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Harry and Louise Are Coming Back: Insurers Planning on Double-Crossing Obama

May 23, 2009
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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 Stanley Feld M.D.,FACP,MACE

 One week after President Obama announced that the nation's health insurance
lobby pledged to reduce healthcare costs by $2 trillion in ten years, Blue
Cross Blue Shield of North Carolina is putting the finishing touches on a public
message campaign aimed at killing a key plank in the Presidents reform
platform.

“Mr.
Obama had told the health care executives, “you’ve made a commitment; we expect
you to keep it.”

When the healthcare insurance lobby realized the trap it fell into it
immediately went to work to defend its control over the healthcare dollar. It is
going to roll out Harry and Louise as it did in 1993. I do not think it will
work. We are living in different times with different media tools.

“From a distance
everything Barack Obama says sounds great. The events of the last eight
years have created cynicism and despair. We are a nation thirsty for hope to
solve our many problems.”

The healthcare insurance industry is going to try to destroy President
Obama’s “National Health Insurance Exchange”. If congress
passes the National Health Insurance Exchange it will lead to a single party
payer system. The government as the single party payer is unsustainable.

“As part of what it calls an "informational website," the company has
hired an outside PR company to make a series of videos sounding the alarm about
a government-sponsored health insurance option, known as the public
plan.’

The industry argues that creating a public insurance program will undermine
the marketplace and eventually lead to a single-payer style system.

Somehow, this isn't surprising. The health insurance industry has showed it
is not serious about controlling costs by
backing away from the promise they made to President Obama.

Now, it wants to eliminate the public health insurance option. The
public insurance option would provide an option for people who cannot afford buy
private insurance because of the healthcare insurance industry’s
restrictions.

“The public
health insurance option is a key provision in President Obama's plan to help
cover all of us. It would finally give everyone the choice between
keeping our current insurance or switching to a new, high-quality public
plan. And under a public health insurance plan our premiums wouldn't
subsidize CEO salaries or stockholder profits we'd all save a lot on
health care costs.”

There are basic problems with private healthcare insurance. Its premiums are
a very rough calculation with large profits built in. The industry has reduced
provider reimbursement and restricted access to care while raising premium and
maintaining grotesque administrative fees. The process is opaque to all.

The
government will do the same as a single party payer because it cannot afford the
program.

President
Obama’s thinking on cost savings is defective. The government outsources the
administrative services of its present government healthcare programs Medicare
and Medicaid to these very same healthcare insurance companies. The healthcare
insurance companies do the same thing to the government. Its providers
(physicians and hospitals) and consumers (patients) will experience the same
reductions and rationing of care. The program will fail just as the
Massachusetts program has failed to be affordable to the state. A systemic
change in the healthcare systems payment structure must occur in favor of
patients and physicians.

“If we had the choice of a public plan, private insurers would have to
lower rates and improve quality to compete, so they're dead set
against it.”

The crafting of a campaign by Blue Cross Blue Shield of North Carolina is the
first of many campaigns we will see in the coming months in an attempt to turn
public sentiment against the “National
Health Insurance Exchange.”

President Obama’s insurance exchange is another way of expanding the Medicare
program. His plan is to arrive at a single party payer through the back door
while promising to maintain the private insurance option. It is Hillary
Clinton’s healthcare plan of 1993 all over again. Nobody asked the practicing
physicians for solutions. Physicians’ representing associations have not done of
very good job of articulating solutions.

The
healthcare insurance industry is not looking to protect its customers
(consumers). It is looking to control the healthcare dollars and protect its
profits. However they have cooked the goose that laid their golden eggs by
abusing consumers, employers and physicians. Harry and Louise will not
work.

Consumers are frustrated and angry. They do not trust government or the
healthcare insurance industry. They are looking for a creative solution.

The new media, the internet and blogs provide a chance for consumers to
express themselves.

“ Obama
will backtrack on this one, too! I don't have any hope that America will join
the 20th century to become a "progressive" democracy. We are an oligarchy and it
will stay that way. Just look how we elect people for office. Millions raised,
millions disappearing in someone's pocket. Money rules! ”

Consumers, it is time we drove the healthcare system because our surrogates
have let us down.  

“Not surprised at all by this. The health insurance companies have had an
unbelievable advantage, they can do anything they want. The only thing they need
to do is keep Congress happy with lobbyists because Congress is not their
customer, they have their own insurance paid by you and I. It's gloves off time
on health reform. These guys will pull no punches, they are fighting for their
yachts. While we lose insurance if we file a claim.”

It is time for consumers to demand control of their healthcare dollar. It is
time they have incentives to be responsible for their own health and be rewarded
for staying healthy. My
ideal medical savings account either funded by employers if the consumer is
employed or funded by the government with insurance for all is the solution that
must be demanded.

