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Medicare: Is Not So Cheap – Part 2

February 24, 2008

inMedicare

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Stanley Feld M.D.,FACP,MACE

Medicare Part B plus Medi-gap is not so cheap and might not be affordable to many seniors. The promise of affordable universal healthcare with a single party payer is hard to believe if this is what is happening with Medicare premiums. However, most seniors can not afford to be without Medicare and Medi-gap. All of their retirement savings could be wiped out with a minor illness.

The magnificent thing about Medicare Part B is that each senior citizen is insurable at the same premium despite pre-existing illness. The guarantee of insurability despite pre-existing illness is a must in any healthcare reform insurance plan. The bad thing is fewer and fewer physicians are accepting Medicare because of the constant reductions in reimbursement. Therefore patient access to care is becoming restricted.

Patients are responsible for the entire retail price of the service if their physician does not accept Medicare payment. If their physicians’ do accept Medicare payment the patients are responsible for 20% of Medicare’s allowable fee. Medicare usually reduces physicians’ fee by 20-50%. Medicare reimburses the physician directly for 80% of its allowable fee. If patients have Medi-gap, it pays the remaining 20%. This means a physician’s fee for service of $100 might be reduced to a Medicare allowable fee of $70. Medicare would pay $56 dollars, Medi-gap $14 and the patient would be liable for an additional $30.

As the single party payer (Medicare) reduces payment (payment might be less than the physician’s overhead) and as Mediare’s rules become more complex and restrictive, physicians are forced to reject taking Medicare patients.

Hillary Clinton and the Democratic Party have not discussed these issues. They have not asked the patients or physicians where the problems are nor how they think they can be solved. The empty promise of universal coverage is all we hear. Barach Obama has not committed to this concept. He wants to get all the stakeholders to the table. Ms Clinton has attacked him for this stance as being weak.

It seems to me that he is the only one who believes there is more to the healthcare story than a flashy sound bite of universal insurance for all.

Medicare has been a godsend to people over 65 who do not have group insurance and are retired. People over 55 years old can not get healthcare insurance from carrier if they have any pre-existing illness without a coverage exclusion. Most are rejected outright. By the time Americans are 55 years old they have at least one preexisting illness. If they could get healthcare insurance it would be with after tax dollars.

Over 60% of Americans 60 years old have at least one risk factor for coronary artery disease. Obesity is an epidemic that has to be dealt with by providing patient incentives. It afflicts 50% of people over 60. The healthcare insurance industry does not want to assume the disease burden of obesity. It wants to pass this risk to the government.

I have pointed out that the healthcare insurance industry has stated that it wants to work with the states and the federal government to insure the uninsured. My interpretation of this statement is it wants to pass the risk on to the states while it insures healthy low risk citizens. If the federal government mandates healthcare insurance with a penalty to non covered citizens, the healthcare insurance companies would benefit by enrolling more healthy people and shunting the sicker people to the government roles. Citizen free choice would be eliminated. Hillary Clinton’s stated healthcare plan would cause this to happen.

What is the solution? Stakeholder incentives and appropriate rules of the game is the solution. Mechanism Design explains the construction of the appropriate rules. The playing field needs to be leveled for citizens to force the healthcare insurance industry, the hospitals and physicians to compete for their healthcare dollar at the best price. The government needs to remove all the artificial subsidies for secondary stakeholders, and shift subsidies to the patients benefit so that each pays a fair premium pretax premium determined by accurate means testing. Accurate means testing could result in a subsidy to many citizens. It will cost the government less if the patients owned their healthcare dollar than the ever escalating entitlement system supporting vested interests of the facilitator stakeholders.

The federal government has the power to do all of this without impinging on anyone’s freedom.

Medicare and Medicaid have failed as an entitlement. It is foolhardy to create a super Medicare or Medicaid system without further injuring our healthcare system and Americans’ ability to get good medical care.

As consumers, we stimulate the economy. Now is our chance to demand that he politicians give us control of our healthcare system. They are presently begging for our vote. We have to make it clear that they our not solving our problems. They are only going to make them worse. We must demand proper reform now.

