Stanley Feld M.D.,FACP,MACE

Barney Frank declared during the healthcare reform bill debate, if we do not have a public option healthcare reform will fail.

Senator Kerry felt we must have a single party payer system. He stated the Democratic Party did not have the votes to put it in the bill.

President Obama and the Democrat figured out how to sneak a single party payer system into the healthcare system in America by default.

President Obama’s signature promise about the healthcare reform bill was "If you like your health care plan, you can keep your health care plan. If you like your doctor you can keep your doctor.”

What President Obama left out of his promise was that if your employer stops your healthcare insurance coverage there will be no choice but to use the subsidized government healthcare plan from the healthcare insurance exchange “Public Option”.

President Obama uses this move a lot. It is called misdirection.

“As companies crunch numbers on what the new law means for their bottom line, some have concluded they might be financially better off canceling their health care coverage and moving their workers to government-subsidized "exchanges" that will be created in four years. “

Corporate action to drop healthcare insurance will make Barney Frank, Nancy Pelosi, John Kerry and President Obama happy. I do not think the Democrats have thought about the unintended consequences. Just think what the influx of consumers to the government subsidized plan will do to the CBO’s estimate of the healthcare reform bill reducing the deficit by $115 billion dollars in ten years and 1 trillion dollars over the next 10 years.

The CBO revised its estimate this week. It stated that the bill will increase the deficit by that amount in the tenth year instead of decreasing it. I believe this is an underestimate.

AT&T Inc has concluded that eliminating employees’ healthcare insurance could mean a $1.8 billion dollar saving per year. It is much cheaper to pay an estimated penalty $2,000 per employee than $15,000 to 18,000 in non deductible dollars for employee healthcare insurance coverage.

“The documents, obtained by Fortune magazine and posted online this week, reveal that four companies – AT&T, Verizon Communications Inc., Caterpillar Inc. and Deere & Co. – had investigated to varying degrees the impact of dropping health care coverage and pushing their workers onto the new exchanges, where they will be able to buy their own insurance.”

This year AT&T spent about $2.4 billion to cover medical costs of its 283,000 active workers. Next year they are scheduled to pay more.

AT&T instantly denied that it has a plan in place to drop healthcare insurance for employees. AT&T would only have to pay an annual penalty of $600 million, or $2,000 a worker if the company dropped the healthcare insurance.

The burden would be on the employee and the government. President Obama promised us all affordable healthcare insurance.

Large companies are sick of dealing with increasing insurance premiums, insurance paperwork and regulatory compliance. These large companies would pocket huge savings by eliminating healthcare insurance for employees.

"Even though the proposed [penalties] are material, they are modest when compared to the average cost of health care," Hewitt Resources said in its report. "To avoid additional costs and regulations, employers may consider exiting the employer health market and send employees to the exchanges."

All the large corporations are denying they have plans to drop healthcare insurance. However it is o
bvious this is just what they should do to protect their vested interests.

Just as bad an unintended consequence is firms fewer than 50 full time employees do not have to pay a penalty for dropping insurance. A firm at the 50 employee threshold could fire workers to get below the 50 mark. They could then hire them back as part time employees.

If al these people lose healthcare insurance they will be forced to go into Medicare, Medicaid or the government subsided “Public Option” through the healthcare insurance exchange. Either option will increase government spending. The estimate increases are low at $160 to 300 billion dollars per year.

President Obama’s little trick will work. The losers will be consumers. Everyone will be forced into the “Public Option” by default. The single party payer (the government) will automatically take over the healthcare system in America (socialized medicine).

The federal deficit will increase without Repairing the Healthcare System.

Taxes on everyone will have to be increased . Does President Obama understand all of this?

Americans must wake up. The 2010 midterm elections are near.

“It is time to trow da bums out”

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

Stanley Feld M.D.,FACP,MACE

I received the following note from Dale Fuller M.D. a retired Radiation Oncologist. Like me Dr. Fuller does not have a billfold agenda for Repairing The Healthcare System. I will add my comments to his extensive critique of Accountable Care Organizations (ACO).

“I read your piece this morning, and a number of thoughts come to mind; One is a quote from Richard Nixon, who when he was "vamping for time", would say.”Let me say this about that!"  In this case the "that" is the issue of ACO’s. It stimulated some general ideas about how medicine is structured, and how care is or could be paid for.”

Dr. Fuller has expressed some of the same concerns that I have about ACO. He nailed it with his concern for the hospital systems taking advantage of physicians’ intellectual property.

It concerns me that the lead in the formation of ACO’s is generally a hospital, and most often, a large one, with multiple sites of service.  My fifty years in medicine have caused me to recognize that the management of hospital organizations and the leadership of doctor groups of any size, small or large, do not have interests that are congruent.

When hospital systems realize its vested interests must be aligned with physicians’ vested interests systems such as ACO might be effective.

I have no reason to believe that the administrators of hospitals understand the business side of medicine very well. Hospital administrator may be able to learn the business of medicine over time. The doctors would be well advised to "watch their hats and coats" while the learning is taking place.

Moreover hospital administrators tend to come and go, sometimes with great frequency, and each change brings new managers with new management strategies. Doctors, changing as they do with much less frequency, will have to learn to adapt to constantly to new management strategies.

Hospital administrations usually change because the hospital is not making enough money. Hospital systems might not make enough money when administrators treat staff physicians poorly. Physicians can undermine hospital systems’ built in profit leverage. Physicians’ may have also negotiated too good a deal.

Some of those changes will in one way or other impact physicians’ earnings. That is to say nothing about recognizing the difference in the earning expectations and compensation strategies among the various specialties likely to be swept up together in an ACO.