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

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President Obama’s Healthcare Reform Trick Play

May 17, 2009
inDisinformation and the healthcare system, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

Healthcare policy definitions are easy to confuse. I am an advocate for universal healthcare coverage. I am not an advocate for a single party payer. I believe the only way to be successful in repairing the healthcare system is to remove control of the healthcare dollar from the healthcare insurance industry. Consumers must be in control of their health care dollars. The ideal Medical Savings account can motivate patients to be responsible for their health.

Patients with chronic disease must be motivated to control their chronic disease. If they are motivated to control their disease healthcare costs would decrease. Using the ideal medical savings account a patient with diabetes for example would be expected to spend $4000 dollars a year. It they controlled their disease well and avoided hospitalization their employer or the government could afford to provide a bonus. If they controlled their disease and avoided hospitalization they would have $2000 to put in a retirement account. They could be eligible for an additional $2000 bonus. The result is a savings of $4000 into their retirement account. Patient responsibility and motivation are the only way we have a chance to Repair the Healthcare System.

President Obama healthcare plan is going to make patients more dependent on government and less responsible for their care and choices. In fact choice will be rationed. His allies in the single party payer camp are complaining that he has “caved” in to hospitals and healthcare insurance companies.

They claim he was elected to install a single party payer system. They ignore the point that the government cannot afford to pay for the Medicare single party payer system much less universal coverage for the entire population as the single party payer.

The function of the government should be to make appropriate rules to align the incentives of all the stakeholders in the healthcare system. President Obama is confusing everyone with his position on healthcare reform in order to decrease resistance to his plan. My guess is he is doing it intentionally.

“Although Barack Obama was elected on a health care reform platform, his version ignores single payer. Nor is single payer advocated by his allies in the well-funded coalition called Health Care for America Now, composed of MoveOn, USAction, ACORN, Americans United for Change, the unions SEIU and UFCW and other liberal heavy hitters.”

President Obama is a clever politician. He understands that it would be political suicide to directly advocate a single party payer system. The American public wants choice. They do not want to have healthcare rationed. The American public understands the government cannot afford a single party payer system for all. The public outrage would dominate the debate. His healthcare plan is designed to arrive at a single party payer system by default.

The advocates of a single party payer do not understand the subtlety of President Obama’s positioning in the healthcare reform debate. .

“Journalist Russell Mokhiber, founder of the new group Single Payer Action, notes that no advocate of a single payer system was invited to the recent White House summit on health care reform. Only protests by Progressive Democrats of America and others won an invitation for Congressman John Conyers, sponsor of the United States National Health Care Act: H.R.676.”

The advocates of single party payer system are now attacking President Obama. They are accusing him of caving in to the demand of powerful vested interests.

“Mokhiber quotes Dr. David Himmelstein of Physicians for a National Health Program: “The President once acknowledged that single payer reform was the best option, but now he’s caving in to corporate health care interests and completely shutting out advocates of single payer reform," even though "the majority of Americans favor single payer, and it’s the most popular reform option among doctors and health economists."

This is political spin. President Obama is not caving into anyone. The majority of Americans are do not want rationing of health care that usually follows the high cost of a single party payer by government that exists in other western countries.

The President knows the best way to achieve a single party payer system. His plan is to get there by default.

The Obama healthcare reform plan is create a National Health Insurance Exchange to help individuals who wish to purchase a private insurance plan. The Exchange will act as a watchdog group and help reform the private insurance market by creating rules and standards for participating insurance plans to ensure fairness and to make individual coverage more affordable and accessible.

I believe his National Health Insurance Exchange will drive the private insurance companies out of the healthcare insurance business. This might not be a half bad idea since the healthcare insurance industry controls healthcare cost and earns a grotesque amount of money.

It could change the healthcare insurance industry but I doubt it. It should become a 6% broker as the administrative service organization instead of 15% broker in a private insurance system. However there is no price transparency. In reality the government pays 18% for Medicare administrative services. President Obama healthcare reform proposals will not repair this abuse. Nothing will change. The government will restrict access and ration healthcare.

Watch out.

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

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Consumer Driven Healthcare Plans Trickle

March 11, 2009
inMedicaid, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust, Universal Healthcare
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Stanley Feld M.D.,FACP,MACE

 

As the healthcare debate heats up the meaning of consumer driven healthcare (CDHC) needs repeating. The true meaning of CDHC has been bastardized by the healthcare insurance industry as represented by Health Savings Accounts (HSA).

The healthcare insurance industry feared that if Medical Savings Accounts dominated it would lose control of the initial healthcare premium dollars. The result would be a decrease in profit and an increase in price competition and real price transparency.