Below are a series of blog posts I have published previously describing all the steps necessary to Repair the Healthcare System.

Ideal Medical Savings Account
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2006/10/the_ideal_medic.html

The Definition of an Electronic Medical Record
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/01/the_complexity_.html

The Ideal Electronic Medical Record
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/01/the_ideal_elect.html

Medical Claims Data: The wrong measurement to control cost
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/11/physician-focus.html

Fall 2007 Summary Post- Part 1
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/11/fall-2007-what-.html

Fall 2007 Summary Post-Part 2
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/11/fall-2007-wha-1.html

Mechanism Design- Noble Prize in Economics 2007
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/11/mechanism-desig.html

Definition of Real Price Transparency
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/05/what_is_real_pr.html

E-Prescriptions= Fuzzy Thinking
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2007/12/e-prescriptions.html

Inequality and Healthcare
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/02/inequality-and.html

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

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Private Insurers Jump on Physician Ranking

November 21, 2007

inMedicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

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

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

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

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

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

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

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

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

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

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

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

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

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CONGRESS DOES IT TO US, AGAIN

July 14, 2015

inDisinformation and the healthcare system, Healthcare Insurance Industry, Medicare, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

Americans have lived through scandal after scandal and lie after lie during the Obama administration.

None of the guilty parties have been penalized.

President Obama lied about Obamacare. “If you like your doctor you can keep your doctor.” “If you like your insurance plan you can keep your insurance plan.”

Yet Obamacare continues to destroy our healthcare system as well as our economy with unconstitutional changes in the law, lies, increased regulations and an expanded bureaucracy.

Notable scandals have included the Benghazi affair, clandestine weapons to Syria, red line foreign policy retreats, IRS scandals, the Clinton email scandal, and now the Iranian nontransparent nuclear agreement scandal. I can go on and on.

The traditional media does not report the details of the scandals. There is little complaining from the traditional media about these scandals that President Obama reports as insignificant.

The scandals last only a few news cycles. Most of the scandals are then ignored. There is hardly ever accountability from or punishment for the guilty parties.

Republicans just sit back and do nothing to expose the scandals.

The number of uninformed Americans amazes me. Government policies are mentioned but are deemed by progressives as being insignificant. There is hardly ever any correlation between the scandals and the effect on our budget deficit and our economy.

I think Americans are finally starting to get it. They are becoming fed up with the unbridled arrogance of President Obama and congress.

The government is shafting American taxpayers without anyone knowing it.

The most outrageous scandal in Washington has been kept under the radar and away from the press.

The House and Senate have both falsely certified themselves as small businesses in order to fund health insurance for themselves and their staff with taxpayer dollars, sidestepping provisions of Obamacare.

How did this happen? Why wasn’t this reported in the press?

When President Obama and the Democrats were rushing the health care law through Congress without even knowing what was in it, Chuck Grassley (R-IA) managed, with strong public support, to insert a provision in the law requiring members of Congress and their staff to purchase insurance through the new health care exchanges.

Senator Grassley’s goal was to have Congress and their congressional staffs have the same healthcare insurance experience that millions of Americans were going to have.

His hope was to create a strong incentive for Congress to make sure that President Obama’s new healthcare insurance system worked.

When congress and the congressional staff realized the cost of being in the healthcare exchanges and they needed to give up Medicare C, Congress’ special Medicare program, congressmen and their congressional staff bitterly complained to President Obama.

President Obama had the Office of Personnel Management (OPM) issue a rule in 2013 allowing Congress and congressional employees to once again have taxpayers continue pick up most of the cost of their premiums.

State and federal health insurance exchange rules do not permit employers of large organizations to pay the premiums for their employees.

“Like many Americans being dumped into Obamacare exchanges, members of Congress and their staff stood to lose their employer contributions – in this case, the generous financing of their health benefits by taxpayers that they had before the law passed and took it away.”

The OPM ‘s rule makes clear that congressional members and staff still can receive the contribution from the government even though they have purchased their insurance from their exchange.

