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Stakeholder Abuse of the Healthcare System

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“We’re Saving Medicare Not Destroying It”

May 25, 2011
inDisinformation and the healthcare system, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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 Stanley Feld M.D.,FACP,MACE

The week Paul Ryan replied to the Democratic Party’s spin misters and to the bias of the traditional media.   

Everyone will agree America has an unsustainable increase in deficit spending during the Obama administration. It has amounted to 4.7 trillion dollars. America has raised the debt ceiling at least three times in the last two anda half years. China is buying our debt at a very low interest rate. China can force us to raise our interest rate by selling our bonds and moving the cash to higher yielding assets. If the interest rate increases the cost of borrowing will be higher and our deficit will be even greater.

The government must decrease spending. There is tremendous waste in government spending. President Obama has not done much to decrease duplication of agency spending or decreasing entitlement spending. He has ignored the recommendation of his own deficit reduction committee.

President Obama’s Healthcare Reform Plan increases entitlement spending not decreases it. The action he has taken in his Healthcare Reform Act has increased costs and decreased efficiencies already. The CBO has warned us of the need to be fiscally responsible.  

“President Obama has been ignoring the warnings.  Medicare is carrying $24.6 trillion in unfunded liabilities through 2085, and chief Medicare actuary Richard Foster says even that does "not represent a reasonable expectation for actual program operations." 

Our major entitlement programs, Social Security and Medicare and Medicaid are fiscally defective in different ways. These programs have to be made fiscally sound in somehow.  Their percentage of America’s GNP grows yearly and is unsustainable.

The fact that 50% of the population pays no taxes and consumers most of the entitlement spending means our population is becoming poorer and that the redistribution of wealth is becoming greater.

The middle class is the real victim.

Paul Ryan and his budget reduction plan has been attacked again this week by none other than Newt Gingrich.  Mr. Ryan’s reply was “With friends like this who needs enemies.”

Newt made a big mistake. I do not believe he understands the Ryan Plan. He has been back pedaling all week.

President Obama, Democrats in congress, liberals and the traditional media do not want to understand Paul Ryan’s plan. His plan is common sense. If only the public was given the opportunity by the traditional media to understand it they would agree.

 I do not believe Republican congressmen and women and the Republican National Committee has the courage and the skill to neutralize Democratic demagoguery*. The Republicans are afraid of losing the election in 2012. They are afraid the public believes they are “destroying Medicare.”  Paul Ryan’s plan is  not destroying Medicare. The Republican Party should be helping the public understand the facts and the advantages of the Ryan plan. It is a plan that will save Medicare not destroy it. 

 

*“Demagoguery  is a strategy for gaining political power by appealing to the prejudices, emotions, fears, vanities and expectations of the public—typically via impassioned rhetoric and propaganda, and often using nationalist, populist or religious themes.  

Paul Ryan said on Meet The Press last week,

“If I can put it in a nutshell, we're saying: Don't affect current seniors,” Ryan told host David Gregory of his party's Medicare-reform plan. “Give future seniors the ability to deny business to inefficient providers. As a contrary to that, the president's plan is to give the government the power to deny care to seniors by empowering a panel of 15 unelected bureaucrats to put price controls and rationing in place for current seniors.”

Paul Ryan has hit the nail on the head.  Obamacare is destined to fail as I have pointed out in this blog over and over again. We are seeing this failure even before complete implementation of the act. We have seen over 1300 waivers, almost 300 new bureaucratic agencies, and tremendous increases in healthcare insurance premiums. Seniors are starting to see a decrease in access to medical care.

 Paul Ryan went on to point out,

“So I would argue that the opposite is true: We're being sensible, we're being rationale; we're saving this program. And you cannot deal with this debt crisis, David, unless you're serious about entitlement reform. And unfortunately, I think we're going to have ‘Mediscare' all over again, and that's unfortunate for the country.”

David Gregory said he has heard privately from Republicans that they're “scared to death” about the politics of what Ryan is proposing, and that he is handing over a huge issue to the Democrats.

“Of course people are scared of entitlement reform,” Ryan said. “Because every time you put entitlement reform out there, the other party uses it as a political weapon against you.”  

Paul Ryan said we must get serious about the drivers of our debt.

 “And the irony of this is all: If we don't fix these programs, people who rely on these benefits are going to get cut the first. They're going to be hurt the worst under a debt crisis. We're saying if we fix this now, we can keep the current promise to current seniors and people 10 years away from retiring. If we allow politics to get the best of us, if we allow demagoguery to sink in, and do nothing, then we will have a debt crisis and current seniors will get hurt.”

