Stanley Feld M.D.,FACP,MACE

Alex Berenson’s article “Sending Back the Doctor’s Bill” in the July 27,2007 NYTimes demonstrates the problems the mass media is having in a world of changing communication. Unfortunately, articles such as Mr. Berenson distort and misrepresent the facts.

Mr. Berenson says “Americans generally do not seem to mind the fact that doctors are well paid. In public opinion surveys, doctors usually rank as the most trusted professionals. Congress has repeatedly blocked Medicare’s efforts to reduce the amount it pays for each procedure doctors perform, even though overall Medicare payments to doctors are soaring and the cuts are legally required to keep the program’s budget balanced.”

It is important to study Mr. Berenson’s words carefully. He says “doctors usually rank as the most trusted professionals.” I believe that is true and is deserved. However, he and others are doing their best to destroy that public trust. The trust between a patient and physician (patient/physician relationship) is part of the therapeutic effect. Effective medical care is not a commodity. The therapeutic effect has a personal component that is being destroyed by our present environment.

Mr. Berenson implies that the government must “reduce the amount it pays for each procedure doctors perform.” He ignores the fact that the hospital charge for a procedure done in the hospital is greater than the physician charge to do the procedure. The hospital’s reimbursement is greater than the physician’s reimbursement for his skill and intellectual property. Recall the insurance company paid the hospital twice as much as they would have paid Dr. Westbrock if he was allowed to do the same x-ray.

Mr. Berenson’s last sentence is a warning. It should alert us to what we are in for with universal coverage, and single party payer system. It is socialized medicine.“Congress has repeatedly blocked Medicare’s efforts to reduce the amount it pays for each procedure doctors perform,” This is not true. Congress has decreased the percentage of reimbursement reductions sort by Medicare. Significant physician fee reductions have occurred yearly.

Mr. Berenson goes on to say “even though overall Medicare payments to doctors are soaring and the cuts are legally required to keep the program’s budget balanced.” Physician reimbursement has not been soaring. It has been declining. Hospital costs and administrative payments to the insurance industry have soared. The last phrase portends what we have in store for us with socialized medicine. We will see limitations to access of care, restriction of care and longer waits for care because it has to fit in a budget. We need only think of the examples of England and Canada.

The wonderful Surgeon’s Blog by Sid Schwab touched on this the other day in a post called “Times Two.”

Dr. Schwab is a general surgeon nearing retirement age who writes about the challenges in surgery. He has an excellent and informative blog.

He writes,
“Working hard for its own sake, striving for excellence without any tangible recognition will be seen in some — but hardly most– doctors if they go on a salary. Because, unsurprisingly (or maybe surprisingly, to pundits) that’s not how it works in real life. I’ve been in the military, and I’ve worked at VA hospitals. Try getting a case on after three p.m. Try getting a lab test or Xray thenabouts. Work another patient into a crowded schedule? Stay through lunch, after hours, come in early? Sorry. That’s what ERs are for. If Alex Berenson (the NYT editorialist) is ok with it, so am I. Sleep, I’ve discovered, can be a pleasant thing.”

Princeton University economics professor, Dr. Uwe Reinhardt, pretty much the “go to guy” for health care economic theory responded with a letter that was published two days latter:

In “Sending Back the Doctor’s Bill” (Week in Review, July 29), you compare the incomes of American physicians with those earned by doctors in other countries and suggest that American doctors seem overpaid.A more relevant benchmark, however, would seem to be the earnings of the American talent pool from which American doctors must be recruited.

Physicians are the central decision makers in health care. A superior strategy might be to pay them very well for helping us reduce unwarranted health spending elsewhere.”

I believe you have heard that from me repeatedly. Someone should be paying attention.
I have followed Dr Reinhardt for years. He has finally figured it out. Bravo Dr Reinhardt! Maybe we have a chance. Maybe everyone will figure it out. Maybe a presidential candidate will figure it out.

Stanley Feld M.D.,FACP,MACE

On July 29,2007 Alex Berenson wrote a lead article in the Sunday New York Times business section entitled “Sending Back The Doctors Bill.” I believe everyone should be exposed to all opinions. However, Mr. Berenson’s article needs rebuttal because he simply does not know what he is talking about.

In my view the quality of the news in the New York Times has deteriorated recently. Alex Berenson is producing yellow journalism. It is sensational and does not accurately address the problems in the healthcare system. Following on the heels of “Sicko” and the misinformation and disinformation contained in Michael Moore’s film. Mr. Berenson’s article can make people believers of the wrong conclusions. A review of Mr. Berenson’s recent articles confirmed my opinion of his sensational reporting tendencies.

This article confuses the issue of how to repair our dysfunctional and broken healthcare system. I had hoped there would be resounding public outcry against his article. Unfortunately the response was meager. I have struggled with my response because the physicians’ incomes are not the problem in the rising costs of the healthcare system. In fact, cognitive physicians (internists, and family practitioners) are not paid enough. The hospital fees, the insurance industry fees, and the exorbitant administrative fees and inefficiencies of the hospitals and insurance industry are the problem.