Office of Personnel Management’s (OPM) changed the rule in 2013. The rule insulated these insiders from the premium increases of between $5,000 and $10,000 per person they would have otherwise faced if they were forced give up their taxpayer-subsidized policies and buy their insurance through the Obamacare exchanges.

This rule is illegal because it separates Congress and staff from the rest of the population. The only employers that can make contributions for their employees purchasing insurance through the exchanges are small businesses with less than 50 employees.

“There is no mechanism for employer contributions in the individual healthcare exchange market.”

Congress also filed false documents claiming the House and Senate each have less than 50 employees to qualify as “small businesses,” even though over 13,700 congressional employees have in fact signed up.”

“ That’s fraud.”

Judicial Watch obtained these false documents in Freedom of Information Act litigation.

However, the documents were heavily redacted including the names of Senators and Representatives who signed these false documents under penalty of perjury.

The blatantly false documents stated that the Representatives and Senators each have only 45 employees. The congressional staff is not an individual Representative or Senator’s employee. They are government employees.

The employer, the federal government, has more than 49 employees and is not a small business.

“The House and Senate have both falsely certified themselves as small businesses in order to fund health insurance for themselves and their staffs with taxpayer dollars, sidestepping provisions of Obamacare.”

An important question the public has to know the answer to is which Senators and Representatives signed the false declaration.

“Senator David Vitter (La.), chairman of the Senate Small Business Committee recently tried to subpoena the documents in which the false declarations were made, but he ran into strong bipartisan opposition.”

Senator Vitter wanted to know how the House and Senate, with thousands of government employees, came to be officially designated as small businesses. He wanted to know who signed the false documents and have his committee question these representatives.

Fourteen (14 of the 19) members of his committee objected to Senator Vitter proceeding with the subpoena of documents.

Democratic senators on Senator Vitter’s committee all voted in lockstep to keep the signed documents a secret from the American people.

They are: Jeanne Shaheen (N.H.), Maria Cantwell (Wash.), Ben Cardin (Md.), Heidi Heitkamp (N.D.), Ed Markey (Mass.), Cory Booker (N.J.), Chris Coons (Del.), Mazie Hirono (Hawaii), and Gary Peters (Mich.).

Republicans on the committee who voted to keep the documents secret from the people are Mike Enzi (Wyo.), Jim Risch (Idaho), Deb Fischer (Neb.), Kelly Ayotte (N.H.) and Rand Paul (Ky).

Republicans on the committee voted with Chairman Vitter to issue the subpoenas to those whose signed the false documents were Marco Rubio (Fla.), Tim Scott (S.C.), Cory Gardner (Colo.), Joni Ernst (Iowa).

These Republicans were the only ones that voted for the vested interest of the American people.

This is a very significant scandal.

The traditional mainstream media should be reporting this scandal. I think the Representatives and Senators who signed the false documents should be booted out of office.

It is a perfect example of Congress and the President making backroom deals for the benefit of Congressmen their congressional staff.

The congress is ripping off taxpayers while taxpayers not only are paying for their illegally subsidizing healthcare insurance.

Taxpayers have to pay the increased premiums for their own insurance while they are paying for congress’ healthcare insurance by on illegal congressional maneuver.

This corruption should make the American people madder than hell if they knew this was going on.

However the media is the message. The media is keeping us stupid. This scandal like others will fade away as being insignificant.

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How Should Healthcare Quality Be Measured?

April 26, 2015

inDisinformation and the healthcare system, Medicine: Healthcare System, Patients Problems, Physician's Problems, Quality medical care measures, Stakeholder Mistrust

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Stanley Feld M.D., FACP,MACE

The U.S. Preventive Services Task Force’s (USPSTF) grading system for measuring the quality of healthcare is an wrong. It results in a way to limit physicians’ judgment and treats medical care as a commodity. It enables a computer program to judge if physicians have followed an algorithm to treat patients.

“The U.S. Preventive Services Task Force (USPSTF).^[57]^[^{citation needed} has developed grading systems for assessing the quality of evidence for making judgments about treatments.

