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Mechanism Design and the Repairing the Healthcare System


Stanley Feld M.D., FACP, MACE.      

On November 11, 2007, I published the following blog: “Incentives and Mechanism Design.” The authors Leoid Hurwicz, Roger Meyerson and Eric Maskin were awarded the Nobel Prize in Economics for the concept in 2007.

http://stanfeld.com/?s=mechanism+design

 I suspect few politicians know about Mechanism Design in 2019. I am certain Bernie Sanders and the “Medicare for All” crowd do not know anything about Mechanical Design.

In my last blog, I described how politicians and the mainstream media use Confirmation Bias to try to put the government in control of healthcare against the will and welfare of the public.  

https://en.wikipedia.org/wiki/Confirmation_bias

I think Donald Trump either studied the use of Mechanism Design and its mechanics or he intuitively uses its principles in his thinking.

Mechanism Design is a concept that tries to put science into social science. It mathematically evaluates vested interests of stakeholders in order to eliminate confirmation bias and line up all the stakeholders’ vested interests for the greatest good. It assumes all the stakeholders have expressed their vested interests truthfully.

The Democrats want to hold onto (fix) Obamacare. However, the Democrats understand Obamacare is not viable in its present form. I believe “Medicare for All” with central government control of healthcare will be a disaster as it has been in most single party payer systems.

I do not believe Obamacare is fixable. I believe President Obama and the Democrats believed that Obamacare would fail. Then the nation would beg either his public option or Medicare for All.

I think President Obama believes “Medicare for All” and the total government control of healthcare is the ideological solution to the problems in our healthcare system.

His confirmation bias overrules all of the examples of “Medicare for All” failed examples at home (Vermont California and Colorado), as well as Denmark, Sweden, England, and France.  

In 2017, the Republicans with a slim majority in the Senate refused to repeal Obamacare. Whether the Republican failure to repeal Obamacare was because of intramural revenge or ideology is best to question is which system is best for the common good.

If our politicians understood the principles of Mechanism Design and were diligently working for the people who elected them benefit, America would be on the way to “Repairing the Healthcare System.”

Against this backdrop of a hostile Democratic Party, in control of the House of Representatives, Donald Trump and his administration is slowing working its way to “Repairing the Healthcare System” using the principals of Mechanism Design.

In November 2007, pre the Obama administration, I wrote:

Last month the Nobel Prize in economics was awarded to Leoid Hurwicz, Roger Meyerson and Eric Maskin. They were awarded the Nobel Prize for developing the economic theory of “Mechanism Design.” My first reaction was “what is that?”

https://en.wikipedia.org/wiki/Mechanism_design

After some research, I discovered the power of Mechanism Design. It is a brilliant economic theory that could solve many economic problems. Mechanism Design applied to our healthcare system could solve the healthcare systems problems.

What is it? “In economics, mechanism design is the art and science of designing rules of a game to achieve a specific outcome, even though each participant may be self-interested. This is done by setting up a structure in which each player has an incentive to behave as the designer intends. The game is then said to implement the desired outcome. The strength of such a result depends on the solution concept used in the game. It is related to metagame theory, which is the theory of games the play of which consists of developing the rules of another game.

Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. However, it is impossible to guarantee optimal results for all four outcomes simultaneously in many situations, particularly in markets where buyers can also be sellers [1], thus significant research in mechanism design involves making trade-offs between these qualities. Other desirable criteria that may be achieved include fairness (minimizing variance between participants’ utilities), maximizing the auction holder’s revenue, and Pareto efficiency. More advanced mechanisms sometimes attempt to resist harmful coalitions of players.”

Lodi Hurwitz contributed to the idea of incentive compatibility. His point is the way to get as close to the most efficient economic outcomes is to design a mechanism in which everyone does best for themselves. He says this can be achieved by sharing information truthfully (Price Transparency). It is easy to understand that some people can do better than others by not sharing information or lying.

If everyone’s incentives are aligned, you have a much more efficient economic system. An example is defense contracting. If you agree to pay on a cost-plus basis you have created an incentive for the contractor to be inefficient. If you agree to pay a fixed price you can come close to an efficient price if you have all the truthful information. If you do not you have incentives aligned and truthful information you create the incentive to be overcharged. Most people can do better by not sharing truthful information. If the rules of the game require truthful information you can get close to an efficient market-driven solution.

The concept of Pareto efficiency means no one can be made better off without someone becoming worse off. Therefore, the incentive is to maintain your dominance by not being truthful at the expense of others. Hurwicz observed as others had that the dispersion of information was at the heart of the failure of a planned economy. He observed that there was a lack of incentive for people to share their information with the government truthfullyThe free market mechanism was far less afflicted than central planning bureaucracy by such incentive problems. The free market economy was by no means immune to this defect. He observed that the free market economy can get us closer than central planning to incentive compatibility because the end consumer can drive the discovery of truthful information.

The customer creating rules of engagement in a market-driven economy can get you closer to the ideal of Mechanism Design. Since the customer determines success of an enterprise by creating demand in a transparent environment, they can get closer to incentive efficiency. They create the rules of the game for compatible incentive.

Roger Meyerson contributed the revelation principle, a mathematical model that simplifies the calculation to create the most efficient rules of the game. The mathematical model gets people to reveal their truthful private information leading to aligned incentives.