 Paul Ryan is absolutely correct. I hope the Republicans do not chicken out. The Democrats are trying to scare them. Remember, the Democrats and bureaucracy got us into this mess in the first place.

 

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

 

 

 

 

 

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It Will Not Work!

May 11, 2011
inDisinformation and the healthcare system, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP, MACE

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

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

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

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

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

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

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

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

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

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

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

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

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

Dr. Daniels’ practical experiences are:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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It Is Easy To Forget

May 7, 2011
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

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

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

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

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

The result will be a disaster for everyone.

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

 

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

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Dr. Fleming’s  DIAGNOSIS:

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

 

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


JOHN FLEMING, M.D.
Member of Congress

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

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

 

 

  • Jo edwards • May 9, 2011

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

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Why Will Accountable Care Organizations (ACOs) Fail?

May 1, 2011
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE


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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The are at least 7 key deficiencies with ACOs

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

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Accountable Care Organizations Will Fail !

April 27, 2011
inMedicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

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

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

I don’t think anyone has considered the following,

  1. Which consumers will ACOs treat?

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

     2. How many Medicare patients will be covered?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

 

 

 

 

 

  • Dan • September 10, 2012

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

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The Accountable Care Organizations (ACOs) Plot Thickens.

April 24, 2011
inDisinformation and the healthcare system, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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 Stanley Feld M.D., FACP, MACE

Thousands of articles have been written about forming ACOs. Millions of dollars have been spent by hospital systems to try to form an ACO. Healthcare policy consultants have discovered a new cash cow.

Hospitals systems are wasting their money. They think the return from owning salaried physicians’ intellectual property will be more than worth the cost.

  1. Thousands of physicians have been confused by the concept of ACO.
  2. Many have felt ACOs are an attack on their freedom to practice medicine the best they can.
  3. Many have rejected the concept because they feel they will have to be salaried by hospital systems.
  4. Many physicians do not trust President Obama or Dr. Don Berwick.
  5. The Stage 2 ACO regulations are not easy to understand. They are more ominous than the stage 1 regulations.

The two core stated objectives for ACOs are:

(1) Reducin healthcare costs.

(2) Preserving and improving quality. 

The stated objectives are laudable. The government regulations and controls are confusing. They are a threat to physician autonomy. There are many unwritten rules pending. Physicians are being asked to accept the unwritten rules on blind faith and trust them.

ACO requirements are;

 1.     Agrees to participate for three years.

2.     Cares for 5,000 Medicare patients

 3.     Is prepared to receive and distribute shared savings.

4.     Is prepared to repay shared losses (if it takes economic risk).

5.     Establishes reporting, and ensures ACO participant and ACO provider/supplier compliance with program requirements, including the quality performance standards.

6.     Has shared governance that provides all ACO participants proportionate control over the ACO’s decision making process and includes Medicare patient representatives.

7.     Is operated and directed by Medicare-enrolled entities that directly provide health care services to Medicare patients. ACO participants (e.g. physicians, hospitals) must have at least 75 percent control of the ACO’s governing body.

8.     Has sufficient primary care physicians to meet the primary care needs of the ACO patients.

9.     Has administrative and clinical organization and leadership.

10.  Is patient-centered though the use of such things as patient assessments and individualized care plans

11.  Is subject to substantial monitoring and reporting requirements, including public reporting of quality data to ensure transparency.

The rules get complicated. They will be difficult to execute and enforce.

 

Those who can participate include,

  • Group medical practices
  • Networks of group practices (e.g. IPAs)
  • Partnerships of joint ventures between hospitals and physicians (e.g. PHOs)
  • Hospitals employing physicians
  • Anything else that accomplishes the objectives of the Act

Group practices are placed at the top of the list intentionally. It is to decrease physicians’ anxiety and sense of losing control.

 The only way ACOs have a small chance of succeeding is if physicians are hired by the hospital systems and the hospital systems divide the money. The fight will then be between hospital systems and their physicians.

Two questions immediately come to mind:

  1. How is the calculation done to divide the money by the hospital system? What money is taken off the top for hospital systems’ salaries and expenses before the savings is shared with physicians?
  2. If there is a loss rather than a cost saving, and the government reduces the ACO’s compensation, how is the distribution of the loss calculated? Let us say four physicians in the system were responsible for 90% of the loss.  Should everyone be responsible? I do not think any of this has been thought out.