The reality would be America would have universal healthcare in a more efficient healthcare system. The system would be more efficient because it would be driven by the consumer for their benefit and not a third party payer. A more efficient system will maintain healthcare insurance industry’s profit while permitting a decrease in healthcare system costs.

“A lack of consumer understanding has contributed to the glacial growth of consumer-driven plans. Can better information from health plans help CDHPs take hold?”

HSAs place limits on consumers’ incentives. All of the healthcare premium dollars are eventually paid to the healthcare insurance industry.

Our economic recession along with increasing unemployment have set the stage for consumers to accept any help government will provide. Enter a single party payer and all its problems. Since Medicare and Medicaid have proven to be unsustainable, it is foolish to throw money at a failing system. It is time to revitalize the system.

Just the opposite should be occurring. CDHC should be promoted and not be marginalized. President Obama’s universal healthcare with a single party payer system marginalizes CDHPs. The route he is taking to achieve everyone’s goals and will not repair the healthcare system.

“The idea behind consumer-driven health plans is to transform members into healthcare consumers through education and place more responsibility on the individual.”

Health Saving Accounts (HSA) do little to encourage patient responsibility or make patients informed consumers. HSA were a political compromise designed by the healthcare insurance industry. The resulting plan gutted the intent and effect of the CDHC movement.

“ Studies show that the percentage of Americans insured in CDHPs is still in the single digits, largely for two reasons: Consumers simply don’t understand the tax-free savings accounts that are connected to CDHPs, and few health plans are providing cost and quality information to allow consumers to compare doctors, hospitals, and treatment options.”

Wrong!

Consumers do not see a financial advantage of the HSA because there are none. The money has to be used to pay present deductibles and future deductibles. There is no reason the future deductable will not be increased reducing the present value of the money in their health savings account. The healthcare insurance industry wants health savings accounts to fail. It feels its margins are presently excellent and does not need a change.

“More than one-quarter those respondents said that HSAs are difficult to open/manage, or too complicated, or they simply didn’t understand the accounts.”

Consumer driven healthcare is the only thing that can repair the healthcare system. It would take control out of the healthcare insurance industry’s hands. The route to take is the ideal medical saving accounts.

Healthcare insurance would convert to real at risk insurance. Consumer would own and control their healthcare dollar. The government could teach the consumer to use the healthcare dollar wisely. The government could provide clear price and quality transparency. It would force all the secondary stakeholders to compete for the consumers’ healthcare dollar. This competition would force an increase in efficiency and decrease in administrative waste.

The government should act as the facilitator for the competition. The time has come for politicians to do something for consumers and not for secondary stakeholders.

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Our Sound Bite Society: The Media Is The Message

March 4, 2009
inUncategorized
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Stanley Feld M.D.,FACP,MACE

 

America’s present healthcare crisis is neither a Democratic nor a Republican issue. It is an American issue. It can be solved logically and swiftly using common sense. Let the American consumers control their healthcare dollars. Provide consumers with financial incentives for wise healthcare purchases and education for good health maintenance to prevent the onset of a chronic disease.

President Obama’s healthcare team is setting up a healthcare system where the government will make the healthcare choices for Americans. Ultimately government will ration care.

Daily, Americans are overwhelmed by bad news sound bites. For years we have heard that our healthcare system is broken. It is broken because the government has broken it. Only 20% of the people are sick at any one time. The other 80% do not think there is a problem with the healthcare system. In the last 25 years most Americans have heard of or experience horror stories about the dysfunctional healthcare system. The goal should be to repair the problems and not impose another dysfunctional healthcare system on us.

First, it was HMO’s and the restrictions of access to care. Then, it was Managed Care. Managed Care turned out to be managed costs and restrictions on access to care. Then, it was the ever increasing healthcare insurance premiums. Now, it will be the government‘s experiment with a single party payer system. An experiment that is destined to fail.

The Bush administration did nothing about repairing the healthcare system. Correction. Everything President Bush tried to do the congress rejected. The healthcare insurance industry and its executives made grotesques profits while restricting access to medical care and decreasing physician reimbursement.

Medicare and Medicaid’s costs have continued to rise. The healthcare insurance industry controls Medicare’s dollars. The Bush administration did nothing to stop it. The Bush administration recognized that bureaucratic entitlements would destroy our economy. The administration tried to get rid of the Medicare entitlement by providing a bonus to the healthcare insurance industry for the takeover of Medicare with Medicare Advantage and Medicare Part D. The cost to seniors and the profit to the healthcare insurance industry has been huge.

Neither Republicans nor Democrats in congress have done anything logical to fix the healthcare system. The executive and legislative branches have only generated greater mistrust among all the stakeholders in the healthcare system.

