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Managing Points Of View and Healthcare

May 27, 2016

inDisinformation and the healthcare system, Medicine: Healthcare System, Patients Problems

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Stanley Feld M.D.,FACE, MACE

Finally, it is official. Ben Rhodes, the deputy national security adviser for strategic communications, admitted that the Obama administration lied about the Iranian Nuclear deal to the press, public and congress.

His interview with David Samuels in a New York Times Magazine typified the approach to manipulating the truth by the Obama administration in all areas of the administration’s activities.

The administration has been trying to walk back Ben Rhodes’ statements for a week. The traditional media is trying to bury his statements even though the king of the mainstream media (the New York Times) published the interview.

The justification for this behavior is that it has been used by all-previous administrations including that of George Bush. It is therefore an insignificant objection.

Ben Rhodes explained to David Samuels, in the New York Times profile that, “it was first necessary to lie to a corrupted and inexperienced American media about all sorts of things, beginning with the nature and intentions of the enemy in this case the Iranian regime.”

Subsequent lies were added, as the White House took advantage of a dangerous mix of journalists’ ignorance, their ideological and partisan commitment to the administration, and finally, their career aspirations.

It reminds me of Jonathan Gruber’s attitude toward the press and President Obama’s pretense that he hardly knew Jonathan Gruber.

http://stanfeld.com/?s=Jonathan+Gruber

https://www.google.com/search?q=Ben+Rhodes+Iran+nuclar+deal&ie=utf-8&oe=utf-8

Rhodes went on to say, “The average reporter we talk to is 27 years old, and their only reporting experience consists of being around political campaigns… They literally know nothing.”

This implies the lack of respect the Obama administration has for the press, Americans and for the virtue of honesty. It is not a good example for our youth’s future behavior and the way to mange a Point of View.

Thus they (the press) will believe what he tells them. He also tells friendly non-governmental organizations and think tanks what he is telling the journalists. Those outlets produce “experts” whose expert opinion is just what Rhodes wants it to be. These ignorant young journalists thus have quotes that look like independent confirmation of the White House’s lies. :

Ben Rhodes admitted, when David Samuels asked, “We created an echo chamber of freshly minted experts cheerleading for the deal. ‘They were saying things that validated what we had given them to say.’

This is the apparent attitude of President Obama and his administration. It is applied to every lie they have told to the American people.

Ben Rhodes described a tactic that is an extension of Sol Alinsky’s playbook. I believe the American people are catching on.

The defendants of the Obama administration marginalize the people who expose the lies with additional lies.

The Obama administration and its defendants are usually effective in marginalizing their opponents.

The defendants of the lie have the power of the pulpit and a friendly mainstream media.

The same tactics are used in defending Obamacare as I have described many times in my blog.

I find it difficult to believe that so many smart people believe these lies.

Carl Sandberg said “if you tell I lie enough times its eventually becomes the truth.” This is especially true when people start adjusting and investing in the lie.

Marilyn Travenner, now that she is CEO of the healthcare insurance industry lobbying group, has a different point of view than when she was the head of CMS. Someone else other than government is paying her.

I have said that the dysfunction in the healthcare system is the fault of all the stakeholders, namely the government, the healthcare insurance companies, the drug companies, the physicians and the patients.

Each group adjusts to a dysfunctional element making the healthcare system more dysfunctional. The growing dysfunction is driven by the multiple points of view.

President Obama’s ideology has accelerated the dysfunction.

Marilyn Travenner is now diverting blame for the dysfunction away from the healthcare insurance industry. Many do not realize that the government run healthcare system is totally dependent on the healthcare insurance industry. The healthcare insurance industry does the administrative services for the government.

The administration brags that CMS’ overhead is only 2.5-5% of Medicare’s cost. This is an illusion; It is false.

The percentage of overhead published does not include the cost paid by the government to outsource the administrative services to the healthcare insurance industry.

The administrative services overhead is added into the cost of healthcare. Insurance premiums are calculated using the Medical Loss Ratio calculation. Many insurance company expenses are considered direct medical care expenses. Direct medical care expenses should only be for direct medical care.

The government programs set payments to the healthcare insurance industry for administrative service according to the Medical Loss Ratio.

Insurance administrative expenses, like a help desk or network selection expenses, should not be included in direct medical cost. Presently, it is the method used by the healthcare insurance industry to ultimately take 30-40% of the healthcare dollars off the top.

President Obama and his administration brag that Obamacare is bending the healthcare cost curve for Medicare and Medicaid. The only reason this was true in 2012 and 2013 was because Obamacare’s hidden taxes from citizens at every income level were being collected while there were no Obamacare medical care expenditures until 2014. The 2014 and 2015 cost curve was bent upward contributing to the 19 trillion dollar deficit.

In my last blog I mistakenly left out the word contributing to the 19 trillion dollar deficit. Obamacare is not budget neutral. It is not presently bending the healthcare cost curve.

Some smart people believe Obamacare is bending the healthcare curve because they uncritically believe all the administration’s press releases.

In the last few weeks we have been warned not to believe everything President Obama and his administration tell us.

I am sure the judge in Texas who was lied to by the Department of Justice about immigration reform is not very happy.

The cost of physician services might be increasing on a retail level. However, government and insurance reimbursement to physicians is decreasing.

Travenner, in her previous life blamed the rising cost of medical care on physicians. In order to divert attention from the healthcare insurance industry she continues to blame physicians.

“The cost for everything from office visits to complex surgeries is on the rise, so there’s not much that can be done here to ebb this common cause of premium inflation.”

This is an incorrect premise. It is true that hospital costs are rising. If the premise is incorrect the solution is usually incorrect.

Next, Ms. Travenner explains additional reasons for increasing premiums.

“Prescription drug price inflation is a far bigger problem. A lack of a universal health plan, long periods of patent exclusivity, high demand for pharmaceutical products in the U.S., and the speed with which approved drugs can be brought to pharmacy shelves are all reasons why prescription drug costs could continue soaring in 2017 and future years.”

She omits the most important reasons for the increase in drug prices to the public.

President Bush’s deal with congress to pass Medicare Part D was to eliminate government’s ability to negotiate drug prices with the drug companies. The government negotiates drug prices for the military and VA. It gets negotiated prices that are comparable to all other countries on the globe.

At the same time the government restricts consumers from buying prescription drugs in Canada, suppressing competition.

The Obama administration keeps blaming the drug rules on President Bush’s administration. Why hasn’t President Obama renegotiated a better deal in the last seven years, or just change the rules by executive order as he usually does?

Tavenner also hit on “the point that restructuring the insurance market hasn’t paid benefits as expected.”

New regulations requiring Obamacare insurers to provide plans with a host of minimum benefits, as well as being unable to deny benefits to people with pre-existing conditions, has left insurers exposed to adverse selection.

In plainer terms, it means sicker people who’d been shut out of the insurance system previously have flooded in, and not enough healthier individuals have enrolled.

This last point is valid. The claim that the insurance industry is losing money is not true. It is losing money on adverse selection but they are making up that loss by increasing premium prices to the government and the corporate market.

If they did not make money how could they pay CEOs of some healthcare insurance industry companies 100 million dollars a year?

