or another progressive president loke Hillary Clinton to institute a single party payer system.

A single party payer system has been Hillary’s dream since Hillarycare 1993. Now she is saying she wants a private insurance based system. The purpose of this statement is to neutralize (freeze) her free market system critics.

Once more America is being exposed to Hillary Clinton’s use of a typical Saul Alinsky tactic. The tactic in his “Rules for Radicals” is to freeze your opponent by stating his position as yours even if it is a lie.

Hillary wrote her senior Wellesley College thesis on Saul Alinsky and “Rules for Radicals”. She also became a big fan and good friend of his.

Hillary Clinton and President Obama know Obamacare is failing. They are just waiting for the tipping point. The tipping point will be when the American people say please help us and give us a single party payer system.

At that point we will hear the typical gee shucks, I guess we will have to try a single party payer system.

A single party payer system will be a bigger financial and patient care disaster than what we have now.

The data on the first week of applications for Obamacare’s healthcare.gov was announced to the rave reviews by the Obama administration.

Since few pay attention to the actual numbers President Obama can get away with the lie.

The CBO predicts 19 to 21 million will sign up for Obamacare for 2016. The administration estimates they are going to have 9.1 to 11 million enrollees for 2016.

The Obama administrations estimate is 30% lower than the announce 13 million enrollees in 2015. In reality only 9.7 million enrollee paid for healthcare insurance through healthcare.gov 2015. Of those 9 million only 6.5 million kept their insurance premiums current for the entire year.

The www.acasignup.net quoted the Obama administrations claim that 595,590 filled out applications to get price insurance quotes. Only 8% of the reported applicants or 47,243 paid their first month’s premium for 2016.

These numbers are not a cause for celebration unless you want to misinform the public by claiming a successful first week enrollment.

Let’s do the math. The enrollment period for 2016 is from November 1st until December 31st 2015 or eight and one have weeks with four major holidays, Veterans Day, Thanksgiving, Christmas and New Years.

Let us the assume all 600,000 that filled out applications will pass the application requirements and pay their assigned premium for each month. Let us also assume the average weekly application rate is 600,000 per week for the 81/2 weeks. The grand total enrollees would be 5.1 million enrollees for 2016. This is 4.5 million less paid enrollees than in 2015.

There was an attrition rate 2% a month in 2015. President Obama extended the enrollment period several times to get more people to sign up.

2015 FULL YEAR ENROLLMENT/ATTRITION RATE TABLE PROJECTION:

2015_full_year_projection_effectuated

2014 FULL YEAR ENROLLMENT/ATTRITION RATE TABLE (FINAL):

  Microsoft ExcelScreenSnapz 2014 458

It is clear that President Obama’s victory laps celebrating the success of Obamacare is unwarranted.

However the media is the message. He controls and manipulates the media. It would have been much easier to provide Medicaid and CHIP coverage to the poor outright than destroying the healthcare system with changes that are not working.

The final enrollment for 2014 was 6,338,622 not over 13 million. The final enrollment for 2015 was 9,736,350 and not over 13 million. This is a net gain of 3.5 million new paying enrollees in 2015.

This year the Obama administration estimates that 9 million will purchase insurance through the health insurance exchanges. At the present rate only 5.1 million will purchase insurance for 2016 at the end of the enrollment period December 31, 2015.

The CBO’s estimate was 19-21 million paid enrollees.

It does not represent a very successful net gain when the government publishes that there are 34 million uninsured Americans. No one knows if the 90 million unemployed Americans are counted in the number uninsured.

Unaffordable care act

All anyone hears is the Obama administration’s reasons our taxes, and insurance premiums are going up, while our insurance coverage is going down. The Obama administration is blaming the healthcare insurance industry and Republicans.

President Obama has used, with the help of the mainstream media, the Saul Alinsky tactic to freeze opponents by shocking them with unsustainable factoids.

 The Avalere Health consultancy’s analysis of 2015 signup data showed surprisingly weak ObamaCare enrollment at modest income levels. At between 150% and 200% of the poverty level, just 41% of those eligible signed up for coverage. The number falls to 30% among those between 200% and 250% of the poverty level.

 In 2016 President Obama is going to penalize people that do not have healthcare insurance.

It’s now clear that the actual impact of ObamaCare’s individual mandate tax penalty will be far worse than the benign intent that the Obama administration claimed.

“What we’re talking about is a penalty for the few people who will refuse to buy health insurance — even though they can afford it — and who expect the rest of us to pick up the tab for their care,” a September 2009 White House defense of the individual mandate states.”