Eric Maskin’s breakthrough was in perfecting Mechanism Design with his “implementation theory.” His theory clarifies how to design mechanisms that heighten incentive alignment and efficiency.

How does Mechanism Design relate to the Repair of The Healthcare System? We have to set the rules of the games so that we align all the stakeholders’ incentives without one stakeholder takes advantage of another. The insurance industry is taking advantage of the patients, doctors and hospital systems. The hospital systems are taking advantage of the patients, doctors and insurance companies. Doctors are taking advantage of the insurance companies, hospital systems, patients and the government. The government is taking advantage of the hospital systems, the doctors and the patients. Employers who pay the insurance bills for their employees are taken advantage of by the insurance companies. The drug companies are taking advantage of patients and unduly influencing physicians.

In our healthcare system, everyone is pursuing his vested interest in a game that has rules that do not lead to “incentive compatibility.”

Some politicians think central planning will straighten out the rules. Historically, central planning has not worked. The winners of this year’s Nobel Prize in economics have proven this fact.

I believe consumers can fix the rules of the game so that all the incentives are compatible. Consumers have to have incentives to force politicians to fix the rules of the healthcare game. Consumer-driven healthcare system will achieve the alignment (incentive compatibility) using the ideal medical saving account.

Twelve years have passed since 2007. America has not gotten closer to the solution to Repair the Healthcare System even though the solution is staring us in our eyes.

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



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Swedes Are Frustrated Over Their Socialized Healthcare System

Stanley Feld M.D.,FACP,MACE

Sweden has a universal healthcare system that has been touted, by Bernie Sanders, to be the premier socialized medical system model in the world. The Swedish socialized medical system has hardly lived up to the praise. The fact is Sweden’s healthcare system is falling apart.

All Bernie Sanders has to do is read the local Swedish newspapers. He would learn that socialized medicine is not working in Sweden. He might even stop pushing his lie to the American public about how great “Medicare for All” will be for America.

“That Sweden no longer keeps up with those countries is largely due to its inability to reduce its patient waiting times, which are some of the worst in Europe, as the latest edition of the Euro Health Consumer Index (EHCI) revealed in Brussels on Monday.”

The 2014 EHCI also confirms other big problems within Swedish healthcare.

This is not primarily due to the fact Swedenhas become worse – rather it is the case that other countries have improved faster.” 

https://www.thelocal.se/20150127/swedens-health-care-is-a-shame-to-the-country

According to 2017 OECD figures, Sweden does have the fifth-highest life expectancy in Europe. Its cancer survival rates are among the continent’s highest. This could be because the rest of Europe’s socialized medicine systems are not as good as they could be.

One of the main pillars of the Swedish welfare stateis its universal healthcare system. The Swedish people are totally frustrated by the healthcare system’s inefficiency. The inefficiency is due in large part to the government bureaucracy.

Swedes have little confidence that politicians will solve this,” said Lisa Pelling, chief analyst at progressive think tank Arena Ide. 

“There is a risk their faith in the welfare state will be eroded,” she told AFP. 

As an example of the frustration of the Swedes:

Asia Nader didn’t know whether to worry more about being diagnosedwith a hole in her heart at the age of 23 or having to wait a year for Swedish doctors to fix it. 

“I completely fell apart when I found out,” she told AFP, remembering the long agonizing months until she finally had her operation in June this year, one month before her 23rd birthday. 

Credit: George Hodan/public domain

https://medicalxpress.com/news/2018-09-swedes-world-class-healthcarewhen.html

There are long waiting lines waiting for access to care due to a shortage of nurses and available doctors in some areas.

The average income tax rate paid by Swedes is 50%. Immigrants cannot pay 50% of their earnings and survive. Immigrants are entitled to social services including medical care. The voters are angered over the flood of immigrants putting a tremendous strain on the healthcare system and delaying regular citizens access to care.

 The rules set up by Swedish law about access to medical care are being ignored and unenforced.

Swedish law stipulates patients should wait no more than 90 days to undergo surgery or see a specialist. Yet every third patient waits longer, according to government figures.”

“Patients must also see a general practitioner within seven days, the second-longest deadline in Europe after Portugal (15 days).” 

 Dental appointments can take a wait of 6 months.

The median wait for prostate cancer surgerywas 120 days. It has taken up to 271 days.to get prostate cancer surgery.

Swedes complain that they can’t see their own GP. There is little chance to develop a physician/patient relationship. Patients are being seen by temporary hires provided by outsourced staffing companies.

Telemedicine has mushroomed. Physicians are complaining about the fragmentation of care. There is little chance for continuing follow-up and assessing the result of therapy.   

The number of hospital beds has declined in recent years. There is a hospital bed shortage in many communities.    

In Solleftea, the premier’s northern hometown with nearly 20,000 residents, the only maternity ward was shut down last year to save money.” 

“With the closest maternity ward now 200 kilometres (125 miles) away, midwives offer parents-to-be classes on how to deliver babies in cars—which some have since done.”

Despite the bed shortages and delays in access to care, Sweden is the third highest spender on healthcare in the European Union. Sweden spends 11% of its GDP on its healthcare system.

 Socialism and healthcare for all are not as great as Bernie Sanders is telling Americans. We should not believe him.

There is no question we have to improve our healthcare system to make it affordable and available to all.