Finally, Tavenner cautioned that the turbulence can be expected because insurers “sit in the three-R world.”

What Tavenner is alluding to are two programs that are set to end in 2017: the reinsurance program that provided payments to plans that enroll higher-cost members, and the risk corridor, which acted like a modern day Robin Hood by taking excessive profits from top-performing insurers and giving them to Obamacare insurers losing excessive amounts of money.

Without the risk corridor, new insurance entrants could be discouraged, since they’d be responsible for covering the entirety of their losses. The third “r,” risk adjustment, will remain in place to distribute capital from plans with low-risk enrollees to those with high-risk.

The reinsurance aspect of Obamacare was probably illegal. The government guaranteed the insurance companies that it would make up whatever loss they claimed. The Obama administration paid the healthcare insurance industry only 12% of the promised amount. This deception by the government has led to some of the reasons UnitedHealthcare and now Aetna are pulling out of Obamacare’s health exchanges.

However, the government is totally dependent on the healthcare industry for it administrative services.

The devil is always in the details.

There is an ever-growing need to lie to manage the public’s point of view in favor of Obamacare.

The public is becoming aware of the Obama administration’s attempt to mange the public’s point of view. Ordinary citizens are madder than hell at the Obama administration and the establishment in both the Democratic and Republican parties.

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

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Destroying The Healthcare System

January 6, 2016

inMedicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D, FACP,MACE

I believe President Obama’s goal is to destroy the healthcare system. The people will then beg the Obama administration to institute a single party payer system with the government being in full control.

The fact is Obamacare is not working despite the Obama administration’s convincing the mainstream media to advertise that it is very successful.

I was shocked at a December 9^th New York Times article stating:

“ A million new customers have signed up for health insurance during the Affordable Care Act’s third open-enrollment season, Obama administration officials said on Wednesday, and call centers have been deluged.”

This statement is an optimistic statement and a distraction from the true. A readers impression would be Obamacare is doing great.

The Obama administration simply ignored last year’s enrollment numbers. Ten million people were supposed to have signed up for healthcare coverage through the Federal Health Insurance Exchanges. Only seven million of those who signed up paid their premiums for the entire year.

The premiums and deductibles were too high even for the poor who received federal subsidies.

Most of the people remaining in the Obamacare in the federal exchanges were people with a pre-existing illness. One diabetic told me her individual premium for Obamacare was $12,500 dollars with a $6,000 dollar deductible. Her bill for last year, being hospitalized one time, was almost $100,000. She felt Obamacare was a very good deal for her.

The insurance company covering these kinds of patients with a pre-existing illness cannot make money for the insurance coverage they are required to provide.

If all the patients have pre-existing illnesses, the only thing the insurance companies can do is raise the premiums or stop selling insurance in this Federal Health Exchange market.

The Obama administration promised it would limit the insurance industry’s loss with its reinsurance program. The Obama administration reneged on its word and only paid 12% of what was due for 2014. The administration did not have the money to pay for it.

In 2014, the first year of coverage, we were told 13 million signed up, but only 7 million had coverage at the end of the year.

The administration provided data to the CBO to predict the number of enrollees Obamacare will have in 2016. The CBO predicted 21 million would be signed up for 2016. The CBO used data provided by the Obama administration to make this calculation.

What happened to the remaining 7 million enrollees for 2015? We are not told how many enrollees automatically re-enrolled.

We only hear that, ‘ A million new customers have signed up for health insurance.”

We can now understand the concerns expressed by UnitedHealth Group and other insurers that say they are losing money in the Obamacare Federal Health Insurance Exchanges.

Open enrollment is due to end January 1, 2015. In mid December CMS announced,

‘We are now seeing a surge of interest as we get closer to the deadline,” “Each day has been bigger than the day before.”

The last two weeks in December had less that 100,000 people sign up. Yet the government published these numbers. Many wonder how real these numbers are. If they are real there has been no increase in enrollment in the last year.

Confirmed 2016 Exchange QHPs: 9,584,850 as of 12/30/15
Projected Exchange QHPs: 11.32M by 01/02/15 (8.60M via HC.Gov)
In the last week in December only 80,000 people signed up compared to 96,000 the same week last year.

The coverage is poor and too expensive for most people.

Open enrollment has now been extended to January 31 for enrollment March 1^st.

“People who go without insurance next year may be subject to tax penalties of $695 a person or more, although some may be able to qualify for hardship exemptions.”

This is a joke. However, the joke is on the consumers and taxpayers.

So far, Obamacare has created a 10% increase in federal taxes middle-class taxpayers.

It has increased coverage for the Medicaid eligible poor. However, these people cannot find a doctor who will treat them.

The healthcare system is costing over three trillion dollars a year and increasing our deficit more than $1.5 trillion dollar a year. There are still 34 million people uninsured. How many people are under insured because their jobs have been changed to part time jobs? They cannot afford to buy Obamacare’s insurance?

2017 is the year the healthcare insurance markets are supposed to stabilize. These markets have not stabilized. Healthcare insurance companies, and business groups can not understand how the new CMS’ proposals will regulate and expand provider networks and standardize plan options let alone have insurance markets result in lower premiums.
“We remain deeply concerned that this proposed rule will not stabilize the individual market,” Steven Kelmar, Aetna’s executive vice president for corporate affairs, wrote in a letter to the CMS. “Unless some fundamental flaws are corrected, we believe there is a grave risk that the federal exchange will not operate as a viable, competitive market in 2017.”

One of the more significant and controversial provisions in the proposed rules involves the adequacy of provider networks. The CMS proposal demands that ACA-compliant health plans sold on the federal exchanges in 2017 would have to abide by new network standards.

All plan networks would have to include hospitals and doctors within certain travel times or distances from members. There would also be minimum provider-to-member ratios for some medical specialties.

CMS proposed that all health plans in each metal tier on the federal exchange have the same benefits. For example, all 2017 bronze options would have a $6,650 deductible, and all plans would have no more than one provider tier.

This proposal practically guarantees that the healthcare insurance industry selling insurance under Obamacare’s exchanges would lose money. Therefore, the industry would choose not to participate.

The big losers would be patients with preexisting illnesses. They would lose their insurance.

The traditional mainstream media is already cranking up the Obama administration spin machine to promote a single party payer system as the best and simplest option to provide insurance for all Americans.

Nobody is thinking about who will pay for a single party payer system after the administration emotionally conditions the public to beg for a single party payer system.

The hardest by increased costs in the system are consumers at every income level.

As the cost rises to unaffordable levels all consumers are starting to take think about taking responsibility for their health and healthcare dollars.

“The new research also finds that as a result of the increase in health care costs, focus group participants are changing how they operate within the health care system.

They are questioning their doctors recommendations more frequently, comparing cost and quality information for local providers, and even putting off seeking care altogether.”

Despite the low of enrollment in 2016 (that the Obama administration denies), CMS is about to publish new 2017 rules for the insurance industry. These rules are guaranteed to make the healthcare system more dysfunctional.

The fact is the structure of Obamacare is failing and about to collapse.

All of the Obama administration’s tinkering to stop the free fall is creating greater momentum for total collapse of the healthcare system.

The answer to fixing the healthcare system is not a single party payer system.

The answer is a consumer driven healthcare system with the aid of smart phones and the Internet and Medical Savings Accounts.

