Stanley Feld M.D., FACP, MACE

The control of the healthcare system is dominated by the insurance industry, the government, hospital systems and pharmaceutical companies.

One of the reasons hospital systems bought physicians practices was to have control over ancillary services generated by the physicians’ intellectual property. These ancillary services are laboratory services, CT scans, MRI scans, cardiac catheterization labs and ECGs.

The business of medicine had become too complicated for most physicians. Physicians who sold their practices to hospital systems did not realize they could not make a living without the revenue from ancillary services. Physicians retreated to the safety of hospital guaranteed salaries without realizing they were giving away their intellectual property the only property they had to sell. Physicians reacted when they realized that the hospital systems were generating undo profit from their intellectual property. Physicians also realized that hospital systems were inefficient in operating some of the ancillary facilities. These services were more convenient for their patients in physicians’ offices. The result was inefficient care to their patients.

On the other hand, many hospital systems learned they could not make any money from physician productivity. The hospital systems guaranteed the physicians the salary they had generated before the practice buyout. The hospital systems are now giving the physicians back their practices. The hospital systems lost their cash buyout of the physicians’ practice. It would not be surprising to me that this loss was billed back to the patient in the form of cost of service. We cannot figure out the actual cost of services.

The focus of the hospital systems was changed from ownership to management of the back office duties such as billing, hiring, firing, and paying the rent. Hospital systems also demanded that the physicians used their hospital facilities.

Another round of physicians’ reaction is in the offering. Physicians are starting to realize that the hospital system is overcharging physicians for back office services. Hospital systems require physicians to use the hospital systems inpatient facilities.

The large physician groups now own the revenue generated by several ancillary services. They are benefiting from the use of their intellectual property. However, physicians are realizing they are not getting their fair share of the revenue they are generating. In many cases their practices are being overcharged for overhead, payroll, rent and administrative services. The thinking by hospital systems advisors was that younger physicians would not be as interested as older physicians are in how the business is handled. I think the hospital systems are going to be in for a big surprise. A sleeping giant is slowly awakening. Especially when the younger physicians are realizing that the hospital systems are under coding and under collecting for their physician services and not billing a professional fee for ancillary services. The result will be that physicians will demand they control their overhead and their billings. The problem for the hospital systems is that management of physicians’ offices was a nice profit center. With less inpatient services needed and the increase in brick and mortar investment over the last ten years, hospital systems are going to be in a cash flow bind.

The physicians’ goal is to practice the best medicine they can while earning a living consistent with the value of their intellectual property is worth. The level of mistrust that physicians have for hospital systems is simply going to intensify when they find out what is happening to them financially. The hospital system- physician relationship will shift from bad to worse.

Physicians’ control of their overhead, in my opinion, is good shift during the changes healthcare undergoing. In the changing environment toward consumer driven health care and the patients owning their healthcare dollar, the physicians controlling their own practice overhead, the result can be an enhanced relationship between the primary stakeholders the patients and the physicians. Competition for patients will create physician incentives to force physicians to become more efficient. Physicians will adopt EMR’s more rapidly in an attempt to increase the level of efficiency and service.

Competition will motivate physicians to increase quality and lower price. Focus factories will develop in Family Practice offices. New mechanisms for building healthcare teams for the creation of systems of care to prevent the complications of chronic disease will occur. The result will be a decrease in complications of chronic diseases. Prevention of chronic disease will also be increased because patient will demand preventative services. They will compensate physicians for the preventive care. I can envision physician being compensated telemedical communication systems to avoid frequent office visits and hospitalization. I can imagine an increased compliance with treatment and a demand for effective patient education when the patients understand that they own their healthcare dollar.

Presently, there is no insurance mechanism to compensate physicians for preventative care. I see a bright future for patients, physicians, the physician extenders and the secondary stakeholders. The losers will be the administrative waste and avoidable and expensive services rendered for the complications of chronic disease.

Stanley Feld M.D.,FACP,MACE

This entry might be a little over the top for many of my readers. However, it is an important entry for our understanding of how the medical profession is contributing to the dysfunction of the healthcare system.

There is much skepticism about the medical profession. I have avoided discussing my professions problems so far. The profession has created many of its problems. Our own colleagues have undermined our own credibility with the publication of flawed scientific articles that have resulted in uncertainty about medical treatments. This subversion decreases patients’ confidence in the medical community’s ability to treat patients’ problems effectively. Public sensationalizing by the media of the contradictory results of clinical research has undermined the patient physician relationship. The re-evaluation of clinical research results has led to contradictory conclusions since the beginning of modern medicine. The constant testing of results and hypothesis is a good thing. We have always been searching for the truth through more objective scientific information.