However, we should not go down the path of Sweden and Finland with Bernie Sanders socialistic program of “Medicare for All.”

We will not only bankrupt America but also make access to care impossible.

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



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Bernie Sanders’ Proposed Tax Hikes To Pay For “Medicare for All”


Stanley Feld M.D.,FACP, MACE

Nothing is free despite Bernie Sanders and other socialists’ promises. “Medicare for All”is proposed to replace private insurance with government insurance as the single party payer.

The government controls of several parts of our healthcare system. All these parts, Medicare, Medicaid and the VA Healthcare System, are financially unsustainable. All, except Medicare for seniors, are unsatisfying for patients.

Each year the Medicare premiums and deductibles for seniors have been increased, services have decreased and reimbursement to providers have decreased. It is past the point of being unaffordable for many patients although it has been invaluable for sick patients who could not possibly afford the cost of care without Medicare.

In reality the government owns these healthcare services, but it does not run these healthcare services. The administrative services are outsourced to the healthcare insurance industry. The healthcare insurance industry, in turn, has figured out how to game the system and take advantage of the government and citizens involved in the system.

Additionally, the inefficiency of government bureaucracy intensifies waste and cost. The estimated cost of Bernie Sanders’ “Medicare for All” is thirty -trillion dollars of ten years. Many believe thirty-two trillion dollars over ten years is a low number. It is also over 90% of the United States’ total ten- year budget at present spending.  

 Bernie Sanders has released a set of tax hike options in order to get some of the money to pay for his fiasco.

These tax hikes would hit American families at every income level and businesses large and small. The proposal increases taxes by $16.2 trillion over the next decade, according to an estimate of Americans for Tax Reform.”

This proposal will cover only half of the thirty-two trillion-dollar estimate.

  1. A 4% increase in payroll tax to employees.

“According to Sen. Sanders’ estimates, this increases taxes on American families and individuals by $3.9 trillion over ten years.”

  1. A new 7% increase in payroll tax for employers.

This tax will hinder business growth. It will decrease employment because it will decrease business spending on employees. It will also increase government spending for entitlements. This tax increase will only provide an estimated 3.5 trillion dollars over 10 years. It will probably result in less than 3.5 trillion because there will be less payroll tax to collect.

Please note Bernie’s numbers between employee and employer payroll taxes do not add up. It is pure fiction.

  1. The proposal would ban employer-provided healthcare insurance and repeal the employer deductions for health care insurance. The net result will be increasing taxes on businesses by over $3 trillion over a decade.

     This adds up to an additional 3 trillion-dollar cost to business not necessarily a three trillion-dollar savings.

  1. Bernie Sanders’ proposal would also repeal Health Savings Accounts, which are utilized by an estimated 25 million American families. Health Savings Accounts are a good deal for middle class families earning between $60,000 to $200,000 a year. Health Savings Accounts would even be more attractive if they were changed to Medical Savings Accounts.  

At present roughly half of the Health Savings Accounts are owned by middle class families.

A key element in a successful reform of the healthcare system is to provide health and financial incentives to citizens. Citizens must become responsible for their health and healthcare dollar in order for healthcare reform to succeed.

Bernie’s plan helps people be less responsible for themselves and more dependent on the government.

Isn’t this exactly what the socialists want? Historically socialism always fails.

  1. The tax deduction for cafeteria plans and the medical expense deduction is also eliminated.
  2. Eliminating Health Tax “Expenditures”

n all, Sanders estimates this will increase taxes on families and businesses by $4.2 trillion.

  1. 70 percent Top Tax Bracket for Ordinary Income and Capital Gains Income


This would give America the highest income tax rate in the world.

“ According to the Tax Foundation, a top 70 percent rate for ordinary income and capital gains income above $10 million will raise $51.4 billion over a decade. After accounting for macroeconomic effects, the proposal would actually cost the government $63.5 billion because of the proposal suppresses investment and economic growth.” In reality the income and negative effect to the government are a small number and insignificant to paying for the cost of “Medicare for All.”

  1. 77 Percent Death Tax

“Sanders proposes raising the death tax rate to 77 percent for inheritances.  

     Currently, the death tax applies to estates over $11 million or 22 million per couple. Over 22 million dollars is taxed at a rate of 40%.

      The death tax is, in reality, a double tax. People have paid tax on the money they have saved already. At the time of death, the government taxes them again on post-tax dollars. The tax should really be called a confiscation tax.

      Bernie Sander’s death tax proposal will increase taxes by $2.2 trillion over ten years. This is an insignificant amount compared to what “Medicare for All” will cost.

  1. Wealth Tax
    “Bernie Sanders proposes an annual wealth tax of 1 percent kicking in above $21 million in assets. Sanders estimates the proposal will increase taxes by $1.3 trillion over ten years.”

      10. Bank Tax

         “ Sanders proposes a tax on financial institutions totaling $800 billion over ten years.”

      11.Broaden the Self Employment Tax
Sanders would require business owners to report more of their business income as salary, increasing the amount of self-employment tax owed. This would increase taxes by $247 billion over ten years.

The total increase in taxes would only result in a $16.5 trillion-dollar payment on a thirty-two trillion-dollar bill. Where will Bernie get the rest of the money? He probably figures the government could print the other $16 trillion dollars. If it does it will decrease the value of the tax increases and an overall cost will be higher than 32 trillion dollars.

