Stanley Feld M.D.,FACP,MACE

What is the Coordinating Council for Comparative Effectiveness?

The mission of the Council for Comparative Effectiveness will be to decide on best practices and most cost effective practices. The council will recommend cost effective treatments for diseases to The National Coordinator for Health Information Technology (NCFHIT). The NCFHIT will determine treatment at the time and place of care. It is charged with deciding the course of treatment for the diagnosis given by the doctor.

The U.S. Department of Health and Human Services announced the formation and membership of the Federal Coordinating Council for Comparative Effectiveness Research that will be funded by President Obama’s stimulus program the American Recovery and Reinvestment Act (ARRA). The council was allocated 1.1 billion dollars to set up comparative effectiveness of medical practice.

Why was this 1.1 billion dollars funded from the economic stimulus package?

Unknown

The missions are based on the premise that practicing physicians do not have the ability to recommend the most cost effective medical treatment for their patients. (see executive summary)

Who are the members of the Federal Coordinating Council for Comparative Effectiveness?

The members of the committee were picked without congressional approval immediately after the economic stimulus bill was passed. They are all bureaucrats working for the government in one capacity or another. There are no practicing physicians on the panel.

Dr. George Thomas wrote in response to my last article on electronic medical records;

“The problem remains that it still takes me 25 minutes to admit a patient using the EHR, and only 5 minutes using pen and paper. If I admit 3 patients, it adds one hour to my day. Where do I get the extra hour, and who pays me for it? So far the main beneficiaries seem to be the HMO’s who can use the computer info to hassle you.”

I think Dr. Thomas stumb
led on to something. The government wants to be able track in real time treatment decisions of physicians with the use of the EMR. The government can automatically decide on whether physicians are practicing best practices as defined by the council for comparative effectiveness. If physicians are not practicing best practices that are cost effective, the government will force physicians to comply using penalties.

The sentiment about this issue is express by a physician in the following You Tube. It is a worthwhile watching.

The losers are patients and physicians. The healthcare insurance industry’s profits are unharmed and government power over the healthcare system is enhanced.

There are many defects in President Obama’s point of view on how to measure quality and appropriate care. It is a monetary viewpoint. It is not from a medical care viewpoint. President Obama’s approach will lead to many unintended consequences.

Another reader wrote in response to the electronic medical record article;

Hi Dr. Feld,

Refresh my memory please, what is your perspective on how am I going to determine how good a Dr. is in the future?  I want competition based on value and I know there is a wide difference between physicians in terms of skills, adopting technology and innovation etc. and results or outcomes.  How do you propose I determine the best value for my money?

How do you pick a restaurant, a dry cleaner, a plumber, an electrician or a builder? Each vendor competes for your business. If the vendor does not provide satisfactory service it will lose patrons and go out of business.

Websites such as Open Table and Trip Advisor help us with making wise choices. Angie’s list has been a transformational website. It has changed the way consumers choose contractors. Consumers are very interested in expressing opinions both good and bad. Contractors read every entry and improve to become more competitive.

Physicians have to be made to compete for patients. Only he consumers of healthcare can force physicians to compete. Consumers need to be given control of their health care dollars, not the government, or a third party.

Patients should make choices based on quality of care and reputation of the physicians. Patients should be incentivized to get the most value for their healthcare dollar. Value of medical care should not be determined by a government bureaucracy using inaccurate criteria.

Websites are available for consumers to make intelligent evidence based choices. Other websites can be developed to teach consumers how to evaluate physicians and their care. These websites must be interactive. Patients can share their experiences with others. The costs of services have already been negotiated by the healthcare insurance industry and the government. These fees should be made available to patients.

I believe consumers are smart. They can drive prices down in a consumer driven healthcare system.

Physicians are not the problem with the healthcare system. It is the healthcare insurance industry and its control of the healthcare dollars.

It is a mistake for the government to make decisions for consumers of healthcare.

