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Why Vermont’s Single Party Payer Healthcare Plan Failed

 Stanley Feld M.D., FACP,MACE

Vermont’s single party payer healthcare plan was doomed to fail from the onset for several reasons.

Healthcare policy consultants do not understand the medical care system. The healthcare policy consultants for the Vermont healthcare system were the same consulting architects President Obama used for Obamacare.

The consultants were Harvard’s William Hsiao and MIT’s Jonathan Gruber.

William Hsiao has spent most of his academic career helping governments install healthcare systems. William Hsiao is the K.T. Li Research Professor of Economics in Department of Health Policy and Management and Department of Global Health and Population, at Harvard T.H. Chan School of Public Health.

Jonathan Gruber is a professor of economics at the Massachusetts Institute of Technology, where he has taught since 1992.[1]

He is also the director of the Health Care Program at the National Bureau of Economic Research, where he is a research associate.

Jonathan Gruber has been heavily involved in crafting public health policy.

He has been described as a key architect[2] of both the 2006 Massachusetts health care reform, sometimes referred to as “Romneycare”, and the 2010 Patient Protection and Affordable Care Act, sometimes referred to as the “ACA” and “Obamacare”.

There is little evidence that the systems he and Dr. Hsaio have built are overwhelming successful, cost effective or preserve consumer freedom of choice.

In fact, a study by NPR and Harvard’s T.Chan School of Public Health concluded that Obamacare is a complete failure.

Dr. Hsaio is on the faculty the Harvard T.Chan School of Public Health.

NPR AND HARVARD T.H. Chan School of public Health SAY: OBAMACARE IS A COMPLETE FAILURE

In a New York Times interview in 2009 Dr. Hsiao discussed the system of healthcare Reform he installed in Taiwan.

The question was:

What’s the most important lesson that Americans can learn from the Taiwanese example?

Dr. Hsiao.

You can have universal coverage and good quality health care while still managing to control costs. But you have to have a single-payer system to do it.

The Taiwan government managed to insure 98 percent of the population with a premium cost of 4.6 percent of wages.

Q.

Has your system of healthcare in Tiawan translated into better life expectancy or lower complication rates from major diseases?

Dr. Hsiao.

“There is evidence of positive health results for select diseases, like cardiovascular disease and kidney failure.”

There is no medical or financial data available to prove outcomes have improved.

“Overall, it’s really difficult to say that national health insurance has improved the aggregate health status, because mortality and life expectancy are crude measurements, not precise enough to pick up the impact of more health care.”

“That said, life expectancy is improving, and mortality is dropping. And everyone now has access to good health care”.

This is not good science. It is not even good social science. This is a biased opinion.

Q.

What are the system’s weaknesses?

Dr. Hsaio

“In the legislative process, compromises had to be made. First, the president yielded on payment reform, so Taiwan kept its fee-for-service payment system. Unfortunately, that encourages doctors and hospitals to give more treatment in order to boost their income.

“Second, the Taiwanese system doesn’t have a systematic way to monitor and improve quality of care.”

“Third, in the legislative process, they rejected a provision to adjust the premium automatically when the national health system depletes its reserves.”

“In every country, health care costs are increasing faster than wages. When that happens, the premium has to go up. But that provision wasn’t incorporated into the law. As a result, the system is running a deficit.”

“National health insurance tries to cut the fees for hospital and physician services. But eventually these fee reductions will adversely affect the quality of health care.”

President Obama was so anxious to change the healthcare system in the United States to fit his socialist ideology that he picked two professors, Dr. Hsaio of Harvard and Jonathan Gruber of MIT to be the architects of Obamacare.

Jonathan Gruber has been introduced as the ‘architect’ of the Massachusetts law and/or Obamacare”.[52]

Neither professor had scientific evidence that a single party payer system would work efficiently.

Obamacare was not working efficiently yet the progressives in Vermont hired Dr. Hsaio and Dr. Guber to be the architects for Vermont’s single party payer system.

Jonathon Gruber has turned out to be a honest about the Obama administration’s lies.

Many of the videos show him talking about ways in which he felt the ACA was misleadingly crafted or marketed in order to get the bill passed, while in some of the videos he specifically refers to American voters as ill-informed or “stupid”.

In October 2013, Gruber we said: “the bill was deliberately written “in a tortured way” to disguise the fact that it creates a system by which “healthy people pay in and sick people get money”.

Some of Americans are waking up to the fact that they cannot trust President Obama and his administration to be our surrogate. This is true not only in healthcare but in his decision making in every area of the economy and our live.

Gruber said this obfuscation was needed due to “the stupidity of the American voter” in ensuring the bill’s passage. Gruber said the bill’s inherent “lack of transparency is a huge political advantage” in selling it .[31]

 In 2010, Jonathan Gruber expressed doubts that the ACA would significantly reduce health care costs. He thought lowering costs played a major part in the way the bill was promoted by the Obama administration.[36]

President Obama said he never met Jonathan Gruber and did not think he came to the White House. President Obama forgot he hired him and paid him a $400,000 consultation fee.

In 2014, the Obama administration claimed that Gruber did not have a major role in creating the PPACA.[50]

President Obama acted irresponsibly to the public by hiring healthcare policy wonks to change America’s healthcare system without evidence for the success because their thoughts fit his ideology.

I don’t think President Obama understands he has changed the way hospitals and physicians have changed their approach to healthcare and medical care.

In my opinion, healthcare and medical care has changed for the worse.

Rich Lowry said that the videos were emblematic of “the progressive mind, which values complexity over simplicity, favors indirect taxes and impositions on the American public so their costs can be hidden, and has a dim view of the average American”.[41]

The American public eventually figures it out.

Commentator Charles Krauthammer called the first Gruber video “the ultimate vindication of the charge that Obamacare was sold on a pack of lies.”[42]

 The Vermont governor hired Dr. Hsaio and Dr. Gruber to create a single party payer system in Vermont figuring,the system would be easier in one small state than in the nation.