There is something seriously wrong with socialistic thinking. I do not believe the majority of American will fall for this serious defect in thinking.

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



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Do Finland’s and Britain’s Healthcare System Work


Stanley Feld M.D.FACP,MACE

 The Finn’s have been frustrated with their highly praised and publicized socialistic healthcare system. Finland’s free healthcare system has received excellent press in Britain. Now citizens in the U.S. are being brainwashed about the success of this system by Bernie Sanders.

Why? Britain’s socialized medicine system is collapsing. The system lost 200,000 nurses since 2010.  

In 2017/18, more than 26,000 nurses left the health service.  Voluntary resignations from the NHS is up 55 per cent.

The number of NHS staff quitting over long hours has tripled in six years. Voluntary resignations citing chronic staff shortages resulting in long hours and poor work-life balance were the largest reason for such nurses quitting the NHS. Primary care physicians are quitting for the same reasons and low reimbursement.

Royal College of Nursing (RCN) acting chief executive, Dame Donna Kinnair, said: “Health and care services are losing thousands of experienced, dedicated nursing staff who feel as if no-one is sufficiently listening to their concerns and patient care is routinely compromised by chronic staff shortages.

The National Health Service is about to lose more nurses and physicians because the National Health Service is about to have to reduce nurses’ pay once again while increasing weekly work hours.

“Finland’s health service has been in a parlous state for decades and it is getting worse.”

Bernie Sanders should not be telling us how great “Medicare for All” will be.

Last year former Social Security and Medicare Trustee Charles Blahous exposed the $32.6 trillion price tag.

“As massive as BernieCare’s estimated $32.6 trillion ten-year price tag is, it would be even more massive if it didn’t assume that U.S. doctors and nurses will simply accept the low pay and poor working conditions that Mr. Sanders has in mind.”

“The 32.6 trillion assumes doctors and nurses in the United States continue to willingly practice medicine if the job comes with lower pay and even more bureaucracy than the current highly regulated system?”

it will create a deficit of more than three trillion dollars a year and not save the 600 billion dollars over ten years promised. Bernie Sanders should know Britain’s and Finland’s free healthcare systems have failed. He should stop lying to the American public.

https://www.zerohedge.com/news/2019-03-12/finlands-government-collapsed-under-weight-socialized-healthcare

Back to Finland and the big Bernie lie. 

Finland has more doctors per capita than the UK but, at the level of primary care, a far higher proportion of these physicians are in private practice that is the case in Britain.

Seventeen percent (17%) of Finnish doctors work solely in the private sector. Most of these physicians are general practitioners. This is twice the percentage of physicians that were in the private sector twenty years ago.

An additional twenty percent of physicians work in the private sector as well and the public sector.  

The bizarre thing is most employers in Finland pay for their workers to have private primary healthcare. Employers do not pay for their employees’ families. The families remain in the public sector.

The public sector is far from free. A family practitioner visit cost 16.10 euros. However, patients only pay for the first three visits and then it is free.

According to Dr. Saarinen of Ula “the more experienced and “better” doctors end up in the private sector, leaving the “inexperienced” and “inefficient” doctors running the health centers.”

 Private practitioners are better paid and work under less pressure than public practitioners.

“A hospital consultation in the public sector costs about €38, and you pay for each night that you spend in the hospital, up to a maximum of €679.”

The free healthcare service in Finland is not national. Municipalities pay for the free service. The result is service in poorer areas of the country tend to have bad health service and limited access to medical care.

Private GPs usually set up practices in more affluent areas where they are more likely to get paid.

It looks like a grim socialized medicine system. No wonder Finns deny the finding they are the happiest people in the world.

In Helsinki there are reports of huge queues at health centres (GP surgeries), waits for appointments of many weeks, and greater and greater demands with less and less funding. In south-eastern Finland, it takes about a month to see a GP. Back in December 2013, it was reported that Finns were increasingly using private doctors in neighboring Estonia to save time and money.”

Dr. Saarinen explains that the system essentially forces people to go private or rely on friends who are doctors.

Finland’s healthcare system has been a mess for at least two decades.

The big question is why in the U.S. do we permit politicians such as Bernie Sanders, OA Cortez, and a complicit mass media get away with the lies about the glory of socialized medicine?

How do we permit our media and our politicians get away with this disinformation?

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



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The Concept of “Medicare for All” is Misguided

The Concept of “Medicare for All” is Misguided

Stanley Feld M.D.FACP,MACE

Bernie Sanders (I-VT), has long been touting Finland, Sweden, Denmark and Norway as the shining examples of socialism and socialized medicine. 

 The New York Times reported on a UN study proving Finland is the happiest country in the world. The problem is the Finns do not think the study is accurate.

The New York Times has once again printed fake news to influence readers to believe in the wisdom of “Medicare for All.”

Carl Sandberg said in “The Prairie Years”, “If you tell a lie enough times it becomes the truth.”

https://blogs.scientificamerican.com/observations/finland-is-the-happiest-country-in-the-world-and-finns-arent-happy-about-it/

Bernie Sanders (I-VT) has been hanging his socialistic rhetoric on the success of Finland’s socialist society and especially Finland’s healthcare system which is free healthcare for all. 