The division of the "pie" of dollars will be a daunting exercise, just as it is now, but with the added complexity of hospital administrators adding their own expectations to the process, and claiming their own piece of the pie.

The transition will mark the end of the era of the practice of medicine as a "cottage industry" as it is transformed into an assembly line approach to the delivery of  the care of patients.

You can bet the process of dividing reimbursement will be contested. It is difficult enough when deciding compensation among physicians in multi specialty groups.

“In your piece you mention that the dollars paid to the ACO will still be procedures based, and I believe that same process, probably with RVU’s, could easily be translated into an algorithm to facilitate the division of the revenue to those delivering the services, with, of course, that healthy slice off the top, for the administration of the ACO, provided by you-know-who.(hospital administrators).

Physicians are beginning to understand that the healthcare insurance industry loads its overhead. As physicians enter into partnerships with hospital systems they are starting to realize that the hospital systems administrators overload physicians overhead. Hospital systems pay all the overhead for employees, rents and equipment maintenance many times at an inflated fee.

Physicians are not stupid. They are starting to wake up.

“I have the sense that not only of the adage "he who has the gold makes the rules “will apply, but in addition, "he who has the data controls the flow of payments".  And, more often than not, the data is controlled by the insurance companies and by the CMS (aka the government)”

  Generally the doctors are pretty clueless about the existence and the potential usefulness of the data, prevented as they have been from negotiation with the payers with both sides having equal access to that information.

I have been told by healthcare insurance executives that physicians will remain clueless. I replied that physicians are a sleeping tiger. When they awake the party for secondary stakeholders will be over.

Physicians are reluctant to purchase and install expensive electronic medical records. Data such as claims data have been used against them. Claims data are inaccurate. Physicians are starting to learn how to collect data to be used for their advantage.

“The data is all there and could readily be used to develop case rates for individual diagnoses, or, given the characteristics of a given patient population, a capitation rate could be set quite easily based on the experience and the risk factors inherent in the makeup of the population.”

Useful data presupposes a large data base. Most of the physicians are solo or in small groups. It had been impossible to calculate capitation rates with data available in the past.

A large margin of error must be built into the cost of care. Patients are becoming sicker because of the obesity epidemic and poor lifestyle choices. Patients over utilize the healthcare system because they have first dollar coverage.

“ Once the ACO is paid, the division of the income could be made in a variety of ways, the easiest being by the Relative Value Units (RVU’s) for the services provided to the patient by the physicians.  The physicians in the ACO over time should be able to monitor the actual RVU’s reported by individual physicians.”

From the physician side if the RVU’s were fair and primary care was valued appropriately. ACO might work. ACO would not control patient utilization of the healthcare system. Patients must be motivated and incentivized to control utilization.

“When "outliers" are identified, those physicians can be re-educated about the wisdom of practicing medicine with some greater level of restraint where the provision of services is concerned.  Some of the larger organizations are already using such an approach with the evolution of clinical pathways.”

Data could be used and should be used constructively to control outliers. Groups of physicians must control the data and discipline to outliers. A peer group must have incentive to control “outliers”. It must be done in a non punitive way.

“It isn’t all that easy.”

ACO will no
t decrease costs.

“An ACO will change forever the business side of medical practice, but that may be the way the ball will be made to bounce”.

An ACO might wake up physicians and patients. It might stimulate secondary stakeholders not to take advantage of primary stakeholders (physicians and patients). I believe the chances are slim.

All in all, it is a good time for the docs to be very careful, and not to rush into something they may later have cause to regret.    DEF

The idea of ACO is a good one if it could be priced fairly. The patient incentive component is missing. Consumers of healthcare with first dollar coverage drive increasing utilization and costs.

Prevention of the onset of disease and the complications of chronic disease will drive the cost down. This can only be accomplished by consumer driven healthcare utilizing the ideal medical savings account.

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

Stanley Feld M.D.,FACP, MACE

Accountable Care Organizations (ACO) are supposed to manage Medicare cost. Policymakers are desperate to control costs. Proponents of ACO want to test it along with such alternatives as patient-centered medical homes, pay-for-performance and payment bundling.

President Obama’s practice models pilots are going to be a great waste of money. Each model has major defects.

None of the models offer patients the ability to control of healthcare dollars. None of the models provide incentives to patients to be responsible for their own health.

The models replace individualism with collectivism. They replace individual self-responsibility with community governance. Bureaucracy stifles initiatives and innovation, two characteristics that have been the engine of progress in medical advances.

The models subject medical care to the deadening hand of bureaucracy. The net result is a more costly healthcare system and increasing federal deficits. Bureaucracy always has loopholes. The advantaged vested interests always game the system to the disadvantage of consumers.

What are Accountable Care Organizations (ACO)?

“The goal of ACO is to encourage physicians and hospitals to integrate care by holding them jointly responsible for Medicare quality and costs.”

A typical Medicare ACO would include a hospital, primary care physicians, specialists and potentially other medical professionals. Services would still be billed under fee-for-service. The ACO’s members would coordinate care for their shared Medicare patients.

I do not know when hospital systems have not tried to profit from its physicians’ intellectual property. What will suddenly get them to not take advantage of physicians intellectual property?

“Because ACO members are held jointly accountable for this care, they would share in any cost savings that stem from the quality gains.”

Cost overruns would be deducted from the fees billed. Realistically surgeons have always dominated the primary care physicians. It is unrealistic to believe surgeons would relinquish this position passively. Surgeons would not agree to increase compensation to primary care cognitive physicians at their expense

“The goal of ACOs is to pay providers in a way that encourages them to work together, to pay providers in a way that does not encourage supplier induced demand, and to create an organization that is rewarded for providing high quality care.”

