Stanley Feld M.D.,FACP, MACE

Prescription drug consumption can demonstrate the power of the consumer. This can demonstrate the power of a consumer driven healthcare system. Since 2006 the use of generic drugs to reduce the cost of healthcare for patients and the healthcare insurance industry has escalated.

Consumers have demanded that physicians use generic drugs when possible. Insurance drug plans promote the demand for generic drugs by having higher patient deductibles for branded drugs as well as not covering some branded drugs. Some insurance drug plans have eliminated the patient deductible for patients using generic drugs.

Physicians are being forced by their patients to become more aware of the cost of medications. Patients (consumers) are demanding generic substitution. In the past pharmaceutical companies seduced physicians into trying their new drugs. They sold the new drug as better than the first generation drug. In some cases it was. In most cases the difference was marginal.

Pharmaceutical companies also started to manufacture many me too drugs as well as combinations of two older drugs in order to extend expiration of the drug patent. This prevented generic drug manufacturers from manufacturing blockbuster drugs at lower generic prices.

The marketing implications were that the new medications were “better” than the old medication. The Food and Drug Administration (FDA) approved many of the combination drugs.

As physicians became aware of the cost difference between branded and generic drugs they became irritated. They have switched patients to generics.

Brand name drug patents usually last 14 years from the initial studies for FDA approval. Generic medication manufacturing undergoes the same rigorous FDA quality control study as do brand name drugs.

Both the healthcare insurance industry and Medicare/Medicaid programs have drug benefit programs. Medicare and Medicaid drug benefits are outsourced to the healthcare insurance industry by the federal government. The healthcare industry buys drugs from a Pharmaceutical Benefit Organization (PBO). Many times a healthcare insurance company owns the PBO. The payment system is very complicated. There is no way of telling what the real wholesale price of a drug is. There are many conflicts of interests involved.

There are multiple wholesale prices for a drug. Every time the drug goes through another middleman overhead and profit are also built into the drug price. In fact, the healthcare industry earns 4.7 billion dollars from the federal government per year from Medicare Part D.

There is nothing transparent about the profits made by the secondary stakeholders.

Wal-Mart almost broke the healthcare insurance industry’s cash cow by selling many generic drugs for $4 per month. Wal-Mart has recently instituted a 3 month supply cost of the drug for $10. Interestingly enough the large pharmacies, the healthcare insurance industry and the PBOs have figured out how to rip off the consumers despite Wal-Mart’s initiative.

If patients use their drug benefit insurance policy for a generic prescription, they will be charged $4 or more. The total charge toward their Medicare donut might be $30. The price the pharmacy plan (Medicare Part D) supposedly paid for a one month prescription. If seniors pay Wal-Mart cash and do not use their drug benefit plan, the total cost of the transaction to seniors is $4 as opposed to the $30 charged to their donut.

Most seniors have not figured this out. They use Medicare Part D to pay for their medications. Seniors should buy their generic medications for cash. They should not charge it to their Medicare Part D drug benefit. Since the healthcare care insurance industry probably gets the generic from the pharmacy for $4, the healthcare insurance company’s out of pocket expense for the medication is zero. Seniors have paid for the drug with their deductible. If seniors hit their donut, they will have to pay retail to the pharmacy for additional medications.

President Obama’s healthcare reform act modified the donut insignificantly. Yet he is selling the $250 increase toward the donut as a great advance.

Why is it so complicated? We are dealing with lobbies from at least three industries. None of these lobbyists represents patients or physicians.

Does President Obama’s healthcare reform act do anything to solve the cost of medications seniors need to maintain health? No.

President Obama’s healthcare reform act has done very little and very ineffectively to fix the drug benefit problem. He has not protected seniors or others from the abuses of the healthcare insurance industry.

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

Stanley Feld M.D.,FACP,MACE

President Obama is starting to believe. State Governors, both Democratic and Republican, are serious about trying to balance their budgets. He also understands that the proposed cuts in services and reimbursements for Medicaid eligible patients will torpedo his healthcare reform act.

President Obama cannot afford to lose state support for his Medicaid law.