Last week Finland’s government collapsed over universal healthcare costs.                                                                                                                                                  

 Similar problems are bedeviling Sweden and Denmark, two other countries frequently held up as models to follow on health care. Finland’s crisis in particular comes as calls for universal health care have grown louder among Democrats in the United States.”

Americans have not heard from the mainstream media about the collapse of Finland’s government or the reasons for that collapse.

Norway is excused from this discussion because Norway has become a very rich country from its North Sea oil income and its restrictive immigration policies. It is the citizen’s sugar daddy along with a 50% tax rat

The Kaiser Family Foundation found that 58 percent of Americans oppose “Medicare for all” if told it would eliminate private health insurance plans, and 60 percent oppose it if it requires higher taxes.

Reuters reported that soaring treatment costs and longer life spans have particularly affected the Nordic countries financial problems.

“Nordic countries, where comprehensive welfare is the cornerstone of the social model, have been among the most affected,” according to Reuters. “But reform has been controversial and, in Finland, plans to cut costs and boost efficiency have stalled for years.”

..Just a few days before Finland’s government collapsed over its inability to foot the bill for its expansive socialist experiment, Sanders took to Twitter in an attempt to shame America.

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“In the United States it costs, on average, $12,000 to have a baby. In Finland it costs $60. We’ve got to end the disgrace of our profit-driven health care system and pass Medicare for all.”

With the collapse of Finland’s government over its inability to financially support its massive socialist agenda, Bernie will undoubtedly do the same thing he always does when socialism (or communism) fails: ignore, obfuscate, and deflect.”

 We only have to remember Vermont’s “Medicare for All” failure.

Bernie Sanders and AOC should read Finland and Sweden’s newspapers to understand that the people are unhappy with free but unavailable medical care. The unhappiness of the citizens historically happens in every socialist state.

If Democrats are successful in getting “Medicare for All” into law, we will face the same dilemma in America’s future.

Finland has been held up as a model welfare state. The distribution of the resulting high taxes is spent on the social issues the politicians think are most important and not what the citizens think are most important.  The majority of the high taxes are spent on education and childcare, not on health care.

The experience of a patient in Finland is very educational. This article appeared in Britain’s Guardian newspaper as Britain struggles with its National Health Services system.

“Why is Finland’s healthcare system failing my family?”

This reporter moved to Finland from the U.K. to experience this highly rated welfare state. Finland receives an extremely positive press in Britain. The British welfare state systems are failing.

“I have moved to from Britain to Finland because it is lauded as the shining example of a successful welfare state.”

https://www.theguardian.com/society/2016/feb/23/finland-health-system-failing-welfare-state-high-taxes

“Imagine going to your nearest doctors’ surgery at 9am on a weekday with your sick six-year-old daughter because you cannot make an appointment over the phone. After your drive to another part of the city, you can’t simply book a time with the receptionist.”

 There is no receptionist. You have to swipe your daughter’s national insurance card through a machine, which gives you a number.

“Then you and your feverish child simply sit and wait. Or rather, you stand, because the room is so crowded that people are sitting on the floor, on steps, or leaning against walls. The numbers come up on a screen every 10 minutes or so, in no particular order so you’ve no idea how long your wait will be as your daughter complains of feeling cold then hot and then cold again.”

Patients get sicker and frustrated waiting for care.

“By 10.45, another patient’s dad exclaims he’s been there since 8.15, he’s had enough, and he’s going to go to a private GP. “You used to just be able to make an appointment with a doctor!” he says angrily.”

You are not waiting to see a physician you are waiting to see a nurse that will determine whether you see a physician assistant or General Practitioner.

At 11.30, you give up and take your daughter to see a private doctor as well, forking out £50 for the privilege.”

Finland’s schools always have the best ranked international student assessment results in the western world; there’s high social equality; all its teachers have master’s degrees.

But unknown to Bernie Sanders, Finland has one of the worst health services records in Europe.

According to an OECD report published in 2013, the Finnish health system is chronically underfunded. The Nordic nation of five million people spent only 7% of GDP on its public health system in 2012, compared with 8% in the UK. In 2012, the report found, 80% of the Finnish population had to wait more than two weeks to see a GP.

America’s healthcare system is becoming unaffordable. When politicians like Bernie Sanders, AOC, and all the announced Democrat candidates for president support “Medicare for All” it sounds easy and appealing. The fact is socialized medicine doesn’t work.

The only system that can work is a system that creates incentives for consumers to be financially and medically responsible for themselves and the creation of rules by the government forcing insurance companies and hospital systems to become competitive in favor of consumers.

Donald Trump knows this. If only our elected officials in Washington wanted to act for the benefit of the citizens who elected them.

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



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 Changing The Rules: It Is Just The Beginning

 Stanley Feld M.D.,FACP, MACE

A proposal to cut Medicaid payments to some insurers with excessive reserves stirs concern from healthcare insurers.

Progressive politicians refuse to believe that entitlement programs like Medicaid are not viable. Politicians should be looking at creative ways to structure the Medicaid form of insurance for both physicians and patients.

https://www.politico.com/states/new-york/albany/story/2018/01/22/proposal-to-cut-medicaid-payments-to-some-insurers-with-excessive-reserves-stirs-concern-206875

I have not written a blog lately because both the Democrats and the establishment Republicans in both the house and the senate disillusion me. Neither house or senate members are interested in being creative.

Neither body knows how medicine works.