Vermont Governor Peter Shumlin (D.) announced that he was pulling the plug on his four-year quest to impose single-payer, government-run health care on the residents of his state.

“In my judgment,” said Shumlin at a press conference, “the potential economic disruption and risks would be too great to small businesses, working families, and the state’s economy.”

Watch out Colorado!

Why doesn’t a single party payer system work?

All of the healthcare policy wonks, especial Dr. Hsaio and Dr. Gruber, leave out the most important ingredients in a successful healthcare system.

Consumers cannot be treated as a commodity. Consumers cannot be forced to take what is given to them. The healthcare system must have a viable physician patient relationship provision.

The physician patient relationship is a big part of the therapeutic index. If treatment is to be successful patients must participate in their care.

Consumers of the healthcare system must drive the healthcare system. It must not be government or the healthcare insurance industry.

Consumers must be a the center of the healthcare system.

A system needs to be developed that puts patients in charge, not the government. Consumers must be responsible for their healthcare and their healthcare dollars.

This will motivate doctors and hospitals to compete for patients’ business.

My Ideal Medical Savings Account will provide incentives for the consumers to have a consumer driven healthcare system. This system will in turn drive hospital systems and physicians to compete for their care.

The end result will be to decrease the cost of the healthcare system and improve medical care and consumer satisfaction with the healthcare system.

 

 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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We Never Learn: Watch Out Colorado

Stanley Feld M.D.,FACP, MACE

“You can always count on Americans to do the right thing – after they’ve tried everything else.”

 Winston Churchill

There are many smart people in America.

Americans form opinions from the information presented to them. When the information presented in incorrect or incomplete it is easy to form the wrong opinion.

The art of presenting misinformation and disinformation has been perfected.

The people of Colorado are now being bombarded with the need to pass Amendment 69 or ColoradoCare.

Most Coloradans have not paid sufficient attention to the amendment. Their opinions are being influenced by misinformation or inadequate information concerning the unintended consequence that are inevitable.

Many might look at ColoradoCare’s official website. http://www.coloradocare.org/know-the-facts/increases-savings/ and read the following.

  • With Amendment 69, ColoradoCare, every Colorado resident can contribute their best, knowing ColoradoCare has everyone covered with universal health care.”   Sounds wonderful.
  • “ Imagine life with ColoradoCare. If you’re a resident and you need any kind of health care (including mental health), you just go to see your provider, and ColoradoCare pays the bill.”Free is great.
  • “Without the layers of hassles, businesses, providers, and everyone in the state can go about their important work of contributing to their families and communities knowing ColoradoCare has everyone covered.”   The problem is nothing is free.                                                                                                        
  •  In a statement to the Colorado Independent October 2016, Bernie Sanders lent his support to the single-payer measure.
  • “Colorado could lead the nation in moving toward a system to ensure better healthcare for more people at less cost. In the richest nation on earth, we should make healthcare a right for all citizens.”

Hillary Clinton has not yet supported ColoradoCare. I believe she is afraid it will steal her thunder by having large increases in government healthcare expenditures she has planned. She plans to increase taxes and get healthcare governance firmly in the hands of the federal government.

The ColoradoCare website goes an to say,

“An economic analysis of health care spending in Colorado has calculated that comprehensive health coverage for every resident could be paid for with pre-tax payroll premiums of 3.33% for employees and 6.67% for employers.”

There has been no effort to prove these numbers are correct.

In fact, all of the Republican establishment politicians in Colorado are against ColoradoCare as well as many high ranking members of the Democratic establishment.

The Democratic establishment includes Governor John Hickenlooper and former governor Bill Ritter. They are opposed to Amendment 69’s passage because they understand the financial burden ColoradoCare would put on the state’s budget and growth.

The size of the current state budget is $25 billion dollars. The tax increase for ColoradoCare would be an additional $25 billion dollars. Everyone can assume the state would need more to implement the program.

ColoradoCare would be far and away the largest tax increase in state history, and would give Colorado the highest tax rate in the nation.”

“ This would be implemented as a payroll tax that would be split into 3.33% for employees, and 6.67% by employers.

An additional $18billion dollars would be asked of the federal government, as well as a waiver to let the state opt out of the Affordable Care Act in order to fund Colorado care.

If voters approve ColoradoCare, it would be written into the state constitution, making it very difficult to dismantle and impossible to amend.

The president of the Denver chamber of commerce is opposed to ColoradoCare because the chamber knows this will drive businesses out of the state and inhibit businesses from coming into the state. The Denver chamber of commerce has worked very hard and very successfully to bring business into the state.

Most of all these politicians know that Obamacare has failed. Oregon’s attempt at the state being the single party payer has failed.

Most recently, Vermont’s attempt at a single party payer system has failed.

Both Oregon’s and Vermont’s governance realized the great fiscal burden to the state budget as well as its businesses and residents.

These states quit before the taxpayers realized the extraordinary tax burden the single party payer system would have on their state.

However, most progressive thinking people cling to the ideology that a single party payer system is the way to universal coverage.

Why did Vermont fail to institute a single party payer system after the state legislature passed the bill?

I will describe the reasons for failure in my next blog.

Walker Stapleton, the Colorado state treasurer said, “a major part of his responsibilities is attention to the fiscal and economic condition of the state.”

He goes on to say,

“If passed by the voters, the provisions of Amendment 69 will have a great negative impact on the state’s fiscal and economic health, as well as impacting individual residents fiscally.”

“If passed, Amendment 69 — creating a governmental entity called ColoradoCare to administer the health care payment system — would amend the Colorado Constitution. It would not be a legislative issue to which the Colorado Legislature could make amendments as needed.”

Walker Stapleton said the state health exchange was supposed be self-sustaining. However, the state health exchange has blown through federal dollars provided.