It seems to me that recently there has been a loose use of statistics in interpreting clinical research, leading to inaccurate conclusions. These conclusions are broadcast and publicized by the media as truth before the conclusions are carefully evaluated by the medical community. In our sound bite society the conclusion counts and not the facts.

I have concentrated on the problems the facilitator stakeholders impose on effective medical care in a dysfunctional healthcare system. It is appropriate to point out some of our intra-professional contributions to the dysfunction of the healthcare system.

Steven Nissen M.D. and Kath Wolski M.P.H. of Cleveland Clinic published an article, “The Effect of Rosiglitazone On The Risk Of Myocardial Infarction And Death From Cardiovascular Causes.” The New England Journal of Medicine published the article. The publication of this article, in my view, contributes to the dysfunction of our healthcare system. The article misrepresents evidence based medicine. Evidence based medicine has become the holy grail of medical practice. Evidence based medicine is gleaned from the published medical literature. It includes commentary and review of the evidence by experts in each field.

According to the Centre for Evidence-Based Medicine, “Evidence-based medicine is the conscientious, explicit and judicious use of current best evidence in making decisions about the care of individual patients.” The operative words are “use of current best evidence.”

There are three problems with Dr. Nissen’s paper. The design of the study is flawed. The collection of data is incorrect. The results derived from defective data are not statistically significant.

Marshell McLuhan pointed out that “The Media Is The Message” in his landmark book of 1967.

The NEJM has been criticized in the past for pre-releasing information to the press, before the medical community has a chance to evaluate the quality of the information. The medical literature judges have also made mistakes in evaluating data in the past. In my opinion, they have once again made a mistake with Dr. Nissen’s article. The public prejudgments are developed by media stories. The media broadcasts the results (sound bite) and not the facts. The media is the message!

The media loves to expose the deficiencies of the medical profession, the healthcare system and the Federal Drug Administration. Every federal agency is hobbled by bureaucracy. We all realize it. It is one of the reasons will mistrust putting the responsibility for our healthcare in the hands of government. However, sometimes the FDA is criticized unfairly. The unfair criticism receives a lot of media coverage even if the facts are incorrect.

Dr. Nissen and others have criticized the FDA for its inadequacy of evaluating new drugs in general and rosiglitazone in particular because of the results of his study. “The FDA considers demonstration of a sustained reduction in blood glucose levels with an acceptable safety profile adequate for approval of antidiabetic agents. However, the ultimate value of antidiabetic therapy is the reduction of the complications of diabetes, not improvement in a laboratory measure of glycemic control. After the failure of muraglitazar and the apparent increase in adverse cardiovascular outcomes with rosiglitazone, the use of blood glucose measurements as a surrogate end point in regulatory approval must be carefully reexamined,” Dr. Nissan writes.

I agree with Dr. Nissen. A surrogate measurement of a drugs effectiveness is not as precise as the measuring the direct outcome of namely decreasing the complications of Diabetes Mellitus. However, in the DCCT study of 1993the surrogate measurement of blood sugar control (HbA1c) has clearly demonstrated a reduction in the complication of diabetes mellitus. It is totally acceptable to use this information in subsequent studies.

Dr Nissen’s view about the FDA is shared by Psaty and Furberg, who write: “Ongoing trials using rosiglitazone may provide important new data, but for a drug approved in 1999, the delay in obtaining information about health outcomes has already been considerable.” They add that tens of millions of prescriptions for rosiglitazone have been written, and if the current findings represent a valid estimate of the risk of cardiovascular events, rosiglitazone represents a “major failure of the drug-use and drug-approval process in the United States.”

I do not believe that Dr. Nissen’s findings are an estimate of the risk of cardiovascular events with the use of rosiglitazone. Perhaps it is not a failure in the drug-use and drug approval process used by the FDA. It is in the lack of validity of the results of Dr. Nissans’ paper that should be criticized.

Dr. Steven Nissen’s recent paper promotes the distrust of the medical profession and its regulators. The medical profession did not have a chance to evaluate this evidence before it was prejudged in the media. Dr. Nissen has been on network and public television and radio multiple times. Sensationalism in clinical research only serves to decrease the confidence of the public for the value of clinical research.

1. The design of the study is flawed

The study subjects were derived from a meta-analysis. A meta-analysis is an analysis that combines all studies on a subject into one study. The goal is to derive a larger population than each individual study. The purpose of a meta-analysis is to see if an adverse event that is statistically significant is occurring that was not apparent in smaller studies.