These politicians have no interest in doing what is best for the people who elected them. They are only interested in maintaining power and extending their power over the people they govern.

The result will be to decrease to quality of care to patients forever.

In the meantime there have been news stories on how different corporate organization and big businesses are trying to take over medicine.

Many readers have noticed that emergency clinics are popping up in every city and town.

I believe these emergency clinics centers are in reality real estate plays waiting for so that big corporations, like Aetna; to buy them out in order to expand their plans to take over medical care.

It feels similar to the proliferation of small banks in the 1980’s. These new small banks’ plan was to grow and be bought out at a premium by larger banks in order to enlarge the sale premium.

When the defective program (Medicaid) is a failure one should learn from that failure. One should not continue to try fixes to the program (Medicaid) when each fix creates greater dysfunction.

One should institute another plan that might work. However, government officials continuously apply an additional patch that leads to more unintentional consequences.

This week New York State governor Andrew Cuomo put another patch on its failed Medicaid system. I predict this patch will lead to more unintended consequences. The result will be to make Medicaid coverage worse for its New York State’s Medicaid recipients.

Governor’s Cuomo’s initial mistake was expanding Medicaid at President Obama’s request. He then compounded the mistake by subsequently allowing illegal immigrants in the state to receive Medicaid coverage.

It is not wise to take a financially failed system and expand it. It is much better to change the system.

Now Governor Andrew Cuomo’s budget is proposing to cut Medicaid payments to certain health insurance companies with excess reserves, a move that is alarming insurers because of its intent and its ambiguity.

“The proposal, part of the $168.2 billion executive budget released last week, says that any Medicaid managed care or long-term care Health Maintenance Organization that has excess reserves across all lines of business would be subject to a prospective cut in Medicaid rates.”

 Why would an insurance company want to participate in these programs?

The immediate unintended consequence is that the insurance company that found a defect in the payment schedule for HMO’s and managed care would leave the Medicaid market.

The second unintended consequence is it would discourage companies from having incentive to make a profit.

“Under current law, all Health Maintenance Organizations are subject to minimum reserve requirements,” said Erin Silk, a spokeswoman for the Department of Health. “This policy will provide the commissioner with the discretion to make rate adjustments to plans holding reserves in excess of the statutory requirements for reasons that cannot be explained or justified.”

The state did not project any savings from this proposal.”

The state cannot run Medicaid without insurance companies being the administrative service providers. It is the same old story. This comes on top of a proposed fourteen percent tax on for-profit insurers as well as the state receiving a cut of the proceeds when a nonprofit insurer converts to a for-profit insurer as a result of the new tax law.

Governor Coumo wants this additional money because he thinks the insurance industry is going to have a windfall from President Trump’s new tax law. He figures the state will collect $640 million dollars more as a result of this move.

“There were 3 million New Yorkers enrolled in these types of plans in 2014, according to a report from the United Hospital Fund.”

The insurance industry gave the usual illogical reason for opposing Cuomo’s proposals.

These insurance companies are there to make money. They are not going to let Coumo out of his commitment. I believe they will walk away from providing administrative services for the states Medicaid insurance coverage.

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

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Where Is The Missing Money?

Stanley Feld M.D.,FACP,MACE

Does anyone know how much Obamacare cost each year? Does anyone know if Obamacare is the cause of America’s more than one trillion-dollar deficit each year despite the Obamacare tax increases that are supposed to pay for it ?

If someone knows they sure are not telling taxpayers. A good friend who is a liberal and a big fan of President Obama said to me he is not worried about the federal deficit. Neither is President Obama. President Obama has convinced his base that the budget deficit and America’s escalating debt is an insignificant problem.

It follows that he can spend money as he wishes and waste money with impunity. I was taught that is not the way to run a business. Especially when the waste fullness gets negative results that leads to more deficit spending.

The problem is the waste of money is reported in dribs and drabs and usually on a Friday afternoon.

We have seen that happen in the VA system. After one year and billions of dollars spent the waiting times have decreased slightly. The medical service to veterans has not improved. No one in the bureaucracy has been held responsible. Veterans have been complaining more loudly since nothing has improved.

Missing Money

The federal government awarded over $5 billion to help states set up Obamacare exchanges, with the vast majority – $4.6 billion – going to 16 states and Washington, D.C.” 

The Government Accountability Office (GAO) recently reported that most of the money has not been accounted for. Several of those State Health Insurance exchanges have gone out of business this year.

$1.4 billion of that has been spent on IT projects. This sounds very high for 16 different web sites. Why couldn’t everyone use the same website?

Three ($3 billion) has been “spent or drawn down.” Only some of the drawn down spending has been detailed.

At least $1.6 billion is unaccounted for. Only three states returned any portion of the money. The federal government has only received back $1 million.

It sounds like government bureaucracy inefficiency at best and fraud and abuse at worst with no one being held accountable.

Can Americans trust the government to run our healthcare system?

Where did those taxpayer dollars go?

More Missing Money

Obamacare created the co-ops to encourage State Health Insurance Exchanges to increase competition in state insurance markets.

The intent was to offer consumers choices with the hope of holding down premiums.

Co-ops were snuck into Obamacare to replace the public option. No one has spoken about this being a substitute for the “public option.” The public option is an obvious ploy to convert the healthcare system quickly to a single party payer system.