Reality should be coming into focus by now for the average American taxpayer and the poor. Obamacare is ripping everyone off.

The mandate’s primary impact will be to compel low-income households to buy bronze coverage with deductibles of up to $6,850 per adult that are well beyond their capacity to afford.

Even after these poor people pay the $6,850 deductible they have a 40% deductible on the rest of the billing.

Who said poor people are too stupid to handle their own money and be responsible for their healthcare dollars?

They are smart enough to know the government is ripping them off.

George  Shore101  3 months ago

If the Obama administration and Democrats love the poor why did they force the poor to purchase something they can not afford and then penalize them for not being able to afford it?

It is a horrible thought to think President Obama is working to make the poor poorer and make the healthcare system fail the American people.

It looks like he is. His plan to replace it with a single party payer system will result in a bigger failure.

Why are Republicans just standing around doing nothing? Why don’t they publicize my Ideal Medical Saving Accounts?

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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I Told You What To Do 8 Years Ago: Part 2

Stanley Feld M.D. FACP,MACE

There are so many little changes that can have a big affect on repairing the healthcare system.

These changes would go a long way in putting consumers in control of their own health and healthcare dollars.

President Obama and the Democrats want to make consumers dependent on government. Most Republican politicians do not understand the healthcare system’s problems.

Republican senators and congressmen have not been able to come up with a viable solution because they are influenced by vested interests other than the consumers’ vested interests. .

Republicans cannot understand that consumers are smart. Most know how to spend their money wisely. Consumers can solve problems if they are given the right tools and incentives.

In last week’s Republican debate Mike Huckabee got close when he said we have to solve four chronic diseases and the costs to the healthcare system would plummet. He mentioned diabetes, heart disease, cancer and lung disease. He was almost correct.

The care of chronic diseases that are manageable consume 80% our healthcare dollars. Most of the 80% is spent on the complications of these chronic diseases.

Motivating patients to become the “Professor of Their Disease” can prevent at least 50% of the complications of these diseases.

Mike Huckabee missed that part. Patients must be provided with financial incentives to prevent a chronic disease from occurring in the first place and then learn how to prevent complications from occurring.

I am publishing the spring of 2007 blog summaries to demonstrate that none of the obvious fixes have been executed to put consumers in a position to make wise choices and be responsible for them.

What Have I Said So Far? Part 2 Spring 2007

April 3,2007

Stanley Feld M.D.,FACP,MACE

 

The solutions I have proposed are all directed to a patient centered, patient driven, and patient advantaged system. I will review the proposed solutions in the next two blogs.

 Price transparency is an essential beginningNot only must the retail price be published but all of the discounted prices must be transparent as well.

The government must enact legislation so that the providers and the insurance companies post their range of prices. The government has to empower the patient with negotiating power to get the best price.

There are many different prices paid for a service depending on the negotiating power of the purchaser. The net effect of this total price transparency will be lower the prices and decrease cost of health insurance.

Consumer must demand real price transparency. Aetna’s declaration of price transparency last year was a rouse. The hospital associations of Wisconsin and now Texas have developed web sites to provide hospital retail prices.

We have little idea how much the government or insurance companies pay for these services. I assure you the discount is very deep and the hospitals are satisfied with the payments. 

The automobile industry has figured out how to deal with total price transparency and the Internet publication of the MSRP, the invoice prices and the average prices paid for an individual automobile. 

We should demand that the healthcare system does the same. The system should be set up where patients can negotiate price pre or post treatment. Sometimes the patients need a care emergently and are not in a position to negotiate in an emergency room.

Yet an oncologist is not permitted to administer the drug in his office for one and one half times the cost of the drug. It is estimated that $150 billion dollars are wasted on administrative costs in the hospital and in the insurance industry. These costs add not value to the treatment of patients. Increased executive salaries and increasing construction of enlarging hospital facilities absorb the administrative waste. The brick and motor expansion of hospitals should be over since much can be done on an outpatient basis.

 These are some of the solutions necessary to repair the healthcare system. The solutions have to be instituted as a total plan and not introduced piecemeal. Each of the pieces of the solution is dependent on each other in order to have a positive effect on repairing the healthcare system. Next time I will review the other elements of my plan needed to Repair the Healthcare System.

April 03, 2007  

There are two more parts to go. If only our elected officials would listen. The only way that will occur is if consumers start making demands. If the politicians do not listen them kick them out of office.

The most profound thing said at the Republican debate last week was by Marco Rubio. He said the traditional media is the Democrats largest and most powerful special interest group.