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

Stanley Feld M.D.,FACP, MACE

Accountable Care Organization(ACOs) are not going to decrease the waste in the healthcare system.

Waste occurs because of:

1. Excessive administrative service expenses by the healthcare insurance industry which provides administrative services for private insurance and Medicare and Medicaid. A committee is writing the final regulations covering Medical Loss ratios for President Obama’s healthcare reform act. The preliminary regulations are far from curative
2. A lack of patient responsibility in preventing the onset of chronic disease. The obesity epidemic is an example.
3. A lack of patient education in preventing the onset of complications of chronic diseases. Effective systems of chronic disease self- management must be developed.
4. The use of defensive medicine resulting in over testing. Defensive medicine can be reduced by effective malpractice reform.

A system of incentives for patients and physicians must be developed to solve these causes of waste. A system of payments must also be developed to marginalize the excessive waste by the healthcare insurance industry. Patients must have control of their own healthcare dollars.

By developing ACOs, President Obama is increasing the complexity of the healthcare system. It will result in commoditizing medical care, provide incentives for rationing medical care, decrease access to care, and opening up avenues for future abuse.

The list of barriers to ACOs’ success is long and difficult to follow.

1. The government would rather deal with a few hospital systems than with individual physicians. Hospital systems would receive a lump sum payment for the care of attributed patients. The hospital system would control the money. Physicians would fight with hospital systems for equitable distribution of funds.

The idea has multiple problems. Most physicians in practice do not trust their hospital system. In the past physicians who became employed by hospital systems became disenchanted with the relationship. The hospital systems overloaded the expenses to the benefit of the hospital systems. The result was multi- million dollar salaries to hospital administrators and decreasing physician salaries.

It will be hard to get all physicians to be employed by hospital systems.

1. The Dartmouth group’s results are based on claims data. Claims data is notoriously inaccurate. Government policy decisions using claims data will lead to policy mistakes.
2. ACO patients are attributed to an ACO on the basis of their pattern of services used. Patients see a primary care physician who belongs to that ACO. All that patient’s care and expenses are attributed to that ACO’s lump sum payment.

If the costs incurred by the ACO’s “attributees” are sufficiently below Medicare’s spending projections for that population, the ACO shares in the savings realized by Medicare; if the costs are too high, the ACO loses nothing.

This represents a shift in incentives. The ACO, run by the hospital system, would want employed physicians to do less for the patients to earn more money. The result would be decreased access to care. Physicians have to be incentivized to do the right thing. .

1. A problem will be the selection of attributed patients. There is no risk weighting of patients’ disease burden. Some patients are at greater risk of disease and its complication.

If one ACO gets sicker patients than another ACO that ACO’s chances of making money are less than the second ACO. Risk weighting of patients and their diseases is complicated but essential.

If a patient with the same coded illness as another patient does not follow instructions his chances of having complications from a disease are higher and his cost of care more expensive than another patient that follows instructions.

Attribution of the cost of medical care will be further complicated by the need to consider reasonable patterns of patient visits.

The nature of the attribution rules will have enormous implications to ACOs’ medical management.

1. Hospital systems that salary physicians receive fixed payments for diagnosis-related groups under Part B (physician payment for Medicare). Medicare also reimburses hospital based physicians for part of the costs of very expensive cases.

ACOs will be held fully accountable for outlier patients. Hospital systems will be hesitant to take on this uncontrollable risk. Accountability for costs under Medicare Parts A and B look like they are becoming daunting. After hospital systems realize the challenges of ACOs few hospital systems will choose to become an ACO.

N Engl J Med 2010; 363:1389-1391October 7, 2010

6. President Obama’s healthcare reform law directs ACOs to be permeable to all patients. At the same time, they are held accountable for services by their patients obtain from outside providers. The financial risk is shifted from the government to the ACO. Once this is fully understood hospital systems and medical groups will not be willing to participate.