Kathleen Sebelius , Secretary of Health and Human Services said in a letter to state governors that the administration understands the governors budgetary concerns. She also emphasized the administration’s understanding that states already has substantial discretion to alter benefits and establish or increase co-payments.

She went on to instruct governors on how to save money by selectively and judiciously reducing benefits, curbing overuse of costly prescription drugs and attacking fraud all at the states’ expense.

She refused to say whether President Obama would allow states to adopt stricter eligibility standards. President Obama understands that changing the eligibility requirements would, in effect, throw low-income people off the Medicaid rolls. It would destroy his objective of “universal coverage.” The states have realized that his objective of “universal coverage” was going to be at the states’ budgetary expense.

“The states are hamstrung by federal prohibitions against lowering Medicaid eligibility, governors from both parties are exercising their remaining options in proposing bone-deep cuts to the program during the fourth consecutive year of brutal economic conditions.”

“Please know that I understand fully the impacts of this rollback, and it is with a heavy heart that I make this request,”. Arizona governor Jane Brewer wrote this week in seeking a waiver, the first of its kind, from Kathleen Sebelius, the secretary of health and human services. “However, I am left with no other viable alternative.”

Gov. Nathan Deal, the new Republican leader of Georgia, proposed this month to end Medicaid coverage of dental, vision and podiatry treatments for adults.

A number of states, Texas and California among them, are considering further reductions of as much as 10 percent in payments to providers. Medicaid reimbursement is already so low that many physicians refuse to accept the coverage.

South Carolina is considering going a step further by also eliminating hospice care.

Rick Scott in Florida is proposing a 5 billion dollar budget cut for Medicaid.

Even with increase in federal payments for Medicaid aid to states from President Obama’s economic stimulus package, state budget deficits from Medicaid were so great that 39 states cut Medicaid payments to providers in 2010 according to the Kaiser Family Foundation. The economic stimulus package subsidy was unsuccessful and is scheduled to disappear in July 2011.

MITCH DANIELS ,governor of Indiana wrote a brilliant op-ed piece in the Wall Street Journal on February 3.

“Unless you’re in favor of a fully nationalized health-care system, the president’s health-care reform law is a massive mistake.

It will amplify all the big drivers of overconsumption and excessive pricing: "Why not, it’s free?" reimbursement; "The more I do, the more I get" provider payment; and all the defensive medicine the trial bar’s ingenuity can generate.”

His article represents the position of twenty-one governors representing more than 115 million Americans. They have written to Kathleen Sebelius asking for more flexibility on health-care reform.

President Obama’s healthcare reform act has provided Kathleen Sebelius massive power without the need for congressional consent.

“All the claims President Obama made for his healthcare reform act were false. It will add trillions to the federal deficit. It will lead to a de facto government takeover of health care faster than most people realize.”

“As millions of Americans are added to the Medicaid rolls and millions more employees (including, watch for this, workers of bankrupt state governments) are dumped into the new exchanges many trillions of dollars will be added to the federal deficit.”

The traditional media has not articulated this impending disaster. It will get worse. Governor Daniels has expressed his concerns gently. He also hit the nail on its head for the states.

“The law expects to conscript the states as its agents in its takeover of health care. It assumes that we will set up and operate its new insurance "exchanges" for it.

“The federal government want us to use our current welfare apparatuses to do the numbingly complex work of figuring out who is eligible for its subsidies, how much each person or family is eligible for and re-determining this eligibility regularly, and more.”

“Then, we are supposed to oversee all the insurance plans in the exchanges for compliance with Washington’s dictates about terms and prices.”

States do not have the infrastructure to accomplish most of this. The federal government does not have the apparatus to accomplish this. The point was proven recently by the federal fiasco when the states refused to participate in setting up high-risk pools.

“ As widely reported, it went poorly, with costs far above predictions and only a tiny fraction of the expected population signing up.”

“If the feds can’t manage this little project, what should we expect if they attempt it on a scale hundreds of times larger and more complex?”