Let us do some math. Health costs are now $2.2 trillion per year and rising in the U.S. Physicians’ gross revenue represents about $500 billion per year of the total exclusive of overhead. The $500 billion dollars in revenue represents 22% of the healthcare costs. Therefore 78% of the healthcare cost are spent in other places. Medicare has proposed a 10% reduction in physicians’ reimbursement in 2008. Since the insurance industry adjudicates the claims for Medicare they will also try to reduce payment by the same amount for the private healthcare insurance policies they service. A 10% reduction is $50 billion dollar or 2.3% of the healthcare expenditures. The 2.3% reduction represents an insignificant reduction in the overall cost of healthcare. This reduction will generate much pain and resentment. The cost of care reduction must come from areas that generate the other 78% of expenditures. The other stakeholders have been responsible for the yearly increase in healthcare costs while physician reimbursement has decreased. A $4,000 to $30,000 a day hospital charge should raise some eyebrows.

The physicians’ payments are not the cause of the rising healthcare costs. It is the insurance industry’s fees, insurance industry’s administrative waste and salaries as well as hospital fees, administrative waste and salaries. If we knew their costs (price transparency) and we saw their profits and we forced them to eliminate waste, we would truly reduce healthcare costs.

The only way to accomplish this is by adequate governmental rules, and a consumer driven system to stimulate competition.

If we are going to have a conversation about the ills of the healthcare system this is where Mr. Berenson’s energy should be expended. Mr. Berenson has created a smoke screen with sensational reporting to distract the conversation from the real causes of increase costs to the healthcare system.

Mr. Berenson says,

“But many health care economists say both sides are wrong. These economists, some of whom are also doctors, say the partisan fight over insurers and drug makers is a distraction from a bigger problem: the relatively high salaries paid to American doctors, and even more importantly, the way they are compensated.”

He then goes on to say that “Doctors in the United States earn two to three times as much as they do in other industrialized countries.” We should probably earn more if we compare incomes and the necessary skill level required in medicine to the salaries paid to less comparable skill levels in other industries in the United States of America.

The temptation of practicing physicians is to become defensive about their income. In my mind all the defensive arguments are valid but unnecessary. It has become easier for physicians to communicate with people and each other since the advent of blogging.

Richard Reece M.D. says

“Given the years of training that doctors require, the stress, and the responsibility of their jobs, few would disagree that they should be well paid. In addition, with a year of medical school now about $30,000, many doctors leave school deeply in debt. And many doctors would argue that cutting salaries would only persuade talented, college graduates to pursue better-paying professions. These actions will worsen the doctor shortage. Presently this shortage is estimated to be about 50,000 physicians. The shortfall has been quoted to be 200,000 by 2020.”

Ask yourself, why would any bright young person spend 11 to 15 years preparing for a profession in which systematic fee reductions are guaranteed ?

Dr. Rob Oliver in Plastic Surgery 101 nailed it.

“Completely missed by the author (Mr. Berenson) is both the expense of training physicians and the “opportunity costs” invested in becoming a Doctor by highly educated people in their early twenties.”

• Tuition and living expenses during college ~ $150,000
• Tuition and living expenses during medical school ~ $85,000
• Average wage during my intern year in 1998 ~ $5.80 /hour
• Average wage my 8th year in surgical training in 2005 ~ $9.75 /hour
• Spending ages 22-35 in the library or hospital ~ PRICELE$$

It is important to note that Dr. Rob Oliver is a young physician. I applaud his frankness. In the past, policy wonks have used the argument that young physicians will not have experienced the “golden age of medicine”. Therefore they will not know any better. I believe the policy wonks are going to be in for the surprise of their life. Bravo Rob Oliver!

How do you calculate how much someone is worth? How much is Barry Bonds worth? How much is Kobe Bryant worth? How much is Paul Levy CEO of Beth Israel Hospital in Boston worth? $1.2 million dollars a year? He thinks so. How much is the CEO of United Healthcare worth? $1.8 billion dollars? How much are the CEO’s of Fortune 500 companies worth? Are any of these people worth more than $150,000 per year?

How much is the discovery and effective treatment of an illness that saves a life worth? These questions are not questions that are going to be answered by Mr. Berenson’s yellow journalism. They are also not questions that are going to be answered by academic policy makers with little to no clinical experience in the trenches. They are questions to be answered by the marketplace. The sooner we understand these questions the faster we will be able to develop a formula to repair the healthcare system.

Consumers understands these questions, especially when they become sick. However they have been rendered powerless by our present healthcare system. The people are going to have to drive the repair of the healthcare system. Government policy should be to express and service the needs of the people efficiently and effectively. Government policy should not be driven by facilitators’ vested interests.

Do you think the Insurance Industry should own the healthcare system? My answer is no! Do they? Yes!

The healthcare system should be owned by the patient. The patients should own his healthcare dollar. This is the only way that competition and innovation can be stimulated. The necessary paradigm shift is not going to be driven by the insurance industry, the hospitals, or government officials under political influences. The government can only do the right thing with the appropriate leadership. It seems to me the only potential presidential candidate that has the slightist clue to repair the healthcare system is Rudy Giuliani.

Last week Mr. Giuliani called for “transforming the way health care coverage is provided in the United States, advocating a voluntary move from the current employer-based system to one that would grant substantial tax benefits to people who buy their own insurance.

“He proposed tax exemptions of up to $15,000 per family, allowing individuals to direct that money toward the purchase of health insurance and other medical spending. He also said he opposed any government mandates that would require people or businesses to buy insurance, which is central to the universal health care plan neighboring Massachusetts, passed in April 2006 when Mitt Romney, a Republican rival, was governor there.
In order to help the poor or others struggling to afford health insurance, Mr. Giuliani said he would support vouchers and tax refunds along with savings incentives. ”

I believe Rudy Giuliani’s rhetoric is a relatively meaningless sound bite at present. However the sound bite is on the right track. I believe if his campaign gets off the ground he will be willing to learn from physicians and patients. He would be capable of leading us out of the morass we are in. He also believes the healthcare issue is a vital issue. I think he believes in sound business principles. He seems to understand the problems of the dysfunctional healthcare insurance industry.