The State has no way to fix the state exchange or has a way to pay back the federal loan. Walker Stapleton acknowledged the problems with Colorado Health Benefit Exchange, saying, “The exchange was intended to be self-sustaining, and it is anything but, and we have blown through federal dollars.”

United Health and others are leaving the exchange. The exchange has one-fifth of the enrollment anticipated because of cost, network size and service.

“The exchange is in a hole and we have not yet come up with a way to fix it,” he said.

He added that Amendment 69 would assume the state health exchange burden in addition to its debt.

This burden is not good for the single party payer financial burden.

ColoradoCare (Amendment 69) was proposed by a Boulder State Senator, a progressive M.D., with support of the other progressive M.D.s in the Boulder, Colorado community.

Most of the M.D. practices in the Boulder community are owned by Boulder Community Hospital.

I wonder if the M.Ds understand the unintended consequences to the state’s fiscal health, the unintended consequence to the business environment as a result of the increase in tax rate and the unintended consequence to residents experiencing increases in taxes.

I wonder if these physicians are aware of the unintended consequences to their ability to practice medicine.

I suspect the author of the amendment and her followers have not thought about the unintended consequences.

Consequences.

1. Amendment 69 authorizes state taxes be increased $25 billion annually in the first full fiscal year and by such amounts that are raised thereafter.

2. ColoradoCare would be exempt from Taxpayer’s Bill of Rights (TABOR).

3. “A 10 percent payroll tax for every employer in Colorado,” Stapleton said.

The employer would pay 6.7 percent and the employee 3.3 percent. If a taxpayer were self-employed, he/she would pay both, for a total 10 percent.

4. Investment income is subject to this tax.                                                                                                                                                                         5. If the employer is outside the state, the tax does not apply for the employer’s 6.7 percent so the employee pays the full 10 percent.                                                                                                                                                                                                                                     Walker Stapelton said, “It is possible retirement income would be taxed,”

Also of great concern to Stapleton are these additional provisions in Amendment 69:

Transferring administration of the Medicaid and children’s basic health programs and all other state and federal health care funds for Colorado to ColaradoCare;

• Transferring responsibility to ColoradoCare for medical care that would otherwise be paid for by workers’ compensation insurance;

• Requiring ColoradoCare to apply for a waiver from the Affordable Care Act to establish a Colorado health care system;

• And suspending the operation of the Colorado health benefit exchange and transferring its resources to Colorado Care.

I hope the people of Colorado understand what this dangerous amendment represents to the fiscal health of the state.

The population will only understand its negative connotations if it starts paying attention to the consequences.

If it only believes that free medical care is good they do not understand that nothing is free.

A system in which the state offers free medical care will fail at the expense of all the taxpayers.

It has already been proven in Oregon and Vermont.

There is a more effective and less expensive way!

If you are interested please read the following links.

My ideal medical savings account is democratic and provides universal coverage with the consumers being responsible for their choice of medical care while being in control of their healthcare dollars.

Consumers’ responsibility for their health is always left out of models of healthcare reform.

If the federal government or a state government wants a business model to be successful, it should adapt my future state business model.

It is a consumer driven model with consumer responsibility built in so that consumers control their healthcare dollars.

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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More On The Public Option

Stanley Feld M.D.,FACP,MACE

Hillary Clinton is a tax and spend Democrat. She will be an extension of the Obama administration.

Her list of promises and expenditures will continue in healthcare without success in providing better cost effective care to Americans.

Her plans for healthcare will result in increased government control of Americans’ lives and freedoms while escalating the federal deficit.

The expansion of President Obama’s failed programs will simply accelerate the path toward total collapse of our healthcare system.

Slide7

Dr. Robert Kocher was special assistant to President Obama for health care and economic policy from 2009 to 2010. He was instrumental in promoting the consolidation of healthcare systems. He also encourage these healthcare systems to buy physicians practices in order to consolidate networks.

The rational was the government would then deal with one provider (the hospital system). The communications within the network would improve the quality of care and decrease the cost of care.

Theoretically, this should be true. However, the differences between the culture of hospital administrator and physicians made Dr. Kocher’s goals impossible to achieve.

I believed then that the consolidation of doctors into larger physician groups was inevitable and desirable under the ACA.”

This last week he admitted that he was wrong and individual practicing physician groups are more efficient and less expensive than “hospital controlled networks of physicians.”

“I, along with Ezekiel Emanuel and Nancy-Ann DeParle, argued that “these reforms will unleash forces that favor integration across the continuum of care.”

“We thought only hospitals or health plans can afford to make the necessary investments” needed to provide the care we will need in a post-ACA world.”

“Now I think we were wrong to favor it.”

“What I know now, though, is that having every provider in health care “owned” by a single organization is more likely to be a barrier to better care.”

In 2010, I predicted hospital systems owning physicians would not work. Anyone with an understanding of hospital politics and hospital administrators thinking knew it could not work.

The only reason physicians let hospital systems buy their practices was because the physicians were disgusted with the intrusive government rules and regulations and they were afraid they would be left out of the growing future trend.

It was clear to me the trend was misguided political manipulation.

The best of the clinicians tried to make it work but failed. ACO’s controlled by hospital systems were destined to fail and not save money.

ACO’s that are owned by private group practices are barely saving money and profiting by that savings.

President Obama and his administration fell for the concept because they visualized it as a path to control physicians and the healthcare system.

The Obama administration and its experts never considered what the consumers might want or need.

The healthcare insurance industry is now suing the government because the government is reneging on its reinsurance commitment totaling billions of dollars.

President Obama and Hillary Clinton are calling for a public option. This is a diversionary tactic The public option is certain to fail.

The government will continue to remain totally dependent on the healthcare insurance companies for administrative services.

The reintroduction of the public option will accelerate the collapse of the healthcare system. It appears that Ms. Clinton has no idea of the unintended consequences.