Level I: Evidence obtained from at least one properly designed randomized controlled trial.
Level II-1: Evidence obtained from well-designed controlled trials without randomization.
Level II-2: Evidence obtained from well-designed cohort or case-control analytic studies, preferably from more than one center or research group.
Level II-3: Evidence obtained from multiple time series designs with or without the intervention. Dramatic results in uncontrolled trials might also be regarded as this type of evidence.
Level III: Opinions of respected authorities, based on clinical experience, descriptive studies, or reports of expert committees.”

The grading system is wrong. I will lead to shabby medical care. If quality of care should be measured, it should be measured by using Evidence-Based Behavioral Practice evaluations

“Evidence-based behavioral practice (EBBP) "entails making decisions about how to promote health or provide care by integrating the best available evidence with practitioner expertise and other resources, and with the characteristics, state, needs, values and preferences of those who will be affected.”

“Empirically supported treatments (ESTs) in some clinical settings are defined as "clearly specified psychological treatments shown to be efficacious in controlled research with a delineated population" ^[3]

Only when physicians’ clinical judgment and observations are included in the assessment of their quality of medical care should evaluation of that quality of care be measured.

The narrow criteria of the USPSTF will not define quality. It will only serve to restrict access to care and penalize physicians for using clinical judgment and consumers’ from receiving medical care.

Suddenly, it becomes easy to see how difficult it is to assess the quality medical care.

There is little question that an occasional physician practices terrible medicine. This is obvious to the medical community. The mechanism for improving a bad physicians quality of care is in place but not well executed.

Few, especially healthcare policy wonks, seem to understand the difficulty of assessment of medical care.

It should be easy for policy wonks to understand the limitations and criticisms of evidence based medicine.

Yet the Obama administration regards evidence-based medicine as measured presently as the gold standard of clinical practice,

Limitations and Criticisms of Evidence-Based Medicine (EBM)

EBM produces quantitative research, especially from randomized controlled trials (RCTs). Accordingly, results may not be relevant for all treatment situations.^[67]

This is obvious to most physicians.

The theoretical ideal of EBM (that every narrow clinical question, of which hundreds of thousands can exist, would be answered by meta-analysis and systematic reviews of multiple RCTs) faces the limitation that research (especially the RCTs themselves) is expensive; thus, in reality, for the foreseeable future, there will always be much more demand for EBM than supply, and the best humanity can do is to triage the application of scarce resources.

The reasons for EMS shortcoming are listed below. The list is not complete.

Because RCTs are expensive, the priority assigned to research topics is inevitably influenced by the sponsors' interests.
There is a lag between when the RCT is conducted and when its results are published.^[68]

There is a lag between when results are published and when these are properly applied.^[69]
Certain population segments have been historically under-researched (racial minorities and people with co-morbid diseases), and thus the RCT restricts generalizing.^[70]
Not all evidence from an RCT is made accessible. Treatment effectiveness reported from RCTs may be different than that achieved in routine clinical practice.^[64]
Published studies may not be representative of all studies completed on a given topic (published and unpublished) or may be unreliable due to the different study conditions and variables.^[71]
Research tends to focus on populations, but individual persons can vary substantially from population norms, meaning that extrapolation of lessons learned may founder.
Thus EBM applies to groups of people, but this should not preclude clinicians from using their personal experience in deciding how to treat each patient. One author advises that "the knowledge gained from clinical research does not directly answer the primary clinical question of what is best for the patient at hand" and suggests that evidence-based medicine should not discount the value of clinical experience.^[56] Another author stated that "the practice of evidence-based medicine means integrating individual clinical expertise with the best available external clinical evidence from systematic research."^[72]
Hypocognition (the absence of a simple, consolidated mental framework that new information can be placed into) can hinder the application of EBM.^[73]
Valid enthusiasm for science should not cross the line into scientism, losing critical perspective.
Although clinical experience and expert opinion are insufficient by themselves, neither are they valueless, as EBM fervor that approaches scientism sometimes tends to paint them.

This last point is repetition of a very important shortcoming.