The concept of meta-analysis was introduced to clinical medical research in 1992. Most of us never understood the value of meta-analysis in medicine. The design of the various studies combined usually do not have matching protocols. Dr. Nissen’s study combined studies with varied protocols. In fact, similar studies that had no adverse effects either from the placebo or treatment side were eliminated from his meta-analysis. The inclusion of these studies in the meta- analysis might have diluted the effect he was seeking making his results less statistically significant. His data should be reevaluated including these data.

2. The collection of data is incorrect.

Dr. Nissen pointed out the shortcomings of the meta-analysis.” They point out that this meta-analysis is limited by a lack of access to original source data, which would have enabled time-to-event analysis, and on a relatively small number of events (there were 86 MIs and 39 cardiovascular deaths in the rosiglitazone patients vs 72 MIs and 22 cardiovascular deaths in control patients). But they say that despite these limitations, patients and providers should consider the potential for serious adverse cardiac effects of treatment with rosiglitazone.”

I agree, but by his own statistical analysis cardiovascular deaths were not significant and myocardial infarction results were barely significant.

3. The results derived from defective data are not statistically significant.

In order for a result to be statistically significant the confidence interval should not cross one(1). In the analysis of cardiovascular death the confidence interval crossed 1. (C.I. 0.98-2.74). A p value of .06 is not significant. p value should be no greater than 0.05

The C.I. from the analysis of myocardial infarction almost touched 1. (C.I. 1.03-1.98). A p value of .03 is barely significant. Many statisticians believe a significant odd ratio must exceed 2 to be significant. The odds ratio for cardiovascular death was 1.64 and for myocardial infarction 1.43. Those odds ratio numbers are strange because the non significant finding of cardiovascular deaths odds ratio is closer to 2 and a greater trend toward significance, than the barely significant findings of myocardial infarction.

If Dr. Nissen did not remove the clinical trials that did not produce adverse effects in his meta-analysis, the total number of patients in his analysis would be increased and would probably have changed the myocardial infarction confidence interval so that it would cross 1 and p value above 0.05 making the result non significant.

All of the patients in the studies retained were poorly controlled diabetics with HbA1c levels above 8%. Normal should be 6% or below. A high HbA1c alone would increase the incidence of myocardial infarction and cardiovascular death. There is no indication of the distribution of the HbA1c control in the multiple populations. A criticism is that there are two many confounding variables in this studies that can result in an increase in myocardial infarction and cardiovascular death. These confounding variable are not examined independently among the studies. Focusing on one end point, the effect of rosiglitasone on myocardial infarction and death from myocardial infarction without consideration for varience of the other variables is unacceptable.

Rosiglitazone might cause an increase in myocardial infarction and cardiovascular death. However, Dr. Nissen’s paper did not demonstrate this relationship. The public and patients on rosiglitazone have be confused by being presented with the results without rigorous scientific critique of the study.

The confidence of the public in medicine has been shaken by the method of presentation of the results. There have been other effective medications that have suffered the same consequences. The consequences of prejudgment of the results without scientific comment have deprived the public of effective treatments in the past.

In my view this decreases the confidence the public has in the medical care system and adds to the dysfunction of the healthcare system.

Stanley Feld M.D.,FACP,MACE

The term healthcare provider, in my view, has been constructed to decrease the value of physicians. The goal is to decrease reimbursement and distribute reimbursement for medical care delivered by physicians to others. The physician is now in the same category as the nurse, nurse practitioner, physician assistant, pharmacist, physical therapist, occupational therapist and dietician, to name a few. We are all referred to as healthcare providers by secondary stakeholders.

Several states now permit these ancillary providers to bill independently of the physicians. I believe to treat chronic disease effectively it has to be done as a coordinated team approach with the patient as the most important person in the team and the team leader the medical doctor. Everyone on the team has to have the same focus. The goal is to provide a holistic approach to the patient’s illness and to enable patient’s to become professor of his disease. This is a focused factory. A focused factory team approach to chronic diseases will increase the quality of care given and decrease the cost. The members of the team, the nurses, nurse practitioners, physician assistants, pharmacists, physical therapists, occupational therapists and dieticians should be physician extenders not healthcare providers competing for the patient’s healthcare dollar. A multidisciplinary team approach is essential for the coordination of education and care for the patients with chronic disease. Contradictory instructions given by individual healthcare providers simply serve to confuse patients and not add value to their intensive self management.

