Stanley Feld M.D.,FACP,MACE

I previously stated that Pay for Performance (P4P) is another way of decreasing physicians’ reimbursement using misleading medical claims data. The raw medical claims data is an easy but inaccurate way to judge physician performance. If someone really wanted to help patients understand quality of medical care in order to choose their physician it could be done correctly. The only concern of private insurers seems to be their bottom line.

I have been accused of having a vested interest in protecting physicians.

My interest is protecting consumers from dumb policies that will result in decreasing access to quality care and promoting a further gaming of the healthcare system by all stakeholders except the patient.
Immediately after the judge’s decision on releasing raw medical claims data, the insurance industry started rating physician on the basis of medical claims data.

New York Attorney General Andrew Cuomo sent letters to Aetna and Cigna warning them that the doctor-rating systems they use to guide consumers are confusing and could be considered deceptive. “ Health insurance companies create physician ranking programs to recommend certain primary care physicians and specialists to consumers. In his letter to Aetna and Cigna Healthcare, the Attorney General describes the problematic design of the physician ranking programs created by Aetna and Cigna Healthcare: the rankings are based on claims data, which is well-known to carry several significant risks of error when used to rank individual physicians; the insurers do not disclose the accuracy rate of their rankings; and insurers have a profit motive to recommend doctors who cost less, not necessarily those who are most qualified.”

Cuomo told UnitedHealth in July not to roll out its rating program in New York without his approval. “We’re not opposed to the ranking systems in and of themselves, but we think these may have problems,” spokesman Jeffrey Lerner told Health Blog.

The letters also describe how inaccurate physician ranking programs may cause financial harm to consumers. Some employers steer employees to the doctors preferred by the insurer by lowering co-payments or deductibles. Consequently, employees who choose not to go to the preferred doctors could pay more.

New York’s Cuomo further warns that rankings based on claims data can be badly flawed, and that the insurers have conflicts of interest. He’s asking the health plans for a “full justification.”

The stern letters follow a recent lawsuit filed by Connecticut doctors in Superior Court in Danbury. The Fairfield County Medical Association and a group of orthopedists accuse Cigna and UnitedHealth of libel, unfair trade practices, breach of contract and more for setting up the ranking programs.
All of this was totally predictable. It leads to more dysfunctional relationships among stakeholders in the healthcare system.

The key to the Repair of the Healthcare System is to align incentives by complete price transparency so that no one stakeholder can game the system. It is clear the health insurance industry has positioned itself to game the system for profit with the publication of inaccurate medical claims data at the expense of the patients and physicians.

We must create an environment that promotes mutual trust among all stakeholders. Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. The most efficient economic outcomes are systems designed in which everyone does the best for himself under fair and truthful sets of rules. This can be achieved by sharing information truthfully (real price transparency). It is easy to understand that some people can do better than others by not sharing information, distorting information or lying.

If everyone’s incentives are aligned, you have a much better chance for an efficient economic system. I believe the use of raw medical claim data without defining quality medical care properly and not risk weighting medical outcomes will result in misleading judgments. These judgments will hurt patients and physicians. The result will be a decrease in the quality of medical care. It will also lead to more mistrust between the insurance industry, government, consumer groups and physicians.

The only stakeholder who can align the other stakeholders incentives is the consumer, in a consumer driven healthcare system demanding that the government act fairly on setting appropriate rules.

Stanley Feld M.D.,FACP,MACE

Real price transparency, affordable healthcare costs and improved quality of care for chronic disease are essential goals in order to repair the healthcare system. Real price transparency by all the stakeholders, accurate criteria for evaluating quality of care, along with patients controlling their healthcare dollar and having access to the information have to occur simultaneously. Only then will stakeholders compete for the patients’ healthcare dollar. The result will be a decrease in the cost of healthcare.

At this moment neither quality health care nor real price transparency among stakeholders has been defined. When this occurs the marketplace will determine the price of healthcare. Neither artificial negotiation of prices nor price controls will result in a stable price environment.

Nevertheless a federal judge ordered the federal government to release the results of the raw medical claims data accumulated by Medicare. This data is supposed to be used to judge the quality of medical care and cost of that care delivered by thousands of physicians across the nation. This judgment would be fine if the data were a valid measurement of quality medical care. It is simply one of many tools that define cost of a disease.

