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.

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

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.

 Stanley Feld M.D.,FACP,MACE

President Obama’s has created an incentive program to encourage physicians to adopt functional Electronic Medical Records.  The program’s $27 billion dollars (funded by President Obama’s Economic Stimulus package) will turn out to be a colossal failure and a waste of money.

Twenty seven billion dollars would provide $44,000 for 640,000 physicians. After the bureaucratic infrastructure is built the federal government will be lucky if one third of the money remains for bonuses to physicians.

Only 21,000 of 650,000 (3%) of physicians have applied to date.

 Complex bureaucracies and complicated regulations never save money. These bureaucracies create bigger government, inconsistent policies, more complicated regulations and inefficiencies.

The best and cheapest way to create a universally accepted and functional EMR is for the federal government to put the software in the cloud and charge physicians by the click for the use of the Ideal Medical Record.

Upgrades in software to the Ideal Medical Record will be swift , inexpensive and instantly adopted.

The federal government has done it before with an electronic billing system in the 1980’s. The incentive to physicians was to be paid in one week as opposed to the one to two months wait for payment using a paper claim.

Last week the proposed rules for defining “meaningful use” of EMRs starting in 2013 were published.

As soon as Stage 2 of President Obama’s EMR bonus program were published organized medicine complained that the rules were unrealistic and onerous.

Organized medicine is correct.  This usually happens when the bureaucracy piles one set of rules on top of another. The Stage 2 rules will discourage physicians from participating even at the threat of an undisclosed penalty.

 "Meaningful Use Workgroup Rules Regarding Meaningful Use Stage 2," from the Office of the National Coordinator for Health Information Technology requires the following in order to be eligible for the federal bonus;

Higher thresholds (in % of eligible patients, visits or orders)

• Use computerized physician order entry (CPOE) (from 30% to 60%:
• CPOE will expand from drug orders to lab and radiology orders)
• Use e prescribing (from 40% to 50%)
• Record demographics (from 50% to 80%)
• Record vital signs (from 50% to 80%)
• Record smoking status (from 50%to 80%)
• Use medication reconciliation (from 50% to 80%)

Elective to mandatory requirements

• Implement drug formulary checks
• Record existence of advance directives
• Incorporate lab results as structured data
• Generate patient lists for specific conditions
• Send patient reminders
• Provide summaries of care record
• Submit immunization data
• Submit syndromic surveillance data

New measures

• Use electronic physician notes
• Offer clinical encounter information for download
• Offer health record information for download
• Ensure patient use of online portal
• Ensure patient use of secure messaging
• Record patient preferences for communication medium
• Provide lists of care team members
• Record longitudinal care plans

Physicians can receive bonuses from Medicare of $44,000 and Medicaid of up to 63,750 for installing and using an eligible EMR system.  These payments (bonus) if you qualify are taxable as ordinary income.

There are several practical problems;

1. Most physicians and physician practices cannot afford the time it takes to find an eligible EMR they can trust.

2. An EMR that might be eligible for federal bonus could cost $70,000 per physician.

3. Physicians cannot visualize the potential payback.

4. Physicians cannot visualize the added value toward improving quality care when quality care has not been adequately defined.

5.Physicians cannot get loans from banks to finance the costs.

6.Most physicians are uncertain about the future of their practices.

Thousands of physicians (3%) are trying to meet stage 1 requirements, which went into effect January 2011.

Eligible EMRs in Stage 1 must be able to meet 15 core measures of functionality and the physician's choice of five out of 10 elective measures.

In order to meet Stage 2 requirements physicians have to spend more money to upgrade their information system to be eligible.

"Unrealistic stage 2 requirements will overly burden physicians and hamper adoption — especially for those physicians in small or solo practice."

Karen Bell, MD, chair of Certification Commission for Health Information Technology said she “does not believe any vendor's system can meet stage 2 requirements yet.”

Developing EMR technology is expensive, and vendors don't want to build complete systems when the standards probably will change in the future.