Either we have a bunch of rookies in the White House who do not know what they are doing, or we have a bunch of geniuses who have choreographed the destruction of the healthcare care system in such a way that America will have no choice but to permit President Obama to install a completely socialized medicine system with the inefficiency inherent in government run bureaucracies.

Stanley Feld M.D.,FACP,MACE

Twenty-six states joined Florida’s legal challenge on the constitutionality of President Obama’s healthcare reform act. The sub-plots of the law suit are states’ rights vs. federal control, the constitutionality of a mandate to force individuals to purchase insurance and forcing states to create increases in budget deficits. President Obama’s healthcare reform act is going to cause fiscally responsible states to fund fiscally irresponsible states through increased federal taxes. The result will be an increase in state taxes.

President Obama’s mandate has greater significance than forcing everyone to have healthcare insurance. Federal Judge Roger Vinson struck down President Obama’s entire healthcare reform act last week on all counts. He essentially ordered President Obama to cease implementation of his healthcare reform act.

“A federal court issued a binding judgment voiding the law, with Judge Vinson noting that he trusted the Administration would obey the "long-standing presumption" that such a judgment is "the functional equivalent of an injunction."

The White House and Health and Human Services announced they’ll continue to implement “ObamaCare” as if nothing has changed.

This is disgraceful.

It tells us something about President Obama’s respect for the law of the land. If President Bush had said the judicial rulings against his policies on wiretapping and some civil liberties would be ignored the traditional media would have been all over him.

State governments have decided to obey Judge Vinson’s injunction and are suspending implementation of the new regulations and mandates.

"For Wisconsin, the federal health-care law is dead," Attorney General J.B. Van Hollen said in a statement, unless Judge Vinson’s decision is stayed by the 11th Circuit Court of Appeals.

Florida Governor Rick Scott said he had no intention of wasting "time and money" executing the for-now defunct law, and his insurance commissioner returned a $1 million federal assistance grant.

Idaho will also freeze implementation, and we hope the remaining 23 states will join the rejectionists.

President Obama’s healthcare reform act has previously demonstrated disrespect for the will of the people. Its passage also demonstrated a lack of respect for the congressional process. Now President Obama is demonstrating his disrespect for the judicial process. His web site dismissed the judgment as a decision by an activist judge.

President Obama’s arrogance is obvious. He knows best. He knows what the people need regardless of what they want.

I have pointed out continuously that President Obama’s goal to reform the healthcare system is admirable. He wants universal coverage, more affordable care and an increase in quality of care. His strategy to achieve his goal is wrong.

President Obama’s methodology is not practical. It will destroy America’s healthcare system. If permitted to proceed it will not only expand the federal deficit, it will decrease the quality of medical care as well as decrease access to care and result in rationing of care.

Attorney General Holder can file an appeal asking the 11th Circuit for a stay. The prediction is he will. When he does, President Obama will be admitting that his administration has ignored the rules of the judicial process.

The traditional media has failed to describe effectively the issues individual states face and the threat to individual freedom.

President Obama has made so many “deals” and granted so many waivers that his healthcare reform act is becoming a joke.

The legal and political challenges against President Obama’s healthcare reform act are becoming increasingly more complex daily. The American public is starting to understand the horrible process used to pass the bill and the actual meaning of terrible legislation. It is not going to Repair the Healthcare System.

The best way to fix “Obamacare” is to repeal it, provide an alternative that will express the will of the people and align all the stakeholders’ vested interests.

Most importantly, we must put Patients First.

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

Stanley Feld M.D.,FACP,MACE

Prior to the passage of his healthcare reform act President Obama removed a provision dealing with reimbursing physicians for end of life counseling. There had been a great public uproar over this provision.

It was viewed at a first step toward end of life rationing of care. It was really a signal that most care would be rationed.

When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system.

Sarah Palin called it death panels.” A government panel would decide whether Medicare would pay for the treatment of patients deemed hopeless regardless of the patient’s will.

Sarah Palin’s use of “death panels” was sensationalistic. In our sound bite society this was an effective sound bite.

The words “death panel” illustrated the truth about a world of finite resources and infinite entitlements.