Medical claims data can be used to evaluate the length of stay in a hospital for a hernia repair. If the average hospital length of stay is one post op day it would seem logical to say the physician releasing the patient in one day did a better job than the physician who released the patient in five days. If physician A’s patients were all released in one day and he did one thousand hernia repairs a year one could conclude the physician has many good hernia repair experiences.

The inaccuracy of medical claims data is easy to understand. Let us say physician A did hernia repairs on athletic patients under the age of 25. Physician B did hernia repairs on all patients. The majority of physician B’s patients have multiple diseases such as diabetes mellitus, hypertension and coronary artery disease. His patients were at greater risk of post operative complications and needed more post op hospital days. Technically, both surgeons were equal. However, physician A receives a higher score on his report card and a higher reimbursement for his performance (P4P) than physician B. Physician B would quickly figure this out. He would start selecting only healthy patients on whom to hernia repairs. His goal would be to match physician A’s performance and reimbursement. The result would be access to care for sicker patients would be restricted. The only way raw medical claims data could work is if the raw medical claims data would be refined to include accurate risk weighting of the patients.

Therein lies the weakness of medical claims data. Each piece of data has to be risk weighted. This simple example demonstrates only one defect in the use of claims data to determine quality care. On the surface medical claims data is intuitively sound but the details are complicated and the use of raw medical claims data to determine quality is invalid.

How could medical claims data judge a cognitive physician such as an internist, an endocrinologist or a non invasive cardiologist? Clinical endocrinologists take care of sicker diabetic than the generalist. They use the same billing codes. The generalist refers his most difficult cases to the clinical endocrinologist. This is as it should be. However, sick patients with chronic disease have worse clinical outcomes than patients who are less sick. These patients will cost more than less sick patients. Medical claims data will not measure the quality of care received by these sick patients as opposed to non sick patients. Raw medical claims data cannot and does not measure this nuance.

Emboldened employers and insurance companies could easily manipulate the medical claims data and steer employees to a lower quality of medical care using the inaccurate raw medical claims data definition of better-performing doctors.

Consumers Checkbook http://www.checkbook.org/ a consumer non profit company is developing web site to publish this medical claims data. They sued the government demanding the release of the medical claims data. Their business plan is to sell this potentially misleading information to patients for a fee in the name of consumer advocacy. Robert Krughoff the president of Consumers’ Checkbook says “This will make the efforts to rate doctors more reliable, more valid. The group will use the data to measure the quality and efficiency of doctors and plans to launch a Web site that tells consumers how much experience doctors have performing certain procedures”

Consumer experts believe the ruling, made by U.S. District Judge Emmet G. Sullivan in Washington, will not be appealed by the Bush administration. Last year, in an executive order, President Bush called for greater cost and quality transparency in the health care system.

“It honestly is a treasure trove,” says Francois de Brantes, the national coordinator for Bridges to Excellence, http://www.bridgestoexcellence.org/ a program that rewards doctors for improving the quality of their medical care. “There is an unbelievable amount of analysis that can be done with the data that up until today just hasn’t been possible.”

Bridges of Excellence looks like a start up web site in search of a product. Rather than being a benefit to patients, it is interpretation of the raw medical claims data by laymen who have no concept of the complexity of medical treatment and can be harmful to patients.

“Consumer groups say the data has limitations but it nonetheless can be used to accurately rate physician quality.”

I think they truly believe what they are saying. They see a business opportunity. Physician organizations must define quality care and judge the quality of delivered care. Misleading, inaccurate and complicated raw medical claims data can only result in a decrease in quality and access to medical care. Healthcare system has just made another complicated mistake.

Stanley Feld M.D.,FACE,MACE

Dick Swersey is a Columbia College C’59 classmate. He is extremely intelligent. He has commented on my blog Repairing the Healthcare System in the past. He is a strong free market advocate. In response to my blog post Mechanism Design and Repair of the Healthcare System he wrote the following:

“Stanley:

I wouldn’t necessarily dismiss a role of government in this arena. Fully 20% of the Wealth of Nations is a section called “The Role of the Sovereign”. You might want to look at that section to see if there are any relevant principles. I’ll do the same.”