An informed clinician can weigh confounding variables in a clinical case and decide that following a population-based guideline to the letter feels inadequate for the situation. Thus clinical backlash against "cookbook medicine" is not always misguided, and "guidelines are not gospel."^[74]
Conceptual models, by having fewer variables than always-multivariate reality, face limits of predictive accuracy, just as even the best supercomputer simulations cannot predict the weather with 100% accuracy, whether because of the butterfly effect or otherwise.
Thus, just as clinical judgment alone cannot give epistemological completeness, neither can RCTs and systematic reviews alone.”

The answer to the reader’s last comment and question, “I believe a carrot and stick approach may be necessary with more carrot and less stick. Your thoughts?” is

I believe that government must learn how to evaluate quality medical care accurately, if they want to base healthcare payments on the quality of medical care. Presently, the government is far from achieving that goal.

It could also be that measuring quality medical care is not President Obama’s goal.

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

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The Chautaugua: The Feld Men’s Trip

August 29, 2012

inLife's Experiences

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Stanley
Feld M.D, FACP,

Two weeks ago
after I wrote “A Tribute To Jack Feld”, I received a bunch of requests to write
about the upcoming Chautaugua we had scheduled at the Aspen Institute for this
year’s Feld Men’s Trip.

Left to Right: Daniel, Stan, Kenny,
Jon, Brad in front and Charlie. There was no room on the rock for Brad so he
was pushed off.

Our private
Chitaugua took place August 23rd-26^th. Each of the 6 of us had 2-3
hours to talk about anything we wanted. During that time there would be
discussions and reactions to the ideas each of us presented.

My brother,
Charlie Feld, requested that he go first and that I be the cleanup presenter.

I figured
that was good because I would try to pull everyone’s ideas together.

Charlie
distributed statistics about the United States for the last 70 years. There are many categories that can be compared
such as population, the unemployment rate, the national debt and the baseball
standings.

http://www.infoplease.com/year/1942.html

http://www.infoplease.com/year/1952.html

http://www.infoplease.com/year/1962.html

http://www.infoplease.com/year/1972.html

http://www.infoplease.com/year/1982.html

http://www.infoplease.com/year/1992.html

http://www.infoplease.com/year/2002.html

The only
thing that remained stable was that on August 23 of each decade the New York
Yankees were in first place in their league or division.

The major
point that was made was there has always been uncertainty and change in the
world.

Technological
change has accelerated social, political and economic change.

PC’s are 30
years old. Smart phones are 12 years old. Our son’s kids don’t know what a
typewriter is. Imagine the rate of change in the next ten years.

We did a
lot of imagining.

We
concluded that change is not random. Technological change has stimulated innovation,
which in turn stimulated more innovation.

Leadership
evolves, and initiatives are started. The ability to change and progress lies
with Americans’ individual freedom.

The U.S.
constitution gives Americans these freedoms. We must protect these freedoms.

My son,
Brad Feld, was next. Brad is in the midst of creating a “Start Up
Revolution.”

He just
finished a book called” Start Up Communities, Building an Entrepreneurial
Ecosystem in Your City.”

Brad spoke
about the value of entrepreneurial ecosystems. He outlined how networking can increase
the efficiency of all organizations.

He stated
that society is in the process of changing from a hierarchical society to a
networked society. Hierarchical society was an invention of the industrial
revolution. The networked society is an outgrowth of the Digital society as we
progress through the Electronic
Revolution.

He also
spoke about the importance of social networking to communities and the vital
need for mentees to become mentors in their community.

The
community should become a non-zero sum community to enhance innovation in the
community. Community meet-ups are vital to enhancing entrepreneurial
ecosystems.

For more
details, buy his book. I think it is great even if I am his father.

The level
of the discussion of the first two sessions overwhelmed me. In fact the
discussions spilled over well into dinner.

Jon Feld
was up next. Jon talked about the mechanism for being great at something. First
you have to have a passion for the activity. Then it takes 20,000 hours of
intense practice. Sometimes putting in your 20,000 hours does not result in
greatness.

Daniel Feld
is missing because he is taking the picture. Jon is speaking and Charlie, Brad, Kenny and Stan are listening.