The government cannot afford entitlements much longer. Yet President Obama’s healthcare reform act is going to expand the Medicare and Medicaid entitlements.

President Obama plans to control entitlement spending by defining what he will pay for. The result will be rationing of care.

There are other ways out of the mess. President Obama is not attacking the root of the problem. One way is a consumer driven healthcare model using ideal medical savings accounts. It would place the responsibility on patients and their family. Patients would be in a position to choose rather than having the third party (the federal government) choose their medical care. Patients and their family might decide to limit hopeless care when they are spending their own money..

A system of sensible tort reform would decrease the large cost of defensive medicine. The result would be lower healthcare costs. President Obama has ignored tort reform.

These two changes can help attack a few of the root causes of the increasing healthcare costs.

I have objected to President Obama’s healthcare reform act. It places all the decision making power in the executive branch and out of the hands of congressional oversight.

The Obama administration has the power to effect change through regulation rather than legislation . An example is Dr. Donald Berwick, chief of CMS, instituting the same policy by regulation that was removed from the bill by legislation. The new regulations go into effect January 1 2011.

At a stroke, Medicare chief Donald Berwick has revived the "death panel" debate from two summers ago.

CMS will enact the same policy removed from the bill through regulation. Congress has had no input. There will be a never ending series of steps to give government control over both patients’ and physicians’ freedom to make medical decisions. Some regulations seem benign on the surface. President Obama has been given complete control over the healthcare system by his healthcare reform act.

It is the reason there is such an outcry to repeal his healthcare reform act. President Obama has tried to hide the new regulations from stakeholders involved.

“The office of Oregon Democrat Earl Blumenauer, the author of the original rider who then lobbied Medicare to cover the service, sent an email to supporters cheering this "victory" but asked that they not tell anyone for fear of perpetuating "the ‘death panel’ myth." The email added that "Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch."

President Obama has used a number of tricks to achieve his goal. He appointed Dr. Berwick during congressional recess without congressional hearing after he withheld the request for a congressional hearing and approval for 3 months.

Dr. Berwick now slips through a regulation about reimbursement that Congress explicitly rejected. The email slipped out illustrating the scheming with his political patrons to duck any public scrutiny.

“Expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch.”

Administrative spokesmen, when challenged, immediately declared “the rule-making is not coercive and gives seniors more autonomy, not less.” Nothing could be further from the truth.

The facts are a panel of medical experts decide on treatments or service that are worthy of reimbursement. They then tell the administrators what to pay for. Some treatment won’t be paid for it even if it is in the best interests of patients.

Can a panel of medical experts be wrong? They certainly can. The experts judgments might be correct. However, their opinion and exceptions to the regulations cannot be incorporated into the healthcare system by inflexible bureaucratic machinery.

The bureaucrats put the experts’ decisions into a rules based computer program. Reimbursement is driven by this inflexible system , not by medical circumstances or medical judgment.

Last month a group of Clinical Endocrinologists received a Medicare denial code 151 stating;

“Payment adjusted because the payer deems the information submitted does

not support this many/frequency of services.”

This had not happened to this group in 20 years of endocrine practice. It concerned serially measuring thyroid function to regulate thyroid replacement therapy after patients are rendered hypothyroid with radioactive iodine of surgery. Initially patients have to be followed with thyroid function testing every month or two.

“Medicare allowed payment for the first laboratory service, then denied the next three tests as “too frequently.”

CMS also describes in its National Coverage Determination (NCD).

Thyroid testing may be covered up to two times a year in clinically stable

patients; more frequent testing may be reasonable and necessary for patients

whose thyroid therapy has been altered or in whom symptoms or signs of hyperthyroidism

or hypothyroidism are noted.

The “medical experts” got the exceptions correct but did not define the frequency of testing to permit the CMS to incorporate into the reimbursement system..