Congress knows the increasing Medicare costs are unsustainable. The Congressional Budget Office predicts a 100 TRILLION dollars per year deficit for Medicare alone in 50 years.

Why would a responsible member of congress or the executive branch want to increase an entitlement that does not work to included the entire population?

Today’s sound bites have frightened most of the population. Americans are anxious to be rescued by anything that sounds good. All that is needed is a well crafted public relations campaign of sound bites promising salvation.

Liberal Democrats have put together such a public relations campaign. President Obama has captured the lead to be society’s savior. It does not matter whether his proposals are logical or if they will work. It sounds good. America is ready to go for it.

Republicans are feeling overwhelmed. They intuitively understand that a government controlled single party payer system will not work. Massive government programs have not worked effectively in the past. Why should they work now? Consumers should be empowered to make their own decisions. Government should not make decisions for them.

An organization call the “Leadership Conference for Guaranteed Healthcare , the national single pay alliance” has crafted such a public relationship program. They have cobbled together a group of social networks to express the anger and fears felt by the American public. Their sound bites are compelling.

President Obama will play off these social networks to force his change in the name of goodness and justice for all. It is Tom Daschle’s doctrine. Most of the proposals will fail. They will fail not because they are unjust. They will fail because the route to achieve them is wrong. The costs will be unmanageable as we have seen in the Massachusetts experiment..

The sound bites are indeed compelling:

  1. Everybody In, Nobody Out. Universal means access to health care for everyone, period.
  2. Portability. If you are unemployed, or lose or change jobs, your health coverage stays with you.
  3. Uniform Benefits. No Cadillac plans for the wealthy and Pinto plans for everyone else, with high deductibles, limited services, caps on payments for care, and no protection in the event of a catastrophe. One level of comprehensive care for everyone, regardless of the size of your wallet.
  4. Prevention. By removing financial roadblocks, a universal health system encourages preventive care that lowers an individual’s ultimate cost and pain and suffering when problems are neglected and societal cost in the over-utilization of emergency rooms or the spread of communicable diseases.
  5. Choice. Most private insurance restricts your choice of providers and hospitals. Under the U.S. National Health Insurance Act, patients have a choice, and the provider is assured a fair payment.
  6. No Interference with Care. Caregivers and patients regain their autonomy to decide what’s best for a patient’s health, not what’s dictated by the billing department. No denial of coverage for pre-existing conditions or cancellation of policies for "unreported" minor health problems.
  7. Reducing Waste. One third of every private health insurance dollar goes for paperwork and profits, compared to about 3% under Medicare, the federal government’s universal system for senior citizen healthcare.
  8. Cost Savings. A guaranteed health care system can produce the cost savings needed to cover everyone, largely by using existing resources without the waste. Taiwan, shifting from a U.S. private health care model, adopted a similar system in 1995, boosting health coverage from 57% to 97% with little increase in overall health care spending.
  9. Common Sense Budgeting. The public system sets fair reimbursements applied equally to all providers, private and public, while assuring that appropriate health care is delivered, and uses its
    clout to negotiate volume discounts for prescription drugs and medical
    equipment.
  10. Public Oversight. The public sets the policies and administers the system, not high priced CEOs meeting in private and making decisions based on their company’s stock performance needs.

Who can argue with any of these points? The major question is can a government bureaucracy administer this system effectively without impinging on citizens’ choices, rights and freedoms.

Is this the solution to the high incidence of chronic disease and the dysfunctional healthcare system?

My answer is no. Americans are being duped once more by cool sound bites.

The Alliance has put together interesting groups. They have used the internet to leverage the Alliance. They have used the same technique that President Obama used to become President. They have formed giant social networks and put them together. President Obama can easily play off this coalition as evidence for the need by the public for a single party payer system.

The social networks and President Obama have outflanked common sense. They have created a false hope and it will fail to repair the healthcare system. .

Leadership is needed to formulate a common sense strategy to solve the healthcare system’s dysfunction for all American at every socioeconomic level. Neither the Democrats or the Republicans have such a plan.

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

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A New Study: Massachusetts Health Reform Has Failed

February 25, 2009
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests
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 Stanley Feld M.D., FACP,MACE

 Physicians for a National Health Program have been advocates of a single party payer for a while. Public Citizen has been an advocate for a longer period of time. Sidney Wolfe M.D. is the healthcare director for Public Citizen. I have had difficulty agreeing with the position of both in the past. I agree with the conclusion of this study. I do not agree with its solution.

Both groups have declared the Massachusetts health care system a failure.
“In a study released Wednesday, two organizations (Physicians for a National Health Program and Public Citizen) say the Massachusetts health system is a failure and national policymakers should not look to that model as a possible solution". Instead, they propose a single-payer "Medicare for all" system as a better alternative.”