The Medicare Advantage program pays a lump sum to private insurers. The government holds the healthcare insurance industry accountable for all medical care. The healthcare insurance industry is in control of the healthcare dollars.

Medicare pays the healthcare insurance industry a $3000 premium per patient above and beyond the average cost of $6600 per patient. Patients pay on average 33% of the total $9600 premium. The healthcare insurance industry decreases physician reimbursement to increase its profitability.

Medicare Advantage looks good to the patients because premiums are low. Patients do not realize restriction to access to care exists. Patients are happy.

The government was happy despite the large subsidy because it had a fixed cost. The insurance industry was happy because its profit increased.

The problems with ACO are:

“Accountability rests with the providers.  Providers or provider groups, rather than insurance companies, are evaluated on the quality and efficiency of care.”

Physicians are unhappy. They are being judged on utilization without concern for medical risk their patients present or the need for defensive medicine to avoid malpractice liability.

Patients’ responsibility for their health and medical care is not considered. Obesity, substance abuse, or noncompliance are not considered as a patient responsibility in this or any other model considered by President Obama’s healthcare team.

Eighty percent of healthcare dollars are spent on treating the complications of chronic diseases. When the risk of disease and complications of disease is high the risk management is the responsibility of physicians and not patients.

“ACO allow for flexibility in the type of organization.  Some regions may prefer independent practice associations (IPAs) while others may prefer a physician-hospital organization (PHO).”

The ACO is a fixed reimbursement system. Cost overruns will occur at the expense of physicians. Physicians and hospital systems will not know how to price reimbursement in advance. Utilization of medical care services is dependent on both patient and physician behavior. If patients were healthy there would be great cost savings. There are no incentives in ACO for patients to remain healthy.

“The physician-centered organization makes much sense to many policymakers because “the resources that flow from the decisions physicians make with patients account for a major portion of overall health care costs, regardless of where the care actually takes place.”

Physicians are good at treating illness. They are not good at risk management. Patients must be incentivized and taught to manage the risk of complications.

Many physicians will get stuck with high-risk patients. Medicare will have to increase payments to those physicians or risk losing them as providers. ACO will become insolvent. This will increase the deficit.

 ” If participant believe that ACOs are essentially tightly managed ‘HMOs in drag’ that are going to restrict their choices, undermine the doctor-patient relationship, and result in cheaper but lower-quality care, the concept will be met with skepticism, if not overt opposition.”

Physicians and patients should view ACO for what they are. ACO are HMO in disguise. They represent a fixed reimbursement for variable amounts of necessary service.

Physician groups and hospital systems are allergic to HMO because they did not know how to price the reimbursement adequately. They also do not know how to price risk and manage risk.

Neither the healthcare insurance industry nor the government knows how to manage or price risk. The healthcare insurance industry compensates for overuse by increasing the premium next year.

How can they expect physician groups to price risk? Many physicians’ practices and hospital systems lost money on HMO. This resulted in non participation in HMO.

Many patients hated HMO because medical care became commoditized, choice was restricted and the doctor-patient relationship was undermined. The resulting cost was not lower.

The HMO were a failure. ACO will be a failure. The result will be opposite of the intent with increasing cost, increasing deficits and decreasing quality of care.

The only way to manage risk is to
motivate consumers to manage risk. This is the definition of consumer driven healthcare using the ideal medical savings account.

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 bill was rammed through congress over a month ago. He has been first to point out that the world has not fallen apart yet. He is being disingenuous since he healthcare reform plan does not influence medical care until 2014.

The strategy is to not do anything drastic until after he wins the November 2010 elections for the Democratic Party and the Presidential election in November 2012.

He is disregarding American’s anger toward him for ignoring their wishes. He is hoping they forget their anger.

The traditional media is helping America forget the tactics used to pass the healthcare reform bill. They are not evaluating the long term consequences on medical care and the budget deficit. It is not economically feasible to enlarge failed entitlement programs.

The public opposes the healthcare bill yet Wellpoint, who has been making billions of dollars a year, raises insurance premiums by 39%.

Immediately, President Obama, Harry Reid and Nancy Pelosi demonized the healthcare insurance industry. The choice given the public was to keep the present system along with healthcare insurance company abuse or adopt President Obama’s healthcare reform plan. The Republican Party did not present an alternative loud enough.

President Obama’s healthcare reform plan won the day by a partisan vote and a frustrated electorate. It led to Nancy Pelosi’s comment that Americans will understand the bill after it is passed.

The reality is the healthcare reform bill will lead to a single party payer system with increasing deficits, increased taxes and decreased access to care.

The healthcare insurance industry and Big Pharma are supporting President Obama’s healthcare reform plan because they will continue to control the healthcare dollars. Now the government will subsidize their business.

After passage of the healthcare reform plan, President Obama went on to his financial reform bill. There was much opposition to his plan. The plan does not go far enough to repair structural defects in the financial system. It also increases government control of the financial system without preventing abuse. Fannie Mae and Freddie Mac are not restructured.

In the midst of the financial system reform debate the Democrats started a congressional hearing on alleged abuses by Goldman Sachs. Congress has demonized Goldman Sachs. The public has another choice. America can either support President Obama’s financial reform or the old structure.

President Obama’s environment and energy bill was going nowhere. Cap and trade looked dead. President Obama agreed to permit offshore drilling for oil as a compromise.