The unspoken reality of the “public option” is to destroy private healthcare insurance. It is not a good idea. It will accelerate the  collapse of the healthcare system.

Slide7

I have written extensively about the consequences of the public option.

The government would squeeze private insurance out of the marketplace through regulatory control over access to care, premium control over consumers, and financial control over providers. The government would undercut the marketplace.

The government will remain dependent on the healthcare insurance industry to administer the services provided for all of the existing government healthcare services including Medicare, Medicaid and Obamacare.

The healthcare insurance industry would be in better shape because all the insurance risk would be transferred to the government.

The government programs are unsustainable at the moment. This unsustainability will escalate.

“While private plans must negotiate market rates with doctors and hospitals, a Medicare-like “public option” would fix payment rates by fiat, well below the rates that would otherwise prevail in a real market.

President Obama said just the opposite in his Journal of the American Medical Association article.

Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.”

President Obama’s statement is a total lie. However, the mainstream media is repeating the lie as a fact.

I hope President Obama and Hillary Clinton’s public option is no more convincing today to the public than it was in 2009.

It should be less convincing in the face of all the Obamacare failures to date.

Taxpayers are realizing that the public option will put them at more real financial risk. Taxpayer financial risk was clearly stated in the first version of the public option with no congressional questions asked.

The public option does not create a competitive marketplace and level the playing field. The competition will disappear at the taxpayers’ expense.

“Using a market mechanism, like a “health insurance exchange,” then adding a “public option” to undercut private plans and destroy a competitive private market was a political strategy.”

“All the public relations rhetoric about expanded “consumer choice,” promoting “market competition,” and keeping private plans “honest” was, of course, classic boob bait.”

It is clear that both Barack Obama and Hillary Clinton think the American public is stupid.

President Obama has been playing the American public for 71/2 years. He was correct when he told Senator Kerry and Representative Barney Frank that we don’t need a public opinion.

Obamacare was enough to get central government control of the healthcare system.

Let us think about it a little.

The federal government mandated coverage. The problem is the mandates didn’t work.

Then, Obamacare defined what healthcare plans are permissible.

These Obamacare regulations escalated the premiums and the deductibles to unaffordable heights.

The federal government determined what health benefits consumers could receive.

It didn’t work. If a benefit was not included, consumers bought that benefit outside the system or did not buy healthcare insurance if the benefits where too many.

Physicians started to not participate in the Obamacare system. This non-participation has caused a shortage of providers.

Some medical procedures or treatments were not covered. The government decided what should be covered, what level of coverage should exist and what copayments and deductibles were to be allowed.

Consumers have been protesting. The government has not been listening.

Obamacare has all the tools and power of the law to control the healthcare system without a public option.

However, the Obama administration and another future Clinton administration feel they must destroy the healthcare insurance industry in order to give the public no choice and compel them to comply.

The public option will also fail. It will lead to restrictions on freedoms and liberty. When this is clear the public will get very angry.

The cost of healthcare will rise, not fall, because of greater inefficiency and bureaucratic control.

There will be reams of red tape and unenforceable provisions as a result of government control.

There will be special deals to certain providers in order to avoid uncontrollable protest.

Who will lose? The poor and the middle class!

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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President Obama Continues to Deceive i.e. The Public Option

Stanley Feld M.D., FACP,MACE

President Obama continues to deceive the American people about Obamacare’s success as his term in office is winding down.

He is trying to use his charming personality to erase the fact tat Obamacare is failing.

The public must keep their eyes and ears open.

Obamacare is falling apart as the months continue. President Obama and the liberals are queuing up to pour more money into a failing healthcare reform model by reintroducing the need for a public option.

On June 30, 2016“CMS division of the HHS Dept. released the HHS Dept. released the actual Q1 effectuation report,

Each year the Obama administration has lied to Americans about enrollment in the health insurance exchange program.

As of June 30,2016, only 11.1 million people have signed up and continued to pay their premiums for Obamacare coverage in the 38 federal health exchanges as opposed to over 13 million that were published. State exchanges are closing monthly.

The latest prediction is that only 10.2 million will have insurance through Obamacare for the entire year. Eighty-seven percent of those insured through the federal health insurance exchanges have government subsidies in the government’s attempt to make health insurance purchased through the exchanges affordable.

If President Obama is correct about Obamacare providing insurance for 20 million people who did not have healthcare insurance previously then 9 million new people have signed up for Medicaid coverage.

Medicaid coverage is completely free to the recipients and is a single party payer system. The federal government presently pays for Medicaid coverage. The increased enrollment is also increasing the federal deficit.

Soon the federal government is going to dump some of the financial responsibility on participating states that are already running budget deficits.

It is only a matter of time before all the 23 state Co-Ops will go out of business and the federal health insurance exchange will take over.

Illinois is the 16th state to close its Co-Op doors. It followed one week after Oregon Health Co-Op closed its doors.

Land of Lincoln Health received $160.1 million in loans from the Centers for Medicare and Medicaid Services. More than 54,000 enrolled in coverage from the co-op through March 31.

 Where are these 54,000 people going to go for healthcare insurance?

 “It’s a bad day for the marketplace in Illinois and our consumers,” Jason Montrie, Land of Lincoln Health’s CEO said. “This is the end.”

Who is going to pay CMS back for these federal loans? The state of Illinois cannot afford to pay CMS back. The American taxpayers will re-pay the loan.

So far the total number of federal loans given to the failed nonprofit insurers is more that $1.5 billion for an experiment that was destined to fail from the start.

When are the liberals and progressives going to learn? You cannot keep spending other peoples’ money. You will eventually run out.

These last two weeks have been a big distraction because of party conventions.

Hillary Clinton announced her healthcare proposals. She has proposed an increase of $40 billion dollars in mandatory federal spending insulated from annual budget fights over the next 10 years to develop community health centers.

Hillary Clinton also wants to expand Medicare by letting people age 55 years old or older to opt into Medicare.