The legal issues involved with ACO’s are vast and expensive. One issue revolves around the Stark law and the anti -kickback statutes in the law. How can an ACO participate in the proposed Medicare Shared Savings and not violate the Stark law provisions? Easily say the OIG and CMS. They will issue waivers from the Stark law. The implication is these agencies will bypass congress once more. 

The provisions listed to get an anti-kickback waiver are complicated. It will require expensive compliance. There will be issues which will require expensive legal action by the hospital systems and physicians as a result of a net decrease in reimbursement.

“Conceptually speaking, DOJ has publically stated that they will seek to support organizations which accomplish the law’s two core objectives—lower cost and improve quality. More specifically, DOJ has said “[they] will not challenge an ACO that otherwise meets the CMS criteria to participate in the Shared Savings Program if ACO participants that provide the same service (common service) have a combined share of 30 percent or less of each common service in each ACO participant’s Primary Service Area (PSA), wherever two or more ACO participants provide that service to patients from that PSA.”

 Does anyone understand this? It gets worse.

 “DOJ have even allowed for the possibility of ACOs where the combined PSA share would exceed 30 percent in saying “an ACO outside the Safety Zone may proceed without scrutiny by the Antitrust Agencies if its combined PSA share for each common service, wherever two or more ACO participants provide that service to patients from that PSA, is less than or equal to 50 percent. An ACO in this category is also highly unlikely to present competitive concerns if it avoids certain specified conduct.”

As we get further into the weeds the Stage 2 ACO regulations become even more confusing.

“The Justice Department has stated that they will use the more malleable “rule of reason” analysis when reviewing ACOs. The Antitrust Policy Statement explains, however, that for ACOs that do not meet the Rural Exception, a combined PSA share for common services of more than 50 percent provides a valuable indication of an ACO’s potential for competitive harm.” DOJ is proposing an expedited review process for ACOs; and we can expect many ACOs to line up for the review process.”

My reflex is that you have to trust that President Obama will do the right thing for physicians and their patients.

You also have to trust that the hospital systems that salary physicians will be looking out for their physicians and not themselves while owning physicians’ skills and intellectual property.

It will be a very difficult task!

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

 

 

 

 

 

 

 

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Another Big Idea

April 20, 2011
inChronic Disese Management, Consumer Driven Health Care, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

President Obama refuses to listen to this big idea. He is not focused on the real problems in the healthcare system.

A healthcare cost saving of at least $800 billion dollars a year would occur if the complications of chronic disease could be decreased by 50%.  It could occur if he concentrated on changing the culture from medicine’s job is to fix disease to society’s job is to prevent disease. Patients must also learn to be responsible for the self-management of their chronic disease.

The healthcare system is dysfunctional. President Obama’s Healthcare Reform Act will not fix this dysfunction. It is making it worse. He is ignoring many of the real causes of the inefficiencies in the healthcare system. 

The question is who is at fault? All the stakeholders are at fault. The stakeholders are the healthcare insurance industry, the government, the hospital systems, the physicians and most importantly, the patients.

President Obama is ignoring the patient’s role and responsibility in the inefficiency of the healthcare system. He is focusing exclusively on the physician’s role.

Once President Obama is successful in making medical care a commodity the patient-physician relationship will be destroyed. The patient –physician relationship accounts for a large part of the therapeutic effect of a treatment.

The primary stakeholders are patients with physicians. Without patients or physicians we would not have a healthcare system. Healthcare insurance companies, the government, and hospitals are secondary stakeholders. President Obama focus will increase the benefits of the healthcare system to the secondary stakeholders and not to patients.

The healthcare insurance industry has turned out to be the biggest villain . It has taken advantage of the dysfunction of the government and weakness of patients and physicians as lobbying groups. The healthcare industry takes sixty cents out of every healthcare dollar spent by Medicare, Medicaid and private insurance. President Obama’s Healthcare Reform Act’s rules and regulations do not deal with the healthcare industry control over these healthcare dollars.  It has yielded to every demand by the healthcare insurance industry.

The healthcare insurance industry is abusing its power. It has manipulated congress and the administration to serve its own vested interest.

The result is grotesque salaries for executives and excessive administrative fees. Our healthcare system is supposed to be for the benefit of the consumers (patients), not for the benefit of the healthcare insurance industry.