I do not agree with their conclusion of “Medicare for all” in Medicare’s present form. Why would anyone replace one failed system with another failed system? I would rather understand why both systems failed and then fix the reasons for the failure.

 “Massachusetts' healthcare reform, which included an individual mandate that required residents to purchase insurance, has increased coverage, but critics charge that the plan has not decreased costs or improved access to care."

"PNHP and Public Citizen have charged the Massachusetts project has not covered as many people as claimed, not contained costs, and hurt safety-net providers like public hospitals and community clinics.”

“In fact, the individual mandate is merely a "new tax on the uninsured," according to the study.”

 They should have concluded the healthcare plan was written for the advantage of the healthcare insurance industry by politicians who did not understand it. The result is a great cost to the state of Massachusetts and its individual citizens

"We are facing a healthcare crisis in this country because private insurers are driving up costs with unnecessary overhead, bloated executive salaries, and an unquenchable quest for profits–all at the expense of American consumers," says Sidney Wolfe, MD, director of Public Citizen's Health Research Group in Washington, DC.

Sidney Wolfe has developed many effective sound bites. He is a compelling voice for Public Citizen. He believes what he says. I have found over the years that his criticisms are compelling but his solutions are weak.
"Massachusetts' failed attempt at reform is little more than a repeat of experiments that haven't worked in other states. To repeat that model on a national scale would be nothing short of Einstein's definition of insanity."

It was pretty obvious that the Massachusetts plan did not address healthcare insurers overhead. The plan was destined to increase premiums. It did not create price competition among insurers or hospital systems.The healthcare insurance companies control the healthcare dollars and the more people insured the more money they make.

 

“ In the study, the two groups said the individual mandate meant more business for health insurers, but didn't address administrative costs associated with private health insurance. In fact, the Massachusetts Connector, which was created to promote the program and help link people to the health plan options, adds 4-5 percentage points to private insurer policies, according to the study.”

 Massachusetts healthcare official have been forced to be defensive in claiming the program is a success as it is going down in flames as stated in my last blog entry.

“Jon Kingsdale, executive director of the Massachusetts Connector level of uninsured is consistent with the stated goal of health reform to achieve near-universal coverage and is only a point or so above the uninsurance rates reported by many European countries with so-called universal access."

 The study's authors claim healthcare costs will increase from $1.1 billion in fiscal 2008 $1.3 billion in fiscal 2009. It was suppose to cost 487 million dollars.

They claim, “If the state had created a public single-payer system, it could save about $8-$10 billion annually through reduced insurer administrative costs, which could go to covering uninsured residents and improving coverage for those with health insurance, according to the study.”


My first criticism of the comment is the numbers quoted do not match. Second Massachusetts outsources the administrative services at a 15% premium to the healthcare insurance industry. Medicare claims a 2% overhead.

Medicare also outsources administrative services to the healthcare insurance industry. Even though Medicare’s overhead is 2%, the healthcare insurance industry builds the additional 15% into its fees. Medicare’s total overhead is 17%. The overhead is obscene.

This abuse will not be solved by a single party payer. It will only be solved by the ideal medical saving account.

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

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New Budget Cuts Herald Failure Of Massachusetts’ Bipartisan Universal Coverage Plan

February 22, 2009
inMedicaid, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Universal Healthcare
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Stanley Feld M.D.,FACP,MACE

 

I have predicted that the Massachusetts bipartisan universal coverage healthcare was destined to fail. I have explained all of the reasons for my prediction.

Never the less, President Obama’s healthcare team is modeling his universal healthcare plan after the Massachusetts plan. It is possible the President’s healthcare team knows this plan will fail. They will then conclude the only remaining option will be a single party payer system run by the government.

However, the government presently outsources Medicare’s administrative services to the healthcare insurance industry. The healthcare insurance industry controls the healthcare dollars and therefore controls the costs and the coverage. A single party payer system will also fail just as Medicare is failing unless the structure of the Medicare system is changed.

The solution is to change the control of the healthcare dollar from the healthcare insurance industry to the consumer.

In the meantime President Obama’s healthcare team will destroy the healthcare system piece by piece.

“Several key public health programs face sharp cuts under the state budget proposed yesterday by Governor Deval Patrick for the next fiscal year.”

“The $28 billion spending plan also freezes Medicaid reimbursement rates for doctors and hospitals who care for poor patients, after steep cuts made in October.”

Massachusetts’ physicians seem to be the most tolerant physicians in the nation. They tolerate continued reimbursement freezes and cuts even though their overhead rises but they are losing their tolerance rapidly.