Mr. Giuliani understands a good deal about how the free market economy works. He believes in the power of the consumer and people power. He also understands how dysfunctional systems can be repaired. Recall that he took a totally dysfunctional New York City riddled with crime and corruption, and transformed it into a functional and civilized city. He also angered a lot of the established vested interests along the way. However, most were grateful that he broke the log jam.

He transformed the national view of New York City and its people. He stimulated an unprecedented prosperity for New York City and New Yorkers at a time when companies and industries were moving out of the city. I recall being picked up by a limo driver in New York City on the way to a press conference several months after Mr Giuliani was elected. I always figure that New York City limo drivers know more about what is going on in the city than anyone else. I asked the driver what he thought of Mr. Giuliani. He said “Rudy is great. He took three police forces that did not work and made them into one police force. Believe it or not the police have been energized. The police force works. We all feel safer.” My silent response was “holy cow”. I did not think New York City had a chance. Maybe Mr. Giuliani was lucky.

Many feel the same way about the healthcare system. Repairing the healthcare system doesn’t have a chance. I think they are wrong. The healthcare system can function with the principle stakeholders, the physicians and the patients, in charge and the consumer driving the system.

I also believe Mr. Giuliani’s campaign has many problems. Many people will be against him for his views on other issues. His seemingly logic approach to the healthcare issue makes him the only possible shining star presidential candidate for the healthcare morass. He does not have the formula for repair quite right, yet he maybe a fast learner, if there is such a thing in a politician. He may also be able to stimulate a more attractive candidate to understand the desires of the people as it relates to healthcare. We need to put the people in charge not the insurance industry or the government.

Stanley Feld M.D. , FACP, MACE

Hopefully, many of you have found that physicians are kind people. Physicians do not want to fight with anyone. Most physicians love medicine and appreciate the privilege of helping people who are ill. The pressures and distortions of practicing medicine in our healthcare system have led to a spinning of the kindness of physicians in an ugly way. Healthcare is a big business. It is a two trillion dollar a year business and rising. This two trillion dollars does not include money customers spend on products and services to keep themselves healthy such as megavitamins, personal trainers, health foods, and health clubs just to name a few. This additional industry is estimated to be one hundred billion dollars.

The insurance industry is in business to maximize its bottom line. Most of the healthcare insurance companies do not have sophisticated information technology systems to accurately measure data it presumes to measure as illustrated in my last blog entry. It has legacy systems that can not handle the complexity it has built into its approval and payment system. It also does not have an interest in understanding the complexity of the medical transaction between the patient and physician (patient-physician relationship).

Despite these facts, the government and its Medicare program have authorized various insurance companies in various states to adjudicate Medicare claims at a substantial price to the government. The less the insurance company pays to providers the more the insurance company makes from these administrative tasks. United Healthcare is not the only villain. Aetna has also taken advantage of its power to the disadvantage of the patient and the physician. Physicians are finally starting to fight back and expose the abuses of the insurance industry. The states local authorities are responding to the physicians and patients pain. Below is an order by the New Jersey Department of Banking and Insurance fining Aetna Health Inc. I am publishing this order because it is important that this decision does not represent another tree cut in the forest with no one around. It should be heard by as many people as possible. Employers, patients and physicians must hear this loud and clear. It emphasizes that there is something People Power can accomplish.

“Aetna ordered to cease unfair limitation of Medicare payments

In a victory for physicians around the country and a strong message to health insurers nationwide, the New Jersey Department of Banking and Insurance (DOBI) fined Aetna Health Inc. almost $9.5 million for an attempt to pay certain out-of-network providers what it deemed a “fair” amount—125 percent of Medicare—rather than the providers’ billed charges. According to the DOBI ruling, Aetna must directly pay the affected providers’ billed charges, in reparation, for certain services rendered out-of-network.

The $9,457,500 total penalty is among the largest that DOBI has ever levied against a health care insurer. The penalties include:
• $650,000 for misrepresenting its obligations in letters sent to 130 providers (amounting to $5,000 per offending letter)
• $7,747,500 for not attempting, in good faith, to effectuate prompt, fair and equitable satisfaction of the claims for certain services
• $530,000 for not providing its Health Maintenance Organization members and patients the right to be free of balance billing by providers for medically necessary services that were authorized or covered
Richard J. Scott, MD, president of the Medical Society of New Jersey, credited DOBI Commissioner Steven M. Goldman for the ruling.
“DOBI’s order demonstrates that [he] understands the hardships New Jersey’s physicians and their patients can suffer because of the actions of health care companies,” Dr. Scott said. “We commend DOBI for its response to Aetna’s actions, and we appreciate the time the commissioner has taken during the year to listen to what New Jersey’s physicians have to say.”

Physicians are starting to fight these abusive tactics all over the country as demonstrated by the Seattle physicians’ action against Regence Blue Shield in Washington State.