The healthcare industry has restricted access to care. It has decreased physicians’ reimbursement and withheld payments for services rendered without explanation or justification.

The government outsources the administration of Medicare and Medicaid to the healthcare insurance industry.  

There are many examples of healthcare insurance industry abuse of the healthcare system. Medicare Part D provides an excellent example. Medicare Part D fees for 2011 increased once again with the consent of the government. These new fees are abusive to seniors. It is difficult to understand why government regulars do not defend seniors.

Seniors on fixed incomes need a reliable drug coverage plan. The healthcare insurance industry lobbied for four years to get a drug plan passed that would be to its advantage at the expense of the government and seniors.

The government subsidizes Medicare Part D. Yet the government cannot negotiate drug prices. The abuses are the result of high deductibles and a doughnut hole that does not provide drug coverage between $2,700 and $5200 dollar spent. Prices are rigged so a patient can find himself in the doughnut hole in a hurry.

Humana and United Healthcare rushed to insure seniors under Medicare Part D. They visualized the money making opportunity quicker than most of the other healthcare insurance companies.

Both companies also realized that as healthcare insurance premiums increased in the private sector there would be more uninsured consumers. The less lives covered the lower its profit. Therefore a drug plan leveraged in their favor sponsored by the government would cover the decrease in profit in the private sector.

United Healthcare paid AARP over 4 billion dollars to be their exclusive carrier for AARP senior members. There is no shortage of complaining from AARP’s seniors. The payment to AARP for sponsorship has not been fully disclosed nor its ethics been investigated.

United Healthcare made a profit of $4.7 billion dollars last year from Medicare Part D at patients at the government’s expense. Despite this enormous profit the Medicare regulator have permitted United Healthcare to increase the premiums each of the last five years.  

On careful analysis seniors are being ripped off. In response seniors have flocked to Wal-Mart and others to buy $4.00 per month generics drugs. They pay cash and avoid using brand name drugs. Their goal is to avoid the Medicare Part D doughnut.

If seniors used Medicare Part D, their co-pay would be $6.00 for a month’s supply of medication rather the $4.00 paying cash at Wal-Mart. The doughnut could be charged between $20 and $50.  The healthcare insurance company would probably only pay Wal-Mart $4.00. None of these price manipulations are transparent or restricted. Seniors are the losers.

Medicare Part D is a good place to start to understand the abuse of this non-transparent system. President Obama is making a big deal of his token changes to Medicare Part D. His changes are not significant.

Similar abuses occur with government outsourcing Medicare Part A and B.

There is a tremendous waste of government and consumer resources. Real price transparency is essential if there is going to be any progress in reducing the cost of the healthcare system.

What do I mean by real price transparency? It means knowing,

  1. The cost of the drug to the pharmacy.
  2. The cost of the drug to the healthcare insurance company.
  3. The price of the drug calculated toward the doughnut.
  4. The government subsidy for the cost of the drug to the healthcare insurance industry for administration of the program.
  5. The profit for the healthcare insurance industry.

If real price transparency occurred, we would be able to have a competitive pricing system.

The administration is busy penalizing patients with decreased access to care and physicians with decreased reimbursement to decrease healthcare costs. It should focus on the real villain in the healthcare system, the healthcare insurance industry.

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

 

 

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A Big Idea For President Obama

April 17, 2011
inMedicine: Healthcare System, Patients Problems, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

President Obama has been disingenuous during his entire time in office.  He has publicly asked for ideas on Repairing The Healthcare System before and after he took office. I will repeat the advice that he has ignored in the next few blog post.  

He has been influenced by the ideas of Tom Daschle and Don Berwick to the exclusions of ideas that might actually be effective. Both men are convinced that the healthcare system would be repaired if there were a complete government take over.

President Obama has been extremely cunning in working his way toward a complete government takeover of medicine. Some of Mr. Daschle and Dr. Berwick’s ideas are good. Most of their ideas will not fix the defects in the healthcare system. There is a total disregard of citizens in their program.  

President Obama is expanding the bureaucracy and creating a wasteful morass of new agencies. Those agencies are generating incomprehensible and non-enforceable regulations. The regulations are trying to commoditize medical care  in America. 

Our healthcare system is a mess. Medicare and social security in its present form will result in a 100 trillion dollar a year deficit in 75 years. The solution to Repairing the Healthcare System is relatively simple. The key to the solution is social responsibility by all stakeholders involved in the healthcare system and individual responsibility by the consumers and potential consumers of healthcare.