He gave us
examples. The discussion then went to kids and their inability to be exposed to
multiple activities because of the intensity of competition.

The lack of
concentration on one activity puts them too far behind children who have perfect
one activity.

The
examples given were basketball, baseball, piano, orchestra playing, dancing, singing
or acting.

The
children of today must concentrate on becoming expert in one activity and make
the grade in middle school or high school.

I remember
being perfect in nothing but exposed to everything. I wanted my boys to have
the same exposure. It worked.

In my view
a one- dimensional exposure to activities can be stifling when a child reaches
adulthood.

The
combination of a one-dimensional child exposed to fierce competitive stress can
burn out a child rapidly. If the parent is living through the child’s success
is can affect the parent/child relationship.

“Kids are
people too.”

I reminded
the guys that my father said to me “I could do anything I wanted as long as I
became a doctor.”

Brad
reminded us all that I said to him, “he could do anything he wanted.” I ended the sentence there and he appreciated
it.

The
discussion lasted a long while with lots of great ideas and opinions.

Kenny was
terrific. He analyzed the way he problem solves. He is very perceptive and very
optimistic. We discussed decision making in the context of reality vs. fantasy.

The
discussion became deeper and deeper as we progressed. This enhanced our bonding
with each other. Jon brought up the concept of the six of us being a tribe and
something special was happening here.

Daniel
asked us to define the meaning of charitable giving. Of the six of us Brad’s
concepts and methodology wins the prize. He and Amy have done a lot of thinking
about the concept. They have developed a well-designed plan for giving.

There were
many meaningful ideas presented. We all
agreed that charity was a lousy word. The common denominator should be that
giving be self-satisfying.

I was the
cleanup hitter. I started off by saying a mentor somewhere along the line gave
my brother and me the thirst for lifelong learning. I have learned from this meeting
that we have somehow transmitted this thirst to all four boys.

I also said
we all have to be involved in our community whether national or local.

This
statement pressed my Repairing the Healthcare System button. My brother is a
fan of my concept.

The boys
understand that the healthcare system is self-destructing. There is nothing
anyone can do because of the political irrationality of the day.

My point
was we should never stop trying.

This led to
the last question. Which character did each of us identify most with in “Atlas
Shrugged” and why?

I will leave
the answers for another time.

It was a
fascinating weekend. When I spoke to Cecelia during the weekend all I could say
was it was a phenomenal weekend as I was savoring the concepts discussed.

Wow. Same
time next year.

My Brother
and I discussing the progress of the Chautaugua at breakfast.

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

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A Little More Disinformation From The New York Times

November 20, 2011

inUncategorized

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Stanley Feld M.D.,FACP,MACE

It is getting harder and harder for me to read the New York Times. The half-truths are glaring. The bias is becoming more and more transparent.

Dr. Ezkiel Emanuel’s article in the New York Times on November 3^rd continues with these half-truths and bias.

“According to many on the left, health insurance companies are sleazy and unethical, making obscene profits by charging high prices to sick people, giving physicians and patients the runaround to avoid paying bills, and rescinding policies just when people who paid in good faith get cancer, while their executives often walk away with millions in compensation.”

All of the above is true. The main issue is how the healthcare industry can continue to get away with it.

Dr. Emanuel has not bothered to learn how to read the healthcare insurance industry’s financial statements.

The individual state’s Board of Insurance is in charge of regulating the healthcare insurance industry. The stated goal is to protect consumers.

All state boards issue licenses to sell healthcare insurance yearly to healthcare insurers.

Few of the state Boards of Insurance have enforced their own regulations. The state insurance boards could easily refuse to issue a license to a company that doesn’t follow the regulations

Dr. Emanuel takes the healthcare insurance industry’s bottom line literally, while ignoring the financial facts.

“Last year, health insurance companies did rack up big profits, but it turns out that the combined profits of the country’s five largest for-profit health insurance companies — United, WellPoint, Aetna, Humana and Cigna — were $11.7 billion, only 0.5 percent of total health care spending.”