The various state boards of insurance are finally siding with patients and physicians. Hopefully these actions will act as a further deterrence to continued abuse.
Recently I received a comment from EC:

I was in Director of Finance and CFO roles where one of my primary responsibilities was evaluating and selecting health care coverage for several hundred employees and then managing the plan (as best as one can – it’s more similar to a rodeo ride where you just try to hang on). Unrelenting (and unapologetic) double digit increases every year. From first hand experience, I can honestly say employers really want to give their employees the absolute best coverage they can but the forces in the industry have them on their knees. If any other expense line item in a company’s income statement experiences half that amount of year after year increases, the person responsible would be shown the door – quickly. But, regarding healthcare, companies honestly try their best to put up with it. I wanted to share that so you can understand my perspective. Our goals are the same – the best, affordable healthcare – but we come at it in slightly different ways.

I absolutely agree with EC. I believe that employers want to give their employees the absolute best coverage they can afford. The insurance industry has priced itself out of the marketplace by inefficient legacy information technology systems, inappropriate incentives, lack of understanding of medicine, restrictive inappropriate pricing, a lack of innovation and a lack of incentive creation. It is not the employer who is at fault. .

The insurance industry must think creatively if the healthcare system is to be repaired. If the patients owned the healthcare system and their own healthcare dollar in a price transparent, price justified system, with equal tax treatment for all, and the possibility of the patients saving money for retirement if they treated themselves appropriately, a market driven system would emerge that would drive all the prices down as the consumer has in other industries. Wal-Mart is a perfect example.

The answer is not price controls. The answer is not artificial price manipulations. The answer is market driven prices that will be determined by consumer demand.

I hope no one thinks that the penalty Aetna suffered in New Jersey will actually hurt Aetna. I am sure the penalty will be built into the next premium Aetna charge to its 400,000 New Jersey customers.

It is time for employers and consumer alike to say we are not going to take this any more. It is time to demand that the government to set up rules that treat everyone fairly. If the consumer drives the healthcare system the consumer can make this happen. It is time for the insurance industry to realize it is killing the goose that laid their golden egg.

Stanley Feld M.D.,FACP,MACE

Medical organizations have tried to standardize the diagnosis and treatment of various chronic diseases by creating clinical guidelines as a template for medical care. I was the chairman of the AACE guidelines for Diabetes Mellitus in 1995 and 2002. I have also been the guidelines co-chairman for Thyroid Disease, Thyroid Cancer and Thyroid Nodules for AACE.

The guidelines were based on the best contemporary evidence based medicine available. They were meant to be educational and not used as a weapon against physicians for not following the guidelines. The clinical guidelines were not supposed to act as algorithms to commoditize medical care. The goal was not to develop systems mechanically treat people or evaluate physician care. Quality Medical Care is a complex combination of many processes. Clinical judgment and the patient physician relationship is a key factor in quality medical care.

One of the problems with the guideline phenomenon, in my view, is there are many guidelines on the same subject by various medical and disease specialty organizations. Some guidelines are more detailed than others. The guidelines were meant to be educational guidelines only. The guidelines are also fluid and always changing. The insurance industry is making a grave misstep in creating faulty data points and penalizing physicians for not following its created data points.

The Washington Post article of July 24, 2007 goes on to describe much of the conflict between the insurance industry and physicians. This article is important to review because it touches on a problem that must be solved for any progress to be made in the repair of the healthcare system.

“The trend, ( using quality measurement guidelines) which parallels a push by President Bush to promote consumer access to information about health-care quality and cost, has spurred a lawsuit in Seattle, a physician revolt in St. Louis and a demand by a state attorney general that one insurer halt its planned program.”

The guideline trend does not parallel the push by President Bush. It does not empowering the patient to make an educated free choice of physician. It is empowering the insurance industry to penalize physicians. It is giving the insurance industry a tool to lower reimbursement without due process.

In my view, the lawsuit by physicians in Seattle and the physician revolt in St Louis with a state attorney general exercising his power to stop these programs is warranted. I would say it is about time someone has some guts to say this is not the way to Repair the Healthcare System.

“Analysts assess cost efficiency by looking at factors such as how many and what types of exams were conducted. Was a breast mass biopsy done in a hospital with an overnight stay or in an out-patient clinic? Was a generic or brand-name pain medication prescribed?”

Isn’t this the insurance industry telling physicians how to practice medicine? Isn’t this meddling in medical care?

“A doctor who performs well might be awarded stars, a smiley face or a Tier 1 rating. An inferior doctor’s patients might require paying higher co-payments, or the physician might be shut out of an insurer’s preferred network.”

Isn’t this bizarre? Is this giving patients a free choice? It looks as if the insurance industry wants to solidify its power over patients, physicians and the healthcare system?

“In the Washington metropolitan area, UnitedHealthcare has been gathering and evaluating data on physicians and in January rolled out a Web site that ranks physicians with zero, one or two stars. Officials at the District of Columbia Medical Society said they were told that the goal of the Premium Designation program was to encourage physicians to refer patients to two-star doctors and for patients to seek out two-star physicians.”

“We were shocked that they would be profiling physicians for the past 18 months and not tell anyone,” said Peter Lavine, chairman of the board of the medical society, which met with UnitedHealthcare officials last fall.”

This was a unilateral decision by United Healthcare to use criteria to profile physicians using information that might not be accurate?

“Officials with UnitedHealthcare, the nation’s second-largest health insurer and a unit of UnitedHealth Group of Minnetonka, Minn., said the goal is merely to provide information to consumers and to help doctors improve their performance”.

United Healthcare acted without consulting with physicians or physicians’ organization about what they were doing.

“Our focus is really on transparency,” said Lewis Sandy, UnitedHealth Group senior vice president for clinical advancement.”