President Obama’s ACOs are creating a level of complexity that will make the healthcare system’s problems worse than they are now.

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

Stanley Feld M.D.,FACP,MACE

Before I beginning I would like to congratulate the Texas Rangers for the magnificent baseball they played against the New York Yankees bringing the American League pennant to Dallas Texas.

Accountable Care Organizations: Another Complicated Mistake

One the many pilot programs being set up by President Obama’s healthcare reform law is Accountable Care Organizations (ACOs). ACOs have become the latest fad among health policy wonks desperate to control costs and boost quality in healthcare.

“An Accountable Care Organization ( ACO) is a health system model with the ability to provide and manage the continuum of care across different institutional settings. These settings include ambulatory (outpatient),inpatient hospital care and post acute care.”

“ACOs should have the capability of planning budgets and resources and are of sufficient size to support comprehensive, valid, and reliable performance measurement.”

In turn, it has become a source of confusion for hospital administrators. Some administrators are hiring healthcare policy consultants to help them create ACOs.

President Obama’s contends ACOs will raise the quality of care and lower the cost of medical care simultaneously.

This is pie in the sky thinking. All President Obama has to do is look realistically at the success rate for Accountable Care Organizations. He continuously uses the following examples of ACOs success:

“What our system needs are more Kaiser, Geisinger, Mayo and Intermountain health systems. These are the integrated delivery systems that are already delivering higher quality and lower costs.”

My question is where is President Obama’s data? Mayo is in the process of not accepting Medicare. Mayo is losing too much money servicing Medicare and Medicaid patients.

“Mayo said last week it will no longer accept Medicare patients at one of its primary care clinics in Arizona. Mayo said the decision is part of a two-year pilot program to determine if it should also drop Medicare patients at other facilities in Arizona, Florida and Minnesota, which serve more than 500,000 seniors.”

Mayo says it lost $840 million last year treating Medicare patients, the result of the program’s low reimbursement rates.

In Arizona Mayo lost $120 million dollars. The losses are usually made up by cost shifting to the private insurers and private patients. These losses are getting harder and harder to make up by cost shifting.

"Mayo Clinic loses a substantial amount of money every year due to the reimbursement schedule under Medicare," the institution said. "Decades of underfunding and paying for volume rather than value in Medicare have led us to this decision."

This is a direct contradiction of President Obama’s contention.

Medicare and Medicaid programs have been no more successful than private insurers in supporting the growth of these organizations. Real health reform will occur when President Obama recognizes patients own their diseases. Patients must have appropriate incentives and be active in their care.

Massachusetts has published data on costs. The cost of care has not been reduced by Partners Healthcare System, an integrated delivery system at Massachusetts General Hospital.

“But there is no sign that Partners has used its size and scale to deliver care at a lower cost. Indeed, there is evidence that it has used its market power to extract higher rates from insurance companies.”

There are no data showing that quality, safety, and efficacy in the delivery of care throughout the Partners system is better than other community hospitals or academic medical centers in the area. .

On January 1,2012, Kathleen Sebelius is supposed to establish a Shared Savings Programs through Accountable Care Organizations in which authorized providers contract with the Secretary of HHS to manage and coordinate care for Medicare beneficiaries.

Acceptable providers include group practices, networks of practices, hospital-physician partnerships and other groups that the Secretary deems appropriate.

Kathleen Sebelius has been empowered by President Obama’s healthcare reform law to use her discretion, without congressional oversight about who will be appropriate providers.

In order to be deemed appropriate ACOs must:

1. Care for at least 5,000 patients.

1. Have a sufficient number of primary care professionals.

The number of primary care providers has not been defined by Kathleen Sebelius at this time. The term primary care providers has been used rather than primary care physicians. It is a subtle point overlooked by many. A nurse practitioner or physician assistant is a provider. It is only a matter of time before a shortage of primary care physicians will be replaced by M.D. equivalent providers.