Progressives have a tendency to forget the math. They have more interest in satisfying an emotional response. The resulting entitlement policies lead to the unintended consequences and only make things worse.

Neil Cavuto demonstrated this logic recently in an interview with a student campaigning for free student loans.

https://youtu.be/Zmji36q8E4o

Progressives’ logic is faulty. It demonstrates a lack of understanding of the affects of entitlements and their unintended consequences.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.

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Making Medicine Function: Five (5) Key Elements From Stanley Feld M.D.,FACP,MACE : Repairing the Healthcare System

January 4, 2016

inSummary Blogs

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Scott Becker of Becker’s Healthcare asked me to write an article on Element needed to Repair The Healthcare System. Becker’s Healthcare is the leading source of cutting-edge business and legal information for healthcare industry leaders.

His portfolio includes five industry-leading trade publications:

Becker’s ASC Review
Becker’s Infection Control & Clinical Quality
Becker’s Spine Review
Becker’s Hospital Review
Becker’s Dental Review

My article appeared in the latest addition and with permission from Scott Becker. I am reprinting it on my site. Becker’s Healthcare is a valuable information site.

Making Medicine Function: Five (5) Key Elements From Stanley Feld M.D.,FACP,MACE : Repairing the Healthcare System

Patients, physicians, hospital executives, healthcare insurance executive and government all believe the healthcare system is dysfunctional and unsustainable in future years.

All the stakeholders are unhappy with Obamacare.

Clinical Endocrinologist, Stanley Feld, MD, FACP, MACE, is a physician who believes Obamacare’s business model is seriously flawed. He also believes that Obamacare has accelerated the dysfunction in the healthcare system.

Dr. Feld believes Obamacare has increased the healthcare system’s unsustainability by causing an increase in bureaucracy, a decrease in efficiency and encouraging the gaming of the healthcare system by all stakeholders.

The Obamacare business model must be changed to a consumer driven healthcare business model with the consumer in charge and in the center of the healthcare system, not the government or other secondary stakeholders.

Consumers must be taught and incentivized to use all the 21^st century technology tools available including smart phones. The goal must be to improve medical care and treatment outcomes, not improve the measurement of medical process outcomes.

Dr. Feld became interested in the causes of the healthcare system’s dysfunction in 1991 while he was on the steering committee of a nascent medical organization, the American Association of Clinical Endocrinologists (AACE).

He became AACE’s third President and was chairman of the Type 2 Diabetes Guideline committee. He was the chief author of “A System of Intensive Self-Management of Type 2 Diabetes Mellitus.”

In 1991 there was little government and healthcare insurance industry support for the concept of teaching the Type 2 Diabetics how to be the “Professor of Their Disease” even though there was a Type 2 Diabetes epidemic.

The epidemic was the result of lack of understanding by consumers (patients) of how to prevent and treat Type 2 Diabetes Mellitus. Uncontrolled Type 2 Diabetes causes complications that are coronary heart disease, kidney failure, blindness and amputations. Quality of life of is decreased. The complications are costly to the patients and the healthcare system.

America was in the midst of an obesity epidemic. The epidemic continues today. Obesity predisposes consumers to Type 2 Diabetes Mellitus and its subsequent complications.

Dr. Feld said everyones goal for the healthcare system is to have a healthier population at an affordable price. The goal can be accomplished by putting consumers in control of their health and healthcare dollars. Consumers must also be given financial incentives to control their health. No one is focused on the consumer’s responsibility to lower cost in the Obamacare business model.

Dr. Feld believes Obamacare’s business model has too many faults to repair. Each time President Obama alters the business model to fix a fault, the healthcare system becomes more costly, dysfunctional and unsustainable.

Dr. Feld developed a business model that would accomplish the goal of providing a functional and efficient healthcare system at an affordable cost to consumers, employers, healthcare insurance companies and the government.

Dr. Feld’s business model would eliminate most of the government’s inefficiency that absorbs 40% of the healthcare dollars. The inefficiencies must be eliminated or at least significantly decreased.

Here are Dr. Feld’s five key elements necessary to Repair the Healthcare System.

All the key elements listed are explained in detail in Dr. Feld’s blog “Repairing the Healthcare System”. Each link will have a full list of my blog posts on the topic.

The Ideal Medical Savings Accounts (MSAs).

Dr. Feld’s Ideal Medical Savings Account is the insurance model in his business plan.

Medical Saving Accounts are different than Health Savings Accounts. Health Saving Accounts are the fastest growing healthcare insurance plans. Medical Saving Accounts provide consumers with more financial incentive.

The Ideal Medical Saving Account transfers the premium dollars saved by consumers into a tax-free retirement trust that is not restricted to medical care. The financial incentive will cause consumers to be responsible for the control of their health and wisely spend their healthcare dollars.

The Ideal Medical Savings Accounts are democratic. The employer, the individual or the government could fund the Medical Savings Account. The deductible must be high enough to provide enough financial incentive for consumers to be motivated to become responsible for their health and their healthcare dollars. Once the deductible is reached the consumer receives with first dollar coverage for an illness.

If the deductible is not spent the consumer gets it tax-free in their retirement trust.

Ideal Medical Savings Accounts provide consumers the choice of physician. The environment is created where consumers decide on who will provide the best value for their healthcare dollars rather than the government, the healthcare insurance industry or the government.

MSAs would create a Consumer Driven Healthcare System with the benefit of consumers creating competition among the stakeholders in the healthcare system rather than stakeholders deciding for consumers. For greater details go to this link.

The Importance of Tort Reform

Most politicians have ignored the importance of Tort Reform. They have been led to believe that Tort Reform is an insignificant cost to the healthcare system.

Dr. Feld points to study by the Massachusetts Medical Society. Every practicing physician believes the data of this study. The resulting data is an excellent and truthful indicator of the huge cost of over-testing to prevent malpractice claims.

The lack of Tort Reform costs the healthcare system $200 billion to $750 billion dollars a year as a result of over testing by physicians to avoid malpractice suits.

Physicians who order a test usually do not receive the profit built into the test he/she has ordered.

The Importance of Self-Management of Chronic Disease

The unsuccessful management of chronic diseases results in 80% of the cost of care for those diseases. Most important is to prevent the chronic disease from occurring in the first place. Diseases with the highest costs are Diabetes Mellitus, Heart Disease, Hypertension and Cancer. Obesity and consumer’s genetic makeup are responsible for most of these chronic and costly diseases.

Consumers are in control of the development of obesity. They must be responsible for preventing it. However all of our cultural stimulation encourages obesity. Consumers must make a choice. Government can provide public education programs to help consumers make the correct choice. When consumers are educated and are at financial risk for developing obesity, they will become responsible and avoid becoming obese.

The reformed healthcare system could prevent the onset of complications of these chronic diseases. The cost of the complications of chronic disease is 80% of the cost of treating that disease.

These teams must be an extension of their physicians care and responsible to their physician.

The Magic of the Patient/Physician Relationship.

Obamacare tries to quantify patient care. Twenty thousand rules and regulations have been produced so far to measure the care delivered by physicians to patients.

Maybe the measurement criteria for quality care are wrong? Maybe the government is measuring the wrong thing.