The implications, as well as notions, are that these healthcare providers can be physician substitutes providing cheaper care than a physician controlled team. We are presently seeing this trend as Nurse Practitioners and Physician Assistants run Doc in the Boxes in pharmacies and supermarkets for private non medical corporations. The Doc in the Boxes are advertised as centers providing inexpensive, convenient, and rapid medical treatment.

All of the healthcare providers are very important to the healthcare system. However, from a responsibility for care as well as patient safety point of view, these healthcare providers should be called physician extenders and not have equally status to physicians. The compensation for these other healthcare providers should be billed through the physician’s office with physician having the responsibility for effective, safe and quality care. Physician extenders should not have stand alone practices.

These healthcare providers have been licensed by some states to do procedures, examinations and consultations. In the past these duties were the physician’s responsibility. I have doubts about the clinical judgment of these healthcare providers.

The “instant frog” story is appropriate. It takes two weeks to hatch a frog from a tadpole. If you put a tadpole in a petri dish and put thyroid hormone in the petri dish, you can produce something that looks like frog in thirty six hours. This analogy can be applied to healthcare providers who have not had the breath of education, experience, and time to develop the clinical judgment that physicians have had. Therefore it is unwise to equate an instant healthcare provider to a fully developed physician.

If these “Doc in the boxes survive, we as a society will be making a great mistake. As a society we have invested a great deal of money in developing our physician work force. Today, Family Practitioners are having a hard time surviving. They are not permitted to produce income generated from ancillary services for their intellectual property on the one hand, and are being challenged by healthcare providers who are compensated for private practices on the other hand.

We as a society do not realize it yet but we are about to destroy a precious resource for the sake of the corporate bottom line. If physicians are inefficient in the delivery of care, we ought to teach them how to deliver efficient care and not destroy them. If we do, we are destroying 6-8 years of graduate education and the clinical judgment developed in that process.

We need to rethink our present path.

Stanley Feld M.D.,FACP,MACE

The hospital systems and the insurance industry have archaic and unscientific methods of determining price. The combination of the methods of pricing and the excess cushion built into the price leads to the excessive profits, salaries to executives and excessive building and remodeling. I look at this as creating a perfect opportunity for creating a competitive environment on pricing between hospital systems and between hospital systems and physicians practices. It also is a perfect environment for insurance companies to compete with each other. The result would be lower premium prices. If one insurance company made a move to lower prices, increase efficiency and decrease consumer grief, the others would follow. The insurance industry has some leeway on pricing because of their excess profits. Naturally, hospital systems and insurance companies do not want to give up this profit advantage. This is the reason hospital systems and insurance companies have lobbyists in State Governments and in the Federal Government. When consumers are in charge of their healthcare dollar and can profit from its wise use, they will force the insurance industry to lower prices.

All that is need is to pass a few rules and regulations by the politicians in government to create this price competition. The rules would include present price transparency, reporting on the methods used to determine the prices for hospital services and the price of premium creation, as well as the patients’ access to this pricing mechanism. If the politicians in government had the courage to act on these suggestions the mess in the healthcare system could clear up very quickly.

The people and not the insurance industry should have control of their healthcare dollar. If the people use the control over their healthcare dollar wisely, the money saved would grow in a tax free trust account each year to be used at retirement. This concept is embodied in my ideal medical savings account. The insurance companies would adjudicate the claim. However now it would be done instantly decreasing administrative costs for the insurance companies, the hospital system and the physicians. They would continue to negotiate the best fees for the patient. If they did it poorly the people would move to another insurance company. They would receive the privilege of holding the insurance premium and the trust account money. They would provide pure insurance if an illness cost more than $6,000.

Community rated group insurance would be available to all with pre-tax dollars. People would can not afford insurance would be supplemented by the government. This form of insurance would also apply to Medicaid and Medicare. It would be universal healthcare in a consumer driven and controlled system rather than universal health care in a single party payer system.
Doing all this at once would force the hospital systems, the insurance industry and physician to be more efficient. It would accelerate the development of the ideal EMR and decrease money wasting inefficiency in the healthcare system.

The most important stakeholder in the healthcare system is the patient. Somehow, the patient has been converted from a person with an illness and needs medical care, to a person who is a potential financial asset to the facilitator stakeholders. It is not uncommon, in the halls of facilitator stakeholders to hear patients referred to as clients, lives and eyeballs. “The more lives you have in your healthcare system, the greater the revenue and the greater the profit.