1. Have defined processes to promote evidence-based medicine.

This is a slippery slope. There is constant change in definitions of the best evidence based medicine. There are also defects in clinical studies.

1. Coordinate care through telehealth, remote patient monitoring and other enabling technologies.

1. Meet patient-centered criteria established by the Secretary, such as the use of patient and caregiver assessments or the use of individualized care plans.

Kathleen Sebelius alone controls the money and makes the determinations for appropriate care. How would you feel if the government selected and bought your car or dress shirts? Big brother is getting bigger and bigger on President Obama’s watch.

Patients own their disease. Neither hospitals or physicians can control complications of chronic disease. They cannot control most readmissions. They should not be liable for those readmissions.

Hospital systems would love to hire physicians and own their intellectual property. They have been unsuccessful in multiple attempts. Previous attempts have cost them dearly.

Hospitals are confused and terrified of the potential financial consequences of ACOs. The rules are vague. Hospital are hesitant to invest to form an ACO.

President Obama wants to control every aspect of clinical medicine.

It is time to face the real issue explicitly. President Obama wants hospital systems to form integrated delivery systems. The ACO concept has not been well thoug
ht out by President Obama. The concept is a non- executable mess. President Obama wants them because he thinks knows best.

He wants to shift the responsibility for costs of insuring patients from the government to hospital systems with hospital systems controlling physicians. He wants the government to pay a fixed low price for medical care. Providers will have fight with each other over distribution of the funds.

Accountable Care Organizations are really HMOs in disguise.

“While we are at it, who is looking at the issue of plan design? If you create ACOs, you probably intend to limit consumer choice of physicians and doctors as part of their insurance plans. Do you mean to put the primary care doctors in the middle of that issue, restoring them to the hated "gatekeeper" role we saw during the era of managed care?

Physicians and hospital systems are starting to figure t out. The best way to fight a war is not to show up. Patients will lose.

Health policy wonks are telling hospitals to form ACOs because they will get privileged funding. Hospital systems are having difficulty understanding the logic.

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

Stanley Feld M.D.,FACP,MACE

I predicted that the healthcare insurance industry would increase healthcare insurance premiums because of President Obama’s healthcare reform plan.

I had also predicted that employers would drop healthcare insurance coverage for employees. It is much cheaper to pay President Obama’s penalty than it is to insure workers.

“McDonald’s Corp. has warned federal regulators that it could drop its health insurance plan for nearly 30,000 hourly restaurant workers unless regulators waive a new requirement of the U.S. health overhaul.”

This is the first corporation to threaten to drop healthcare insurance for employees. It is also a first step toward the failure of President Obama’s healthcare reform plan as written.

I have speculated that President Obama wants this plan to fail. Then the public option could be accepted. The public option will fail. The next step will be government controlled single party payer healthcare system.

The infrastructure for this progression is being put into place. The regulations are being written. The agencies are being formed.

An entitlement system of universal care with restriction of access to care and rationing of care will be a necessary part of this new entitlement program.

The government cannot afford a new entitlement that permits citizens to have the freedom of choice they have enjoyed for so long.

Between now and then, we will hear a lot of babble from President Obama about how the government is doing everything to help consumers take control of their healthcare.

McDonald’s decision is a result of the new regulations. The regulations make the kind of healthcare insurance it offers unaffordable to McDonald’s. McDonald’s provides “mini-med” healthcare insurance for workers at 10,500 U.S. locations. Presently a single worker can pay $14 a week for a plan that caps annual benefits at $2,000, or about $32 a week to get coverage up to $10,000 a year.

It is a plan that offers an insignificant about of healthcare coverage.

The traditional media has made a big deal out of the McDonald’s story. It is a big deal pre midterm elections for President Obama and Democrats seeking re-election. Potentially 1.4 million people could be added to the count as uninsured.

What is going on?