A Family Practice Group of 4 physicians in Georgia recently spent $75,000 per physician upgrading the practice's EMR in order to meet meaningful use stage 1 requirements. Five years ago they spent $200,000 to launch their original EMR.

Fulfilling stage 2 requirements will probably cost at least another $75,000 per physician to continue qualifying for federal bonuses.

This Family Practice is chasing its own tail. It is working at the whim of a bureaucracy whose job it is to write regulations and not think of the consequences to practicing physicians.

Wouldn’t it be easier for the federal government to install its approved software in the cloud, upgrade it as necessary and charge physicians by the click?

Wasting $27 on bureaucratic regulations is a complicated mistake that is destined to fail.

$27 billion dollars could be better spent on direct patient care and the implementation of my ideal Electronic Medical Record   

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Reform Act was passed in both houses of congress one year ago. Democrats had a large majority in both houses. Last week Democrats throughout the country held events celebrating President Obama’s Healthcare Reform Acts anniversary. Either Nancy Pelosi is blind to public opinion or thinks the public is stupid.

 The public is realizing what bad a law Obamacare is turning out to be. We have not even gotten into the truly bad effects of the law yet. The law’s truly bad effects are timed to take effect in 2013 after the 2012 elections. Meanwhile, the costly and wasteful bureaucratic infrastructure is being put in place.

1. Many seniors have lost Medicare Advantage plans as Obamacare is starting to put restrictions on the plans and the healthcare insurance industry is dropping out of providing Medicare Advantage coverage.
2. Millions of other Americans have been forced to find new healthcare insurance options.
3. Healthcare insurance options are decreasing as a result of President Obama’s Healthcare Reform law.
4. Healthcare insurance premiums are increasing rapidly.
5. Employers are discontinuing healthcare coverage or at least increasing employee contributions.
6. States have warned that the law's Medicaid provisions could bankrupt their treasuries,
7. Medicare insurance premiums and deductibles have risen in 2011. A rise in premiums in 2012 was announced today. The Social Security Administration also announced that there will be no cost of living increase for Social Security recipients in 2012.  As Medicare premiums increase without a cost of living increase, Medicare recipients will receive smaller Social Security checks.
8. The new House of Representative has voted to repeal the entire act. They have succeeded in repealing the part of the law dealing with 1099 reporting.
9. Some courts have ruled against the constitutionality of President Obama’s Healthcare Reform Act. The final judgment resides with the Supreme Court.

10. A 3.8% surtax on the sale of homes, and unearned income becomes effective January 1,2013.

11.  “I can make a firm pledge.  Under my plan, no family making less than $250,000 a year will see any form of tax increase.  Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes,” 
President Obama, September 12, 2008

12. States are requesting waivers from President Obama’s Healthcare Reform Act.

13. President Obama has already granted temporary waivers to over 2,000 favored unions and businesses.

14.  Even the Washington Post said Mrs. Pelosi's recent claims that the law has created jobs and will cut the deficit are "false or exaggerated."

An ongoing tracking poll by the Kaiser Foundation found a significant erosion of public support for President Obama’s Healthcare Reform Act. President Obama’s Healthcare Reform Act was not popular when it was jammed through congress by a partisan Democratic majority. It is less popular now.

1. 2010: 35% of respondents said they and their family would be "better off" as a result of Obamacare .
2. 2011: 26% feel they will be better off as a result of President Obama’s Healthcare Reform Act.
3. 2010: 28% believed their quality of care would be better under ObamaCare.
4. 2011: 20% believe their quality of care would be better under ObamaCare.
5. 2010: 31% believed the cost of their care would be better because of the passage of Obamacare.
6. 2011: 23% now believe President Obama’s promises. Only 2% believe healthcare insurance premiums have been going down. 50% believe premiums have gone up.
7.  More people say family income and medical care has been "negatively affected" by ObamaCare than those who say their family has benefitted.

Nevertheless, President Obama, Harry Reid, and Nancy Pelosi continue to praise President Obama’s Healthcare Reform Act as a "a milestone in the history of this country." 

The trio might be right. It is turning out to be a disastrous milestone in the history of the country as many and I have previously predicted. 

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