The use of the word transparency is an insult to medicine and the healthcare system; United Health has done everything in its power to avoid revealing its true costs and its true payments to hospitals and physicians to the consumer. United Healthcare with its high paid administration (1.8 billion over 8 years for its CEO) has been the villain before many times in the past.

With the same breath they have declared that they want to befriend the physicians and patients

“UnitedHealthcare announced it would delay launching its program in New York, New Jersey and Connecticut after doctors complained and after New York Attorney General Andrew Cuomo threatened legal action.”

United Healthcare is gracious enough to delay launching the program in other places. It did not do anything to right the wrong in Washington D.C.

I think physicians should boycott United Healthcare. Another insurance company would get the point and step up and take business away from United Healthcare.

“One doctor fighting ratings systems is Seattle internist Michael Schiesser, who said his rating plummeted from excellent to the 12th percentile within a few months. He said initially Regence BlueShield, an insurer in the Northwest, ranked him in its top 90th percentile of doctors and awarded him a $5,000 check.”

“I couldn’t believe the extent to which they had botched the data,” he said.
“He said Regence faulted him for failing to control diabetes in patients who did not have the disease. He said he was docked points for not performing a Pap smear on a woman who had a hysterectomy. He added that his colleague was faulted for not performing a mammogram on a woman who had undergone a double mastectomy.”

This is not unusual. First of all, where is the due process? Has the State Board of insurance given this insurance company the authority to do this? This is where the State Board of Insurance must exercise its power. It is the government agency that grants insurance companies the license to sell insurance in the state and judge its tactics.
“

Last fall, Schiesser joined five other doctors and the Washington State Medical Association in suing Regence BlueShield, claiming defamation and deceptive business practices after the health plan told participating members that they no longer had access to about 500 doctors because the doctors did not meet the insurer’s quality and efficiency standards”.

Bravo to these physicians. Patients and employers should be right behind them in protesting.

“Regence spokesman Charlie Fleet said that because of the lawsuit, the company could not comment on the data issue. He did say, however, that the data were “provided from the physicians themselves.”

In my opinion this is typical babble from an insurance company spokesperson. The insurance company has overstepped the line and should have its license to sell insurance in the state rescinded.

“In December, Regence abandoned its plan.”

Essentially Regence admitted its error. Where is the State Board of insurance examiners penalty?

“Doctors critical of ratings systems say they are held accountable for whether patients exercise, take their medications or follow their prescribed regimens.”

Here in lies the charade and exposes the faulty evaluation system. Quality measurements were adopted because they are easier to measure than clinical outcomes. Quality measurements may be sensitive in picking up differences between physicians. Many studies show an overall poor correlation between such measurements and clinical outcomes. It is probable that the weak association is due to an inability and unwillingness to measure the many processes involved in medical care such as patient compliance and the physician patient relationships. These processes may have a positive or negative effect on the clinical outcome.
The criteria the insurance companies are using are faulty. Patients and physicians must demand a stop to this faulty profiling.

“Berkenwald, the Massachusetts internist, said he was pushed from Health New England’s top 10 percent of physicians into its second tier because several of his female patients did not get the mammograms or Pap smears he prescribed.”
“But Berkenwald received a top-tier rating by several other insurers participating in the state’s Clinical Performance Improvement Initiative because the health plans use different cut-points for determining who falls into which tier.”
“Disparate ratings can confuse patients and cause turbulence in group practices.”

The disparate ratings also cause anxiety and anger in both patients and physicians toward the insurance industry.

“Despite its flaws, proponents say the systems encourage much-needed quality and cost control.
Dolores Mitchell, executive director of the Massachusetts Group Insurance Commission, which launched its physician-rating program four years ago, said she’s heard doctors’ complaints about errors. But at $1 billion in annual spending on health care, she said, improving performance and efficiency is crucial.”

Someone should tell Dolores Mitchell this is not the way to do improve performance and efficiency.

“The data may not be perfect,” she said. “But they’re better than any data that we’ve had before.”

This kind of thinking will not repair a dysfunctional healthcare system.
It will only create more dysfunction while increasing the insurance industry’s bottom line.

Stanley Feld M.D.,FACP,MACE

l
On July 24, 2007 the Washington Post headlined an article entitled “Doctors Rated but Can’t Get a Second Opinion: Inaccurate Data About Physicians’ Performance Can Harm Reputations.”

In our dysfunctional healthcare system tensions are building to great heights between the insurance industry, patients and physicians. The appearance of this article makes me think that the insurance industry subconsciously has a death wish to completely destroy the Healthcare system. The insurance industry is totally insensitive to patients and physicians. Its only concern is its bottom line and seducing employers to buy its product.

The healthcare insurance industry truly believes it owns the healthcare system and can push anyone around. It can force people to do anything it wants. I do not believe this bullying can last.

“After 26 years of a successful medical practice, Alan Berkenwald took for granted that he had a good reputation. But last month he was told he didn’t measure up — by a new computerized rating system.
A patient said an insurance company had added $10 to the cost of seeing Berkenwald instead of other physicians in his western Massachusetts town because the system had demoted him to its Tier 2 for quality.

No one notified Dr Berkenwald about his demotion to a Tier 2 doctor. You will also note that none of the insurance executives have taken a cut in their salaries. However, they feel compelled to cut costs, to keep the health insurance premiums down.

“In the quest to control spiraling costs, insurance companies and employers are looking more closely than ever at how physicians perform, using computers, mountains of health claims and billing data and sophisticated software. Such data-driven surveillance offers the prospect of using incentives to steer patients to care that is both effective and sensibly priced.”