I suggest people start reading between the lines of the New York Times articles for a start.

Wake up, America.

 

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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I Told You What To Do 8 Years Ago

Stanley Feld M.D.,FACP,MACE

I started my blog Repairing The Healthcare System in 2006. I methodically described the defects in the Healthcare System.

I provided healthcare alternatives in policy and regulations to both Democrats and Republicans to Repair the Healthcare System.

No one listened to me.

In 2007 the healthcare system was unaffordable and unmanageable.

Republicans had some weak ideas and no inclusive business model for the future.

The election of President Obama and the partisan passage of Obamacare have accelerated our healthcare system’s demise.

I believe President Obama’s goal is to destroy the healthcare system. He wants it replaced with a single party payer system (2003). Consumers of healthcare know the government cannot manage healthcare.

American cannot sustain Obamacare financially. Consumers cannot be sustained medically with Obamacare or after the collapse of Obamacare with a government run single party payer system.

The obvious proof is the dysfunction and failure of the VA Healthcare System, Medicaid and Medicare.

All these healthcare systems are government run single party payer systems. All are unsustainable.

As I was archiving my blogs I ran across four blogs I wrote in 2007 outlining the problems and what should be done about them.

The government has made none of the repairs I have suggested. Obamacare has made the situation worse. I will present all four parts of “What Have I Said So Far? Spring 2007” consecutively as written.

What Have I Said So Far? Spring 2007 Part 1

Stanley Feld M.D.,FACP,MACE

April 01, 2007 in Medicine: Healthcare System

 In August 2006 I summarized my blog to that point. I outlined some important solutions necessary to Repair the Healthcare System.

Since then I have covered many of the solutions to the key questions I raised. Not one of these questions has been addressed effectively by our leadership or people in control of making policy.

One must ask: Do they really want to solve the problems in healthcare delivery in this country or are they focused on preserving their own vested interest to the exclusion of a breakthrough that might benefit not only their vested interests but the vested interest of all the stakeholders.

The questions were:

  • How do we reduce the cost of medical care? • How do we provide affordable insurance for the 45 million people uninsured?
    • How to we provide affordable medical care coverage so that all the patients can have access to medical care?
    • How do we align all stakeholder incentives?
    • How do we construct a system so that all the stakeholders make a reasonable return on investment?
    • How do we close the holes in the system to eliminate abuse by stakeholders?
    • How do we restore trust between stakeholders?
    • How do we restore trust between the patient and physician?
    • How do we stop secondary facilitator stakeholders from continuously destroying the patient physician relationship?

In reality, developing solutions to these questions are in themselves business opportunities for facilitator stakeholders that can help Repair the Healthcare System.

However, neither the insurance industry, hospital systems, nor the government see the long term advantage and economic opportunity.

In a comment to my blog Shel Isreal said “

98% of the people think it is broken and the other 2% work for the insurance industry.

The insurance industry has the money and the power.”

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/01/the_ideal_elect.html.

However, we have demonstrated the abuse and misuse of the power of information technology by the insurance industry. The misuse and abuse has lead to further dysfunction in the healthcare system and mistrust by the hospitals and physicians.

The insurance industry and the government have used information technology to penalize both physicians and patients using the wrong data to draw their conclusions.

Insurance companies do not have the information technology resources to measure the correct parameters to measure quality care.

I do not see an attempt on their part to correct this deficiency. I only see a movement to make the healthcare system worse with a Pay for Performance (P4P) reimbursement system that is not well thought out. .

It is essential that the solutions I have proposed be coordinated and introduced simultaneously as a single plan rather than introducing elements of the solution separately.

Unfortunately, the government with the pressures of its present political vested interest influences finds it difficult to present the components of repair as a single plan.

The solutions will have to be driven by the consumer (the patient) and not the government. The patients have the power to drive the solutions because they are the users of the healthcare system. If they were the purchases of healthcare, some clever entrepreneur could provide the option for a compelling insurance product that could reward the patient for being responsible for their own care and well being.

The insurance produce could be built to fix the healthcare system.

All that is needed is for the government to write sensible regulations, enforce them and get out of the way.”

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

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Healthcare Spending Increases To 18.2% of GDP

 

Stanley Feld M.D.,FACP, MACE

 

Healthcare spending has increased each year. Healthcare spending is now 18.2% of the GDP up from 17.7% in 2014.

In 2000 it was 14% of the GDP.