An endocrine practice can submit for redetermination within 120 days. If redetermination fails physicians have 80 days to file for reconsideration.Reconsiderations are the second level in the appeal process and are conducted by the Qualified Independent Contractors (QICs). If physicians receive an unfavorable reply at the reconsideration level, there are three more levels of the appeal process, the Administrative Law Judge (ALJ) Hearing, Appeals Council Review and the Judicial Review in U.S. District Court.

Imagine all the costs involved on both sides in order to adjudicate treatment that is evidence based and totally indicated. Imagine the frustration of physicians treating patients. .

From past experience these hassles will increase as the government gets more and more control over the healthcare system. Patients’ medical care is not first. Federal rules and regulations are first.

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

Stanley Feld M.D.,FACP,MACE

The Medicaid expansion of President Obama’s healthcare reform act is going to increase state spending significantly. Individual states are required to balance their budgets. They currently have significant budget deficits. President Obama’s healthcare reform act will increase these budget deficits despite federal assurances of increased aid.

Neither the states or the federal government can afford to increase their budget deficits. President Obama has ignored this fear of increased deficit spending.

He is making a mistake. He is expanding Medicaid which is a defective system. Instead, his healthcare reform act should be changing the Medicaid system so it works.

The profits of the healthcare insurance industry will increase at the expense of state budgets and ultimately taxpayers. The healthcare insurance industry is expecting a forty billion dollar a year windfall profit from President Obama’s expansion of Medicaid.

We have already seen President Obama cave in to the interests of large corporations and unions. He has given waivers to McDonalds and others for their Mini Med insurance coverage. Minimal wage workers are ripped off by Mini-med insurance coverage for the benefit of the employer and the healthcare insurance industry.

The newly elected Republican Governor of South Carolina Nikki Haley is a feisty lady. She refuses to be marginalized as a Tea Party candidate by the traditional media.

Governor Haley was among a group of newly elected governors, most of them Republicans, who met with President Obama and Vice President Biden in early December 2010.

She asked President Obama to consider letting South Carolina opt out of this year’s federal health care overhaul.

She told President Obama that South Carolina could not afford the health care mandate. She told President Obama his healthcare reform act would cripple small businesses in her state.

“Would you at least consider South Carolina opting out of the program?"

She continued and pushed him further. She said his healthcare reform act challenges her duty to protect her state’s rights. She then asked him to consider repealing his healthcare reform act.

"I respectfully asked him to consider repealing the bill," she said, to which he clearly stated he would not.”

President Obama then told her he would consider letting South Carolina opt out of the healthcare reform act. He said if the state could find its own solution that included a state exchange, preventing companies from bumping people for preexisting conditions and allowing insurance pooling he would consider letting South Carolina opt out.

On the surface, President Obama’s request is reasonable. It fulfills his goal toward achieving universal coverage. It does not deal with affordability of care or quality of care. .
"I think it’s something we go back to South Carolina and start crunching," she said. "This is about saying we’re going to fight this every step of the way and use every option possible."

After the meeting, she was asked if President Obama was listening to her and was serious or was he humoring her.

She said,

"It was a level of communication where we felt like we were being heard," she said.

In early January, 33 Republican governors and governors-elect plan to send a letter to the White House and congressional leaders asking them to remove a part of the health-care overhaul law.

"The effect of the federal requirements is unconscionable," the governors wrote. "The federal requirements force governors to cut other critical state programs, such as education, in order to fund a ‘one-size-fits-all’ approach to Medicaid."

It could be that President Obama was humoring Governor Haley.

President Obama ought to start listening to the will of the people with the passage of a house resolution to repeal President Obama’s healthcare reform act, and additional states joining in Florida’s constitutional challenge of the law.

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

Stanley Feld M.D.,FACP,MACE

President Obama’s healthcare reform act is about to be repealed by Republicans in the House of Representatives. Democrat’s say this is a meaningless gesture. I do not think so. The House of Representatives is expressing the will of the people. The Harry Reid and President Obama will be exposed as ignoring the will of the people.

President Obama’s healthcare reform act will not Repair the Healthcare System. His new entitlement for 32 million people will not save money or reduce the deficit.