Without patients there would not be a healthcare system. The conversion of patients to economic entities is partly a result of the advances in technology and partly the dysfunctional evolution of the healthcare system. CAT scans, MRI scans, and stress echocardiograms and others have served to make the patient a commodity. All these test procedures generate revenue. The organization performing the testing generates the revenue. If patients owned their healthcare dollar, prices for services were transparent, and physicians’ offices were able to compete with hospital systems for procedures that are presently not permitted in the physician offices, all the stakeholders would be driven to more accurate pricing and more efficient care. The price of care would drop. The Lasik procedure is a perfect example of prices dropping in a consumer driven competitive marketplace.

At the same time, the government and the insurance industry are complaining that the physician does not practice evidence based medicine. Patients ought to have a mammogram once a year, a colonoscopy every five years, and a bone mineral density every two years, to name a few preventative screening tests.

The reality is that the increased technology has lead to increased accuracy in early diagnosis and early treatment. The result is a decrease in complications of chronic disease. The complications of the disease absorb 90% of the healthcare dollar. The technology has increased the diagnostic skills of the physicians. However, with the restrictions imposed by the facilitator stakeholders to not allow the physicians to do the testing in the office, and the inefficiencies of getting a hospital system scheduled procedure prevents the physicians from consistently practicing evidence based medicine. The implication is if the physician was permitted to do the test in his office, the physician would over test. This implies physicians are crooks and will take advantage of the patient. Ninety eight percent of physicians aren’t crooks despite what Pete Stark (D-Cal) says. It is easy to stop that 2%. However, the inefficiency in the healthcare system does not permit the physician to give appropriate preventive care to the patient.

Cognitive services are essential to accurate diagnosis and treatment. Yet, the skills these cognitive services have been devalued in recent years. In fact, if payment for cognitive services was the only revenue a physician could generate he would not be able to pay his overhead. This is presently a crisis Family Practitioners are now facing. It seems obvious, that in order to increase ones revenue, one must do indicated ancillary procedures. The counter argument is the physician will be given the incentive to over test. If a test is done in the hospital systems the cost of the procedure is usually higher than when it is done as an office procedure. (remember Dr.David Westbrock’s example). Physician office testing would drive the hospital system prices down if the hospital system wanted to be competitive. It is in the vested interest of the hospital system not to permit a competitive environment. If purchasing of healthcare services was in the hands of the patient they could choice the provider and force a competitive environment.

Physicians have the privilege of helping patients who are ill get well. They also have the obligation to prevent disease. It is not only a privilege, it is an awesome responsibility. Physicians are medical doctors that provide medical care. Medicine is a princely profession. Physicians must be given to tools to provide efficient and effective care at an affordable price. The marketplace through patient control should decide the price. Hospital systems and insurance companies arbitrarily made up the price in the past. This has to stop.

Stanley Feld M.D., FACP, MACE

I have explained why the uninsured are billed the retail price by the hospital. The maximum discount the uninsured can negotiate and will receive is 20%, if they could determine the retail price before the service is performed.

Often the uninsured are billed by the hospitals 350% more than Medicare pays the hospitals.

Two thirds of the uninsured are uninsured because they can not obtain a health insurance policy. Many are between 50 and 65 year old and have lost their jobs. They are now self-employed. They are deemed a poor risk by the actuaries at insurance companies and do not qualify, by insurance company criteria, for health insurance. If they could get insurance they would be rated and charged a higher than usual premium. A premium they cannot afford. A concrete example is a premium of $25,000 per year in post tax dollars as opposed to $10,000 with pre-tax dollars for the same coverage in a group plan for the same age person.

The self employed individual pays for health insurance with after tax dollars. The group policy holder health insurance is paid for with pretax dollars. With present tax laws group insurance is discounted in real dollars 30%.

We have also seen that the insurance companies are required to insure all employees in a group health insurance plan no matter the risk or age of the person. The employee in a group plan cannot lose that insurance. A simple solution would be to qualify everyone for group health insurance whether they are in a group or not. In large groups the risk of illness is spread. The premiums can be lowered.

Despite the elimination of high risk patients from the health insurance pool the price of insurance and the price of hospital care is escalating beyond affordability of large corporate employers.

One can see defects in the system at a glance. If the 46.7 million uninsured were in the insurance pool, the risk would be distributed over a greater number of people and there would be more money in the system. The increased money in the system would decrease the pressure to increase prices by the insurance companies. Presently the insurance companies do not care to lower their prices. If the risk was spread and the cost to insure for illness was lowered, the insurance company might not want to pass the saving along to the customer. The customer could then shift to a health insurance company that was interested in passing along the cost savings and lowering their premium price. That company would increase the number of people in their insurance pool and would have a competitive advantage over the former company. This would set up the competitive environment I have been referring to a force companies to keep their premium pricing competitive.