Healthcare GDP

National spend pic1

The data presented in the following charts are partially correct. They are derived from clams data which are also partially correct. The charts can give an idea on how the healthcare money is

spent. and wasted. Fuel medical costs 2

Wasted Money

Wasted money 3

Drivers of increased Healthcare Spending

Drivers 4

Distribution of Healthcare Spending

Distribution

There are many reasons for this increase. The Obama administration prefers to blame the increasing spending on his most popular reasons.

His reasons might not be completely true.

The traditional media then publicizes the President Obama’s popular reasons. The reasons get translated into public understanding and public opinion.

President Obama’s reasons for the increased healthcare spending are hospitals’ and physicians’ prices are increasing. Hospital and physician retail prices are increases. However, their insurance reimbursement has decreased. Public opinion then demands that physicians decrease their prices.

The reality is physician reimbursement has been steadily declining in recent years as spending has been increasing.

I have continually pointed this out.

Medicare, Medicaid and private insurance have forced physicians to accept lower reimbursement. Patients are increasingly discovering that “my doctor doesn’t take my insurance or my Medicare or my Medicaid.”

Consumers without insurance coverage are charged retail price by hospitals and physicians rather than the discounted prices hospitals and physicians accept.

These consumers can try to negotiate the prices. They are usually more successful with physicians than hospitals.

Decreasing reimbursement is one of the main reasons physicians are driven to see more and more patients in less and less time.

Physicians must continue to pay overhead and salaries.

This phenomenon of increased patient volume disrupts the magic of the physician/patient relationship. It is also the driving force behind the massive increase in concierge medicine.

If it is not the rise in physician reimbursement, what is the reason for the increase in healthcare spending?

There are several possibilities.

  1. GDP is increasing at a lower rate than healthcare spending.
  2. Consumers are sicker. They need more medical and surgical care than previously.
  3. Healthcare insurance premiums are increasing at a greater rate than the GDP.
  4. Bureaucratic support of the healthcare system is growing at a greater rate than the GDP.
  5. Pharmaceutical use is increasing because a sicker population needs more drugs.
  6. RNA Technology has lead to the discovery of more potent therapies that are costly to the healthcare system.

Statistics published by the Altarum Institute in July suggest that President Obama and his fans in the traditional media reevaluate their premises about the rising healthcare spending.

Out-of-control spending on prescriptions drugs and the soaring cost of health insurance administration continue to be the two major drivers behind rising healthcare costs.”

Healthcare spending grew to $3.3 trillion in this year.

 

  1. Prescription drug spending increased by 9.2% from the previous year. Part of that increase was the introduction of new drugs.

Source

The Obama administration ignores the fact that more people are becoming sick because of an increase in obesity, diabetes and hypertension. These people now have to take medicine, see doctors, and buy medical devices.

  1. Administration services costs and net costs of health insurance (after paying medical bills) have increased 9.4% from a year ago.

These costs included government bureaucratic costs, insurance bureaucratic costs, out of pocket expenses and insurance premium costs.

How much waste is in all these administrative services costs.

3. Hospital spending rose 6.1% from a year ago. Hospital bureaucracy has been try how to decrease spending by decreasing waste and personal. However, bureaucracy and unnecessary administrators and outrageous hospital executive salaries continue to increase.

  1. Physician and outpatient clinical expenditures rose 5.0%.

Physician investment in medical structures and equipment rose only 1.7%. Physicians are reluctant to make investments in a failing healthcare system.

Each category in the various graphs above reveals opportunities to decrease the cost of medical care.

It cannot be done by the government’s complete take over of healthcare.

The government is the problem as we have seen and still are seeing with the VA Healthcare system.

Socialism does not work. In leads to unintended consequences as consumers adjust to the rules and regulations of an attempt to manage society.

Consumers must demand rule changes and permit the market place to sort things out.

Repair of the healthcare system can only occur in a consumer driven healthcare system with consumers in control of their healthcare and their healthcare dollars.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Can Government Run Systems Function Efficiently And Cost Effectively?

Stanley Feld M.D.,FACP,MACE

It has been proven over and over again that government does not run its systems efficiently and cost effectively.

Think of the post office, the railroad, the military services, the EPA and the IRS, to name a few. One could go on and on and come up with the same answer to the question. No.

The same holds true for government’s goal to control the healthcare system. It will not work. It has already proven to not be cost efficient or effective.

The Federal Government’s goal is to take over more and more systems operating in the life of the average American. The excuse is to help all Americans live a better life, to help the poor and under privileged. Instead it has kept the poor dependent on government, poor and under privileged.

“Each according to his abilities and each according to his needs” has not worked wherever it has been tried.