The catastrophic oil spill occurred. The traditional media obsessed over the leak. In order to be a “good guy” President Obama announced that off shore drilling is too risky and discontinues his plan to let federal leases for off shore drilling.

We now have an environment and energy bill without off shore drilling. There is no consideration about this decision’s effect on a fragile economy.

The immigration bill is going nowhere also. It has large structural defects. The federal government is not enforcing laws that already exist. Arizona passed a law duplicating the federal laws. Arizona gets demonized by the White House and the traditional media.

President Obama has condemned Arizona. Arizona is only doing what the federal government should be doing. There is now public sympathy for President Obama’s defective immigration bill.

I suspect President Obama will use this opportunity to push through his immigration bill rather than do it right. Where are the Republicans?

President Obama wants illegal immigrants to be legalized citizens. He wants them to have the right to vote. His plan is to get enough new voters to neutralize the independent voter who have defected since he was elected President.

The pattern is clear. You demonize the opposition and then pass your alternative as if it is the only alternative. President Obama’s method has legs with the traditional media. Experts in each area will tell you most of this legislation will not solve any of our problems. It will be ineffective legislation. It will increase the federal deficit and lead to more taxation. It will decrease economic growth by decreasing incentives. It will increase government power over States and suppress individual freedoms. Many unintended negative consequences will occur after government has operational control.

I am afraid the public is growing weary of protest. They will forget the tricks used to produce terrible legislation. We will have many costly unintended consequences for many years to come.

The most frightening consequence is government control over our lives and freedom and a never ending need to raise taxes. It will suppress America innovative spirit.

President Obama is moving ahead with his healthcare pilot studies. In my view all of the approved pilot studies have little chance of success.

A potential pilot study with the biggest chance of success is not being considered. The five models to be studied are Accountable Care Organizations, Primary Care Medical Homes, Bundled Payments, Partial Capitation, and Full Capitation.

All five have problems. The chance of succeeding to reduce cost is marginal. The Ideal Medical Savings Account is ignored as an option. The MSA should be compared to each model tested. The Ideal Medical Savings Account model is the only model with a chance for success. The MSA is a consumer driven model. It puts patients in control of their healthcare dollars. It rewards consumer when they use their healthcare dollars wisely and maintain their health. It promotes self responsibility and self respect.

I will evaluate each model and point out the problems in each model.

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

Stanley Feld M.D.,FACP,MACE

Senate Majority Leader Harry Reid’s support for reelection to the Senate has been stagnating at less than 40%. Each potential opponent for the Republican nomination vs. Senator Reid has support of over 50% of the probable voters.

Senator Reid needs a costly, well choreographed campaign to overcome his poll deficit.

Who do you think is doing it for him?

Big Pharma is paying for his big push.

How come?

Big Pharma is supposed to have been slaughtered by President Obama’s healthcare reform plan. Harry Reid jammed President Obama’s healthcare reform plan through the Senate. Senator Reid is supposed to be Public Enemy Number 1 to Big Pharma and the healthcare insurance industry.

“A new TV ad is up in Mr. Reid’s home state praising the Democrat for creating "good Nevada jobs," expanding "clean energy" and providing "tax credits for small business." Moreover, "thanks to Harry Reid’s leadership, if you change or lose your job, you can keep your health care coverage."

Big Pharma is paying for Harry Reid’s campaign. The reasons are complicated but are becoming obvious. It is another one of President Obama’s trick plays.

“All this is courtesy of the Pharmaceutical Research and Manufacturers of America, in league with the liberal health-advocacy group Families USA.” http://www.familiesusa.org/

Isn’t that strange?What is going on?

Big Pharma should be overjoyed that Harry Reid will lose his election. The healthcare insurance industry is now teaming up with Families U.S.A. to promote Obamacare.

President Obama has promised to provide affordable insurance. If he does provide affordable insurance it will be at the expense of all taxpayers because the government will be subsidizing healthcare insurance and drug costs. It will not be at the expense of the healthcare insurance industry or Big Pharma. Both industries will have a mandated increased customer base with guaranteed payment yielding a larger net profit.

“Big Pharma and health insurance companies are betting on short-term rent-seeking from legislation that subsidizes Americans to use more of their products”

President Obama is not protecting the American taxpayer. He is protecting big business in a different way than big business has been protected in the past.

President Obama is protecting big business because big business provides the money that gets candidates elected. They are providing the money to get Harry Reid reelected.

Thomas P. Stossel M.D. Director, Translational Medicine Division at Brigham & Women’s Hospital Harvard Medical School cofounded the Association of Clinical Researchers and Educators (ACRE),an advocacy group for doctor/drug company partnerships. He believes there is no statistical objective evidence for a conflict of interest in such partnerships. The partnerships are a valuable addition to physician education and clinical research as government funding for both decreases. The partnerships help translate advances in bench science into clinical practice.

Big Pharma might be delighted to decrease its support of physician education. It will decrease its overhead and increase its short term profit. It will also decrease its drive to develop new drugs.

Big Pharma’s ad is partly a thank you to Democrats for new customers. But it’s also political protection. With their business model in the hands of government, the drug makers have to make sure the government doesn’t squeeze them in the bottom line.

Politics does not change. Only the guys running the government change. Someone is going to come along some day and do something to benefit the people. President Obama is just pretending to be doing things to benefit the people.

“Thus do sweeping government programs produce their own special-interest advocates? Lost in this palm-greasing are the customers who ultimately will pay for ObamaCare in higher prices and politically rationed medical care.”

President Obama’s healthcare reform plan is another unsustainable entitlement for the benefit of Big Pharma and the healthcare insurance industry.