In addition she wants a public option.

“Bernie Sanders tweeted. “Together these steps will get us closer to the day when everyone in America has access to quality, affordable health care.”

Who is paying? The middle class taxpayer will pay the burden of the increase in taxes. It will not be paid by the 50% of the entitled citizens who do not pay taxes.

This is an attempt by Hillary Clinton to expand coverage for middle-aged adults. It also gives us a glimpse at how she wants to make Obamacare her own.

President Obama was not taking this lying down. He published an article in the Journal Of the American Medical Association, a “scientific journal.” This article is complete progressive propaganda. Why the AMA permitted this publication is beyond my understanding?

In his “special communication” President Obama once more presents another Trojan Horse (A destructive program that masquerades as a benign application.) to the physicians of America and the consumers of healthcare.

Some parts of the country have struggled with limited insurance market competition for many years, which is one reason that, in the original debate over health reform, Congress considered and I supported including a Medicare-like public plan.

Public programs like Medicare often deliver care more cost-effectively by curtailing administrative overhead and securing better prices from providers.59,60

The public plan did not make it into the final legislation. Now, based on experience with the ACA, I think Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited.

Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government.61

In 2009 Barney Frank and John Kerry insisted that a public option was essential for Obamacare to evolve into a single party payer system.

President Obama told them they would get to a single party payer system without a public option.

He has now changed his mind.

https://youtu.be/f3BS4C9el98

 

I have written extensively about the defects in a public option. http://stanfeld.com/?s=public+option

The New York Times writers did not describe the meaning or consequences of the public option in articles about both Hillary Clinton’s and President Obama’s call for a public option.

The American people should be told the real reason for the public option.

The combination of a “public option” within a health insurance exchange system was originally developed by liberal health policy analysts as a dual action mechanism to secure a “single payer” system. It presents the facade of a free market system but the end game is a full-scale government monopoly.

“If a public option became part of government-run health, the Health and Human Services secretary would establish such a plan, set its benefits, and fix its payment rates.

While private plans must negotiate market rates with doctors and hospitals, a Medicare-like “public option” would fix payment rates by fiat, well below the rates that would otherwise prevail in a real market.”

The “public option” would be a better deal for consumers rather than private healthcare coverage. The government would artificially force premiums down with subsidies. It could indiscriminately lower non-negotiated reimbursement to physicians and hospitals and force insurance companies out of the healthcare market.

It would result in an increase in federal taxes.

Additionally, the result will be a defacto single party payer system with less choice and access to care.

President Obama continues to ignore the fact that the government is dependent on the healthcare insurance industry to perform the administrative services for this government program. He ignores the fact that he needs doctors and hospitals to treat and care for sick patients.

He is only interested in financing the healthcare system and controlling the consumer’s ability to choose.

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

  • Stepehen

    Really very best to know about your blog really this site has been updating about life on the line, thank you for sharing with us. All knowing you are the professional whose job it is to advise keep it up.

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More ACOs Rules Will Mean More Problems For Obamacare

Stanley Feld M.D.,FACP,MACE

 I have written many articles on why I believe Accountable Care Organizations (ACOs) will fail.

ACOs are critical to the success of Obamacare as are many the other programs introduced by the Affordable Care Act.

If one listens to the Obama administration’s propaganda about how wonderful Obamacare has been for the American public, one would be living in a dream world, not the real world.

Obamacare has failed on many levels. The administration believes the public will not remember the previous failures.

Here are the failed promises.

  1. You can keep your doctor if you like your doctor.
  2. You can keep your health insurance policy if you like your health insurance policy.
  3. Each family will save $2500 dollars on healthcare each year.
  4. Anyone making less than $250,000 a year will not pay one red      cent in new tax.

The failures of Obamacare

  1. Obamacare will bend the healthcare cost curve. It bent the cost   curve for the first three years because Obamacare collected new taxes without providing healthcare services until 2014.
  2. Thirty-two (32) states refused to expand Medicaid.
  3. Twenty-two (22) of 50 states signed up to have state health insurance exchanges.
  4. All of the states that developed state co-ops with federal loans are under water. Fourteen of the 22 are bankrupt now. All will be bankrupt by 2017 or 2018.
  5. Private insurance enrollment though the federal health insurance exchanges has not increased for the last 3 years. Many of the buyers of health insurance exchange insurance have pre-existing illness. The health insurance exchanges are the only available insurance.
  6. The hospital system and private practice meaningful use electronic medical records have not increased percentage wise as expected.
  7. Worthless electronic medical records have increase at high costs to medical practices and hospital systems. These electronic medical records are providing some false big data information to the government and healthcare insurance industry to generate defective policy regulations. Hospital systems and physicians benefit little from the data generated.
  8. Healthcare.gov is still not right after spending billions of dollars over budget.
  9. Healthcare insurance premiums have skyrocketed for companies providing healthcare insurance to its employees.
  10. Healthcare insurance premiums have skyrocketed for people buying healthcare insurance from the federal and the few remaining state health insurance exchanges.

The only success I have seen is in Medicaid enrollment for the poor and illegal immigrants. The access of care has not improved for tax paying people.

These are just a few of the Obamacare failures. The public would never remember there have been so many failures reading the propaganda and press releases that appear from the government in the traditional mass media.

The Obama administration’s information has blurred those failures. I sense the public does not want to know about the impending disaster in the healthcare system.

Many intelligent people ignore these facts. They keep reciting the administration’s talking points about Obamacare’s success.

ACOs were supposed to lower healthcare costs. They were supposed to provide incentives for hospital groups and private practice groups to save money by providing more efficient medical care.

If these groups did lower the cost of care they would share in the savings along with the government.

There are many ways to achieve these savings and many measurements to determine these saving.

In short, ACOs were designed to shift the financial risk of care from the government to the physicians. If the physicians didn’t hit the benchmark they would lose money. The goal was also to shift to a flat rate payment for each illness from the individual fee for service based payment system.