Government’s real goal is to have power over citizens. It is to make citizens dependent on the central government.

It is hard to find an example on the planet where this strategy has worked for the people it claims to help.

The results are also just the opposite of what the U.S. Constitution guarantees.

The evolution of the VA Hospital System is a stunning example of how government controlling a system does not work. No matter how much money the central government throws at the system it does not help. Noble goals always go astray. It is because the structure and the incentives in the system are wrong.

No one seems to focus on the main defects. The most important questions are:

Who is the main customer?

What motivates the main customer?

How do you devise a system that fashions incentives to motivate that customer to help make the system work?

It is not a larger bureaucratic structure with larger budgets. Larger bureaucracies move the system further away from the goals of the main customer.

It is not a series of regulations that impose punitive measures on providers and customers who are in the system.

It is not guarantees of tenure for managers of the system.

It is a guarantee to have managers of the bureaucracy listen and understand lower managers in the system who point out the deficiencies in a system.

The larger the bureaucracy the more difficult it is to personalize the system and have participants in the system help and help make the system work. Bureaucracies isolate themselves from the main customers in a system. It is the reason they do not work.

Large corporations in the private sector fail also. These corporations form large silo like divisions that construct systems that do not relate to the main customers or each other.

Large corporations sometimes understand the dynamic and try to reformat the corporation to service their customers. If they do not, their product fails

The people do not have the power to force the government to service them, the customers. Citizens can vote their representatives out of power. The government tries very hard to keep the main issues that disrupt systems out of public view.

There are many government agencies and systems that are failing. Our representatives never fix the systems. Our representatives do not listen to the people who are involved in the systems or who run the systems.

The VA hospital system has had problems since at least the end of WWII. It came to a head since the war in Iraq and Afghanistan.

Veterans Affairs Secretary Robert McDonald had been a successful CEO in the private sector. He made some significant changes in the operations of the VA at the onset of his tenure.

He also needed a $16 billion dollar infusion through the passage of the Veterans Access, Choice and Accountability Act to keep the VA Hospital System open after the scandals in VA care came to the publics awareness.

As government bureaucracies usually act, congress and the president ordered independent multi-consulting firms to audit the VA and tell government how to fix the VA Healthcare system.

Analysts from Mitre Corp., Rand Corp. and McKinsey & Co conducted more than a dozen assessments. No one has told the public what should to be done and what these assessments cost the taxpayer.

“A sweeping independent review of the Department of Veterans Affairs health-care system made public Friday shows the multibillion-dollar agency has significant flaws, including a bloated bureaucracy, problems with leadership and a potentially unsustainable capital budget.”

All that was needed was a little common sense by an authorized executive to realize what the problems were and fix them. All the defects were reported previously.

The government did not need multiple high priced consultants to tell them their problems.

The Commission on Care was mandated by the Veterans Access, Choice and Accountability Act to create a comprehensive reform plan to congress and the VA in 2016.

How much is this going to cost taxpayers?

How long is it going to take?

“The report bears out collectively what I have seen individually, what I have seen in my role as chairman over the past nine months,” said Sen. Johnny Isakson (R., Ga.), chairman of the Senate Committee on Veterans’ Affairs. “There is a huge focus on some glaring deficiencies that need to be addressed.”

The VA needs a lot of common sense and less bureaucracy, not more bureaucracy.

“Mr. Isakson said the VA suffers especially from a system saddled with a number of different departments that can’t effectively talk with each other, as well as a number of vacancies in leadership positions that need to be filled.”

America never learns. Big government does not work. Americans are starting to believe it.

President Obama and Obamacare are leading us in the same direction. It is the path to failure.

We must wake up now and stop this.

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

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President Obama Keeps Doing It

Stanley Feld M.D., FACP,MACE

President Obama is trying to avoid the press attention about  Obamacare’s continuing mess.

The insurance industry announced that insurance premiums in both the federal and state health insurance exchanges are going up to 50% in 2016. The group private markets will increase by the same percentages.

Insurance rates for 2015 were unaffordable for small businesses, and large corporations.

One church that buys insurance in the private healthcare insurance market had its rates increased 37%.

Instead of dropping insurance for their employees and paying the penalty, the church agreed to the pay the increased premiums. The church compensated for this increase in expenses by increasing church membership dues. Some members had to quit the church.

Eighty-five percent of members in Obamacare are receiving a government subsidy. A high percentage of that 85% are receiving higher subsidies than they are entitled to receive because of government lack of verification.

Eventually, when healthcare.gov website connects with the IRS, the government will find out that people received higher subsidies than they are entitled to. The recipients will get a bill they cannot afford.