“Another reminder, if another reminder is needed, that powerful government serves the powerful.”

As government entitlements grow, government’s percentage of the GDP grows. Taxes must increase for all. Black market trading will start. Before America knows it America will be another Greece.

Patients and physicians do not realize how much power they have. They are the primary stakeholders in the healthcare system. Consumers must become vocal. They must force their elected government officials to pay attention to their needs. President Obama and the Democrats are only pretending to pay attention to taxpayers needs.

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

Stanley Feld M.D.,FACP,MACE

On April 22, 2010 Richard S. Foster CMS Chief Actuary issued a report entitled “On the Estimated Financial Effects of the Patient Protection and Affordable Care Act as Amended. “

Mr. Foster’s disclaimer introduces the report.

“Office of the Actuary has prepared this memorandum in our long standing capacity as an independent technical advisor to both the administration and the Congress. The statement, estimates, and other information provided in the memorandum are those of the office of the Actuary and do not represent an official position of the Department of Health & Human Services or the administration.”

The report is an independent assessment of the fiscal reality of President Obama healthcare reform plan. The report contradicts President Obama’s fantasy that a new entitlement will lower health costs. President Obama used a series of trick plays to feed the Congressional Budget Office unrealistic assumptions in order for the CBO to conclude his healthcare bill will reduce the deficit. The only way there can be a deficit reduction is greater tax increases for all Americans.

President Obama’s Healthcare Reform plan does not solve the healthcare systems problems. The present healthcare reform bill will make the problems worse and increase the deficit further.

Here are some of the Actuary Report findings:

1. President Obama claims health care costs will go down but the actuary says they will go up. National health expenditures will increase from 17 percent of GDP now to 21 percent under the new law. Healthcare costs will be higher than they would have been without the legislation. [Page 4] Net federal spending on health care will also increase by $311 billion dollars.

1. The healthcare reform bill will result in the loss of employer coverage by 14 million employees. Employees of small firms are especially at risk despite small employer tax credit subsidies. It is cheaper to pay the penalty than pay for the insurance[Page 7]

1. Two million employees who lose coverage will have to enroll in Medicaid. [Page 3] Medicaid enrollment will increase by 20 Million new beneficiaries. [pages 3-4]

1. Qualifying for a Medicaid insurance card is not a guarantee of medical care. There is no corresponding increase in the supply of physicians. Other health professionals will try to care for the additional Medicaid patients. The quality of medical care must be questioned.

1. A significant portion of the increased demand for Medicaid care would be difficult to service. [Page 20]. Physicians are not participating in Medicaid presently because of the low reimbursement. Further reductions in reimbursement will lead to further non participation. The government could try to force physicians to participate in Medicaid.

1. There are more than one-half trillion dollars in Medicare cuts scheduled. The new health law cuts “$575 billion” from Medicare. [Page 4]. The result will be lower reimbursement and rationing of care. President Obama did not address this comment when the bill was being passed.

1. Medicare Part A cuts would threaten the viability of 15% of hospitals. These Part A Medicare providers would become unprofitable within the 10-year projection period.” [Page 10]

1. Health care shortages are “plausible and even probable.” Because of the increased demand for health care, “supply constraints might initially interfere with providing the services desired by the additional 34 million insured persons.” [Page 20]

1. By 2019, more than 10% of insured workers will “be in employer plans with benefit values in excess of the thresholds (before changes to reduce benefits) and will be taxed. The percentage of workers taxed would increase rapidly thereafter.” [Page 13]

1. The new taxes on medical devices, prescription drugs, and insurance plans “would generally be passed on through to health consumers in the form of higher drug and device prices and higher insurance premiums.” [Page 17]

1. The reimbursement decreases will challenge Medicare providers to continue to take Medicare patients. Medicare providers will find it difficult to remain profitable and might decide not to participate in the program. [Page 10]

1. Enrollment in Medicare Advantage is planned to be cut in half (from its projected level of 14.8 million under the current law to 7.4 million under the new law). [Page 11]

1. The new “Medicare Tax” doesn’t go to Medicare. Despite the Medicare tax title, the revenues generated by this tax on unearned income are not allocated to the Medicare trust funds. [Page 9]

1. Budgetary double-counting does not improve Medicare’s solvency. Medicare cuts “cannot be simultaneously used to finance other federal outlays (such as the coverage expansions) and to extend the [life of the Medicare] trust fund, despite the appearance of extending the trust using present accounting conventions.” [Page 9]

1. The new long-term care insurance plan (CLASS Act) faces “a significant risk of failure” because the high costs will attract sicker people and lead to low participation. [Page 15]

1. The promise to those with pre-existing conditions is unfunded. “By 2011 and 2012 the initial $5 billion in Federal funding for [high risk pools] would be exhausted, resulting in substantial premium increases to sustain the program.” [Page 16]. The healthcare insurance industry is still in control of the healthcare dollars.

These are just some of the Actuary Report finding

Despite President Obama’s repeated promises to curb healthcare costs and allow people to keep their current coverage, the President and Congress have enacted a healthcare law that will escalate healthcare costs, raise taxes, and decrease patient choice. President Obama’s political agenda ignores the will of the people.

The government takeover of healthcare heralds a financial disaster. There will be unsustainable spending and ballooning budget deficits. The financial disaster will not occur overnight. President Obama’s healthcare reform bill is spread out over many years. The increased taxes will be collected for four years before significant benefits will start.

This healthcare reform bill is fatally-flawed. It must be replaced with common-sense healthcare reforms that will solve the problems in a dysfunctional healthcare system. Instead we have a bill that will increase the systemic dysfunction.