Physicians will get paid a flat rate for a particular illness. It means that the risk for taking care of the illness at a particular cost shifts the financial burden to physicians and not the insurance company or the government.

The gigantic defect in the system is there is no burden on the consumer nor is there an incentive for consumers to be responsible for their health or healthcare dollars.

No risk is placed on the patient for compliance with treatment advice.

I have pointed out most of the defects in the ACO model in past blogs. ACOs are essentially an HMO on steroids. Hillary Clinton did not do too well in 1993 with the HMO model

ACOs do not address the problem of the high salaries of hospital administrators and healthcare insurance executives (who provide administrative services for the government). These salaries increase the cost of the healthcare system.

Last week CMS released another final rule intended to improve the way Medicare pays accountable care organizations (ACOs) in its Medicare Shared Savings Program (MSSP).

It is clear that if another final rule is made the last final rule is not working.

The hype of this new final rule is that the Obama administration has solved what many viewed as a critical flaw in the bonus structure for Medicare’s accountable care organizations.

I think the new final rule might make ACOs fail completely.

CMS spokesman said, ”Physician buy-in is critical for the long-term sustainability of the ACO program, which could play an important role within Medicare’s broader reforms to physician payments under the Medicare Access and CHIP Reauthorization Act, or MACRA.

MACRA is another poorly designed program that makes payment for physician service more difficult to understand.

MACRA could inspire physicians to quit the whole ACO enterprise.

A group of executives on the MACRA (Medicare Access and CHIP Reauthorization Act) task force said,

“The goal is to force physicians and payers determine how to most effectively tie payment to performance and value.”

“A panel of healthcare experts and organizational leaders who began adapting to value-based payment years before the Medicare Access and CHIP Reauthorization Act started fleshing out regulations talked about their programs at the event sponsored by the Commonwealth Fund.”It is obvious to me that you cannot force anyone to do anything they do not want to do. You can only provide motivation and incentive for people to do what is best for themselves from their point of view.

MACRA will not get physician buy in because it will be too restrictive, arbitrary and controlling.

So far there are only 433 Medicare Shared Savings Program ACOs. There are 3000 hospital systems that should be participating in the Obamacare’s ACO program.

Only 14% of the hospital systems are participating after 3 years.

There are many large physician practices that should be participating in the ACO program. The number of these groups are unknown.

The lack of participation is a result of the complexity of the ACOs, the inability to form a unified culture of physicians in a hospital system and the difficulty hospital systems have with pricing risk.

Pricing risk is the job of the healthcare insurance industry and not physicians or hospital systems.

The government wants to put that task on the shoulders of the physicians and hospitals.

There are two risk tracts for ACO. Tract one is called one-sided risk.

The ACO only shares in the savings and does not participate in the losses if they spend more than the benchmark costs.

Tract 2 is call two-sided risk. The ACO shares in the savings with a more generous bonus from Medicare than the bonus of the tract 1 participants but pays a penalty to Medicare if doesn’t save money or demonstrate high quality care.

Only 22 of the shared-savings 433 ACOs or 5% of the participating ACOs have chosen two-sided risk. The Obama administration’s goal is to have all 3000 hospital systems participate the two-sided risk model.

The participation rate is .7% participation rate for the 3,000 hospital system that should be participating. It is far short of the Obama administration’s goal.

I would not rate the ACO participation rate as a success after 3 years.

This absolute failure has not been acknowledged by the Obama administration or the Obamacare praise singing traditional mass media.

The new final regulations and MACRA will not fix this failure. It will only make the failure worse. I will discus both the new final rule and MACRA next time.

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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A Point Of View Is Not Reality

Stanley Feld M.D.,FACP,MACE

I find it harder and harder to believe the administration’s press releases. Every press release and press conference seem to be a lie.

How can President Obama’s press secretary live with himself?

America’s government is supposed to be a government by the people, for the people. The three branches of government are supposed to balance each other’s power.

The executive branch under the Obama administration has usurped much of the power of the legislative and judicial branches of government.

I have pointed out that things are not going well for Obamacare.

Consumers cannot keep their doctors.

Consumer cannot keep their insurance.

Obamacare’s hidden taxes have raise taxes at least 10%. Many increases are passed on to all consumers in every tax bracket.

Healthcare premiums have increased for everyone.

The only real increase in Obamacare enrollment has been in Medicaid enrollment. The central government currently pays for 100% of the insurance cost for Medicaid patients.

The Obama administration pays for the yearly increases for Medicaid premiums billed to it by the healthcare insurance industry.

Eighty-five percent (85%) of Obamacare enrollees receive subsidies. The average taxpayer does not know these facts.   I suspect most congressmen do not know these facts.

Meanwhile, during President Obama’s term in office, the budget deficit has increased from 12 trillion dollars to 19 trillion dollars.

Marilyn Tavenner was the former head of the Centers for Medicare and Medicaid Services. She helped construct policy, publicize, sell, and administer Obamacare and its expansion of Medicaid.

Ms. Taverner had one point of view as head of CMS. She helped create greater dysfunction in the healthcare system.

Now, she has a completely opposite point of view. She is presently president and CEO of America’s Health Insurance Plans, the healthcare insurance industry’s premier lobbying group.

She continuously defended Obamacare after each mishap such as the enrollment web site, the enrollment errors in counting enrollees, the insurance premium increases, the poor enrollment and the decrease in service. Each disaster increased the dysfunction of the healthcare system.

Now that her point of view has changed she has become extremely critical of Obamacare.

Her criticisms of Obamacare have gotten her closer to reality. Now, her point of view is that of the healthcare insurance industry.

However, it is not a point of view that supports the needs of consumers.

Someone ought to look at the consumers’ and physicians’ point of view.

Marilyn Tavenner has harsh criticism of the program she once helped get off the ground.