"We have a state that has been visionary in pioneering health reform and universal coverage," said Dr. Bruce Auerbach, president of the Massachusetts Medical Society and head of emergency care at Sturdy Memorial Hospital in Attleboro. "Anything we do that reduces the ability of physicians to care for Medicaid patients is going to negatively impact our pursuit of true healthcare reform."

You bet it will. Politicians will conclude, as they have in California, is the only way to pull this out of the ditch is to increase taxes. They do not realize that if they increase taxes they could drive business out of the state. The result would ultimately be the reduction of state tax revenue.

The governor’s tax proposal also touched on public health: He is seeking new levies on alcohol, candy, and sweetened beverages among other increases in taxes.

This tax idea is not a bad idea. It could encourage lifestyle change and even decrease obesity and alcoholism. The result could be to decrease chronic disease and its complications thereby decreasing healthcare costs.

According to administration estimates, those new tariffs would generate $121.5 million for public health initiatives, if the Legislature goes along with them.

In order to save face the mandated universal healthcare plan was not cut except for one critical element. Eliminating a program that helps the insured enroll will generate more uninsured citizens as unemployment rises during this recession.

“The state’s closely observed health insurance initiative, which requires most adults to have coverage, emerged largely, but not entirely, untouched in the budget blueprint. A program that helps the uninsured enroll for health coverage was eliminated, just as thousands of Bay State residents are losing their jobs.”

This is occurring after the federal government has provided Massachusetts with 8 billion dollars in state bailout money. Someday a healthcare plan that aligns all the stakeholder incentives and solves the problem of the complications of chronic disease will be proposed by a governmental body. It would help to ask patients and practicing physicians what they think the solution is. That day does not seem to be on the horizon.

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

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Dear President-Elect Obama: Part 4

December 7, 2008
inUncategorized
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Stanley Feld M.D.,FACP,MACE

You made a promise to the American people. You would listen to everyone and choose the best plan. If it did not work you would change the plan. You campaigned on a platform of universal healthcare without mandates. It has recently been reported that a consensus is emerging on universal healthcare.

“The prospect of bold government action appears to be accepted among players across the ideological and political spectrum, including those who opposed the idea in the 1990s”.

I see no evidence that this consensus includes the opinions of practicing physicians. There is some evidence that you have included large well known universities, clinics and hospital systems. However they do not represent the majority of the practicing physicians in the country. The practicing physicians  are your workforce and they are the people whose opinion you should seek.

“The answer says leading groups of businesses, hospitals, doctors, labor unions and insurance companies — as well as senior lawmakers on Capitol Hill and members of the new Obama administration — is unprecedented government intervention to create a system of universal protection.”

This sounds like the typical government way of doing things. The consensus crafts the laws and regulations. When the programs fail the law makers are confused. The programs fail because the laws and regulations do not get to the basic problems. This leads to more regulations leading to more failure.

I am afraid you are going to rely heavily on Tom Daschle. He is a nice man and an effective legislator. He is also a self appointed healthcare expert. I have written an extensive review of Mr. Daschle’s book and plan. His plan is dead wrong. His policies do not solve the basic problems of the healthcare system. 

I beg you. Please do not rely on his plan to solve the healthcare problems. It will only increase the cost, decrease compliance and drive the country into healthcare bankruptcy more quickly.

There are some good ideas in his plan but they are poorly crafted. The recession and rising unemployment will certainly increase the uninsured to well over 250,000. I believe universal healthcare is a concept that has come of age.

“Mr. Daschle wants to open to all Americans the Federal Employee Health Benefits Plan–a menu of private-insurance options now accessible only to government workers.”

He suggests there would also be some form of means-tested premium support (or tax benefits) for Americans who couldn’t afford one of the presently available plans. This could solve the uninsured problem. It would at least put the uninsured premium payment on a pretax dollar schedule and level the playing field. Private health plan contributions made by employers enjoy pre tax status. 

However, by making the Federal Employee Health Benefits Plan available to all citizens you are providing a perfect excuse for employers to drop the health benefit.

Providing a healthcare benefit to employees has become too costly. The Bush administration, by distorting the goals of my ideal Medical Savings Accounts, with Health Savings Accounts tried to provide an excuse for employers to drop the healthcare benefit

Employers have had to decrease healthcare coverage to keep the premium prices within reach. Many citizens are under insured. Employers would rather pay the government and let you be the provider of healthcare insurance for their employees. Universal healthcare with a single party payer then becomes socialized medicine with restriction of freedom of choice by the patients and restrictions on practice of physicians.

Your administration would have to continue to outsource the administrative services to the private healthcare insurance industry. This would thrill the healthcare insurance industry as I have described previously.

Your expanded government program would experience the same financial debacle the state of Massachusetts is experiencing with its universal healthcare plan. In fact the state of Massachusetts has applied for an addition 8 billion dollar bailout after receiving 2 billion dollars from the federal government already.