Obamacare’s reinsurance subsidies for the health insurance industries are expiring in 2016.

The insurance industry is raising insurance premiums to cover the revenue lost by not receiving the Obamacare insurance company subsidies in 2016.

President Obama opened the Obamacare reinsurance program when too few insurance companies signed up to sell insurance through the health insurance exchanges.

The reinsurance program was a subsidy to cover the healthcare insurance industry’s supposed loses.

Obamacare hoped that multiple insurance companies would sign up in order create price competition among the companies and result in lower consumer premiums.

The healthcare insurance industry did not want to sign up. The insurance companies knew there would be adverse selection for insurance consumers.

Sicker people would enroll in the federal or state Health Insurance Exchanges. These sicker people could not afford or were not eligible to buy private healthcare insurance. The participating insurance companies would be at risk to pick up these sicker and more expensive patients.

“After finding that new customers were sicker than expected, some health plans have sought increases of 10 percent to 40 percent or more.”

Obamacare healthcare insurance coverage requirements would also cause them to seek an increase in premiums.

None of these issues appear in news stories that are covering this aspect of the story.

The political spin by the Obama administration is that the Obama administration is trying to persuade states to cut back big rate increases requested by many health insurance companies for 2016.”

I predict if the insurance companies do not get their rate increases they will drop out of the healthcare insurance market.

This is exactly what the Obama administration wants. It is a de-facto victory for a single party payout system and all of its ramifications.

It will not work because the Obama administration still needs the healthcare insurance industry to process and pay the claim. The result will be a higher premium for the consumer and an increased payout to the healthcare insurance industry by the government.

The government will be required to raise taxes or increase the deficit.

Kevin J. Counihan, the chief executive of the federal insurance marketplace is trying to convenience the healthcare insurance industry to reconsider its decision.

The facts spin war is starting. Mr. Counihan said in a letter to state insurance commissioners “Recent claims data show healthier consumers.”

This is apparently not true.

Scott Keefer, a vice president of Blue Cross and Blue Shield of Minnesota, which requested rate increases averaging about 50 percent for 2016, said his company had not seen an improvement in the health status of new customers.

“Our claims experience has not slowed at all,” Mr. Keefer said. “The trend has gotten a little worse than we expected.”

I have recently shown that the Obama administration’s claim that it is bending the cost curve is fiction. The cost to the government and the direct out of pocket cost to the consumers has increased.

The government costs have not risen as quickly as predicted by some but they are rising even more now.

Another weak argument the Obama administration is using is the federal tax penalty is increasing in 2016.

The federal tax penalty for going without insurance will increase in 2016, he said, and this “should motivate a new segment of uninsured who may not have a high need for health care to enroll for coverage.”

Why should these people buy insurance when they cannot afford the premiums or the deductibles?

Two additional weak arguments are being used.

“Federal officials said, much of the pent-up demand for health care has been met because consumers who enrolled last year have received treatments they could not obtain when they were uninsured.”

There has not been a very large increase in those insured by the state and federal exchanges between 2013 and 2014 to eliminate the “pent up” demand.

“Federal officials have also told state regulators that medical inflation will be less than what many insurers assumed in calculating their rates for 2016.”

The Obama administration has told these lies over and over again.

Does the president really believe if you tell a lie over and over again it becomes the truth?

There is a much better way to deliver universal health care and spend less money.

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2012/10/business-model-for-medical-care-2020-the-ideal-future-state.html

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Lies About Government Spending

Stanley Feld M.D.,FACP,MACE

President Obama and the mainstream media have been bragging about how well Obamacare is working. They cite that Obamacare is bringing down government health-spending growth.

However they have not been telling the truth. They have taken numbers out of context and have spun a lie.

The evidence presented by federal actuaries is that health growth has been under 4% in the five years prior to 2014.

The Obama administration has made a big deal out of this finding. President Obama has bragged that he is bending the cost curve with Obamacare.

His statements are deceptive. It means government health spending growth has been just under 4%. It is still increasing by 4% year to year and not the usual 6%-10% increase.  

Obamacare spending for direct medical care did not go into effect until 2014. All that went into effect was increases in taxes from 2010 until 2014 and spending on the growth of the bureaucracy resulting in a 4% growth. The math had nothing to do with increased direct medical care.

According to federal actuaries, spending on all health care grew 5.5% in 2014. Actual enrollment was lower than expected enrollment in 2014.