In order to accomplish this, a law would be required to permit the self-employed to buy group insurance at group insurance rates with pre tax dollars. It would also require community rated prices for all and not the present individual rating system. The present system even lets the health insurance industry rate groups individually. The premium price would be level for all. Smaller companies would not be economically challenged by their adverse risk pool and could once again afford insurance for their employees. The simple insurance rule is to spread the risk you can reduce the cost to insure. Once the environment is created prices will fall and be affordable to all. There will be some who cannot truly afford the insurance. The government could not afford not to insure those people. The solution above would be market driven and would not require a new governmental bureaucracy and all the problems it entails.

Next time I will discuss why I think this logical solution has not been adopted and why hospital systems and health insurance companies have resisted this solution.

Stanley Feld M.D., FACP, MACE

Every year my brother Charlie with his two adult son’s Jon and Kenny and I with my two adult son’s Brad and Daniel go on a trip for two days. The purpose of the trip is to simply be with each other and relate to each other without wives or other distractions. The trip is always a wonderful bonding experience as well as intellectually stimulating. I believe we each learn something from each other every year.

In recent years we’ve gone to spring training baseball games. This year we all traveled to Boston for two days of Boston Red Sox baseball at legendary Fenway Park. The Boston Red Sox were playing the Atlanta Braves.

We picked the middle of May because spring time is supposed to be beautiful in Boston. The weather was miserable. It rained every minute we were in Boston. I now remember when I was an endocrine fellow at the Mass General Hospital in 1967-1969, the weather was miserable from October to the beginning of June.
The interleague game between the Boston Red Sox and the Atlanta (PKA Milwaukee, PKA Boston) Braves was rained out on Friday night. We compensated by simply staying at Abe and Moe’s Restaurant for three hours talking about our lives, philosophy and business.

We knew the teams would have to play both games on Saturday even if it continued to rain because the Braves would not be back in Boston the rest of the season.

Needless to say, it rained during both the day and night games on Saturday.
However, all the rain did not deter us from having a great time. We laughed, talked and ate endlessly. I recommend this kind of experience with siblings and your siblings’ children. The togetherness is both inspiring and therapeutic.

Next year’s trip will be to Chicago in May. Chicago Cubs will play the Chicago White Sox in interleague play. I assume it will be another cold and rainy weekend in May because it always seems to be cold and rainy in Chicago in May.

Stanley Feld M.D.,FACP,MACE

President Bush has stated that price transparency is essential for healthcare reform. Price opacity has been frustrating to the individual patient. Patients have not been able to find out the price of services they are buying from hospitals before they have the service completed.

This is especially significant for 46.7 million uninsured Americans. Recently, there has been a series of articles exposing the fact that the uninsured are required to pay at least two and one half times the fees that the insured pay.

We have seen Denise’s frustration. She is an uninsured patient. She wrote an appeal for price transparency to Kinky Friedman the Jewish Cowboy Humorist who was running for Governor of Texas.

We have also seen that hospital systems have proudly declared that they have published their prices on the web in the name of Price Transparency. I have been able to find information for hospitals in Wisconsin and Texas. You can find the retail price for an illness’ DRG and the DRG range of prices for hospitals in the area. You can also study the discounts the hospital system gives to Medicare and a basket of insurance companies. Additionally, the hospital systems’ patient mix is published. This is the hospital industry’s definition of price transparency. The uninsured cannot negotiate the price from this published data.

A few weeks ago I was at a lecture given by the CEO of a large hospital system. He was very proud of the fact that his system published this price transparency information. I asked “If I was one of the 46.7 million uninsured, could I successfully negotiate the price his system accepts from Medicare?” The first answer was an answer to a different question. The second answer to the same question was,“No.” I could not negotiate for Medicare’s discount. I could get a certain discount depending on my financial status. I asked, “If I was a self employed consultant earning a good living could I get a discount?” He said, “The maximum discount I could negotiate would be 20% off the retail price.” I then said, “If I am not able to negotiate a price, what good is publishing your prices?”

The California Hospital Association’s defense of their fees charged by hospital systems is lame at best. “They claim the studies quoted are old from 2004.” My guess is from my small sample the results would be even worse in 2007.

If you have health insurance you would not care about this price transparency discussion. You would think your health insurance company is going to take care of your prices and provide adequate coverage. Today I got a note from a nurse practitioner stating that medical insurance coverage is a racket. The California Hospital Association’s reply was;

“There is no relationship between what is charged, the actual cost of care and what hospitals get reimbursed,” a hospital association spokesperson said. “But we are doing our share. It is unfair to expect hospitals to provide care and also fix the system.”