There is no quality measurements made about patients’ compliance or adherence. There are no rules to measure the patient/physician relationship.

These would be important measurements for bureaucrats to measure in order to quantitate the effectiveness of care.

If one wanted to commoditize the delivery of quality medical care, consumer responsibility for compliance with their treatment is an important measurement.

The patient/physician relationship is magical. It can result in improved patient compliance and self-management of both acute illness and avoidance of the complications of chronic diseases. The end result is that it can decrease the cost of healthcare by at least 50 percent. The healthcare system would then be affordable.

As the government and healthcare insurance companies try to decrease their cost they have decreased reimbursement and increased regulations and paperwork for physicians

A physicians work product is intelligence, skill and time. Physicians do not have enough time to develop a patient/physician relationship today.

The patient/physician relationship is difficult to measure. It cannot be commoditized into a universal report that a computer program can generate.

The Rule of Information Technology

Physicians are not opposed to information technology. They are against information technology generating data that is being used as a tool to judge their clinical competence and reimbursement by bureaucrats. Many times the “big data” is inaccurate.

Information technology should be used as a tool to extend a physician’s ability to patients. It should be used as a tool to improve physicians’ care.

In order to reduce the cost of medical care and increase the patient’s ability to be a “Professor of Their Disease”, medical care must be delivered by a team approach.

Information technology must be a part the team with the consumer being in the center. Physicians must be the coach; the other members of the team must be physician extenders (assistant coaches).

There are many websites generating both good and bad information. As the manager of the team the physician and his assistant managers should pick the websites for his/her patients to use.

Physicians and his/her healthcare management teams should develop social networks so his/her patients can relate to each other and learn the subtleties of their chronic disease from each other. Physicians and his patient extenders would monitor and correct any false information generated through the social network.

These social networks would be very effective in motivating consumers to be responsible for their care and their healthcare dollars.

These are five elements that would decrease the cost of America’s healthcare system. They would avoid the trap and unintended consequences of a single party payer system.

The real cost curve has not been bent downward. It has been bent upward in the actual cost to taxpayers. The government is not measuring all the costs, including new taxes, as payment for Obamacare.

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

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Healthcare Spending Increases To 18.2% of GDP

October 27, 2015

inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests

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Stanley Feld M.D.,FACP, MACE

Healthcare spending has increased each year. Healthcare spending is now 18.2% of the GDP up from 17.7% in 2014.

In 2000 it was 14% of the GDP.

The data presented in the following charts are partially correct. They are derived from clams data which are also partially correct. The charts can give an idea on how the healthcare money is

spent. and wasted.

Wasted Money

Drivers of increased Healthcare Spending

Distribution of Healthcare Spending

There are many reasons for this increase. The Obama administration prefers to blame the increasing spending on his most popular reasons.

His reasons might not be completely true.

The traditional media then publicizes the President Obama’s popular reasons. The reasons get translated into public understanding and public opinion.

President Obama’s reasons for the increased healthcare spending are hospitals’ and physicians’ prices are increasing. Hospital and physician retail prices are increases. However, their insurance reimbursement has decreased. Public opinion then demands that physicians decrease their prices.

The reality is physician reimbursement has been steadily declining in recent years as spending has been increasing.

I have continually pointed this out.

Medicare, Medicaid and private insurance have forced physicians to accept lower reimbursement. Patients are increasingly discovering that “my doctor doesn’t take my insurance or my Medicare or my Medicaid.”

Consumers without insurance coverage are charged retail price by hospitals and physicians rather than the discounted prices hospitals and physicians accept.

These consumers can try to negotiate the prices. They are usually more successful with physicians than hospitals.

Decreasing reimbursement is one of the main reasons physicians are driven to see more and more patients in less and less time.

Physicians must continue to pay overhead and salaries.

This phenomenon of increased patient volume disrupts the magic of the physician/patient relationship. It is also the driving force behind the massive increase in concierge medicine.

If it is not the rise in physician reimbursement, what is the reason for the increase in healthcare spending?

There are several possibilities.

GDP is increasing at a lower rate than healthcare spending.
Consumers are sicker. They need more medical and surgical care than previously.
Healthcare insurance premiums are increasing at a greater rate than the GDP.
Bureaucratic support of the healthcare system is growing at a greater rate than the GDP.
Pharmaceutical use is increasing because a sicker population needs more drugs.
RNA Technology has lead to the discovery of more potent therapies that are costly to the healthcare system.

Statistics published by the Altarum Institute in July suggest that President Obama and his fans in the traditional media reevaluate their premises about the rising healthcare spending.

“Out-of-control spending on prescriptions drugs and the soaring cost of health insurance administration continue to be the two major drivers behind rising healthcare costs.”

Healthcare spending grew to $3.3 trillion in this year.

Prescription drug spending increased by 9.2% from the previous year. Part of that increase was the introduction of new drugs.

The Obama administration ignores the fact that more people are becoming sick because of an increase in obesity, diabetes and hypertension. These people now have to take medicine, see doctors, and buy medical devices.

Administration services costs and net costs of health insurance (after paying medical bills) have increased 9.4% from a year ago.

These costs included government bureaucratic costs, insurance bureaucratic costs, out of pocket expenses and insurance premium costs.

How much waste is in all these administrative services costs.

3. Hospital spending rose 6.1% from a year ago. Hospital bureaucracy has been try how to decrease spending by decreasing waste and personal. However, bureaucracy and unnecessary administrators and outrageous hospital executive salaries continue to increase.

Physician and outpatient clinical expenditures rose 5.0%.

Physician investment in medical structures and equipment rose only 1.7%. Physicians are reluctant to make investments in a failing healthcare system.

Each category in the various graphs above reveals opportunities to decrease the cost of medical care.

It cannot be done by the government’s complete take over of healthcare.

The government is the problem as we have seen and still are seeing with the VA Healthcare system.

Socialism does not work. In leads to unintended consequences as consumers adjust to the rules and regulations of an attempt to manage society.

Consumers must demand rule changes and permit the market place to sort things out.

Repair of the healthcare system can only occur in a consumer driven healthcare system with consumers in control of their healthcare and their healthcare dollars.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone

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Why Republicans Need A Viable Healthcare Plan NOW

November 12, 2014

inDisinformation and the healthcare system, Medicine: Healthcare System, Patients Problems, Physician's Problems, Politicians,Healthcare and Vested Interests

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Stanley Feld M.D.,FACP,MACE

I have been asked by many of my conservative friends why so many of my liberal friends believe Obamacare is great.

My liberal friends think conservatives are are illogical, callous, spiteful, partisan and soulless. Some even believe conservatives are ignorant.

Obamacare provides coverage for people who cannot get coverage or afford healthcare coverage in the pre Obamacare era. Insurance options and county healthcare system were inadequate for servicing these people.

It turns out that people who need to buy healthcare insurance coverage through Obamacare cannot afford the coverage either.

Even with the illegal subsidies they cannot afford the deductibles.

Obamacare is not the solution to our healthcare system problems. Obamacare is an inefficient bureaucracy that was pasted onto a pre-existing dysfunction and unsustainable healthcare system.

The costs overall are increasing despite the Obama administration and progressives telling us the costs are decreasing. Healthcare taxes have increased the overall federal tax rate to 50%.