“Even confiscating every penny of those profits would add up to less than half of the cost-saving threshold. And even not-for-profit insurance companies need to have an operating margin — a profit by another name. There just isn’t enough money there to make a dent in health care spending.

Dr. Emanuel’s obvious conclusion is $11.7 billion profit is not meaningful. It should not be considered to influence the total cost of healthcare or future healthcare policy.

“ A useful threshold for savings is 1 percent of costs, which comes to $26 billion a year. Anything less is simply not meaningful.”

He says .

Health care spending in the United States typically increases by about $100 billion per year. Cutting a billion here or there from something that large is undetectable is meaningless. In health care, you have to be talking about tens of billions of dollars before you are talking about real money.

The bottom line figure after expenses might be published as only $11.7 billion dollars but the real profits are buried into the profit built into the administrative expenses that do not get added into the bottom line.

The truth is,

Over 20 percent of consumers who purchase coverage in the individual market today are in plans that spend more than 30 cents of every premium dollar on administrative costs.

An additional 25 percent of consumers in this market are in plans that spend between 25 and 30 cents of every premium dollar on administrative costs.

And in some extreme cases, insurance plans spend more than 50 percent of every premium dollar on administrative costs.

President Obama thinks his law will decrease these expenses. The public has also been lead to believe that Medicare’s administrative overhead is 2.5%. The 2.5% is the overhead to maintain a CMS department outsourcing administration services to the healthcare insurance industry and generating new regulations.

The percentage of overhead has to be higher much higher now with the development of Dr. Berwick’s bloated bureaucracy.

CMS outsources its administrative services to the healthcare insurance industry. The healthcare insurance industry adds an additional 20-30% to the bid price for services claims.

A large administrative service provider (Trailblazers) in Texas was just outbid for its administrative services by an east coast administrative service provider (Highmark) confirming the bid pricing mechanism.

Strangely, both Trailblazers and Highmark are subsidiaries of Blue Cross/ Blue Shield. This is the place that 20-30% is taken off the top of the Medicaid and Medicare budget and is not included in the bottom line.

The healthcare insurance industry is required to maintain the Medical-Loss Ratio at 80-85%. Medical Loss Ratio means it has to spend 80 to 85 percent of premium dollars on medical care and health care quality improvement rather than on administrative costs.

Healthcare insurance companies have been permitted, by the government, through the influence of its lobbyists, to shift certain expenses from administrative expenses into the patient care expenses. The result is less money spent on direct patient care.

The cost of verifying the credentials of doctors in its networks.

These expenses are designated as direct patient care expenses. Each expense is a profit center. This profit is not reflected in the healthcare insurance company’s bottom line. These are the reasons the net income figures are bogus.

Aetna made $4.8 billion dollars in profit on Medicare Advantage and Medicare Part D alone two years ago.

“Citigroup research group estimates that presently the overall healthcare insurance industry’s net profit is about $56.5 billion per year. The addition of 16 million enrollees will add $40 billion dollars in net profit to the healthcare insurance industry’s bottom line.”

“Gail Boudreaux, UnitedHealth's executive vice president, told investors last month that: "The Medicaid space is a significant long-term growth opportunity for us. It's a big market that's getting even bigger." UnitedHealth pegs the value of new bids or expansions over the next three years at $40 billion.”

The net profit of $11.9 billion dollars is a bogus figure. Dr. Emanuel has to know this. The healthcare insurance industry is cooking its books.

President Obama and his administrative advisors are pretending to believe the numbers produced by the healthcare industry.

The administration in turn is using the media and its power of the pulpit to convince the public to believe it.

The bizarre thing is that the scheme is working as reflected in the comments to Dr. Emanuel’s article.

This is disinformation are its best.

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

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The Healthcare Insurance Industry Is Not Interested in Being Price Transparent.

October 16, 2011

inConsumer Driven Health Care, Healthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Truthful information (Price Transparency) is a huge issue in the healthcare system. Hospital systems, physicians, drug companies, pharmacies, the healthcare insurance industry and the government hide behind the opacity of information.

There is a mutual distrust among stakeholders.