The Federal Health Board is an example of a bad idea with potential for terrible results. Rather than being a board that creates educational programs for physicians to improve the quality of care (an attribute that has not been clearly defined) it is punitive to physicians and restrictive to patients’ access to care. Remember ,when the CEO of Winn-Dixie was asked what his secret to success was. He said, “Don’t get the A&P mad”.

“The health board would manage the pricing, and use, of tens of thousands of medical products and procedures. How can a single board (instead of, say, the market) make so many decisions, and wisely? Mr. Daschle proposes a dozen or so “experts” who would be “chosen based on their stature, knowledge, and experience, ensuring that the decisions they make have credibility across the health-care spectrum.”

Mr. Daschle admits that the board is loosely based on the National Institute for Clinical Excellence in Britain and the Federal Joint Committee in Germany. Both are charged with managing the public’s access to higher-cost drugs, medical devices and procedures. “But both are growing increasingly unpopular in their home countries–precisely because they’ve become a triumph of cost-containment over patient access and choice.”

“Despite the fresh enthusiasm Mr. Daschle shows for his federal health-board proposal, it’s not exactly a new idea. Mr. Daschle himself proposed it as part of the failed American Health Security Act of 1993.”

This is not the way reform the U.S. healthcare system. The healthcare system needs to be reformed using common sense. I am hoping you will use common sense and get to the core of the healthcare systems problems. I will discuss common sense reforms in my next letter to you.

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Politicians Give Me A Headache: Part 3

October 26, 2008
inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests
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Stanley Feld M.D.,FACP,MACE

As the Presidential campaign comes to a close the important issues of the campaign get blurred or discarded. Healthcare reform is one of those issues.

In the past I enjoyed the clarity of thinking of the Wall Street Journal editorial page. Lately it has adopted a patina of fuzzy thinking and muckraking. It frequently misses the essential issues in the name of free enterprise. Last week Newt Gingrich said something intelligent. He said the Republican party should abandon the notion of anti-government for the notion of government involvement with competent management. Barack Obama has hinted that he gets it. 

John McCain does not have a healthcare plan. His healthcare plan has one tactic but is not a strategy to repair the healthcare system. It is an anti-government tactic. An effective healthcare plan must have many tactics. The tactics must align the agendas of all the stakeholders. The most important agenda is the medical care provided to consumers. John McCain’s tactic keeps control of the healthcare industry in the hands of the healthcare insurance companies. The healthcare insurance industry is the stakeholder that has abused the healthcare system. Its abuse has led to the abuse by other stakeholders.

John McCain’s healthcare tax credit is supposed to permit the self-insured to pay for healthcare insurance with pre-tax dollars as opposed to post tax dollars. Employer provided healthcare insurance presently pays for employee insurance with pretax dollars.

Equal tax treatment for employers and self employed should have been instituted years ago. John McCain’s non healthcare plan has many problems. His tax credit is not large enough compared to the cost of healthcare insurance. His plan will give employers an excuse to abandon providing healthcare insurance for its employees. The result long term will be an increase in the number of uninsured. A worker earning $40,000 cannot afford $12,000 a year for healthcare insurance for his family even if $5,000 is tax free. The problem is the cost of insurance and the cost of care.

The Wall Street Journal editorial spends time criticizing the Obama campaign for John McCain’s deficiency.

“One underreported story of this election is how heavily John McCain has been damaged by Barack Obama’s television ad assault on his health-care plan. A lot of voters seem to believe the Democrat when he says that Mr. McCain wants to deny them coverage or bankrupt them with crushing hospital bills.”

Barack Obama’s television advertisement is correct. The result of Mr. McCain’s “healthcare plan” will be just that because “affordable plans” will be sold that do not provide adequate healthcare coverage. We are seeing it now with higher co-pays, higher deductibles and underinsured. The healthcare insurance industry’s goal is to maintain high profits without regard for other stakeholders’ needs.

The Journal spends most of the article criticizing Jason Furman, who is Mr. Obama’s economic policy director because he agrees with Mr. McCain’s tactic. John McCain’s tactic is a tax credit for the self employed that is long overdue. Jason Furman does not agree with the taxable income portion of employer provided healthcare insurance. John McCain’s tax credit, taxable income proposal would result in the elimination of employer provided healthcare insurance.

The problem is healthcare reform needs more than one tactic. It needs innovative reform of the healthcare system. Effective healthcare reform must put the consumer in control of his healthcare dollar with incentives for rewards if consumers use their healthcare dollar wisely. Government and the healthcare insurance industry’s control of the healthcare dollar has not worked. Government control does not work because the government can not manage effectively and outsources control to the healthcare insurance industry.