2014 was the first year of spending on direct medical care. Healthcare spending will continue to increase in 2015 to 5.3%. The reason is spending for Obamacare took affect in 2014 and continued in 2015. The reason for the slight predicted percentage decrease for 2015 is at least two fold. Less people signed up for Obamacare in 2015 than predicted and reimbursement for physicians and hospitals decreased.

Other reasons for a government decrease in spending are consumers are paying a greater share of their medical bills and reining in their use of medical care services.

One in three Americans said they or a family member delayed medical care because of costs in 2014, according to a report late last year by survey company Gallup.”

President Obama and his administration are deceiving the American public about the success of Obamacare.

The cost to taxpayers and people who are insured has actually increased. President Obama continually tells us costs are decreasing.

The mainstream media, especially The New York Times and Paul Krugman, continually repeat the lie. If you repeat a lie enough times people begin to believe it is the truth.

A reader asked me where did the New York Times readers leave their thinking apparatus. Someone else pointed out that the New York Times readership is decreasing because the newspaper has lost its credibility.

The New York Times opinions seem to be presented without supporting evidence.

The truth is premiums are increasing, coverage is decreasing and insurance deductibles are increasing for everyone including the middle class. Access to medical treatment is decreasing. Out of pocket expenses are skyrocketing.

The deception continues unchallenged by Republicans. No one is talking about the fact that the Obama administration is lying about what is happening on the ground.

“According to a report from actuaries at the Centers for Medicare and Medicaid Services published in the journal Health Affairs. In the years through 2024, spending growth is expected to average 5.8%, peaking at 6.3% in 2020.”

The cost of healthcare to the government is going to increase further and faster than predicted by federal actuaries as a result of expanded government insurance coverage under the 2010 health law, and the ever expanding Medicare’s baby-boom beneficiaries entering Medicare age.

As technology increases and as the baby boomers enter Medicare and more expensive life-saving drugs are developed costs to the government are going to increase.

The cost of pharmaceuticals is reported to have increased by 12% last year. The deals the government makes with the pharmaceutical companies are pathetic. The prices continue to mount for the government as consumer out of pocket costs for drugs increase.

By 2024 healthcare costs to the government and consumers are projected to be over 20% of our GDP and rising at the present Obamacare rate.

Americans will be older and sicker.

There is little government focus on helping our population become motivated to become  healthier and more responsible for their health and their own healthcare as they age.

Obamacare is forcing Americans to become more dependent on the government for their healthcare needs.

Hopefully, people are noticing that government does not work and more government will be a disaster to our medical and financial health.

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What Are The 3R’s?

Stanley Feld M.D.FACP,MACE

The 3R’s are the Risk Adjustment, Reinsurance, and Risk Corridors program built into The Accountable Care Act (Obamacare). The 3R’s were meant to encourage the healthcare insurance industry to participate in providing insurance to participants in the State Health Insurance Exchanges. President Obama has extended the 3R’s to included Federal Health Insurance Exchanges.

The 3R’s were activated because of the poor enrollment in the State and Federal Healthcare Exchanges. It was billed to offer protection to the healthcare insurance industry against any losses incurred by participation in Health Insurance Exchanges.

The healthcare insurance industry’s participation in Obamacare’s Health Insurance Exchanges was negative at first.

The Health Insurance Exchanges were viewed as a trap set by the Obama administration to control the healthcare insurance industry. In the process the healthcare insurance industry would ultimately lose money.

The healthcare insurance industry did not participate widely in the health insurance exchanges at first.

 “These risk-sharing programs are often called the “3 Rs” because they are Risk Adjustment, Reinsurance, and Risk Corridor.” The three risk-sharing provisions were intended to protect insurers financially, especially in the first few years the Exchanges are in effect if activated.”

The ACA includes various mechanisms to accomplish this goal including requiring insurers to cover everyone who applies, prohibiting insurers from imposing preexisting conditions limitations, and severely limiting the factors insurers can consider in setting premiums.  Obviously, these mechanisms put insurers at financial risk, since their underwriters won’t have sufficient data to predict claims costs, such as the number of people likely to enroll, their health status or claims history, or other demographic information on enrollees.

The Obama administration included this safety net for healthcare insurers. It also set the traps for the healthcare insurance industry.

Purpose of Permanent Risk Adjustment

To combat overall adverse selection since health insurance is now guaranteed to anyone who applies. Healthcare insurance carriers cannot impose pre-existing conditions limitations. They cannot vary premiums based on individual’s health status.

The trap is that the government will redistribute money between insurance carriers. The Permanent Risk Adjustment scheme is supposed to redistribute profit from insurers with lower claims enrollees to those with higher claims enrollees and losses.