“Why hospitals have full price rates to begin with is the result of a Byzantine pricing system that is as much a result of the country’s broken healthcare system as the hospitals’ billing practices, said Emerson of the California Hospital Assn. Hospitals in large part have borne the brunt of caring for the country’s uninsured population with uncompensated care in their emergency rooms and by writing off what uninsured patients are unable to pay.”.

“If you’re one of the growing numbers of Americans without health insurance, you are billed top dollar for hospital care.”

“Now, for the first time, a study purports to show just how costly that is — although hospital groups immediately took issue with the findings.”

“Uninsured patients on average are billed 2 1/2 times more than what the insured are billed through their health plans, and more than three times what is billed to patients through Medicare, according to the study appearing today in the journal Health Affairs.”

“In effect, the uninsured are billed at full price, while health plans and Medicare receive deep discounts.”

“Hospitals might charge $12,500 for an appendectomy, for example, but collect only $5,000 from a health insurance plan. Members of the plan actually pay a lot less, through nominal co-pays or deductibles.”

I bet Medicare reimbursement for an appendectomy is less than $5,000. The hospital has to accept the payment. Hospitals determine their retail prices by price shifting as a result of the Medicare discount. The brunt of the price shifting is borne by the uninsured.

“Health plans can negotiate such discounts because they can direct a large number of patients to certain hospitals by making them part of their provider network.”

“Uninsured patients do not have such leverage and may face full hospital prices.”

Why can’t we set up a system where the uninsured can buy insurance with pretax dollars and receive the same negotiated discounts health insurance plans receive? Why couldn’t we subsidize the uninsured who truly can not afford to buy health insurance? Doing this would level playing field for all.

“As a consequence, uninsured patients who are billed full prices are left with exorbitant hospital bills that are impossible to pay, said Gerard F. Anderson, author of the study and a healthcare researcher at Johns Hopkins University”.

“Hospitals shouldn’t be charging three times” Medicare rates, Anderson said, “especially from poor people who are uninsured.”

This is the crux of the problem. Hospitals have multiple prices. The price varies depending on their need to compete for patients or the patients’ insurance plan. They have to accept Medicare by law. The government sets the price. The 46.7 million uninsured do not have this negotiating power.

Think about it. Why should the hospital want to negotiate price? All over the country aren’t hospitals overbuilding with their new found profits. They are going to need patients to fill their buildings. They will have to become more efficient and provide better prices at better quality, if they want to pay their overhead. This will happen only if the patients control their health care dollars. Remember hospitals are tax exempt. They could lose this status if the government had the guts to pass the appropriate law and enforced hospital non compliance.

“According to the Kaiser Family Foundation, a research institute, about 15% of the nation’s 45 million uninsured earn above 350% of the federal poverty income level, meaning they make too much to qualify for hospital discounts in many cases. But they are also too poor to afford health insurance.”

“The solution is for people to be covered under health insurance,” said Anthony Wright, executive director of Health Access California, a consumer advocacy group.

Anthony Wright’s concept is a simplistic view leading to the simplistic concept of universal healthcare. His views, as well as some of our politicians’ views, is that universal healthcare will fix everything. The universal healthcare concept has been disputed. In my opinion universal healthcare can not work. The patients have to have incentive to be responsible for their healthcare and healthcare costs in order for a system to work. We must empower the people to make the stakeholders compete for their business on price and quality.

A few weeks ago John Goodman proposed a brilliant idea in answer to a question about his Wall Street Journal article. He said “Suppose we passed a law tomorrow prohibiting all insurance companies (including Medicare and Medicaid) from paying any medical bills less than $5,000. What would happen? The medical marketplace would transform almost overnight.”

It would be transformed from a demand side healthcare economy system to a supply side healthcare economy system. Patients would shop for the best quality and the best price just like they shop for cars, TV’s and clothing. Hospitals and Physicians would be force to be more efficient, increase quality and be more price efficient.

“(Just thinking about it makes you wonder why we haven’t done this already?)”

My answer to the question is that the facilitator stakeholders are afraid that they will lose control our healthcare dollar. We, the people, would be in charge of our healthcare dollar. We would force all the waste out of the system, waste that the facilitator stakeholders profit from. The waste that lets the CEO’s of hospital systems justify their million dollar plus salaries and the healthcare plans CEO is their billion dollar compensation package. At the same time the healthcare system is at the verge of bankruptcy.