Americans have not been provided with the real tax rate increases or unemployed or partially employed statistics since 2009. Yet progressive quote the figures the administration provides as absolute facts.

Americans know something funny is going on because they have less money to spend.

Progressives do not want to understand these consequences. The acceleration of unintended consequences of Obamacare will lead to the economic collapse of the healthcare system as well as the economic collapse of the country.

Progressives want to ignore the effects Obamacare is having on the economy even though only 15 of the 350 million of us are in the individual market and less that 7 million are insured under Obamacare.

Progressives ignore the facts and revert to name calling aimed at conservatives.

Conservatives do not know how to respond. Progressives continue to call conservatives tax adverse, callus, ignorant and for the vested interest of big business.

I try reading and listening both the progressive and conservative media. Progressives play the same theme continuously.

Progressives continuously use emotionally charged examples that anyone would be sympathetic to. At the same time they belittle their “conservative opponents.”

A New York Magazine article by Jonathan Chait entitled, “Yes, the Republican Obamacare Strategy Will Kill People” illustrates my point.

“There is a famous thought experiment called the trolley problem, and it goes like this: A runaway trolley is headed toward five people bound on the tracks. You are standing before the switch that could divert it onto another track, where it would kill only one person. Do you pull the switch?

The problem is a way of grappling with the moral responsibility of actively killing a person for some larger end, a problem that lurks behind much of the role of the state, from policing to Harry Truman dropping the atomic bomb on Japan.”

The reader should not be confused by where this story is going. It is a distraction from the real problems of Obamacare’s healthcare policy and implementation.

“The trolley problem is the most flattering possible way to think about the conservative movement’s fanatical commitment to repealing Obamacare.”

“ That is, if you ignore the obvious elements of partisan spite, callousness, and self-deception, one can posit a commitment to abstract moral principles about the role of the state.”

This sentence serves as an invective against the conservative enemy.

“Conservatives’ abstract principles, like most people, can come attached to specific costs. If they pull the switch and repeal Obamacare, or if they persuade five Republican Supreme Court justices to cripple it, they will spare America from the evils of mandates, taxes, regulation, and what they imagine being European socialist horrors. They will also kill what are now identifiable human beings”.

This sums up progressives’ attack against conservatives. The reader will be convinced that the conservatives are evil, use corrupt tactics and act immorally.

Mr. Chiat ignores the unworkable healthcare policy and economically unsustainable facts.

It is all about character assassination of an opponent. It is a typical Saul Alinsky tactic.

Mr. Chiat then goes on to describe a Washington Post report of a patient (Mr. Tedrow) who without the benefit of Obamacare’s health insurance exchange coverage plus subsidy could not have had a liver transplant. Obamacare saved the patient’s life.

There have been many stories like this published in the traditional progressive media in defense of Obamacare.

The article states that all the Republican Party wants to do is repeal Obamacare and go back the pre-Obamacare dysfunctional healthcare system.

“Republican health-care plan is no better than the pre-reform status quo. Conservatives are within their rights to prefer freedom from taxes and regulation even at the cost of David Tedrow’s well being.”

The New York Magazine article presupposes that a Republican Healthcare Plan will ignore patients like David Tedrow.

“But any morally serious position has to account for the brutal realities embedded in this trade-off. Truman’s war strategy involved killing a lot of Japanese civilians.”

“The Republican health-care strategy is to flip a switch whose immediate effect will be to impoverish and kill a lot of people. Is there a single conservative who will admit this?”

The article also presupposes that Republicans will just flip the switch on the people that need help and kill them.

Republicans must immediately present an understandable healthcare plan to the public that is sustainable and will preserve our freedoms to make our own our healthcare decisions rather than the government choosing for us.

Republican cannot propose tweaks around the edges of Obamacare such as repealing the medical device tax. This proposal will have little effect on repairing the healthcare system.

A reader responding to by last post wrote that describe the writing of a sustainable plan,

“I think you could more simply say this to rally America:

“We must change our healthcare system because its current costs are unsustainable. The only two choices we have is to freely change it by taking more responsibility for ourselves (The American Way) or be forced to do what the Government tells us to do (The Obamacare way).”

“After that, everything else is tactics. Obamacare must be seen for what is it, Government force. It is not healthcare.”

I think the majority of voting Americans, who take the time to think about these things, are aware of the limitations on our freedom to choose and the financial unsustainability of Obamacare.

Americans are aware of the fact that they have been lied to by the Obama administration over and over again. Americans do not trust the Obama administration to make serious healthcare decisions for them.

They do not understand what they can do about it. The President and the congress are supposed to work for us. It is imperative to express your opinion to them.

They understand the progressive spin masters whose only tool is to discredit conservative integrity, thought and intentions.

Republicans must immediately develop and publicize a logical plan will provide universal healthcare for all Americans while maintaining their freedoms.

Americans must be in control of their health and their healthcare dollars even if the government has to supply the needy with healthcare dollars.

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

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Healthcare Needs Some Big Time Disintermediation

March 9, 2014

inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D., FACP, MACE

What is disintermediation?

Disintermediation is a process that provides a user or end consumer with direct access to a product, service or information that would otherwise require a mediator (middleman) such as a wholesaler, lawyer or salesperson.

In many cases the information available on the Internet has often eliminated the need for a middleman.

As commerce grew in the United States after WWII, there was a need for multiple middlemen to fulfill each commercial endeavor.

One of the strongest examples of early Internet disintermediation was Dell Computers. Consumers were able built custom computers by picking the components. They bought exactly what they wanted at a lower price. Michal Dell sold directly to the consumer and bypassed all the middlemen channels and normal retail outlets.

Amazon is another compelling example. It started with books and now includes almost everything. Amazon bypasses most of the channels and all of the expense of brick and mortar structures to lower the cost to the consumer.

Steve Jobs did it best with ITunes. Most people did not want the16 tunes on a CD. They might want one or two. Music publishers and all the middlemen in that industry fought him tooth and nail.

Steve Jobs won because he provided the consumer with what they wanted, the one song at 99 cents as opposed to 16 songs at $16 dollars.

The music publishing companies have now realized that they are doing better since ITunes with less middlemen and more product sales.

My son, Brad Feld, is going to disintermediate the book publishers. Brad authored 5 books for Wiley Press as part of the Start Up Revolution. Wiley Press and its bureaucracy treat him and other authors unfairly.

He and his partners at Foundry Group Venture Capital started FG Press.

“We treat authors like partners, not service providers. Instead of flat fees and unequal royalty assignments, we abandoned the old model and rebuilt it with the author as our top priority.”

I believe the FG Press results will be to disintermediate the entire book publishing industry.

Disintermediation though the Internet also happened in the travel industry, the airline industry, the stock broker industry and the banking industry.

Disintermediation cuts out the middleman.

“By using the Internet, companies and even manufacturers can deal directly with users or end consumers, which is a significant factor in decreasing the cost of servicing customers. The high market transparency often enables the buyers to pay less as they deal directly with the manufacturer, bypassing the wholesaler and the retailer. As another alternative, buyers can also buy directly from wholesalers.”

There is no reason disintermediation cannot be applied to healthcare. The goal in healthcare is to lower the cost, increase quality of care and increase access to care.