You might recall the surveillance Blue Cross Blue Shield used on Dr. Petak. They made him a second tier physician because he used a medication that helped patients become pregnant without the use of expensive invitro fertilization. The fact is Dr. Petak saved the insurance company tens of thousands of dollars. So much said for automatic surveillance.

Why can’t the health insurance industry learn to use some common sense? The answer is they do not have to.

“It also raises questions about the line between responsible oversight and outright meddling in the relationship between caregivers and their patients. And it shows how people such as Berkenwald are at risk of losing control of their reputations as corporations and other organizations mine electronic data to draw conclusions about them and post them online.”

This is especially true when the criteria they use to judge performance might be faulty and have nothing to do with that physician’s clinical outcomes. There should be some serious consequences to the healthcare insurance industry. The interesting thing is the power to regulate the healthcare insurance industry belongs to the individual states. The state insurance board gives permits to the healthcare insurance companies to sell insurance in each state. It would be interesting if we had some local leadership exert its authority.

“The trend is in its infancy, but such programs are already in more than 100 insurance industry markets or regions across the country, from entire states such as Massachusetts to metropolitan areas such as Los Angeles.”

If the insurance industry can get away with the insanity, why not? It will increase the healthcare insurance industry’s bottom line. It will also result in a reduced payout in fees to physicians. Worst of all it will result in a decrease in medical care to the patients.

” Supporters say the programs have slowed the rate of growth of insurance premiums by 3 to 6 percent in their first year.”

I would like to see the statistical evidence for this minimal decrease in insurance premium growth. I would like to see the absolute dollars saved. I would like to see the reduction in premium. I would like to see if insurance executives’ salaries have decreased also.

Arnold Milstein, chief physician for Mercer Health and Benefits, a health-care consulting firm based in New York, whose firm is analyzing data for the Massachusetts program that ranks physicians said:

“In every industry, consumers have a thirst for performance information, “People don’t want to go to a movie or buy a book or buy a car or go to a restaurant without some ability to assess value for dollar. What’s taking place here is inevitable.”

Dr. Milstein is gathering data for the insurance industry’s benefit and not for the patients’ benefit. The information gatherers do not even have the meaning of quality medical care defined accurately. These consulting companies also make multiple collection errors because of their lack of understanding of the therapeutic contract (patient-physician relationship) and the analysis of inaccurate information.

“Physicians who have been profiled, including those with top ratings, say that the data often contain errors and that doctors often lack the ability to correct them. The effort is more about cutting costs than raising quality, some say, adding that doctors could begin to “cherry pick” healthier patients whose problems are less costly to treat. Such systems fail to capture the intangibles of quality, such as a doctor who visits a dying patient at home, critics say.”

In my view this is absolutely the wrong way to go about fixing the healthcare system. It is the way to destroy and demoralize the physician work force. It is a way of depleting a talented pool of physicians developed through years training. It is a great way of producing a physician shortage. It is a way for the healthcare insurance industry to make the physician community never trust you and never want to cooperate with you. At this moment in history cooperation is essential.

This is the reason I have been advocating consumer driven healthcare. The healthcare insurance industry has little concern for our well being. Its concern is for its bottom line.

It is especially clear that the healthcare insurance companies do not understand the value of the therapeutic contract (patient-physician relationship). Physicians and physicians’ organizations would like to ignore all this noise. They have better work to do. Their work is taking care of patients who are sick. However, we can not ignore this insanity any longer.

The information about quality has to be collected accurately. If a physician is not practicing quality medicine he should be taught how to improve by his peers and not punished by a third party with an unusual agenda.

As I stated, quality is not defined by how many tests you do but by your clinical outcomes. A recent NEJM article reported the British healthcare system is going broke by rewarding quality improvement measures. Clinical outcomes have not improved significantly.

“Doctors are rated on standards of quality of care and cost efficiency. An internist, for example, gets higher ratings on quality if he puts his heart attack patients on beta blockers, a medicine that reduces the workload on the heart, or if diabetic patients are tested for blood-sugar control.”

Just imagine the worst physician in a community figuring out what tests would give him a high rating and increase his income. He does the required tests routinely whether the patient needs them or not. He misinterprets those tests to the detriment of the patient. Yet he is rated the best doctor in the town. It is like a bizarre Fellini movie

The healthcare insurance industry is doing absolutely the wrong thing to improve the healthcare system. It thinks it owns the healthcare system. Their consultants do not practice medicine. They believe they understand the principles of good medical care. They also believe they can measure quality medical care and penalize physicians who do not adhere to their rules. Unfortunately, they are wrong. Unfortunately, patients will suffer.

The only stakeholder that will fix this system will be patients and not the healthcare care insurers.

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Stanley Feld M.D., FACP,MACE

Question 1 – I, too, don’t like single payer. I don’t like single anything. Monopolies are bad, governmental or otherwise. But I believe we must get to true universal health care. How do we force the payers to do the right thing by the patients and doctors?

You can not force anyone to do anything. The effective method to create change is through motivation. I do not like single party payer either. The healthcare system needs a dose of innovative thinking. The healthcare system is way behind other business sectors in the use of information technology to create innovative and competitive systems of care. The two major stakeholders in the system are the patients and the physicians. All the other stakeholders should be facilitators for the patients’ and physicians’ needs. Presently, the insurance industry dominates the healthcare industry. The government pays for a good deal of our healthcare costs. If the government was wise, it would create an environment whereby consumers could own their healthcare dollar and drive their healthcare costs. Bureaucracies can not be successful. Both the government and the insurance industry have failed to control costs. If fact, due to escalating costs they have driven the consumer to become uninsured. Neither the government nor the insurance industry wants to give up control to the consumer. The excuse is the consumer is not smart enough and needs to be protected.

