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More Government Control

Stanley Feld M.D., FACP, MACE

I have covered the discovery of the
tricks Obamacare has played on hospital systems, insurance companies, union
leaders and large corporations in the last three blogs.

The Obama administration needs all three
groups to cooperate if Obamacare has the slightest chance of success.

Physicians are now starting to react to
Obamacare and its restrictive regulations.

It is clear to me that the Obama
administration has no respect for physicians, their intellectual property,
their surgical skills, their honesty or their character. 

The Obama administration has labeled
physicians as commodities and thieves. Obamacare devalues physicians and figures
whatever reimbursement it offers physicians will accept.

Ezekiel Emanuel M.D., Obamacare policy advisor, expresses a vivid example of this disrespect in
his recent article in the New York Times entitled “Don’t Give Up On Healthcare

Dr. Emanuel discusses S.G.R., or the Sustainable Growth Rate

The formula is seriously flawed in its attempt to contain rising
healthcare costs. 

The formula is rigged to penalize physicians
yearly for their reimbursement for treating Medicare patients. Every year
Congress waives the penalty for that year. This waiver is commonly known as the
“doc fix.”

The yearly penalty has been accumulating since 2002
so this next year it is scheduled to reduce physician payment by 24.5%.

Neither the AMA nor the traditional media
has articulated the meaning of the S.G.R to the public in a comprehensible way.

The S.G.R provides no incentive for individual
doctors to be more efficient since the target level applies to total nationwide
physician costs.

The cuts from the formula are indiscriminate. The
cuts would affect high quality, cost-effective doctors the same as it would
inefficient free spending physicians. It would also affect underpaid primary
care physicians.

The goal should be to incentivize all physicians to
be efficient and cost effective providers in their treatment and patient recommendations.

Ezekiel Emanual’s disrespect shines through when he

desperately want the S.G.R. repealed and replaced
so they can charge what they
want without the potential of massive cuts hanging over them each year.”

Congress agrees with physicians that S.G.R. is seriously flawed. The House Energy and
Commerce Committee is starting to mark up the repeal of the S.R.G formula. It
is going to replace it with a 0.5% yearly increase in physician reimbursement
until 2018. In 2019 the government will link Medicare payment to the quality of
care each physician provides.

The measurement of physician performance will be
measured, by big data provided by the Enhanced Quality Reporting System. The
EHQRS is being developed using the ICM-10 coding system. ICM-10 uses 68,000 codes
vs. 18,000 codes in ICM-9.

Ezekiel Emanual M.D. doesn’t like this
formula. It does not provide incentives for physicians to accept bundle reimbursement
for the treatment of their patients.

Dr. Emanual believes  

payment incentivizes quantity over quality. Physicians make more money by
ordering more tests, seeing patients more frequently in follow-ups and
providing more treatments. The payment system is a key accelerator driving up
Medicare costs — and therefore the federal government’s deficit”.

Dr. Emanual does not trust physicians to
do the best job possible. He also ignores the defensive medicine issue. He

“In 2009, the
Congressional Budget Office did a comprehensive assessment of the potential
cost savings from medical malpractice reforms

Its conclusions: A
package that included a $250,000 cap on noneconomic damages, a $500,000 cap on
punitive damages and a one-year statute of limitations for claims by adults
would save about $11 billion a year
percent from reduced malpractice premiums and the rest in the form of fewer
defensive procedures like M.R.I.’s.

Emanuel concluded that $11 billion
dollars a year savings is insignificant because it is a cost saving below $26
billion dollars a year
He contends tort reform is a distraction from real
efforts to control healthcare costs and should be ignored. The CBO
scoring information has lead Dr. Emanuel to an inaccurate opinion.

Douglas W. Elmendorf’s,
head of CBO
at the time, conclusion was not nearly as definitive as Dr. Emanuel’s

The malpractice issue of defensive
medicine and over testing is real. The Massachusetts Medical Society survey of
defensive medicine is real. Most physicians in Massachusetts are
liberal/progressive and so the sample is not biased toward conservatives.

truth is a full accounting reveals that more than 10 percent of America's
health expenditures per year are spend on tort liability and defensive

percentage of healthcare costs is even greater when the Massachusetts
Medical Society survey
is taken into account. The amount spent for
defensive medicine can be extrapolated to actual costs from this survey.  

I have
written a series of blogs analyzing the impact Massachusetts Medical Society’s
survey. The extrapolated costs turn out to be about $700 billion dollars a
year. The real cost of defensive medicine is somewhere between $242 and $700
billion dollars a year.

2008 damage awards alone for medical malpractice claims reached $5.9 billion
  The total of medical tort costs was $16 billion for legal
costs, underwriting costs and administrative expenses. From 1986 the average
jury award was $100,000. In 2006 the average award increased to $637,000. No
one knows what the award value is for cases settled out of court.

year, 25% of practicing physicians are sued. 90% of physician sued are found
innocent. The average defense cost is $100,000. This cost is not included in
the CBO scoring

fear of lawsuits causes most doctors to practice "defensive medicine"
as the interviews of Massachusetts physicians points out.  The result is
unnecessary testing, referrals, and procedures to protect themselves from
allegations of medical negligence.  

recent survey of doctors published in the Journal of the American Medical
Association found that 93% of physicians admit to practicing defensive
medicine. A 2008 survey by the Massachusetts Medical Society found that about
25 % of medical procedures are defensive in nature.

waste results in increased healthcare insurance premiums. The premium increases
result in an increase of at least 3 million uninsured people per year. When
these uninsured people get sick they avoid going to a physician. This results
in a decrease in work productivity. It is estimated that the annual decrease in
productivity is more than $40 billion dollars a year.

states where tort reform has been instituted by placing caps on so-called
non-economic damages, the malpractice costs have decreased 39%. This drop in
costs is a result of decreased malpractice suits. The decrease is economically
bad for the plaintiff attorneys. Annual malpractice premiums have gone down at
least 13%. In fact, the medical malpractice business for plaintiff attorneys
has about dried up in Texas.

Dr. Emanuel and the
administration want to connect the leverage they have with the SGR formula to
getting physicians to accept a bundled rate for treating a patient.

Dr. Emanuel “would tie an
S.G.R. repeal to a slow reduction in fee-for-service payments to those
physicians who do not switch to bundled payments and other payment models.”

In other words, accept risk
for treatment that an insurance company would normally accept risk for while
ignoring the malpractice implications of missing a diagnosis or not seeing a
patient at appropriate intervals.

Isn’t the government going
to test physician’s treatment with 88,000 codes in ICM -10 and the Enhanced
Quality Reporting System?

Isn’t the government going
to force the decisions of the Independent Physician Advisory Board on

Now the government wants to
force physicians to accept the potential liability for not using their medical

This is not aligning physician
incentives with efficient treatment cost. It is dictating medical treatment to

This is putting physicians
well on the Road to Serfdom.

Physicians are getting
tired of all of this. They are about to quit treating Medicare patients.

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

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