I do not agree with Senator Obama’s plan because it is going to head us down the road of government as a single party payer with healthcare insurance company management like the Massachusetts plan.

Neither candidate has a viable plan. The WSJ editorial does not focus on the issue of healthcare reform. It confuses us about a sidebar tactic.

“ But wait, let’s consult another one of Mr. Obama’s advisers. David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard, put it this way: “Health insurance is not something that is made better by tying it to employment. As a result, essentially all economists believe that universal coverage should be done outside of employment.”

That passage comes from Mr. Cutler’s 2004 book, “Your Money or Your Life,” which outlined a strategy for universal health care. Not surprisingly, Professor Cutler’s plan, like Mr. McCain’s, also applied subsidies such as “tax credits — people get a lower tax bill, or a refund from the government, to be used to purchase insurance.” In this he was echoing many other liberal health experts such as MIT’s Jonathan Gruber, another Democratic policy star.

I think the WSJ thinks Americans are stupid. If they throw enough unrelated quotes at us we will be totally confused.

I believe as Colin Powell believes. Barack Obama is potentially a transformational figure. He seems to have a deeper view of issues than most. Hopefully, he is smart enough to see through the folly in his healthcare advisors’ plans. John McCain is not transforming anything.

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Stinkin’ Thinkin’ Part 2 Health Costs: More Cost Burden on the Employee

September 24, 2008
inConsumer Driven Health Care, Disinformation and the healthcare system, Health Savings Accounts vs Medical Savings Accounts, Healthcare Insurance Industry, Politicians,Healthcare and Vested Interests
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Stanley Feld M.D., FACP, MACE  

Sound Bytes are deceiving. The Republican Party’s Presidential candidate, Republican Party politicians, and Republican policy wonks have often quoted reports that health care costs are expected to ease slightly for employers in 2009. There is deception in this fact. The overall decrease in healthcare costs for businesses is the result of its shifting the burden of costs to their employees. The result is a decrease in cost for the employers nationally. Therefore the sound byte is inaccurate. The cost of healthcare actually will rise 5.7% for the employers. This represents a decrease from last years rise of 6.1%. The direct costs to the consumer increases 29% next year. Once again, the devil is in the details. We can not rely on sound bytes.  The healthcare insurance industry triumphs again.  The result will be an increase in healthcare insurance industry net profits.   

 

 

What does all this mean in the present Presidential campaign?  Why are healthcare insurance premiums increasing when the provider reimbursement is decreasing? Why is the burden of the cost of healthcare insurance shifting to patients away from the government and the employers? President Bush and a McCain presidency’s goal is to shift the burden of healthcare costs to the employee. Is this going to improve the uninsured problem? No! It will make it worse.

It looks like the healthcare insurance industry is killing the goose that lays its golden egg. It looks like John McCain wants to help the healthcare insurance industry accomplish this feat without either of them realizing it.  It will happen at the expense of the consumer until the consumer cannot tolerate it any more.

It also looks like John McCain’s policy of more of the same is helping Barack Obama and the Democratic Party justify universal healthcare coverage by a single party payer. An equally disasterous strategy. Where are the principles that have made America great? All politicians should be forced to read Adam Smith’s “Wealth of Nations“.

Dick Swersy’s comment on my blog about the Nobel Prize winning technique to repair the healthcare system is noteworthy.   Mechanism Design to Repair the Healthcare  is the art and science of designing rules of a game to achieve a specific outcome, even though each participant may be self-interested. This is done by setting up a structure in which each player has an incentive to behave as the designer intends. The game will then implement the desired outcome. The strength of such a result depends on the solution concepts used in the game. 

Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. However, it is impossible to guarantee optimal results for all four outcomes simultaneously in many situations, particularly in markets where buyers can also be sellers. Significant research in mechanism design must decide on making trade-offs between these qualities and vested interests. The most desirable outcome in the healthcare system should be sustaining patients’ welfare and physicians’ incentives for innovations in care. These goals will strengthen our healthcare system not weaken it.

Our Presidential candidates are not thinking of these goal as they formulate programs to sustain the goals of the secondary stakeholders. How can you create affordable insurance when coverage decreases, deductibles increase, and the price decreases are defined by increasing the price 5.7% vs. 6.1% a year. It is a charade designed to fool Americans. The charade works because Americans are not paying attention to what is going on. We will complain when it is too late.

“America is at its most powerful and most influential when it is combing innovation and inspiration, wealth building and dignity building, the quest for big profits and the tackling of big problems. When we do just one, we are less than the sum of our parts. When we do both, we are greater than the sum of our parts- much greater” Thomas Friedman

  Our Presidential candidate are way off base. It is up to the people to pay attention and force  politicians to stop their Stinkin Thinkin.

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