All non-grandfathered insured plans in the individual and small group market, in or out of the health insurance exchanges, are supposed to pay for this redistribution of money. This redistribution is to be monitored by the federal government. (Another bureaucracy)

Does anyone think this can work? I don’t.The second R is the Transitional Reinsurance Program. It is to run from 2014-2016 and then stop running.

The Transitional Reinsurance Program’s purpose is to stabilize premiums in the individual market during the first 3 years the exchanges operate, because higher-cost (sicker) individuals are more likely to enroll early.

This program’s purpose is to redistribute money from group health plans that make a profit to certain insurers with Qualified Health Plans on the individual State and Federal Exchanges that have high cost (claims) enrollees to prevent loses for those insurance companies. This is supposed to encourage insurance companies to join the exchanges.

All group health plans are required to pay for losses in 2014. There has been no reporting as yet to let anyone know how this has worked out in 2014. This provision further exposes President Obama’s lie that “if you like your plan you can keep your plan.” He knew no one could keep their healthcare plan as the bill was written.

A specific waiver was provided for 2015 & 2016. There are a few self-insured plans that self-administer their claims. Most corporations use healthcare insurance companies as third party payers. Therefore, the wavier is essentially eliminated.

The traditional reinsurance program is going to be very difficult to administer.

The Temporary Risk Corridor for 2014-2016 makes the 3R program even more complicated and more difficult to administer.

The goal of the temporary risk corridor is to limit insurer gains and losses in first 3 years of Obamacare and place all healthcare insurance company risks on a level playing field. The healthcare insurers have a limited amount of data on the risk of claims for Health Exchange enrollees. The healthcare companies have histories of claims for Qualified Health Insurance Plans and the expected enrollment. The health Insurance companies have to guess at their actuarial risk if they participate in Obamacare in order to set premiums.

Limiting the healthcare insurance industry’s risk will be complicated for the government.

Insurers who have actual claims more than expected claims will be paid the excess if funds from these insurers are not sufficient. HHS is directed to pay the excess.

The problem is Obamacare (ACA) did not provide for creation of a specified source of funds or a revolving fund for HHS to pay this excess.

In 2014, the first year of the exchanges insurers received $450 million dollars. The source of the government funds is unclear.

An important concept about insurance reimbursement is always ignored. Insurance claims have nothing to do with the actual insurance reimbursement. Reimbursement is usually 50% less than the claims.

Therefore, the amount of supposed payment is doubled using claims to calculate payment and probably future premiums.

The government is hoping that the entire scheme is budget neutral. It will collect and redistribute the profit made by one insurance company to the insurance company that loses money from the high-risk patients.

The government thinks it will have no out of pocket reimbursement obligation.

The government plans to compare insurers within a state based on the average financial risk of their enrolled population.

“ To more evenly spread the financial risk among insurers, government payments are made to insurers who cover a higher-risk population (e.g., people who are older, sicker or have more chronic conditions) from the profit of lower risk insurers. “

Theoretically, the insurers who make a profit from the lower risk population pay the insurers who make less from their older, sicker population with many chronic diseases.

This is called redistribution of profit and wealth. I have a tough time believing that profit making companies will sign up for that.

Below are the formulas that will be used in 2014 and 2015 for the redistribution of profit of healthcare insurance companies.

2014: Once an insurer has paid $45k in claims for an individual (the attachment point), the insurer is reimbursed for 80% of costs between $45k & $250k per person.  (Originally $45k was $60k)”

2015: $70k attachment point per insured, then insurer will be reimbursed for 50% of costs between $70k & $250k per person.  HHS publishes a Notice of Benefit & Payment Parameters each March, with the numbers for following year.”

“If actual claims are within 3% of expected claims, insurers in Exchanges keep the profits or bear the risks.  If claims are 3-8% more (or less) than expected, insurer pays the gov’t (or is reimbursed by the gov’t) 50% of the gains (losses) and keeps (or bears the loss of) the other 50%.” 

“If claims are at least or > 8% more (or less) than expected, insurer pays the gov’t (or is reimbursed by the gov’t) 80% of the gains (losses) and keeps (or bears the risk of) the other 20%.”

It is all very complicated. It will be impossible to enforce. This is another Obamacare trick to fake out the very profitable healthcare insurance industry.

I think the healthcare insurance industry knows all this. They are taking steps at this very moment to dodge the Obama administrations trap.

The losers will be the American people who will experience an increase in healthcare insurance premiums and higher taxes.