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

Stanley Feld M.D.,FACP,MACE

President Obama’s goal might be for his healthcare reform plan to fail. Once it fails the default plan will be a public option with a single party payer system.

Everyone will be forced to opt into the public option. There will not be a private option.

The cost of healthcare will not decrease. The government will be paying the private healthcare insurance industry to administer the public option. Hospitals and physicians will figure out how to game the new system. The increasing costs will force a restriction to access to care.

President Obama must re-examine his premises. The medical care crisis is neither a Democratic nor Republican problem. It is an American problem. Americans need to be motivated to live a healthier existence. Only then will the cost of care diminish.

Consumers must be provided with education to live a healthier existence. The culture must be changed to emphasize better nuitrition and exercise.

Brad Feld pointed me to a fascinating paper by Carliss Y. Baldwin (Harvard) and (Brad’s mentor) Eric von Hippel (MIT). The paper suggests that some of the most basic theories on which the patent system is based are wrong. The thesis is our present patent system might hinder innovation.

The same logic can apply to the premises President Obama and his healthcare policy wonks apply to medical care. President Obama’s healthcare reform plan is punitive to both patients and physicians. It does not promote patient responsibility. It penalizes physicians for poor patient care outcomes.

Effective healthcare reform should promote patient responsibility and physician innovation. Inappropriate patient incentives and punitive regulations for physicians encourage patients and physicians to get around the healthcare reform system. President Obama’s healthcare reform plan does not achieve its goal of saving money and building efficient medical care systems.

A way to develop efficient medical care systems is through a consumer driven healthcare system with patients being in control of their healthcare dollars.

Nevertheless, President Obama’s healthcare plan is law. He won the election and forced through a partisan vote for a healthcare reform plan the overwhelming majority of the public and the physician community oppose. Only time will demonstrate the impending disaster in the healthcare system.

“Mindful that the new health care law’s ability to slow rising medical costs will depend to a great extent on how it is put in effect, President Obama is assembling a high-level team to carry out key elements of the overhaul and is considering moving faster than the law requires to put them into action. “

Kathleen Sebelius, the secretary of health and human services is reorganizing the Centers for Medicare and Medicaid Services. She is developing an innovation center whose goal is to test ways to reduce reimbursing providers.

She can enforce ideas she deems important nationwide without Congressional approval. The power of the secretary of health and human services has been expanded greatly without checks and balances.

She has started working on new regulations in an attempt control Medicare, Medicaid costs. She is also working on regulations to control independent private health care providers. President Obama wants an Independent Payment Advisory Board for controlling Medicare spending before 2014.

The problem with the Independent Payment Advisory Board is its total independence of congressional oversight. In the past Congress has ignored the Medicare Trustees’ recommendations to reduce costs. President Obama’s healthcare reform bill eliminates congressional oversight. Congress has not exercised its responsibility. However congress is accountable to the public and the Independent Payment Advisory Board is not.

The new board’s responsibilities will be in the hands of a 15 member board nominated by President Obama and confirmed by the Senate for the six-year term. The memberships will be full-time positions.

“Each year that Medicare spending exceeds annual targets, as most analysts expect it will, the board must propose ways to reduce payments to care providers.”

The Independent Payment Advisory Board provides Congress with an excellent opportunity to shirk its responsibility. The executive branch will have a firm grasp on control of the healthcare system.

“With the federal debt projected to rise to levels that many economists consider unsustainable, mainly due to growing health costs and an aging population, Congress might have little choice in coming years but to accede to unpopular limits on payments for doctors, hospitals and other health care providers of the kind that lawmakers have ignored in the past. The board would give them political cover to do so. “

“It’s a very promising structure,” said Peter R. Orszag, Mr. Obama’s budget director. “But like anything else in life, it’s what you make of it. So whether it realizes its potential depends on how it’s implemented.”

Tom Daschle, wants the board to be expanded to deal with not only Medicare but also all healthcare insurance.

“ Otherwise, he said, doctors will shift their costs that Medicare does not fully reimburse to patients with private insurance, “which really exacerbates the problem.”

Tom Daschle said it. It is all about the government takeover of the healthcare system. It is about government regulating the healthcare system at the expense of all the stakeholders including patients. It is not about healthcare reform to produce efficient and safe systems of care through patients influencing physicians to develop innovative systems of medical care.

When was the last time a government controlled system was efficient and cost effective? Government should make the rules and then get out of the way.

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

Stanley Feld M.D.,FACP,MACE

Unfortunately, the answer is yes.

President Obama’s healthcare reform plan will fail because of its poor construction.

The majority of Americans agree with President Obama’s goals. Americans want affordable universal high quality healthcare. President Obama’s healthcare reform bill will not accomplish these goals.

President Obama’s healthcare reform bill will waste 2 trillion dollars, restrict access to care, raise taxes, ration care and destroy infrastructure of a healthcare system that provides excellent medical care to the sick.

Our healthcare system is broken because prices are out of control. President Obama’s healthcare reform bill with a mushrooming government bureaucracy will not control prices by competition. It will try to control prices by regulations and force. Price controls never work.

Previous behavior is a predictor of future behavior. It follows that previous healthcare system reform failures are a predictor of future healthcare reform failure.

President Obama’s healthcare reform plan is similar to the failed Massachusetts healthcare reform plan (Romneycare). Romneycare was destined to fail from the onset.