The way to do it is by making consumers the most important stakeholder. Consumers must drive the healthcare system just as consumers are put at the head of the line in other disintermediated systems that work.

I have described the evolution of the healthcare business model of 1946 to the business model of 2014 and beyond.

In 1946 the healthcare business model was simple. The healthcare contract was between consumers/patients and physicians.

Consumers were responsible for their medical care. The only technology was physicians’ car his stethoscope and his doctors bag. Consumers were also cautious in their utilization of healthcare services. They did not want to waste their money. They were responsible for their health and their healthcare dollars.

Healthcare insurance destroyed this relationship. Healthcare insurance was attractive to sick people. It was attractive to employers to help their employees stay well. It also helped employer keep their valuable labor force.

Consumers became less cautious about spending their healthcare dollars as third parties were paying for healthcare costs.

The use of technology boomed in medicine. The cost of healthcare escalated as more and more technology was used.

In 1965 the government created Medicare. Medicare regulations distorted the free market healthcare system. The distortion increased further in the early 1980s.

All of a sudden there were more and more middlemen. The middlemen added little value to the medical care of consumers/patients. However they did add increased costs to the healthcare system.

In 2008 the healthcare system became so complex and riddled with rules and regulations that enormous barriers existed between the consumers/patients and their physicians.

It looks like a giant hairball that cannot be digested.

Obamacare was invented to use technology and ideology to straighten this all out. It has made and is making healthcare more unsustainable.

Obamacare cannot work. It is government control. The majority of consumers and physicians are against it.

Obamacare destroys the patient physician relationship. Obamacare has resulted in more bureaucracy, large overhead, more middlemen and an increase in costs to the consumers in terms of higher taxes and higher healthcare insurance premiums.

The major problems are there are too many middlemen and the bureaucracy is superimposed on a failed legacy healthcare system.

The healthcare insurance industry takes 40% off the top leaving 60% of the premium dollars working for the delivery of medical care.

Hospitals charges are outrageous. Hospital expenses are inflated.

The need for cost shifting puts a large burden on hospital systems.

Government interference simply escalates costs.

An example is the cost of chemotherapy. In hospital chemotherapy cost is 2 to 3 time the cost of the chemotherapy done by the same doctor in that doctor’s office. The government does not pay for chemotherapy in the doctor’s office.

An example of disintermediation in the healthcare system is the Oklahoma Surgery Center.

“The Oklahoma Surgery Center demonstrates that it’s possible to offer high quality care at low prices. Surgeons can do twice as many surgeries in an outpatient surgery center than they can in a traditional hospital surgical suite.

Most industries try to improve efficiency. However, simple efficiencies have not occurred in most traditional hospitals. Surgeons spend half their time waiting for the patients to come to the operating room or for the availability of operating rooms and equipment.

The Surgery centers have solved these efficiency problems. They can service surgeons’ needs at less than half the cost without the wasted time.”

A key reason is there are not multiple administrators creating multiple regulations and collecting multiple $500,000 to $3 million dollar a year salaries. Surgical centers have one head nurse responsible for everything and zero administrators.

The cost of a “complex bilateral sinus procedure” at the Surgery Center was an all-inclusive $5,885. The traditional hospital bill totaled $33,505 without the surgeon’s and anesthesiologist’s bill included.”

Hospital systems in the area are lowering their prices and becoming more transparent.

Obamacare has made the healthcare insurance costs worse for the middle class. The middle class healthcare insurance premiums are not subsidized by the government.

Obamacare has made the premium cost better for the poor and sick. It has not necessarily lowered the deductible. It has not made access to care better for the poor.

Obamacare may make quality of care worse. It will restrict access to care. It will ration care. Obamacare will make medical care decisions for consumers.

The only way to repair the healthcare system is to make it a consumer driven healthcare system using my ideal medical saving accounts.

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

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The Anatomy of Healthcare Billing

June 9, 2013

inConsumer Driven Health Care, Disinformation and the healthcare system, Healthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley
Feld M.D.,FACP,MACE

The start of exposing the real cause of healthcare inflation has begun. The billing and reimbursement system is
finally being questioned.

I hope the debate creates an uproar among consumers who are the most
important and most disadvantaged stakeholders in the debate. My hope is consumers will realize they
are pawns in the complex billing and reimbursement system created.

Consumers must also realize they have the power to demand control over their
healthcare dollars and not hope the government will protect them.

Steven
Brill’s article in TIME magazine started the debate. The demand for transparent
pricing has started. Steve Brill’s
numbers are far from accurate. However,the
pricing information is close enough to get consumers mad as hell.

The Centers for Medicare and Medicaid
Services finally released its massive database containing what 3,000 hospitals
charge for 100 of the most common medical procedures.

The database compares the hospital
“chargemaster” to the prices Medicare actually paid.

The reimbursement to hospitals is based
on the hospital system’s estimates of the actual hospital costs plus hospital
administrative overhead. These estimates are an error. The calculation should be the actual costs
and not an estimate of the actual cost.

The database only covers 100 of the
most common illnesses.

I have written about hospital
administrators’ salaries being in excess of 1 million dollars a year with many
being up to 15 million dollars a year. These salaries are included in the
overhead covered by Medicare payment.

I have questioned the appropriateness
of these massive salaries. In Boston there seems to be a contest between hospital
systems for which CEO gets a bigger salary.

Another important question is how many
hospital administrators in a hospital system get an excessive salary for the
value they add to medical treatment.

Who is worth more, a physician or a
hospital administrator?

In many cases the
reimbursement by Medicare to some hospitals is 10% of the hospital’s billing. In other hospitals the difference is 20-40%.

The payment gap between hospital charges
for procedures and Medicare payments is also stunning. The average difference
between hospital charges for the 100 procedures tracked and what Medicare’s
average actually payment is a difference of 72%.

A good metric is to beware of the man
that quotes average percentages if you want to understand the actual
difference.

The best example I have seen to visualize the variation of these prices
in simple terms is as follows.

“Imagine a banana in a supermarket. It costs $1 for those paying
with Visa, $3 for those paying with MasterCard, and $32 for those paying with
cash.

You can't sign up for Visa until you're 65, and you can only get
a MasterCard if you have a nice employer or a decent income.

Worse, customers have no
idea that such price discrepancy exists. They don't even know how much they'll
pay for the banana until long after they've eaten it.”

“That would be absurd. No
one would put up with it.

But it's how our health
care system works.”

Why should healthcare consumers in
America put up with it? Isn’t it the government’s job to protect us from this
abuse and not have a system that encourages it? Obamacare claims to stop the
abuse as it has been going on its merry way to encourage it.

This is not the entire grizzly story.

The average prices by states shows
massive discrepancies. In California, the average hospital charges $101,844 to
treat respiratory infections. In Maryland the average price for the same respiratory
infection is $18,144. The difference is 82% for the same disease in two
different states. The government is the same payer for both states.

New Jersey hospitals bill an average for
$72,084 for "simple pneumonia," while Massachusetts’ hospitals charges
an average of $20,722. Neither of the state’s hospitals receives that much
reimbursement for treating these infections from Medicare. However, New Jersey
hospitals receive more.

