Stanley Feld M.D., FACP, MACE Menu


Dear President –Elect Obama : Part 2


Stanley Feld M.D.,FACP,MACE

In my first letter I said repairing the healthcare system was simple. I pointed out the problems in our industrialized food system and its impact on the environment, our energy dependence and our healthcare systems’ costs. The industrial food industry contributes at least 300 billion dollars in increased cost to the healthcare system.

A healthcare cost saving of at least $150 billion dollars could occur if the complications of chronic disease could be decreased by 50%. The practices of chronic disease management using prevention of disease and evidence based medicine makes this promise possible.

The problems in the healthcare system are great. The initial question is who is at fault. All the stakeholders are at fault. The stakeholders are the healthcare insurance industry, the government, the hospital systems, the physicians and most importantly, the patients.

The primary stakeholders are patients with physicians a close second. Without patients or physicians we would not have a healthcare system. Healthcare insurance companies, the government, and hospitals are secondary stakeholders.

The healthcare insurance industry has turned out to be the biggest villain. It has taken advantage of the dysfunction of the government and weakness of patients and physicians as lobbying groups. The control of power in healthcare is in the hands of the healthcare insurance industry. The rules and regulations must be changed so that patients gain control of the healthcare system.

The healthcare insurance industry has abused this power. It has manipulated congress and the administration to serve its own vested interest.

The result is grotesque salaries for executives and excess administrative fees. Our healthcare system is supposed to be for the benefit of the consumers (patients), not for the benefit of the healthcare insurance industry.

The healthcare industry has restricted access to care and has made interpretation of payment for care impossible. It has decreased physicians’ reimbursement and withheld payments for services rendered without explanation or justification.

The government outsources the administration of Medicare and Medicaid to the healthcare insurance industry. The government calls them vendors. There are many examples of healthcare insurance industry abuse of the healthcare system. Medicare Part D fees for 2009 have just been published with the consent of the government. These new fees are abusive to seniors. It is difficult to understand the government regulators reasoning.

Seniors on fixed incomes need a reliable drug coverage plan. The healthcare insurance industry worked for four years to figure out a system that would be to its advantage and not the seniors’ advantage.

The government subsidizes Medicare Part D. Yet the government does not have the right to negotiate drug prices. I have exposed the abuses of Medicare Part D in detail. The abuses stem from the high deductibles and a doughnut hole that does not cover drug costs after a certain amount is spent by seniors for drugs.

Humana and United Healthcare rushed to insure for Part D because they visualized the money making opportunity quicker than most. Both companies also realized that as healthcare insurance premiums increased in the private sector there would be more uninsured consumers. The less lives covered the lower its profit. Therefore a drug plan leveraged in their favor sponsored by the government would cover the decrease in profit in the private sector.

United Healthcare paid AARP over 4 billion dollars to be their exclusive carrier for AARP senior members. There is no shortage of complaining from AARP’s seniors. The payment for sponsorship has not been fully disclosed nor it’s ethics been investigated.

UnitedHealthcare made a profit of $4.7 billion dollars last year from Medicare Part D at patients’ and the government expense. Despite this profit the monthly fee has increased over the last three years from $15 to $27 and in 2009 to $38 a month with the government’s permission.

UnitedHealthcare convinced government regulators they needed a premium increase in order to cover a shortfall. UnitedHealthcare compromised by changing the drug benefit before hitting the doughnut from $2300 to $2700 and lowering the amount you have to spend getting out of the doughnut from $5200 to $4700.

A careful analysis of the math is in favor of the healthcare insurance companies. Seniors have flocked to Wal-Mart and others to buy $4.00 per month generics paying cash and not using Medicare Part D “insurance”. They are paying cash for rather than putting their prescriptions on their Medicare Part D plan. If they put the prescription on Medicare Part D their co-pay would be $6.00 for a month’s supply of medication rather than $4.00 to Wal-Mart. The prescription could be charged between $20 and $50 toward the doughnut even though the healthcare insurance company probably only paid Wal-Mart $4.00. None of these prices are transparent.

President-elect Obama, the problems with Medicare Part D would be a good place to start to understand the abuse of this non transparent system. Similar abuses occur with government outsourcing Medicare Part A and B and probably government employee benefit Part C.

This is a tremendous waste of government and consumer resources for the benefit of the healthcare insurance industry. Real price transparency is essential if you are going to make any progress in reducing the cost of the healthcare system.

Real price transparency in this case means: What is the cost of the drug to the pharmacy? What is the cost of the drug to the healthcare insurance company? How is the price of the drug calculated toward the doughnut? How does the government subsidize the healthcare insurance companies for administration of the program? What would be a reasonable profit for the healthcare insurance industry?

I suggest before your administration gets busy penalizing patients with decreased access to care and physicians with decreased reimbursement, your healthcare advisors should dig deeply into the abuses of the real villain in the healthcare system, the healthcare insurance industry.

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

  • Alan Shimel

    You are right on here Stan. Government approved hikes in premiums should be pegged to the profit these insurance companies are making. Crying with two loafs of bread under each arm is just not right!!

  • Darrell Pruitt

    Dr. Feld, it is refreshing to hear your voice. Very few have the courage to speak up about ambitious stakeholders in healthcare – stakeholders who would have consumers believe that bureaucrats, healthcare IT executives and insurance MBAs are as critical to healthcare delivery as doctors and patients.
    With all due respect, Dr. Feld, I see that someone has successfully taught you to thoughtlessly accept the label “stakeholder” for yourself and your patients. The label you were pushed into buying brings doctors and patients down to the vendor’s level of importance. It is an old stakeholder trick based on semantics. It has to do with spin and other stakeholder PR talents. These guys are slick. And they are empowered.
    On December 21, 2007, the National Committee for Vital and Health Statistics (NCVHS) – an assortment of stakeholders who tell HHS what HHS likes to hear – submitted a letter recommending actions for “Enhanced Protections for Uses of Health Data” to Secretary Michael Leavitt encouraging the elimination of the term “secondary uses” for patient health records.
    “NCVHS observes that ‘secondary use’ of health data is an ill-defined term and urges abandoning it in favor of precise description for each use of health data.”
    The subtle underlying rationalization is that all stakeholders, including doctors and patients, are equally important in a democracy. Since doctors and patients are intentionally poorly represented in stakeholder committees that report happy things to the HHS, such as the NCVHS, CCHIT and the future AHIC Successor Inc., stakeholders unanimously win their power in fair democratic fashion, again and again. And that is why one can expect things to fall short of swell for doctors and patients.
    We are not stakeholders. As doctors and patients, we are principles and we must aggressively fight for the welfare of patients, just like you are doing. Otherwise patients have no representation at all.
    We must be transparent and doctors must be paid fairly. This is too harsh for some to imagine, much less to say out loud, but consumers should be aware that ethics is not free, and you get what you pay for. There are no bargains in spite of what glossy managed care folders advertise.
    Patients and their doctors are principles, not stakeholders. Healthcare is not a natural, renewable resource and mandates are not windfall profits. Patients always suffer the final bill.
    Keep up the good work, Dr. Feld. We’ll overcome stakeholders. We must. Darrell K. Pruitt DDS

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