The similarities between Obamacare and Romneycare are glaring;

1. Both the Massachusetts healthcare reform plan and Obamacare mandate individual healthcare insurance.
2. If individuals do not have insurance they must pay a penalty.
3. Most businesses are required to participate or pay a fine.
4. Both healthcare reform plans rely on government-designed purchasing exchanges (healthcare insurance exchanges)
5. The healthcare insurance exchanges are supposed to provide a vehicle to control private health insurance.
6. The uninsured are covered by the expansion of Medicaid and with Obamacare the expansion of Medicare.
7. Qualified citizens receive healthcare insurance subsidies to help pay for their mandated healthcare insurance policies.
8. The state of Massachusetts has set up many new boards and committees to oversee and administer the healthcare reform plan. The added bureaucracy has failed to control costs.

I predicted the Massachusetts plan would fail at its onset. It has been plagued with cost overruns from the start. I cannot image President Obama’s plan can be budget neutral after ten years. I suspect many Americans can’t image it either. I think the Scott Brown election has given America the notion that the citizens of Massachusetts don’t think Obamacare can be successful.

Why did the Massachusetts Healthcare Reform Plan fail?

1. The healthcare reform plan is administered by the healthcare insurance industry. It controls the healthcare dollar and determines the premiums based on defective accounting rules. These rules permit the healthcare insurance industry to overestimate expenses and underestimate reserves. The result is increased premiums.
2. No one has the political will to challenge or change these rules. The rules permit the healthcare insurance industry to declare a loss while it is removing sixty five cents out of every healthcare dollar from the healthcare dollar pool.
3. There are 410,000 people who are newly insured in Massachusetts. Of those 200,000 are fully subsidized by Massachusetts state insurance exchange.

Policy makers underestimated the number of people that would qualify for subsidy.

1. 3% of the population remains uninsured. The total 140,000 uninsured are required to pay a penalty. Half (70,000) uninsured cannot afford the premiums or penalty and receive a waiver.
2. The state’s premiums have increased every year since the onset of healthcare reform. A typical family of four’s annual premium costs almost $13,788, the highest in the country. This is twice the cost of premiums in Texas. The premiums are 27% higher than the national average.
3. This cost does not include out of pocket expenses.
4. Massachusetts regulations serve to eliminate competition in the healthcare insurance market.
5. Mandates dictate the services needed to be covered.
6. Healthcare insurance vendors are required to sell "just-in-time" policies even if people wait until they are sick to buy coverage.
7. Patients game the system by purchasing health insurance when they need it. Patients then drop insurance a few months later and pay the less expensive penalty. The same will apply to President Obama’s plan.
8. Massachusetts’ safety-net hospitals are treating a disproportionate number of lower-income and uninsured patients. State compensation of these safety-net hospitals has been reduced under the new healthcare plan. It is only a matter of time before the safety net hospitals will declare bankruptcy. The alternative is to increase state taxes further. The result is people will move out of Massachusetts lowering the tax base
9. There is a "critical shortage" of primary-care physicians as a result of increasing the number of people covered and an increase in demand for medical services.
10. Physician compensation is decreasing. Physicians are fleeing the state. Patients cannot get doctor appointments.
11. New patients wait 44 days to get an appointment with a primary-care doctor. A secondary market for primary-care doctor appointments is developing. People are selling their appointment times to patients.
12. Appointment time shortages have led to an increasingly expensive emergency room visit for basic medical services. Emergency room visits increased 7%. More than half need emergency room attention. ER visits are very costly.
13. President Obama gave the state of Massachusetts an 8 billion dollar bailout to help cover healthcare reform expenses. The healthcare insurance industry benefited by the stimulus bailout.

The state has refused to permit the insurance industry to raise rates. The insurance industry will leave the state or decrease reimbursement for services. The results are obvious.

If you do not fix the defects in the healthcare system you will not fix the financial difficulties. People must own their healthcare dollar, be responsible for their own care and have the freedom to choose. All this adds up to consumer driven healthcare using the ideal medical saving accounts.

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

Stanley Feld M.D.,FACP,MACP

Fourteen states are suing the U.S. Government in order to block the healthcare reform bill. The participating plaintiff states are Florida, South Carolina, Nebraska, Texas, Utah, Louisiana, Alabama, Michigan, Colorado, Pennsylvania, Washington State, Idaho, and South Dakota.

Virginia has filed a separate lawsuit. It is anticipated that other states will join the lawsuit.

“State attorneys general wasted no time filing legal challenges to President Obama’s healthcare reform law, swinging into action with legal filings in Florida and Virginia within minutes of the White House signing ceremony on Tuesday.”

The state attorneys general charged that the new healthcare reform package exceeds Congress’ power to regulate commerce, violates 10th Amendment protection of state sovereignty and imposes an unconstitutional direct tax.

“This lawsuit should put the federal government on notice that Florida will not permit the constitutional rights of our citizens and the sovereignty of our state to be ignored or disregarded,”

President Obama’s administration has dismissed the lawsuits. Robert Gibbs said White House lawyers have advised them that the administration would win the lawsuits. Mr. Gibbs’ contention received more traditional media coverage than the reasons for the lawsuits.

A Democratic Party spokesman has turned the table on reality and said the lawsuits are a waste of state funds that will create large state deficits.

Who is paying for the federal government’s defense expenses?

Virginia filed a separate law suit in federal court in Richmond. The suit focuses on the mandate issue. A state law protects Virginia residents freedom to refuse unwanted health insurance. President Obama’s healthcare reform bill imposes penalties on anyone who avoids buying healthcare insurance.

“It has never been held that the Commerce Clause [of the Constitution] … can be used to require citizens to buy goods and services,” the suit says. “To depart from that history to permit the national government to require the purchase of goods and services would deprive the Commerce Clause of any effective limits.”