Uninsured patients and the indigent
without insurance are getting the shaft. These people will have to pay retail
hospital prices or get sued by the hospital system.

None of the hospital prices are
transparent. A patient cannot even beg the hospital system to get a price.

Many treatments can be administered as
an outpatient. The government pays at least three times more for chemotherapy
in a hospital setting or a hospital outpatient clinic as it would to a freestanding
private outpatient oncology clinic.

What’s the deal? The government doesn’t
trust physicians. It is afraid physicians will overcharge.

What does the government think the
hospital systems are doing?

I have also written about primary care
physicians’ salary being about $100,000- $120,000 a year. Surveys of physician
salaries have shown salaries varying between $100,000 to $600,000 per year. Surgical
subspecialists receive more than primary care physicians.

Let us assume the average physician’s salary
is $300,000 per year. There are approximately 600,000 practicing physicians in
the U.S.

The total physician reimbursement is $180
billion dollars a year in a $2.7 trillion dollar industry. This is less than
10% of the total dollars spent. Even if you doubled physicians’ salaries to
include an overhead of 50% physicians receive 13.2% of the healthcare dollars
spent.

A major question is where is the
remaining 2.5 trillion dollars going?

The healthcare insurance companies take
40% off the top of all care delivered including Medicare and Medicaid and other
government programs. They do all the government administrative services and
hide the fees through deductions that should go to expenses but with the
government’s permission go to direct patient care.

The most important metrics are never
discussed and inaccurately measured.
They are clinical outcomes and quality of procedures performed with
respect to financial outcomes.

The reason this measurement is not done
is because there is no accurate definition or measurement of these metrics.
Clinical outcomes as it relates to cost of care has to be included in the
measurement of quality of care. No one
knows how to do this.

How does all this get fixed?

Consumers must drive the healthcare
system. My ideal medical saving account would go a long way in
dis-intermediating the healthcare insurance industry.

An easy to use web site should be constructed
using the Travelocity, Expedia or the Orbitz formula.

All hospital and physicians’ prices
should be online. All insurance and government reimbursement should be
published on this web site, plus
insurance premiums and their justifications. The real government overhead
should also be available to consumers.

A government web based educational
program to make consumers smart medical consumers would decrease healthcare
costs immediately.

All of the above would be a good start.

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

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Hospital Systems’ Abuses Of The Healthcare System

February 28, 2013

inConsumer Driven Health Care, Disinformation and the healthcare system, Medicine: Healthcare System

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Stanley
Feld M.D.,FACP, MACE

In my very first blogs in
2006 I made the point that all the stakeholders are to blame for the dysfunctional
healthcare system.

Most of the incentives that
created a technology driven healthcare system have been perverse. All the major
stakeholders’ incentives are misaligned.

The major stakeholders are
consumers, physicians, government, healthcare insurance companies,
pharmaceutical companies and employers.

The primary stakeholders
are consumers and physicians. The government, healthcare insurance companies,
pharmaceutical companies and employers are secondary stakeholders. Some
secondary stakeholders provide administrative services and some reimbursement.
None provide medical care.

None of the actions of any
of the stakeholders are transparent. All the stakeholders are trying to take
advantage of the payers (consumers, employers and the government).

The government should be
the neutralizing force. It should level the paying field for all the stakeholders.
Government should not permit one stakeholder take advantage another
stakeholder.

Everyone except the
primary stakeholders “patients and physicians” figured out the money game in
the healthcare system early on.

Government and employers
were next to last in figuring out the game of money gouging. This happened in the early 1980’s when both
said they cannot pay any higher price for healthcare services.

At that point the hospital
systems and the healthcare insurance industry figured out another way to continue
the money gouging. The result was HMOs and managed care. They did not work.

The opacity of pricing
continued, cost shifting flourished, and the price of medical care continued to
rise.

Physicians are not
blameless. However, they are the easiest to blame. Physicians are the least
organized and least aggressive stakeholders in the healthcare system.

In the past, I have
pointed out the real problems that have resulted in the dysfunctions of the
healthcare system. Health policy wonks seem to ignore the real problems.

Consumers and physicians
are mere pawns in this money game.

Without consumers or
physicians there would be no healthcare system. They generate the engine that
provides the need for medical care and administrative services.

I have covered much of the
abuse of the healthcare system by most of the stakeholders.

I have been relatively
easy on hospital systems and pharmaceutical companies until now.

However, the basic problems
in the healthcare system must be to be recognized and then fixed. All of the
problems have to be recognized at the same time and fixed simultaneously.

A patch on one problem
simply intensifies the overall problems.

Obamacare does not solve
any of the real problems. It is an attempt at patching a problem. It will only
make the problems worse and will not reduce the cost of care.

On February 20,2013 TIME
Magazine published an article by Steven Brill. The article is an excellent article
pointing out the abuses of the hospital systems.

“Bitter Pill Why Medical Bills are Killing Us” presents
examples of the abuses of large and small hospital systems.

The basic philosophy that
hospital systems should operate by should be “Patients First.” It is not. It is how much money can I make
from each patient.

Steven Brill asked the
major question. “ Why are hospital bills so high?”

He presented the answer:

http://www.time.com/time/video/player/0,32068,2178453595001_2136781,00.html

The answer is obvious to
all physicians.

One fellow physician
wrote.

Stan

Although
we know much of this, this is an excellent overview of healthcare costs.

Steve

All Americans ought to
understand the distortions hospital system pricing creates. The government
ought to make hospital pricing transparent to everyone..

The government should include
the hospital system’s retail price, wholesale price and actual cost for an item
or service.

Then, consumers can choose
the hospital system to go to.

Policy makers continually criticize
this ideal saying that illnesses are sudden and patients are not in a position
to choose a hospital system or negotiate price.

If the hospital system is
compelled to compete on price the price will be the same as the competitive
price when the patient gets sick. If one hospital is much higher than the next
hospital the patient will know this before hand.

Hospital system charges
are actually higher than they appear. Most hospital systems are non-profit
organizations. The hospital systems do not pay taxes.

Hospital charges are
opaque to everyone, including physicians. Physicians generate the services
hospitals charge for.

As seen in Steven Brill’s
article oncology charges are extremely high.

One oncologist wrote to me
and said he could administer the same therapy in his office for one-tenth the hospital
cost.

However, neither the government nor the healthcare insurance industry
would reimburse him for the office procedure. It is the same procedure he performs
in the hospital.

Doesn’t that seem strange? What is going on?

Steven Brill discovered
that it is almost impossible to find out what hospital systems are charging.

The same opacity is true
for pharmaceutical charges. The
pharmaceutical charges are further inflated by multiple middlemen involved in
drug distribution.

This has been less true
for drugs since Internet Drug stores publish drug prices.

However, since the patients’
physicians prescribed the drug patients are hesitate to use substitute drugs.
The patients’ attitude is that the healthcare insurance company will pay for
the drug less the copay.

Therefore the patients are not interested in looking
up the difference in price or the options for substitution.

This is the reason consumers need skin in the game.

The result of consumer apathy is an increase
in healthcare insurance premiums.

Steven Brill covers the
grotesqueness of retail hospital system charges. He also points out the amount
Medicare reimburses for the grossly inflated charge.