President Obama promised his healthcare reform act would provide universal access to care to all Americans, be affordable to both the government and its citizens, and increase the quality of medical care

“Of all the claims deployed in favor of Obama Care, and there are many, the most preposterous is that a new open-ended entitlement will somehow reduce the budget deficit, insure 32 million more people, and save money too!”

Americans have experience with open ended entitlements. They never save money. Most Americans understand that government cannot subsidize coverage for tens of millions of people and simultaneously reduce the deficit

The Democrats’ spin machine started working immediately as the Republicans prepare to repeal ObamaCare.

“Health and Human Services Secretary Kathleen Sebelius chimed in that "we can’t afford repeal,"

ObamaCare will cost at least $2.6 trillion over the next 10 years. Is this a bargain for taxpayers? Presient Obama’s healthcare reform act does little to Repair the Healthcare System.

ObamaCare is setting up Accountable Care Organizations (ACOs). In my opinion, ACOs have little chance of being effective. ACOs will create a system of salaried physicians owned by hospital systems. All physicians have to be integrated into the system in order for the ACO to have a chance. Physicians’ productivity will decrease. ACO will create incentives for secondary stakeholders. There will be few incentives for primary stakeholders. .ACOs will generate regulations that will increase “paperwork” and decrease direct patient care. It will increase government control over the lives of patients. It will not reduce costs.

President Obama released a statement saying repeal will “explode the deficit.”

Meanwhile, other Democrats have taken up arms about House procedure. The GOP adopted a budget rule that says repeal doesn’t have to be "paid for," and the press corps is treating this exemption as a scandal against Washington decency.

The CBO was manipulated by the numbers given to it by the Democratic House of Representatives to score ObamaCare. I would not be surprised if the numbers change if Republicans request a rescore with different numbers. The Democratic controlled congress has gamed the CBO’s budget conventions.

The CBO is required to "score" the numbers presented to them by congress no matter how unrealistic.

The party in power at the time (Democratic Party) makes believe that the CBO’s forecasts are carved in stone. All the score really shows is that politicians have rigged the budget rules to hide the true cost of entitlements.

Americans now understand the congressional process. The congressional disrespect is the reason the polls are unfavorable toward congress. Americans want the truth.

President Obama managed to pass his bill despite the opposition of the majority of the American people. Americans continue to oppose the bill today even though the facts in the bill have become a blur.

“Gallup reported yesterday that Americans favor repeal, 46% to 40%.”

How did gaming the CBO budget scores make President Obama’s healthcare act seem to save money?

1. President Obama’s healthcare law uses 10 years of taxes to fund six years of subsidies.

2. Social Security and Medicare revenues are double-counted to the tune of $398 billion.

3. A new program funding long-term care frontloads taxes but backloads spending.

4. The law pretends that Congress will spend less on Medicare than it really will, in particular, through an automatic 25% cut to physician payments that Democrats have already voted not to allow for this year.

5. President Obama had the law shift the government doctor fix out of the healthcare budget

These are just a few of the tricks used by President Obama to get the CBO to score his healthcare reform budget neutral.

Richard Foster, the chief Medicare actuary separately published analyses of the Medicare and Medicaid spending that would have be devastating to President Obama’s healthcare law. He revealed the true cost. His report was not widely covered by the traditional media.

Doug Holtz-Eakin, a former CBO director and an economist has pointed out that ObamaCare creates an incentive for businesses to drop employee coverage. Employees will be forced into the private insurance market using after tax dollars or Medicaid. This was obvious to me from the start. The results will explode the federal and state deficits far more than the CBO projects. It will also result in a decrease in access to care as well as rationing of healthcare.

“ Entitlements are always sold as modest and "paid for," then years later everyone suddenly discovers that they are "unaffordable" without digging deeper into the pockets of the middle class. How do you think Medicare and Medicaid got to their current pass?”

When will our government ever learn? President Obama should be fixing the core problems in the healthcare system. Instead, he is creating an opportunity for increased government control over healthcare and greater healthcare insurance industry profit at the expense of consumers (taxpayers).

President Obama should try a consumer driven healthcare system and the ideal medical savings account.

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