Neither political party is getting behind a big idea that’s bold enough to actually solve major problems.  

Unfortunately, secondary stakeholders (the healthcare insurance industry, hospital systems and government) have not become socially responsible toward the best interests of consumers. Consumers will assume responsibility with significant incentives and appropriate education.

 One big idea is to reform the food industry. The food industry’s products and advertising undermine Americans eating healthy. The food industry’s advertising has to be redirected to consumer education and not consumer self-destruction.  President Obama’s approach to healthy eating has been tokenism.

He has ignored appropriate input on how to fix the food industry in an effort to decrease obesity in America.

  No one has asked for the opinion of practicing physicians. The focus of all healthcare policy “experts” is economics.

Here is a big idea.

Obesity leads to chronic diseases such as Type 2 Diabetes Mellitus. Walk into any Coronary Care Unit in the nation and 80% of the patients with myocardial infarctions are obese and have Diabetes Mellitus. The complications of Diabetes Mellitus cost the healthcare system $160 billion dollars a year. Eliminating obesity will reduce the incidence of Diabetes Mellitus by at least 50%.

Cheap manufactured food subsided by the government results in 19% of America’s fossil fuel use. It also results in more than 75% of the obesity in this country.

Eighty per cent of the healthcare dollars are spent on the complications of chronic diseases. The eighty percent cost to the healthcare system is one trillion six hundred million dollars a year.

The obesity epidemic is interconnected with our energy policy and energy subsidies, farm policies and subsidies, environmental policy and conditioned attitudes toward fast food.

 Michael Pollan points out the problem with our entire food supply system and the impact it has on healthcare, the environment and energy.

“Which brings me to the deeper reason you will need not simply to address food prices but to make the reform of the entire food system one of the highest priorities of your administration: unless you do, you will not be able to make significant progress on the health care crisis, energy independence or climate change

The three problems are tightly connected. The repair of each problem has to must be done in a creative way that aligns all the stakeholders’ incentives with consumers’ health and wellness.

Michael Pollen goes on to tell President Obama “Unlike food, these are issues you did campaign on — but as you try to address them you will quickly discover that the way we currently grow, process and eat food in America goes to the heart of all three problems and will have to change if we hope to solve them.

Mr. Pollan’s point is the way we grow food and manufacture food stuff is a major reason for obesity and pollution leading to the complications of chronic diseases (Type 2 Diabetes Mellitus and chronic lung disease). This results in a 1.6 trillion dollar cost to the healthcare system. All American’s needs is the will to change.  

It is going to require a lot of public and congressional education. It will be harder to educate congress than the public. Vested interest lobbying drives Congress.  President Obama must help the public create a greater voice than the special interests. The public will then lobby the congress.

Michael Pollan says “the 20th-century industrialization of agriculture has increased the amount of greenhouse gases emitted by the food system by an order of magnitude; chemical fertilizers (made from natural gas), pesticides (made from petroleum), farm machinery, modern food processing and packaging and transportation have together transformed a system that in 1940 produced 2.3 calories of food energy for every calorie of fossil-fuel energy it used into one that now takes 10 calories of fossil-fuel energy to produce a single calorie of modern supermarket food. Put another way, when we eat from the industrial-food system, we are eating oil and spewing greenhouse gases.  

The reformatting of the payment system for physicians with the theoretical effectiveness of Accountable Care Organizations (ACO’s) will not work. It will only waste money. It will only dispirit the medical profession and diminish the effectiveness of a necessary workforce. Physicians are not the villains.

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

 

 

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The Will Of The People

April 10, 2011
inDisinformation and the healthcare system, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System
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Stanley Feld M.D.,FACP,MACE 

I have struggled to understand why President Obama is ignoring the will of the people. I have also struggled to understand why the traditional media ignores the important stories.

The media deals with the day’s murders, tragedies and traffic accidents in exhausting details. Important stories are covered and dismissed with meaningless sound bites.

Americans are interested in learning the story beneath the sound bites. This is the reason traditional newspapers are failing. Its old business model doesn’t work any more.   

Americans want affordable high quality healthcare available to everyone. Most Americans are charitable and hard working. They want to help the unfortunate.  They are sick of entitlements and their wasteful costs. They do not want a system that discourages hard work and responsibility.

President Obama is expanding healthcare entitlements while totally disregarding the fiscal responsibility of the federal and state governments. 