The insurance industry has also made grotesque profits because it controls the money, as well as access to care. It has taken advantage of the healthcare system at the expense of the patients. The insurance industry’s only interest is to maximize profit. If it was smart it would be trying to educate and motivate the consumer to promote innovation by the physicians. The insurance industry should provide incentive for patients to utilize medical care effectively and efficiently. The simplest way to do it is to let patients own and control their healthcare dollar.

If the government controlled the system with a single party payer we would have other troubles. We would have the usual cumbersome bureaucracy that we have in other areas of government. The cost of medical care is escalating partly because of the burden of bureaucracy and administrative costs. As the government is forced to reduce the increasing cost of care it is going to be forced to decrease access to care. The weakest link in the chain is the physicians. Physicians will continue to be blamed for the increasing costs. They will have reimbursement decreased even further. Patients will continue to have access to care restricted. The government seems unable to control hospital fees.

The solution should be to let patients make the decisions about their care with their own money. This is the beauty of my Ideal Medical Savings Account. Patients own the first $6,000 of the insurance premium. The insurance company can administer that money. It is the patient’s job to spend the money wisely. Consumers spend their salary on food and clothing themselves. Insurance for medical care should function as true insurance.

Wikipedia’s definition of insurance is:

Insurance, in law and economics, is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Insurer, in economics, is the company that sells the insurance. Insurance rate is a factor used to determine the amount, called the premium, to be charged for a certain amount of insurance coverage. Risk management, the practice of appraising and controlling risk, has evolved as a discrete field of study and practice.

The insurance industry obviously doesn’t want to give up the power over patients and physicians nor the power over excessive money they accumulate from the present forms of insurance. However, they have priced themselves out of business. Excessive premiums to large and small companies have led to the 46 million uninsured consumers. You may recall the salaries and bonuses healthcare insurance executives collect for creating so much profit for their company. They make most of the money restricting access to care, reducing physician and hospital reimbursement, and holding the float. Naturally, the insurance company retains all the excess monies.

An innovative business group with sufficient information technology infrastructure will figure out how to instantly adjudicate claims for the patients and help patients manage their $6000 deductible. If patients want to spend money stupidly they will not have the opportunity to accumulate money in their Medical Saving Account for retirement.

The government should not be thinking of creating another entitlement they can not manage. They should be figuring out how to teach the patients how to take care of their medical care needs and spend their money wisely on medical care. The government should subsidize patients who are retired and have paid into the system already. They should also subsidize patients would can not afford the high deductible insurance. If a patient spends the money wisely and avoids a complication of a chronic disease he should receive a bonus from his employer or the government. The bonus should be deposited into his Medical Savings Account.

Question 2 “It seems like the system we have now is all about saying no. Can we have an affordable system that is about saying yes?”

My answer to the question is yes. You will recall 90% of the money is spent on complications of chronic disease. Decrease the complication by 50% and you can save $900 billion dollar in a 2 trillion dollar system without saying no to anything. The patient has to be the one that makes the decision and not the insurance company. If you empower patients through education to take care of their chronic disease and give them the appropriate financial incentives they will act to spend their money wisely. Any money saved in the healthcare system presently belongs to the insurance company. It is no wonder the insurance industry restricts the access to care. Their reasoning is that if the patient develops the complication of a chronic disease after they are no longer insured by that company, the complication of that disease is the new insurance company’s problem and not theirs. Where is the motivation for the insurance company to spend money now to prevent complications later? The complications will not be their problem today. The patients get stuck with the complications of the chronic disease. The entire healthcare system is stuck with the bill.

Consumers driving the system will force physicians and hospitals to become price efficient in order to compete with other physicians and hospitals. Every other industry is becoming innovative and efficient through the use of information technology. This has occurred because the consumer has driven these industries to compete. If they do not, they will vanish. The Healthcare System can also make the adjustment if the consumer has a chance to drive the system.

Stanley Feld M.D.,FACP,MACE

The mechanism the facilitator stakeholders use to slow down improvement, in my opinion, in the healthcare system, is to do pilot studies on innovative ideas and improvements using faulty criteria in the context of the present dysfunctional healthcare system. The results are usually contradictory to the expected result, statistically flawed, and confusing. However, pilot studies generate another funding source for academic institutions which perform the studies.

A recent article in the Archives of Internal Medicine stated that the measurement of quality indicators were no better in clinics with Electronic Medical Records than in those clinics without an Electronic Medical Record. The data was collected between 2003 and 2004. I will review the flaw in this data in the future. However, a big flaw in the data is that quality indicators (frequency of specific testing for specific diseases and screening testing) are not a direct measurement of clinical outcomes or the financial costs to achieve the improved clinical outcomes. I covered this topic in detail in my blog on the Ideal Electronic Health Record.

In 2004, the United Kingdom invested $3.2 billion in a new program to reward general practitioners for the delivery of high-quality care defined as adherence to quality indicators. The authors examine longitudinal data on quality and report that the incentive program may have prompted a modest improvement in the quality of care for two of the three chronic conditions they studied.