The Obama administration’s continuous praise of Obamacare’s success has marginalized Ms. Taverner’s recent criticism of Obamacare.

Unfortunately, the Obama administration’s praise of Obamacare’s success is a lie.

The news that UnitedHealth Group, the country’s largest health insurer, announced last month that it would pull out of many ACA markets next year is a very big deal.

UnitedHealth, which actually operates in nearly two-thirds of all U.S. markets, has predicted it could lose $500 million on its individual Obamacare plans in 2016.

The Obama administration’s response was a classic misdirection response.

“The news is not all that shocking, and it is not a sign that the law is failing.”

 United is not a dominant player in the marketplaces that the ACA “Obamacare” set up for individual insurance buyers. It covers only about 6 percent of 12.7 million marketplace participants. United does not appear to have been very effective at competing to attract customers.

 UnitedHealth CEO Stephen Hemsley has blamed higher medical utilization rates for Obamacare members, as well as the ease of switching plans, for his company’s Obamacare woes.

The higher utilization rates are because the government subsidizes 85% of the people in Obamacare. Medical care is essentially free. People do not join Obamacare or pay premiums unless they are sick.

A huge study released by the Blue Cross Blue Shield Association recently analyzed the medical claims of millions of Obamacare and employer-based members and found that Obamacare members are 22% costlier than employer-based members. Obamacare enrollees also tend to be sicker, coming with a host of chronic or expensive-to-treat conditions.” 

United plans offer the largest network of doctors, hospitals and other providers to choose from.

All this is expensive. Unsurprisingly, marketplace insurance buyers tend to pick lower-cost options. All this causes their premiums to be higher.

Most people believe free is best. Many are being conditioned by the administration to love free healthcare insurance.

The quality and availability of care is ignored in the administration’s boasting of Obamacare’s success.

The Obama administration wanted insurance companies with large networks to join. Only companies with restricted networks are joining. These companies are not providing the infrastructure for the access to quality care.

Obamacare ignores individual responsibility for healthcare and emphasizes individual dependence on the federal government.

The Obama administration’s misdirection continues;

“United’s selective exit from ACA marketplaces appears to reflect two positive features of the law. “

First, Obamacare was meant to spur competition among insurance companies, thus constraining premiums; in many markets, this dynamic appears to be at work, to the detriment of United.”

How is Obamacare promoting competition when UnitedHealth Group is leaving and Aetna is threatening to leave?

“Second, the law has curtailed many of the ways that insurers used to contain their costs, such as refusing to cover certain people or certain treatments, or jacking up premiums for older customers.”

This “positive feature” has caused premium prices and deductibles to increase and the affordable care act (ACA) to become the unaffordable care act (UAC).

“Many insurers on the ACA marketplaces have responded by offering plans that keep costs down by narrowing their networks of providers. This is a better way to contain costs than those the law forbids”.

Does anyone think this will make access to quality care more available?

 

Marilyn Tavenner is now implying the worst is yet to come. She made this prediction when she rolled out Obamacare and is declaring the same now as she runs the healthcare insurance lobbying group.

“I’ve been asked, what are the premiums going to look like [in 2017]? I think the overall trend is going to be higher than we saw in previous years. That’s my big prediction.”

 Marilyn Tavenner was formally a big fan of Obamacare. Her point of view has now changed.

She doesn’t see just one problem pushing premium prices substantially higher next year. She sees a confluence of many factors. This would suggest that overcoming these obstacles isn’t going to be easy.

I will discuss the factors Ms.Taverner is referring to my next blog.

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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All Medical And Healthcare is Local

Stanley Feld M.D., FACP, MACE

It is apparent that Obamacare is failing. Obamacare was built on a defective business plan designed with the goal to have all medical care controlled by the federal government.

If a stakeholder could potentially develop a plan that would threaten the central government’s takeover of the healthcare system, President Obama and his administration would simply rewrite the rules to destroy the initiative.

A clear example is the new rules to destroy health savings accounts. Medical savings accounts are similar to health savings account. The difference is Medical saving accounts put the money in the consumers’ hands initially. If there is any money left of the deductible it goes into a retirement account that is not directed to healthcare. Health saving account direct the unspent money to healthcare costs in the future.

The states are responsible for Medicaid. States claim that the central government is impinging on states’ rights by directing states to do what the federal government tells them to do with respect to Medicaid.

States have fought and won their argument in the Supreme Court when the federal government was paying 100% of the bill for Medicaid if states extended Medicaid. The Federal government will pay 100% until 2017. Then payment will decrease to 95% until 2020. At that time it will decrease to 90%.

Twenty-two states are not participating. The issue is a states’ rights issue rather that a healthcare issue even though the states need the federal help.

Even with this help many people on Medicaid cannot find a physician or can afford the medical care.

Many plans are being canceled, and many doctors and hospitals are no longer being covered by the new plans on the health insurance exchanges.”

A Medicaid patient said, “Even though I am now on Medicaid, I cannot use it because I cannot find a doctor. “

Another recently discovered stifling of states innovative ability has come to light.

After much bickering after the Affordable Care Act was written state innovation waivers, also called 1332 waivers, which are to begin in 2017, were written into the law.

The state innovation waivers or 1332 waivers are like a golden parachute to states both participating and not participating in the Medicaid expansion program. They are allowed to dictate the conditions and receive federal money.

The 1332 waiver solves the states’ rights problem.

The 1332 waiver would provide states with block grant funding to provide healthcare insurance to state citizens. It also waives nearly every major component of the Affordable Care Act (Obamacare).

A major provision of the 1332 waiver is that it is deficit neutral.

Two things could happen.

States wanting to experiment with a single party payer system could pursue it.

States that want to experiment with a free market healthcare system could pursue it.

Two prominent examples of innovative experimentation have been proposed.

In Arkansas, Governor Asa Hutchinson has signaled that the state’s “private option” Medicaid expansion. Medicaid beneficiaries would receive private insurance plans.”