Dick is absolutely correct. The government is there to make the rules of the game. These rules need to be constructed so that they are fair to all. The rules have to align everyone’s incentive for the basic goal of the endeavor.

In medicine the basic goal should be the welfare of the patient. The goal should be the delivery of quality medical care at the most affordable price. The patients and not the insurance company should decide on what their needs are. The rules can not interfere with free choice. If a seller is unwilling to sell according to the rules they should not be forced to sell. However, they can not play the game. They need to play in another game. If there is an unwilling buyer to buy he should have the option to buy elsewhere. Both the buyer and the seller should be entitled to pursue their self interest within the rules of the game. All transactions should be transparent so the buyer knows exactly the quality of care he is buying and the price he is paying for it. The rules for defining quality of care and price have to be clearly stated. If the rules of the game are broken the party who breaks the rules should be penalized.

The distortion in the Healthcare System is the opacity of pricing and payment by the healthcare insurance industry, the hospital systems, and sometimes the physicians. Additionally, the consumer does not have the option to choose the products he feels he needs. (Access to care)

The healthcare system needs revision of the rules of the game. Consumers must own their healthcare dollar and drive the healthcare system. They should be able to buy high deductible insurance and deposit the initial at risk dollars in a tax free trust so they can pay for their initial care. If they do not spend the money in their trust account they should not be required to use it for healthcare expenses in the future. The trust account can be set up by their employer, themselves, or the government for them. Money not spent in the trust account should accumulate tax free and be used for retirement.

The self employed would be able to set up the trust with pre tax dollars just as the employer can. This would encourage young people who are well to buy insurance so that they have another source of forced savings for retirement. It is foolish for the young well person to be uninsured because illness can strike at anytime. It would also nullify the healthcare insurance industry’s complaint that the healthy young choose to be uninsured because they are paying for a higher risk pool.

Another required rule change would be the way premiums are calculated. The calculation should be based on community rating and not the archaic actuary calculations now used.

The “sovereign” should make the appropriate rules and then get out of the way and let the marketplace do the work.

Stanley Feld M.D.,FACP,MACE

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?”

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 many of the 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 Hurwicz contributed the idea of incentive compatibility. His point is the way to get as close to the most efficient economic outcomes is to design 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 incentive for the contractor to be inefficient. I 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 truthfully. The free market mechanism was far less afflicted than central planning bureaucracy by such incentive problems. The free market economy was by no mean 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 does 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 the 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.

Stanley Feld M.D.,FACP,MAE

The consumer must fix the healthcare system. None of the other stakeholders has been successful. In fact, of the last 30 years the healthcare system has been made worse by the insurance industry, government and policy makers.

All their systemic changes have failed, because they have, for the most part, been to the advantage of the facilitator stakeholders and not the primary stakeholder, the patient. Facilitator stakeholders’ profits have soared, insurance premiums have skyrocketed while access to care has plummeted. Patients, physicians, hospital systems and the government have adjusted to changes to the detriment of the patient. The facilitator stakeholder adjustments have resulted in further dysfunction in the healthcare system.

Presently, employers and all the stakeholders except for the insurance industry are in pain. However, the stakeholder most at risk is the consumer. Only 20% of the population is sick and interacts with the healthcare system at any moment in time. 80% of the population does not interact with the healthcare system. They think everything is fine. However, the entire populations’ health and well being is at risk! If we stay on the present course, I predict the system will break down completely. Access to care will be limited and rationed. Access to life saving medical advances will vanish. Future advances in medical care will disappear.

The goal of the healthcare system should be;
1. To provide patients
a. with access to good quality care
b. with education to judge quality care
c. with incentives to be motivated to be responsible for their care
d. with the freedom to judge and select the physician of their choice
e. with the information of their evaluations so it is truly portable
f. with choice of health insurance vehicles that are affordable to everyone
g. with education vehicles so they can become “Professors of their Disease” and be truly responsible for their care
h. effective and affordable drug insurance to enhance patient compliance with medication

2. To provide physicians
a. with a precise definition of the meaning of quality care for various diseases.
b. with incentives to provide quality care for both acute and chronic disease
c. with the educational opportunity and motivation to improve the quality of care they deliver.
d. with an actual vehicle developed by their peers to prove that they are delivering quality care.
e. with a mechanism for delivering care at a transparent price
f. with the ability to effectively communicate with patients electronically.
g. with the ability to improve the patient physician relationships
h. with the ability to enable patients to practice effective self-management techniques to prevent costly complications of chronic disease
i. with the ability to improve communication and access to patient information so as to reduce the cost of redundant evaluation and treatment

3. To decrease the overall cost of the system
4. To eliminate the 47 million uninsured
5. To align stakeholders’ incentives to provide satisfactory profit margins to hospitals, and pharmaceutical companies and insurance companies.