The consumers without
insurance are the consumers that get stuck with the retail charges. Insurer consumers recieve a large discount. The uninsured
consumers are least likely to be able to afford these charges.

In some cases Medicare
reimbursement is less than 20% of the hospital retail charge. Steven Brill
points out that at this time Medicare reimbursement to hospitals is still 10
times its actual costs.

The article “Bitter Pill” is
excellent. It covers many categories of hospital system abuse by the use of
case studies.

The facts are
overwhelming. I am going to try to
categorize these facts in my next blogs. The abuses will be easier to remember.

Consumers must be educated.
The hope is consumers can be activated by education. Only a consumer driven
healthcare system can drive the abuse out of the healthcare system.

Then,
Americans will have an affordable healthcare system.

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

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Big Data Is A Major Problem For The Healthcare System.

October 31, 2012

inChronic Disese Management, Consumer Driven Health Care, Information Technology in Healthcare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

President
Obama is blinded by his ideology. His healthcare policy goal is to eventually
have a single party payer system. Medical care will be commoditized with
treatment decisions made by the central government.

It
is a charade that his health insurance exchanges will lead to affordable
private insurance. It is misguided to believe that a non-elected central
committee (IPAB) will be tolerated to make treatment decisions for the
population.

The
larger pretense is that President Obama is building an inexpensive bureaucracy.
Last week he again stated that government overhead for Medicare and Medicaid is
very low. He again declared that the overhead expense is only 2½ percent.

It
cost two and one half percent for the central government to outsource administrative
services to the healthcare insurance industry. The healthcare insurance
industry, in turn, charges the government 18-40% to administer the programs.

Everyone
knows most everything government run is inefficient. President Obama is
enlarging the scope of government in all areas at a time when government is too
large and inefficient. The government’s income is $1 trillion dollars less than
its expenses per year since he has been President.

President
Obama thinks if he spends enough money he will spend his way out off the jam.

President
Obama believes one way to become more efficient is to gather more data. He can
then figure out which hospital systems and physicians are inefficient and
penalize them.

This
philosophy has two potential pitfalls. If the data is faulty the conclusions
are wrong. The second pitfall is that penalties do not encourage cooperation
and meaningful improvements.

“Decision-making in
healthcare can be painfully slow, as any physician will tell you. Hospital systems and
physicians are being spurred on in part because healthcare is beginning to deal
with a shift in reimbursement toward one that rewards quality and disincentives
inefficiency and waste.

One problem is that quality is not clearly
defined and is sometime false. The government must reexamine its premises.

Most hospitals and health systems have lots of
data that might improve outcomes and cut waste.

The
problem is getting that data, which is often unstructured, into a format that
allows clinicians to make decisions faster and in a more coordinated fashion.

All
of the innovation is happening without input from physicians. It is being done
to decrease the cost of the hospitals. One thought would be to get rid of a few
excess salaried, $750,000 a year hospital administrators and $2,000,0000 plus
healthcare insurance company administrators which would go a long way to reduce
the cost of healthcare coverage.

Instead
the government is looking to penalize physicians. Physicians are the providers
that deliver medical care.

There
is software being developed that deals with real time processing of clinical
data. The software can communicate those data to networked physicians instantly
and help physicians deliver more timely care.

Many
hospital systems are trying to install these real time systems. Unfortunately,
many hospital administrators do not understand its power as a teaching tool to
increase the efficiency and effectiveness of medical care.

The hospital systems’ only interest is in the
financial result and the question of whether the huge investment is worth the
capital expenditure.

Some
physician group practices, independent of hospital systems, are incorporating
these software systems into their electronic medical records. These groups recognize the potential
importance of having instantaneous predictive data.

Most
physicians do not have an EMR and only 7% of physicians have a fully
functioning EMR.

In
the monograph from “Pathways to Data Analytics” two things were very apparent. It
looks like the healthcare insurance industry controls the committee and its
plans is to continue to control the healthcare dollars and hope to control the
healthcare data.

Increasingly, a
data-driven approach to healthcare is necessary.

The complexity of clinical care requires it, says Glenn Crotty
Jr., MD, FACP, executive vice president and chief operating officer at CaMC.

“We’re moving from an
individual practitioner cottage industry to a team-based process now . . .. [Medical
care] is beyond the capacity of any one individual to be expert enough to do
that. So we have to do it in a team.”

A team requires information. The changing dynamics of healthcare
spending and reimbursements also require data to navigate.

“Our analytics are not just for finance, which traditionally is
what hospitals invested in,” says St. Luke’s Chief Quality Officer Donna Sabol
, MSN, RN. “When you look at how [hospital] payment is changing [to] a value-based
equation, you have to have good analytics for finance and for quality.”

Absent from the report is the patient and his/her responsibility
to the therapeutic unit. Until some policy maker understands the role of
patients to the therapeutic unit they will get nowhere in improving the
healthcare system.

A glaring example is the money spent by hospital systems to
improve the discharge process to avoid re-hospitalization within the 30 days
post discharge.

Obamacare has instituted the rule November1,2012 that if a
patient is re-hospitalized within 30 days of the initial hospitalization the
hospital system will not get paid.

I can think of 5 ways hospital systems can get around this rule
without suffering the penalty.

None-the-less the hospital systems are buying software to study
and automate the process to avoid re-hospitalization using its clinical data in
real time.

The Seton Hospital System in Austin Texas
might have figured it partially out.

It started what it calls an extensivist
program. It is acting as an extension of its physicians care to help avoid re-hospitalization
and use the best data it can collect.

Its is helping clinicians identify patients who
would benefit most from extra attention following discharge. The program
started with congestive heart failure patient

"A
lot of it is about enabling decision-making," Ryan Leslie says

"It's taking the whole universe of
information we have and cutting out what's extraneous and giving clinicians the
information they need to make decisions."

Ryan Leslie is vice
president of analytics and health economics at Seton Healthcare system. He is taking
unstructured clinical information and connecting that with billing or
administrative information and social demographic information.

He says, "you start connecting all those things
together and you get a more complete picture of the patient as a person, rather
than as a recipient of a bill," he says. "That's been the exciting
thing recently. You realize that a patients' success or failure may not have to
do with the care plan details or the clinical attributes of the patient as much
as the social attributes."

Physicians
outside the hospital work with a team of social workers, nurses, and others to
visit patient homes and figure out what's keeping a patient from effectively
following treatment protocols that will likely keep them out of the hospital.

The software
helps determine, based on a host of combined data, which patients are most
likely to be re-hospitalized within 30 days. Targeting the patients is like
looking into a crystal ball. The hospital system cannot afford to service all
the patients with congestive heart failure. The program is in its early stages.
If successful the plan is to expand it to diabetes and other chronic diseases.

This will
happen well beyond November 2012 and January 1,2014. This hospital system
finally realized that it can and must be an extension of its physicians’ care
and not a competitor for patient care.

Missing is the
patients responsibility and incentive in not being readmitted to the hospital.
This can only be accomplished when consumers not only have a desire to be
healthy they have a financial interest to stay healthy.

This can be
accomplished in a consumer driven healthcare system where the patients are responsible
for their health and own their healthcare dollars. The easiest way to get there
is using my ideal medical savings accounts.

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

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