If the waste was eliminated and a competitive system was instituted, innovative systems would be developed to reduce the price and increase the quality of medical care. The people would be responsible for quality medical care at competitive prices because they would own their healthcare dollar.

Hasn’t Wal-Mart’s innovative $4 a month generic drug price begun to establish such a system? The answer is “Yes.”

Stanley Feld M.D.,FACP,MACE

We could look in many areas to see how they result in unintentional perverse outcomes. The outcomes affect the health of the nation and our healthcare costs. One area of unintentional consequences is the creation of toxic waste from obsolete technical hardware.

We are becoming increasingly aware of the dangers of electronic device waste. There are millions of outdated cell phones and computer equipment disposed of each year. Electronic waste or “e-waste” is the fastest growing waste stream in the world, with 3.96 billion pounds of consumer e-waste discarded in the US alone in 2000. To make matters worse, e-waste is also highly toxic. According to US EPA, e-waste is the source of some 70% of heavy metals in US landfills. The volume of computers expected to become obsolete over the coming decade contain at least 1 billion pounds of lead, 1.9 billion pounds of cadmium and 400,000 pounds of mercury. Often dumped in landfills or burned in incinerators, these materials from computers and other electronics can be released to the environment, creating a massive public health hazard. Lead and mercury do not disappear and end up in our rivers and lakes. The mercury and cadmium affect the food chain and ultimately humans.

Chris Jordan’s large-scale color photographs portray the detritus of American consumption. Gaining access to some of the country’s largest industrial waste facilities, Jordan photographs the refuse of consumer culture (e.g., diodes, cell phone chargers, cigarette butts, circuit boards) on an immense scale. Spanning up to ten feet wide, Jordan’s prints are at once abstract and detailed. This is where creative innovation and recycling would be very important to the future health of our children and grandchildren.
An easy thing to do is to require businesses to recycle all the lead, mercury and cadmium. This would decrease the need to produce more lead, mercury and cadmium. It would not only decrease the pollution to the environment it would preserve our natural resources.
http://www.healthleadersmedia.com/technology/viewcontent/89322.html

We are harming our health while having no idea of the impact to the healthcare system costs. Shouldn’t someone take a leadership position and solve this problem? EPA means Environmental Protection Agency. We need some protection.

If we were able to decrease the complication rate of chronic diseases by 50% we would be saving at least $115 billion dollars in healthcare costs. If we were able to prevent chronic disease the savings would be at least twice that amount. The billions saved would start adding up. However, the industries and subsequent jobs created to service this waste are threatened. They will try to do everything they can to prevent their services from being eliminated. The cost savings would lead to a decrease in the price of insurance. The uninsured could afford to purchase medical insurance.

If we want to do something to increase the health of the nation and decrease the cost of the healthcare system we will have to work very hard as individuals to eradicate these perverse outcomes. There are strong economic reasons that the harmful actions were instituted. There are strong vested interest resistance against any drastic change.

The only way we have seen change occur is by individuals being proactive. We must make our wishes clear to the politicians and policy makers. It can be done. In Texas, we have stopped the ‘dirty coal plants’ for the moment. We are in the process of stopping the governor from giving Texas back to Spain after fighting hard for Texas independence in 1848. The Trans Texas Corridor consists of an 8000 miles by one half a mile wide of toll road. The 8000 mile by one half mile wide land will be confiscated from Texans for a road. Spanish investors will get the contract to make policy. The Spanish investors only have to put 20% down. The remaining funding will come from the Texas retirement funds. The land use including restaurant, hotels, and gas stations will be by Spanish investing. Governor Perry’s policies have frozen out all Texas companies from bidding on the road. Governor Perry has refused to listen to the protests of the Texas farmers losing their land.

The Texas legislature finally had the courage to present bills to stop the governor after the peoples’ protest. Presently, the governor has threatened to veto the legislature’s bills. The people have to remount their protest to overcome Governor Perry’s veto.

Many people in large cities have no idea of what is going on. It took a husband and wife (farmers and working people) to set up a web site and network the people in Texas to protest. Linda and David Stall are a husband and wife team who made it clear to me that in this internet era ordinary people have the power to turn things around in our complex and opaque political society in which deals are made daily that do not represent the interests of the people.

We have to follow the Stall’s example in order to expose these perverse and unwanted outcomes affecting our health to the public. The first step is public awareness of the possible affects and then help the public demand that the problem be solved.

In my last blog I did not link the reference to Newt Gingrich turning green. I apologize.