These are ambitious goals. Processes must change in order for the United States to deliver effective health care to the population now and in the future. Consumers can not leave it up to the facilitator stakeholders and policy wonks to fix the system. Their policies have distorted the healthcare system to serve their vested interest. The patient or future patients must drive the process of change through appropriate demands on our politicians in order to repair our healthcare system.

In my view none of the politicians running for president have a clue. They will only wake up if we make appropriate demands. Patients can make effective demands for a healthcare system that works. They have to demand that they own their healthcare dollar and be responsible for their care!

Stanley Feld M.D., FACP, MACE

Our most precious asset is our health. We should be responsible for our own health and welfare. The ability to maintain our health is dependent on access to the healthcare system for diagnosis, treatment and health maintenance. The dysfunctional healthcare system is decreasing our ability to maintain our health by limiting access to the healthcare system.

In the past thirty seven years as a Clinical Endocrinologist, I have seen many advances in the medical care system as distinct from the healthcare system. We are becoming proficient in preventing the complications of chronic disease. The complications of chronic disease consume 90% of the healthcare dollar. I have observed economic and political distortions of a healthcare system. These distortions have impeded the physicians’ ability to prevent the complications of chronic disease.

Many have declared that the healthcare system is broken. We have also heard that while all goods and services industries have embraced the electronic era (not totally true), physicians have resisted the electronic revolution. It has been stated if medical care is to step into the 21 century, medical practices simply have to adopt an Electronic Medical Record (EMR). The EMR will solve many of the healthcare system’s problems.

In my opinion, the notion that the widespread adoption of an EMR is the solution to the problems with the healthcare system is simplistic and incorrect. It is true that physicians have resisted instituting EMRs, for many good and not so good reasons.

Why have physicians resisted the EMR? It is hard to find a coherent answer in the literature. Here are some reasons.

The EMR’s are too expensive to purchase and too expensive to service. They will not help patient care in their present form. There have not been standard EMRs developed. The EMR should help the patient and physician. If past behavior is a predictor of future behavior the data accumulated by the medical care system will be misused to the disadvantage of the patients and the physicians by the insurance industry and government.

These are some of the reasons for physician resistance. The Ideal Electronic Medical Record outlines my propose solutions to the EMR dilemma. Since we do not have universal adoption of EMRs, society is led to believe that the problems with the health care system are the physicians’ fault for not adopting the EMR.

However, a sober look at the problem reveals all of the stakeholders are at fault. The stakeholders are the government, the insurance industry, the pharmaceutical industry, the hospitals, the physicians and the patients. All have played an important role in the distortions and dysfunction of the healthcare system.

In my view, the patient and the physician are the key stakeholders. Without the patient and the physician, we would not need a healthcare system. The patient is the player and the physician’s role should be the coach, making the diagnosis and teaching the player what he has to do to get well and stay well.

However, in 2007, the patient and the physician are generally listed last among “important” stakeholders by government, insurance companies, hospitals and policy makers.

Since the patient is most important stakeholder, patients should be in the forefront of policy making. Physicians should be second. Unfortunately, as physicians have adjusted to the changes in the business aspects of healthcare their ability to practice efficient, effective and friendly medical care has deteriorated.

All other stakeholders are in reality facilitator stakeholders for patients and physicians. Everything done in the healthcare system should be done for the benefit of the patient first, and not for the economic bottom line of the all the stakeholders. After all it is the patients’ healthcare system! Is it not?

The demand for repairing the healthcare system and action to fix it has to be made by the patients.

Stanley Feld M.D.,FACP,MACE

Texas is not the only state realizing that price transparency is an essential ingredient in the Repair of the Healthcare System.