 These private insurance plans would require higher spending for Medicaid. Theoretically the decreased spending in the Obamacare Exchange would offset the increased spending and better service for Medicaid patients. It would remain deficit neutral.

Rhode Island and Hawaii want to pursuit innovative entitlement programs that would cost less than the inefficient bureaucratic central cost.

The Obama administration could not tolerate the thought of the states being independent of federal control. A recent Friday afternoon, at 3 pm, the Department of Health and Human Services announced a rule change.

“These 1332 innovation waivers must still be deficit-neutral. However,

Savings from Obamacare may not be used to offset increased costs in other parts of a state’s health-care budget.”

The ruling by non-elected officials now makes these state controlled innovative experiments mostly impossible because the states cannot offset the savings.

Since all medicine is local, common sense dictates that states should be able to do a better job than a bloated federal bureaucracy in serving its local citizens’ healthcare needs.

The present system is a multi-trillion dollar failure. The states are correct in wanting to try something new.

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

All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

 

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More Double Digit Obamacare Price Increases

Stanley Feld M.D., FACP,MACE

Its getting boring to hear about Obamacare’s double-digit health insurance premium increases each year. The healthcare insurance industry is now preparing the public for another round of double-digit premium increases in 2017.

It is important to remember the public experienced double-digit health insurance premium every year since 2014.

The cost of buying insurance has skyrocketed since Obamacare was enacted. The public is not forgetting this.

The table below compares health insurance premiums before and after Obamacare.

This table includes both the numbers in the federal and state exchanges and the private healthcare insurance markets.

Ost of Obamacare on individual market 2014

President Obama and his administration are bragging that the healthcare insurance markets are stabilizing.

All the federal funded state health Co-ops will be bankrupt before the 2017 enrollment period.

Updated state reports on enrollment since the close of 2016 extended enrollment period indicates that more than 1 million of the 12.7 million who were reported to enroll for 2016 have dropped their Obamacare healthcare insurance policies.

In 2015 only 1.5 million consumers out of 11.7 million enrollees dropped out the entire year.

Arielle Levin Becker of the Connecticut Mirror reported“In Connecticut of the 18,800 customers who dropped out (16%), 20% failed to provide required information; 53% didn’t pay; 10% asked to have their plans canceled; and 12% shifted to Medicaid.

Those exiting customers were partly offset by nearly 8,000 latecomers, more than one-third of whom lost Medicaid.”

The truth is the Obamacare health exchanges are not stabilizing the healthcare insurance markets. Obamacare is destabilizing the healthcare markets.

It is becoming more and more difficult to believe anything President Obama says or his administration reports.

United Healthcare declared they are dropping out of most of the exchanges they are participating in because of the toll the health exchanges have taken on their bottom line.

Aetna just announced it lost more than $100 million on its healthcare exchange business last year (2015) but hopes to break even this year (2016).

This is a pipe dream on Aetna’s part. Less people have signed up for Obamacare and the people who signed up have been sicker people with pre-existing illnesses.

Aetna chairman and CEO Mark Bertolini said Thursday, “ the nation’s third-largest health insurer still sees a good business opportunity, but Congress needs to provide leeway for companies to design lower-cost plans tailored to young, healthy people.”

President Obama is not going to let insurers design lower cost policies tailored for young, healthy people. His legacy legislation is built on equal premiums for all.

These announcements can put the healthcare debate back in the headlines for the general election. It can re-ignite consumer and voter backlash once again.

President Obama ignored the backlash before. Can Hillary Clinton ignore the upcoming price increase backlash?

“Hillary Clinton is the only one promising to build on the Affordable Care Act. She’s proposed an aggressive effort to increase enrollment along with measures to reduce consumer costs.”

Hillary Clinton is mouthing words that sound good but are impossible to fulfill. People understand these empty promises now.

“ The Republican candidates all want to repeal “Obamacare.”

No one has come up with a solid proposal. Not even Donald Trump.

“Vermont Sen. Bernie Sanders would incorporate it into a bigger government-run system covering everyone.”

 Bernie Sanders is dead wrong. America cannot afford the cost and it has been proven not to work in the healthcare systems in the rest of the world.

The health law has many problems. The problems are too numerous to list here. The biggest problem in terms of costs for next years premiums (2017) are the lower-than-hoped-for enrollment, sicker-than-expected customers, and a bloated bureaucracy that is not an efficient business model.

Obamacare has created a financial drain for many healthcare insurance companies. The increase in premiums and the government pressure to keep prices low have in turn created pressure on insurance companies to lower reimbursement to physicians and hospitals.

Hospitals have to participate in the health exchanges, Medicare and Medicaid for survival. Physicians do not. Obamacare has created a more severe physician shortage.

The healthcare insurance companies would never consider becoming more efficient and lowering their cost. Some top executives are making more than 100 million dollars a year.

The healthcare insurance industry is setting the stage for 2017 premium hikes that could reach well into the double digits.

Virginia has nine returning insurance companies participating in Obamacare in 2017. These companies have submitted premium price increases ranging from 9.4 percent to 37 percent to the state board of insurance.

I am sure the Virginia state board of insurance will start negotiating with the participating insurance companies.

Obamacare will only cover 11 million enrollees in 2016. As more enrollees drop out of Obamacare because they cannot afford the premiums the total might be closer to 8 million. Many of the enrollees are subsidized. These subsidized enrollees have dropped out because they cannot afford the remaining premiums and deductibles.

The healthcare insurance industry increases premiums in the individual and group private markets to protect its profit margin.

This is occurring on top of the destruction of Health Saving Accounts and does not speak well for a stable healthcare insurance market.

President Obama’s goal is to destroy the healthcare system and replace it with a single party payer system.

Does anyone think a government run single party payer system will be more efficient or deliver cost effective care?

If you do, please think of the efficiency and effectiveness of the VA healthcare system?

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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