He continues to use fuzzy math to blur the resulting increases in deficits.  

The entrepreneurial spirit in Americans is the spirit that has made America great. President Obama’s policies are going to destroy this spirit.   

This week a reader wrote:

“Hi Dr. Feld

I’m using my soon to be published book to organize America.  Do you think your son Brad would be interested in setting up a website that helps “defund” the political parties by coalescing average Americans who are tired of the lies to send a dollar to candidates who are not from the establishment of either party?

Until we can get people organized using the internet to change the people in DC, we lose.  It’s all about the money.  1% of America, giving 1 dollar each can send a new face to Congress.  We can do it! we must do it!”

I sent the message to Brad.  On the surface Brad’s reply is straightforward. No is no! To me it has deeper meaning.   

“I'm not really interested in engaging in this. I'm drifting further away from politics every day as I don't think you can easily fix the macro through surgical strikes.”

I have often been asked why, as a retired endocrinologist, I display so much passion for repairing the healthcare system.

During my thirty years in practice I lived through the destruction of our healthcare system. Our government has had its heart in the right place but always seemed to do things to the disadvantage of the two principle stakeholders, patients and physicians. These two stakeholders are the most disorganized and least politically powerful of all the stakeholders involved in the healthcare system.

President Obama either doesn’t have a clue to the problems in the healthcare system or doesn’t care what patients or physicians think. He is either naïve or married to untested theoretical concepts. President Obama is going to destroy our healthcare system and replace it with a bureaucratic system that will make medical care mediocre for all. The federal government cannot afford the cost of his “new healthcare system.”

There is also a big ideological issue. President Obama believes the government needs to do everything for the people. The opposite argument is Americans need to do everything for themselves. The government’s job should be to level the playing field among stakeholders.

Patients and physicians want independence and personal responsibility. President Obama is not listening to the people. 

Kris Kristofferson is one of the great popular poets of our time. His song “To Beat The Devil” has been the inspiration for my blog. My goal is to educate the public beyond the typical sound bite. 

If you waste your time a-talking to the people who don’t listen
To the things that you are saying who do you think’s going to hear? 
And if you should die explaining how the things that they complain about
Are things they could be changing, who d’you think’s goin’ to care? 

There were other lonely singers in a world turned deaf and blind who
Were crucified for what they tried to show,
And their voices have been scattered by the swirling winds of time,

‘Cause the truth remains that no-one wants to know!

When no-one stood behind me but my shadow on the floor and lonesome was more
Than a state of mind. You see, the devil haunts a hungry man; if you
Don’t want to join him you’ve got to beat him. I ain’t sayin’ I beat the
Devil, but I drank his beer for nothing, and then I stole his song!

 

And you still can hear me singing to the people who don’t listen
To the things that I am saying, praying someone’s going to hear;
And I guess I’ll die explaining how the things that they complain about
Are things they could be changing, hoping someone’s goin’ to care.

I was born a lonely singer and I’m bound to die the same
But I’ve got to feed the hunger in my soul; 

  

 

The reader of my blog I quoted is yearning to use the new media to educate and organize the public to say no to the politicians who seem to do everything they can to screw up things the public is complaining about and has no interest in hearing their complaints or eliminating them.

 

On the other hand Brad is saying surgical strikes to the political process does not change things in our society. Innovations by entrepreneurs change things. This is the deeper meaning of Brad's comment.

We are going through an electronic revolution. Jeff Bezo with Amazon.com and the Kindle revolutionized the book publishing business. Google revolutionized the information business. Steve Jobs did the same for the communications and information business with the IPhone and the IPad. Netflix is revolutionizing the movie and television business. Think about the power of Twitter and Facebook. Social networking is in its infancy. It continually gets bad press because of its threat to the traditional media and political power.

These innovations are revolutionary. They will empower citizens to be a deterrent to politicians’ power. They will not be able to limit our freedom of choice. 

Petty political arguments about decreasing the budget by $3 billion vs. $38 billion dollars are silly. Americans are not stupid. This debate is not newsworthy.  Our deficit is over $1 trillion dollars a year. Government spending has not stimulated our economy. It has not increased our standard of living. Both political parties are lost in translation.

“President Obama believes that prosperity begins inside someone's head in Washington and then flows out to the country”

Most Americans disagree.

We need leadership that believes in innovation and entrepreneurship. Leaders should understand that prosperity is born inside the head of several hundred million citizens. 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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