Price transparency initiatives to make healthcare fees more available to consumers and easier to understand is also being undertaken at the national level.

U.S. Health and Human Services Secretary Michael Leavitt said in a speech last spring, “people need to know–they have a right to know–the cost of their care and the quality of the care.” Competition and transparency will make the system better,” he says.

“Change will begin to occur when those who pay for health care in each market area insist that their insurers, and their providers, commit to transparent measurement of quality and price,” Leavitt concluded.

I agree with most of what Secretary Leavitt says except it will not work unless the patient has control of his healthcare dollar. All the politicians seem to ignore this important point. If the patient owned his healthcare dollar he would have an interest in getting the highest quality care for the best price. Now, the insurance industry and government fight for the best price. The problem is they do not pass the saving on to the patients. It simply increases the healthcare insurance industry’s profit. UnitedHealthcare’s profits increase an additional 15% in the last quarter.

“The price transparency trend seems to be picking up steam. According to the U.S. Department of Health and Human Services, Arizona, California, Indiana, Massachusetts, Minnesota, and Wisconsin have all established price transparency pilot programs, and several others are considering similar legislation.”

This is wishful thinking. Pilot programs usually fail. Many are poorly designed. They are not mandates and usually have little impact. The working definition of price transparency is wrong and any pilot is doomed to fail. After they fail to produce the expected outcome the political conclusion will be that price transparency is not a good idea.

The pilot programs also offer an opportunity for the insurance industry. They immediately jumped in to help with the measurement of cost and quality. In effect they become the judge of physicians’ and hospital systems’ pricing. It is clear that the insurance companies’ power has to be limited, not expanded.

“Insurance companies are also establishing online cost-comparison tools. Aetna, Blue Cross and Blue Shield, and UnitedHealthCare offer customers cost and quality information regarding their health care.”
“

“According to the Kaiser Family Foundation, most health care dollars in the United States are spent on hospitals and physicians–more than 30 percent is spent on hospital care, and nearly 22 percent on physicians’ and clinical services. That means half of all the health care dollars spent nationally go to entities affected by price transparency legislation.”

The Kaiser Family Foundation is helping me make my point. Fifty two percent of the cost of care is spent on overpriced cost of delivery of healthcare. Therefore the other 48% is retained by the insurance industry.

The healthcare insurance industry controls the healthcare dollar. It controls both the premium charged and the payments made to the physicians and hospital systems. In order to have any reduction in the cost of healthcare, At least two changes have to occur to have any success in Repairing the Healthcare System. The two most important changes are real price transparency along with consumer ownership of the healthcare dollar. Patients have to have incentives to control the cost of healthcare.

Price transparency should be designed to empower the consumer, not the insurance industry.

Stanley Feld M.D.,FACP,MACE

State legislators are beginning to understand their role in Repairing the Healthcare System. The individual states have the power to license the hospital systems, the physicians and the insurance companies to practice in their state. The states have not used their power wisely to date. It could be they view this as the federal government’s responsibility.

“Texas passed legislation in June that will require health care providers to give consumers statewide greater access to price information for medical services and billing procedures.”

President Bush called for price transparency in his State of the Union address. The reason is accurately described below.

“Many consumers take advantage of comparison-shopping when they are in the market for a new car, electronics, and everyday items, and the purpose of the new law is to allow them to do the same with their health care. It is not uncommon to go to a doctor’s office and be confused by the co-pays, deductibles, out-of-pocket expenses, and other intricate aspects of health care plans.”

Price transparency is an essential ingredient in the Repair of the Healthcare System. The State of Texas is on the right track. The difference between the car, electronics and everyday item purchases and healthcare purchases is for the former the consumer is spending his own money. When the consumer is spending his own money for healthcare, comparison shopping will occur but not before that because the patient is spending other peoples money.

State Sen. Robert Duncan (R-Lubbock) authored Senate Bill 1731, which took effect September 1. The new law includes multiple methods of creating transparency in health care prices.

“Having witnessed the recent years’ incredible growth in the cost of health care, it’s become clear we need more transparency for Texans considering their medical needs,” Duncan said. “This new law will move the Texas health care industry toward becoming a more market-driven entity, which will ultimately benefit consumers and practitioners.”