The goal of the multi-state lawsuit is to move through the court system to the U.S. Supreme Court. The states are confident the U.S. Supreme court will declare the new healthcare law unconstitutional.

“The multi-state lawsuit maintains that new law infringes the liberty of individual state residents to choose for them whether to have health insurance. It also says the states themselves are victims of a federal power grab by leaders in Washington.”

During the writing of the U.S. Constitution, our founding fathers worked hard to preserve individual freedoms and states’ rights. The fear was that a federal system of government would attempt to control those rights and freedoms. These debates are beautifully outlined in Richard Deeman’s book”Plain Honest Men”

Michael Connelly is a constitutional lawyer who explains the constitutional issues in President Obama’s healthcare reform bill. His explanation of the issues are clearly stated on his blog.

“The entire bill is a blatant attempt to hide what is really going on when it comes to the Constitutional implications for individual Americans and the states that we live in.”

“Instead, this is a summary of the most important parts of the bill that will deal a severe and possibly fatal blow to the Constitution of the United States of America.”

Michael Connelly permitted me to print his first analysis of the unconstitutionality of the HR 3200. President Obama, Harry Reid, and Nancy Pelosi used a number of tricks to get the bill passed by a partisan congress.

Many of the tricks are unconstitutional. The methodology and results were not the intention of the founding fathers’.

It is essential that the American people understand the specifics of the constitutional issues. The Public should not accept the administrations sleight of hand comments about the lawsuits.

I salute the state governments who are taking a stand. I hope many other states will join the lawsuits.

It is important to present Michael Connelly’s comments as a source reference to the constitutional issues of President Obama’s healthcare reform law.

“ I won’t even attempt to deal with all of the items covered in the bill because that would probably require a book.        

1. the passage of this bill far exceeds the powers granted to Congress under the provisions of Article 1, Section 8 of the Constitution which specifically states what Congress can do.

2. The bill grants powers to President Obama and the Executive Branch of government that are not authorized under the Constitution.

3. The new law requires every American, simply by virtue of the fact that they are alive, to purchase health insurance from private companies that will be heavily regulated by the Federal government. This is not authorized under the commerce clause of the Constitution and the Supreme Court has never rendered a decision saying that such power exists.

4. The legislation not only requires people to purchase health insurance, but establishes the terms and conditions that such insurance plans will have. In other words, Americans will be forced to enter into contracts for coverage that they may not want or need.

5. Failure to comply with the requirements to buy health insurance or even health insurance approved by the Federal Government will result in punitive action against American citizens. People will be fined for this failure although the bill calls it a tax. This is an effort to bypass the provisions of the 5^th Amendment to the Constitution which provides protection against the taking of our property without “due process”.

6. This tax will be collected by the Internal Revenue Service that will have an additional 16,500 agents and auditors hired to enforce it. This opens the door for people who fail to pay the “tax” being subjected to criminal penalties.

7. In order to facilitate the actions by the IRS the Federal government will have real time access to the formerly private information of Americans including medical records and financial information. This is a violation of our right to privacy and the 4^th Amendment protection against illegal searches and seizures.

8. The imposition of this so called “tax” also violates Article 1, Section 9 of the Constitution that limits the type of taxes that Congress can levy.

9. The bill also takes away from the states their historic right to regulate the health care industry, including health care insurance, within their own borders. Everything will now be regulated by the Federal government. This is a clear violation of the 10^th Amendment to the Constitution.

10. In addition, the legislation will force State Governments to add millions of people to Medicaid, yet the Federal government will not be funding most of this. In other words, the bill will force the states to impose massive tax increases on their citizens in order to pay for this coverage. Congress has no authority to do this and it is
another clear violation of the 10^th Amendment.

11. The impact on senior citizens in the United States will be immediate and devastating and will entail a breach of contract between Americans and their own government. We are required to pay taxes for Medicare coverage and have a right to expect that they will have adequate health care coverage when we reach age 65. However, enormous cuts in the funding of Medicare under the provisions of the new law will deny us the coverage we have paid for and inevitably lead to the rationing of health care for senior citizens.

12. There are also numerous new taxes imposed under this law ranging from taxes on so called “Cadillac” policies that provide a high level of coverage, to taxes on medical devices, and even taxes on tanning booths. I consider all of these to be questionable under the powers granted to Congress in the Constitution.

            These are just some of the important Constitutional issues about this bill, yet there are other disturbing aspects that Americans need to consider.

For example, the bill does not prohibit Federal Funding of abortions and that is something many Americans want. Yet, the votes of some members of Congress who opposed this provision were purchased by the President’s promise to sign an Executive Order prohibiting such Federal funding.

In fact, he did sign such an order shortly after he signed the health care bill. This was a ruse. The President has no authority under the Constitution to issue an Executive order changing the provisions of a law passed by Congress that he has just signed. The Executive Order is meaningless.

            Finally, there is another section of the legislation that has nothing to do with health care. It is an authorization for the Federal Government to take complete control of the granting of student loans for our children to further their education.

If you are preparing to send your son or daughter to college you will no longer be able to go to your local bank to take out a student loan. Instead, federal bureaucrats will decide who gets student loans and under what terms and conditions. What will be owed to the Federal government besides the repayment of loans? Will some type of Federal service will be required and will your child have to attend a university approved by the Government. The potential implications are staggering.”

As the bill was unfolding the trick plays and unconstitutional aspects of the healthcare reform bill were obvious. Besides ignoring the constitution President Obama’s healthcare reform bill ignores the will of the people.

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