The public option was designed to compete with private insurers on the state level by offering lower premiums in order to force the insurance industry to lower its premiums. The co-ops were designed to do the same thing.

President Obama offered state co-ops $6 billion dollars for start-up costs. Since there were only 23 states co-op formed instead of 50 Congress decreased the total payment to $2.4 billion to the 23 start-up co-ops.

All 23 co-ops received their proportional federal loans to meet solvency requirements as well as start-up costs.

President Obama now claims the Republican house denied Obamacare enough money for the co-op to be successful.

Twelve (12) of the 23 nonprofit insurance co-ops announced they will not offer coverage to consumers who bought healthcare coverage in 2015 in 2016. They are bankrupt. Where did the money go?

Somewhere between 300,000 and 600,000 people will be shopping for more expensive healthcare coverage for 2016.

The remaining 11 standing co-ops are $500 million dollar in the hole.

There is no accounting available to explain why these co-ops have failed

Does anyone think these $2.4 billion dollar loans will be paid back to the federal government? I do not. It will simply be added to the federal deficit.

  • “CMS said the government would “use every tool available to recover taxpayer dollars” from the co-ops going out of business, but it declined to say how much she expected to recoup.”

There are many reasons these co-ops have failed. Republicans not giving the co-ops more money, as progressives and Democrats have claimed, is not one of the reasons.

Another area of missing taxpayers’ dollars.

The Senate Finance Committee is looking into the millions of taxpayer dollars being spent on ads to promote Obamacare enrollment.

The total federal government budget for ads and PR was nearly $1 billion in fiscal 2013. How much was spent on Obamacare?

The Health and Human Services budget for “paid media” is about $35 million for the current enrollment period. The $35 million dollars will be spent in the 38 states using HealthCare.gov in the 2016 enrollment period.

Chairman Orrin Hatch, R-Utah, raised concerns about agency ad spending and sent a letter to the acting head of the Centers for Medicare and Medicaid Services (CMS) asking for a full accounting of agency ad spending.

“Increased transparency on government spending on advertising will improve accountability and help ensure that the taxes from hardworking Americans are not squandered and wasted on ineffective or misguided government programs,” he wrote to Acting Administrator Andrew M. Slavitt.

Senator Hatch demanded the accounting by November 25th. Does anyone think he received it?

In 2010, the nonpartisan Government Accountability Office (GAO) reported the Obama administration spent nearly $20 million on a Medicare brochure that contained “instances in which HHS presented abbreviated information and a positive view of Patient Protection and Affordable Care Act (PPACA) that is not universally shared.”

The GAO papered over the ridiculous expenditure.

GAO concluded that “nothing in the brochure constitutes communications that are purely partisan, self-aggrandizing, or covert.” 

CRS reported HHS was second only to the Department of Defense, spending $197.4 million on advertising in fiscal 2013.

“The total federal government budget for ads and PR was nearly $1 billion in fiscal 2013.”

Would healthcare be so expensive if the government was transparent and congress was really on top of everything?

Physicians only receive 20% of the healthcare dollars spent.

President Obama and his administration spend taxpayer’s money at will.

Americans have to demand “more efficiency and much more transparency.”

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Lie. Why Not?

Stanley Feld M.D.,FACP,MACE

President Obama and his administration continue to lie to the American people. One of the major criticisms of letting Syrian refugees into this country is that our vetting process is not robust enough to determine if some of the young strong men might be ISIS operatives.

Ben Rhodes, Deputy National Security Adviser, repeated President Obama’s lie about the U.S. intelligence agencies having a robust vetting procedure. The agencies contradicted President Obama.

How can President Obama have the nerve to tell the American people that Obamacare is working when few enrollees are signing up on www.healthcare.gov so far during this open enrollment period.

On Thursday UnitedHealthcare said it is losing too much money on servicing www.healthcare.gov enrollees to continue. It is threatening drop out of servicing the Health Insurance Exchanges.

The traditional mainstream media did not cover this important news release on its important evening cycle.

In the latest piece of ObamaCare news (Failure) that the liberal media has chosen to ignore, ABC, NBC, and Spanish networks Telemundo and Univision skipped on Thursday night and Friday morning word from United HealthCare from Thursday that it may withdraw from ObamaCare exchanges in the future after reporting losses of around $700 million for the year.”

While ABC and NBC were joined by CBS in censoring this story from their Thursday evening newscasts, Friday’s CBS This Morning stepped forward with a measly 18-second, 46-word brief from co-host Charlie Rose that alluded to a Wall Street Journal piece on United HealthCare.

Charlie Rose said with little emotion, editorial comment or explanation of its meaning, “The Wall Street Journal reports on one of the nation’s biggest health insurance company considering pulling out of ObamaCare. United Health Group said it suffered major losses on the policies sold on the Affordable Care Act exchanges. Operating losses this year will total about $700 million.

The CEO of UnitedHelath’s actual statement was, “in recent weeks growth expectations for individual exchange participation have tempered industrywide, Obama”s co-operatives have failed and market data has signaled higher risks and more difficulties while our own claims experience has deteriorated, so we are taking this proactive step.” 

These are the reasons for the UnitedHealthcare pull out. Fox News covered the story in full on Thursday evening in primetime and Friday morning.

Special Report to devote a full story to the matter from correspondent Rich Edson.” 