It has been clear for many years that an improvement in the measurement of quality indicators does not mean an improvement in quality care. Improving the clinical outcomes by acting on the findings of the quality measurement is the meaning of improving quality of medical care. The execution of the findings is dependent on the patient’s adherence to appropriate therapy recommendations. The only way to improve quality and clinical outcomes in my opinion is to create a competitive environment among physicians driven by patients owning and retaining their healthcare dollars. This will lead to transparent pricing and drive innovation and cost efficiency.

Yet, the entire pay for performance movement is based on grading physicians on the basis of their quality indicator measurements. This is the reason I said P4P is another complicated mistake.

I understand the reason policy maker advocate P4P. It is because they believe they can easily quantitate the quality of medical care. They will discover as the British have that they will be spending more money without improving clinical outcomes. It is the patient/physician relationship that must drive quality care and improve clinical outcomes.

These interim pilot studies take years to complete. They do not help move medical care into the digital age. If anything it slows medical care down.

Consumers must demand legislation to level the playing field. They must make it clear that they are the primary stakeholders and should be the drivers of the system. It is vital for us to create a true consumer driven healthcare system with the patient and the physician being responsible for the execution of medical care. Consumer driven healthcare would permit consumers to drive the system. The government and the insurance industry have failed, as Regina Herzlinger has pointed out in Who Killed the Healthcare System.

Pilot studies of innovative ideas in our dysfunctional system cannot predict the outcome of these ideas in a new system. Our government can not continue to protect old systems that do not work. Health insurance should mean what insurance means after a certain point of risk. Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Only then could we see if these innovative ideas would work.

In the last couple of years the President and Medicare have called for change. Their requests have gone nowhere because facilitator stakeholders to not want to change a system that is to their advantage. The system must be changed to the patients’ advantage.
The changes required have to be enacted simultaneously because single point change will permit secondary adjustments by the facilitator stakeholders. These changes include:

• Pre tax insurance guaranteed for all.
• Community based rating for premium pricing with government oversight.
• Total price transparency of the lowest negotiated prices for all based on cost and not fiction. The hospitals, the physicians and the insurance companies must be required to comply. This is critical. It would generate a competitive marketplace and force stakeholder to be innovative and develop more cost efficient systems.
• There should be guaranteed insurance coverage for all (universal coverage) with government subsidies. The subsidies should be full or partial for the people who can not afford insurance. The Massachusetts model is going to fail because it is built in a non consumer driven system to the advantage of the insurance industry.

• There should be the option for the Ideal Medical Saving Account and not the contaminated Health Savings Accounts built in favor of the insurance industry. Patients must have incentive to control their healthcare dollar. They must be allowed to retained the money they do not spend in a trust account for their retirement. If the patient has a chronic illness and he maintains good clinical and financial outcomes he should receive a financial reward.

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A single party payer system would impose a new and inefficient bureaucracy that would be devastating to the incentives and innovations necessary to Repair the Healthcare system. Innovations and incentive in a competitive entrepreneurial environment is what America’s greatness is all about.

• An affordable Electronic Health Record must be available to all as described in the post the Ideal Electronic Health Record.

All of the above must be implemented at the same time for the new healthcare system to work. It will require strong and bold leadership. This bold leadership will only be precipitated by a very vocal demand by an informed public. In our evolving knowledge based economy this People Powercan be accomplished.

Stanley Feld M.D.,FACP,MACE

Now that you understand the Type 2 Diabetes Mellitus disease process and what you have to learn about your imaginary disease, the strategy for treatment should be simple to understand.

The goal is to decrease the increasing resistance to insulin as you age, gain weight, do less exercise or increase your stress. The blood sugar increases cause a further increase in insulin resistance. By decreasing insulin resistance the result is to decrease the burden on the pancreas to produce insulin. We have to eliminate the causes of insulin resistance, namely, weight gain, stress and the increasing blood sugar. Additionally, exercise increases the effective number of insulin receptors and decreases insulin resistance. If this strategy was simple to execute there would be much less need for the powerful medications developed over the last few years to decrease insulin resistance. A survey done by the American Association of Clinical Endocrinologists (AACE) of its members a few years ago showed that most Type 2 Diabetics were on at least 3 oral medications. The average cost per year of each medication is about $1700.00. If the patient was spending his own money and understood that weight loss, decrease in stress and increase in exercise could help restore insulin sensitivity and decrease blood sugars. The result would be that much of the medication costs could be decreased markedly in most patients. Patient motivation with the appropriate coordinated education about Type 2 Diabetes and the appropriate follow-up by the Diabetic Education Team (DET) would be high.

Another critical self management tool is home glucose monitoring. Patients can now monitor the effect exercise, weight loss, and stress reduction has on their blood sugar. They can also monitor the effect of the various medications on their blood sugars at various times of day. If patients understood how the various medications worked and learned how to spot problems they could make adjustment between visit to normalize the blood glucose level after email consultation with the physicians and their diabetes education center. However, this consultation time spent between visits should be compensated in order to motivate the physicians to expend the time and energy to set up and execute such a system. The new system has to be driven by the patient and his control over his healthcare dollar (Consumer Driven Healthcare).

I have outlined a system of care for Type 2 Diabetes Mellitus. I will review the power of chronic disease management in other chronic diseases.

If our society really wants to fix the healthcare system these various systems of care must be developed, promoted, and funded. The government, insurance industry, and health policy makers are starting to develop an interest in doing the right thing. However, this potentially means their losing power over the consumer and his ability to drive the system in a real market healthcare economy.