There is no explanation how price transparency will benefit the consumer or the practitioner.

“Three key players are affected when price transparency legislation is considered: physicians, insurers, and facilities such as hospitals and clinics.”

“Under the new law, billing requirements statewide are now standardized for all three groups. Also, doctors and hospitals must disclose their billing policies and standardize their billing procedures. Care providers must give estimates of expected charges and itemized statements of services to patients who request such information.”

The immediate problem with the legislation is that each stakeholder has multiple prices. Each stakeholder has retail prices and several discounted prices. In order for each stakeholder to comply with the law they need only to publish their retail prices. This methodology has no relevance. It does not motivate the consumer to comparison shop. If the patients were motivated to save money and taught to be smart about purchasing healthcare they would comparison shop. If the facilitator stakeholders saw this happening they would start posting lower prices on the web than their competition in order to attract customers. Only then would a competitive marketplace be developed.

“ Consumers will now be able to shop online for doctors’ services and estimated costs for procedures. Since physicians are not necessarily equipped to assist patients with complicated insurance information, consumers are better served by a central site where they can collect it themselves, the law’s supporters say.”

“The legislation requires the Texas Board of Medical Examiners to provide on its Web site a Consumer Guide to Health Care that will give patients information on physicians’ billing practices. Patients will be able to access physician billing information and find average charges for procedures.”

Bill 1731 requires price transparency for all the stakeholders. However the focus of the execution of the legislation so far has been on the individual physician and his fees. Physicians are politically the weakest and least organized of the stakeholders. I predict the requirements for compliance will be much slower in coming for the hospital systems and insurance companies. The hospital systems and the insurance companies have the most opaque price policies. A consumer simply cannot get the information from a hospital system in advance or adequate price information from an insurance company.

When the hospital systems and insurance industry publishes their prices the consumer will only see the retail prices. The solution is to require everyone to print all their prices as the automotive web sites Edmunds and the Kelley Blue Book do. At these web sites you can get the manufactures average retail price, the average sales price in your area and the invoice price.

Only when this happens and consumers have ownership of their healthcare dollar will a competitive market driven healthcare system occur.

Stanley Feld M.D.,FACP,MACE

My son had his Bar Mitzvah in 1978. Many boys receive presents of cash when they celebrate their Bar Mitzvah. Gold coins were hot in 1978. Many Bar Mitzvah boys exchanged their new found fortune for two gold Krugerands. Gold was being predicted to increase to $1400 an ounce in the coming year.

Not Brad. His cash gifts totaled $1300. He wanted an Apple II Computer. The Apple computer company released the Apple II computer in 1977. I was delighted that he wanted to invest his Bar Mitzvah money in himself and not gold. At age 13, he was certain that he could learn to program the Apple II computer. I asked him how much it would cost. He said about $1300.

The following Saturday, after his soccer game, we went to the computer store to buy his Apple II computer. Brad convinced me during the preceding week that “we” needed an Apple II. After spending $3100 for the Apple II computer and all the necessary peripherals, “we” walked out of the store with all the pieces “we” needed to “create the future”.

As we were walking to the car I had an “aha” moment. Brad’s willingness to spend all his Bar Mitzvah money on his future convinced me to spend an additional $1800. I was sure he had all the characteristics of an entrepreneur. He told me the future was in personal computing. “We have to spend the money on the future”. This was a pretty profound statement for a 13 year old boy in 1978,

He was right. Not only did he learn how to program the Apple II himself, he started a business. He taught boys and girls in the neighborhood how to program in basic for a fee.

In 1982 he was tiring of the Apple II. I needed a program to print out laboratory reports generated in my chemistry laboratory. Brad volunteered to write the program, design the pretty printout and sell me the Apple II computer and all the peripherals for $1600. The laboratory program was a bargain to me. Brad monetized his asset for a profit. He added value to me while he leveraged his acquired talent.

The moral to the story is many of our children are very perceptive. We should listen to them. We have to create the environment for them to want to learn and be excited to learn. We have to make them responsible for their actions. They have to them put “skin” in the game. Our country’s greatness was built on entrepreneurship. It is parents’ responsibility to help promote the tradition of entrepreneurship. I am convinced that by creating an environment in which my sons can be creative and innovative, I have learned more from them, than I have taught them.