“Host Bret Baier declared in a short lead-in that “a major setback” is possibly “in the works tonight for ObamaCare” as “[t]he President’s health care law could be losing a huge source of the coverage provided.”

“Edson also made sure to mention that such a story has given “ObamaCare critics” additional reasons to argue that “with rising premiums, fewer health provider choices, is another sign of the unsustainability of the health care law.”

How can anyone expect the public to be informed about Obamacare’s failures when the major networks who these important stories?

But the public is catching on. The major networks are acting as a shill for the Obama administration. The major networks should not be surprised that their viewership is declining.

 As opposed to covering the major healthcare story Thursday’s CBS Evening News and NBC Nightly News each found time to tout the Food and Drug Administration’s approval of a genetically-modified salmon for human consumption that won’t actually become widely available for at least a few years.

How can President Obama think the American people have confidence in him?

The lies continue daily. The majority of the information sources have become a super pac for President Obama. What is the public recourse to stop this madness?

Most of the people in the country have never heard of Saul Alinsky or his book “Rules for Radicals.”

Saul Alinsky’s recommendations are exactly what President Obama is using.

You lie to the people and restrict information so that the critics of your policies seem unreasonable. Opponents cannot mount an effective offensive and therefore get enough public support to demand change.

I suggest Republicans hire an effective and innovative public relations firm to counteract President Obama’s attacks on the freedoms of the American people.

President Obama’s response to his critics has been that Republicans are fear mongers and should be ignored. He presents no evidence just accusations.

I am republishing the following 2014 blog’s You Tubes because viewing these amazing You Tube compilations of President Obama’s lies are essential to understanding President Obama’s method of operation.

http://youtu.be/4puS-yjwsiE

This You Tube is worse than the Words Matter You Tube

 

http://youtu.be/1YqXCFCXXL8

The American people must do their own research, get involved and not let President Obama manipulate us into a socialist state.

Socialism does work as we are seeing in Europe. France cannot afford to fight ISIS because entitlements consume 54% of the GDP and taxes are close to 70% of personal income.

The wealthy people with large incomes who paid high taxes in the past are fleeing the France.

As corporate taxes and individual taxes have gone up in the United States on President Obama’s watch we have not only had a tax inversion occur with corporations moving over 3 trillion dollars overseas, we are now seeing a tax inversion movement by rich individuals.

President Obama’s lies and manipulations cannot be ignored anymore. These lies are a clear and present danger to America’s economy and way of life.

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



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My Two TechStars Sons

Stanley Feld M.D., FACP,MACE

A few Mondays ago I flew to Boulder on the first American Airlines flight from Dallas to Denver get to TechStars FounderCon before 9.30 a.m. and the first morning session.

I wanted to see what FounderCon was all about and how my son, Daniel Feld, put it together.

Daniel and his staff put on FounderCon in Boulder. It attracted over 800 TechStars founders. I wanted to be there to celebrate Daniel’s success.

Also I wanted to spend time with all these young people observing how their powerful social network works.

I love spending time hanging out and learning from my sons. I try to take every opportunity I can to learn from them

Daniel Feld is Vice President of Operations for Techstars. He leads its powered by TechStars expansion efforts with corporate partners including Nike, Kaplan, R/GA, Sprint, Disney, Barclays, Ford, MetroAG and others.

FounderCon is a TechStars annual event for all Techstars graduate founders. The conference is two full days of keynote speakers and breakout sessions in addition to social and business opportunity networking.

The primary purpose is to learn and network with almost 800 Techstars founders across the 36 TechStars programs in the U.S. and around the world.

My conclusion at the end of the conference was that Daniel is an excellent organizer and administrator. His staff is dedicated to his leadership.

His father (me) is very proud of him. I also learned a ton from all these young entrepreneurs about their corner of the world.

What is TechStars?

TechStars is a startup accelerator founded by David Cohen, David Brown, Brad Feld and Jared Polis in 2006.

In Las Vegas in 2006 on one of our father-son weekends Brad told me the two David’s idea to see how I would react. I knew he had already made up his mind that he was going to go for it.

I thought it was great. There is nothing like a young startup entrepreneur learning how to start and run a business from mentors who have already started up a business. It is much better and more efficient than learning from scratch.

TechStars has grown into a fabulous franchise in the last nine years. There are founders who have learned how to startup a company from all over the world. It is growing rapidly.

FounderCon provides an opportunity for graduates of TechStars to grow and help each other.

The TechStars mantra is give first. Do not worry about the return. The concept is expressed eloquently in Brad seminal book for start ups Startup Communities Building An Entrepreneurial Ecosystem In Your City. “ The book has been published in many languages.

The book is the foundation of his Startup Revolution.

The startup energy results from his Boulder Hypothesis. This hypothesis has led to the formation of many very successful startup companies.

TechStars has expanded geometrically in the pursuit of developing Startup communities.

The magic of TechStars and the development of a successful Startup Community are expressed in the following You Tube.

 

My sons Daniel and Brad teach me more that I teach them these days.

I am all ears and try to learn all I can.

We also have a great time hanging out and enjoying chocolate ice cream.

 

Daniel and I at foundercon

Daniel and Stan. Which One is Stan?

Brad and I Boulder founderCon

Brad and Stan at our tradition.

Thanks guys. I love you both very much.

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE





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