McDonald’s outsources these “mini-med” benefit plans to healthcare insurance carriers. Carriers are supposed to pay 80% of the premium for healthcare insurance benefits in 2011.The healthcare insurance industry has fought hard to exclude many of its overhead expenses from this calculation.

For example, if McDonald’s pays the carrier $100 for a premium, the amount that goes for insurance overhead is excluded from the medical loss calculation. Let us say fifty cents on the dollar is excluded. Then the healthcare insurance carrier must pay 80% of the remaining fifty cents for benefits. If the insurance carrier does not spend the 80%, McDonald’s should get a rebate on their insurance premium the following year.

President Obama’s healthcare reform law is trying to limit credited expenses claimed by the healthcare insurance industry. President Obama wants to regulate profits by regulation rather than by competition.

The healthcare insurance industry is raising its rates in anticipation of the government’s new regulations. McDonald’s has a high turnover of employees. The carriers claim this high turnover increases its administrative services. Administrative services it will not get credit for as expenses in the new regulations. Therefore, it must increase the premium. McDonalds cannot handle the increase in premium for 30,000 employees

“McDonald’s last week sent a top official at the Department of Health and Human Services a memo saying "it would be economically prohibitive for our carrier to continue offering" its "mini-med" limited benefit plan unless it got an exemption from the requirement.”

Mini-med healthcare insurance plans are becoming a stopgap for employee health care coverage. With more employers than ever cutting back or completely removing health insurance from their fringe benefits, providing this minimal coverage plan is becoming more popular. The employee, not the employer, most often carries the entire premium cost for the plan.

McDonald’s offers its hourly workers two different health care plans, which are known as “mini-med” plans. In one, workers can pay about $730 a year for benefits of up to $2,000. In the other, they can pay about $1,660 a year for benefits of up to $10,000.

The “mini-med” plan is very cost efficient for the employer.

These employees of McDonald’s mini-med plans are in reality uninsured now. However, it makes these McDonald’s look like a good corporate citizen. The healthcare insurance industry makes a lot of money. Employees think they have good healthcare insurance.

Two days later, the Obama administration said its top health official will "exercise her discretion" in enforcing a new health-law requirement.

One commenter said;

RE: "The Obama administration said Thursday that its top health official will "exercise her discretion".
“This is it folks; this is the beginning of the end. We once had a government confined law, now we instead are ruled by "her discretion.””

“We are getting a small taste of the wonderful world of big government bureaucracy and unintended
consequences.”

White House officials said they have sought to ensure that insurance coverage for employees isn’t disrupted as a result of the law.

Aetna Inc., one of the largest sellers of mini-med plans indicated that a potential medical-loss ratio waiver could provide relief to dozens of low-wage employers. Aetna provides min-med plans to Home Depot, CVS, Disney Worldwide Services, Staples Inc., Blockbuster Inc., AmeriCorps teaching-program sponsors, and others.

Kathleen Sibelius issued “her discretion” decision to grant waiver through the HHS bulletin.

“In the case of mini-med plans, the HHS bulletin says plan sponsors can seek a waiver from those limits for 2011 through 2013.”

Howe
ver, the government bureaucracy went to work. A plan sponsor must apply for a waiver, must detail terms of the plan, the number of covered individuals and the plan’s annual limits for approval.

Also required is a statement by the plan administrator or CEO of the issuer of the coverage that says the plan existed prior to Sept. 23, 2010, and that meeting the minimum annual limits would result in a significant decrease in access or a significant increase in premiums for the plan.

Another commenter said;

“ Wonderful. This is exactly the problem with huge government intervention in the marketplace. Large businesses with enough clout can get a waiver but small guys get the shaft.”

There are several important issues;

1. President Obama now has the power to interpret healthcare law at “its discretion.”
2. Healthcare waiver is being used to political advantage to affect the mid-term elections.
3. Lobbying and big business clout is influencing President Obama’s administration to interpret the law in its favor.

We are going to see these unintended consequences repeatedly in the coming years.

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