This mutual distrust must be overcome and price transparency achieved before any progress can occur in Repairing The Healthcare System.

In order to achieve Pareto efficiency in the healthcare system all the stakeholders must agree to price transparency. The advantage of Pareto efficiency is that all the stakeholders will be better off in the long term while some might have to yield to some issues in the short term.

Lodi Hurwicz introduced the idea of incentive compatibility. His point is the way to get as close to the most efficient economic outcomes is to design mechanism in which everyone does best for himself or herself. He says this can be achieved by sharing information truthfully (Price Transparency). It is easy to understand that some people can do better than others by not sharing information or lying.

The lack of interest in price transparency by the healthcare insurance industry was demonstrated in New York State in the last few weeks.

Major health insurance companies seeking steep premium increases in New York have submitted memos to state officials to justify the higher rates. Now they are fighting to keep the memos from the public, saying they include trade secrets that competitors could use against them.

Benjamin M. Lawsky, the state superintendent of financial services, whose new agency oversees the state insurance division said,

“How these companies are setting these rates is vital for the public to know, and should not be treated like a state secret,” “Transparency will promote healthy competition and enable the public to rigorously comment on proposed rates, two goals that all of us should favor.”

The state insurance division issues permits to healthcare insurance companies to sell insurance in the state. If a healthcare insurance company does not want the state to publish the reasons for its insurance premium increases they should not be issued a permit to sell healthcare insurance in that state.

Mr. Lawsky has ordered that the memos be made public. His decision will go into effect by the end of November unless the companies obtain a court injunction.

The healthcare insurance industry has held the advantage over consumers in the past under the long-standing “trade secret” exemption. The state legislature should have the courage to eliminate that exemption.

The decision followed a battle by a consumer advocacy coalition, Health Care for All New York, which had first sought information for a policyholder in Queens who faced a 76 percent increase in his family’s Emblem Healthpremium. (The fee was later raised by 270 percent.)

State Insurance Department has received hundreds of consumer protests over proposed premium increases, many of them double-digit percentages without justification except that it must be done. The State Insurance Department now has the power to reject proposed rate increases. The question remains as to whether they have the courage to reject the increases.

Aetna and others are making outrageous profits selling healthcare insurance and paying its executives many millions of dollars a year in salary.

Aetna, like other carriers, has said premium increases are driven by the actual cost of health care. But consumer advocates dispute such assertions, while complaining that it is hard to challenge the increases without access to the company filings.

United Health/Oxford wrote, “This matter is of critical importance to us.” It called the information “proprietary.”

Aetna wrote, “Public disclosure in this format will provide ready and easy access to comprehensive pricing, product and marketing strategies,” and warned of “substantial and irreparable injury to Aetna.”

Independent Health said, “It had spent “well over $700,000 developing the trade secret documents” and estimated that the value of keeping them confidential was much higher.

It sounds as if both Aetna and Independent Health are threating the state with legal action. If they do not like the state rule they should move on and not sell insurance in that state.

The state’s obligation is to protect its consumers from abuse. The state should simply deny permits to the healthcare insurance company to sell healthcare insurance in the state.

Moreover, other companies argued, the filings are too technical to be understood by consumers.

“Several of the exhibits to the rate application as well as the actuarial memorandum contain not only trade secrets as noted above, but esoteric actuarial pricing precepts best understood by fellow actuaries and health plan competitors,” Sean M. Doolan, a lawyer representing Excellus, Empire, Connecticut General, and Capital District Physicians’ Health Plan wrote to state officials.

“These documents, often speaking of concepts such as morbidity and anti-selection, could cause not only confusion, but also unnecessary alarm to the layman policyholder.”

These are excuses. They are lame and patronizing. Consumers are not as dumb as the insurance industry thinks.

Elisabeth Benjamin is vice president for health initiatives at the Community Service Society of New York and a founder of Health Care for All New York, a coalition of 100 groups working for more affordable medical care. She said the group has hired its own actuaries.

“The only way the public will find out whether these outlandish price hikes are justified is if we can see the underpinnings,” she said. “They would like to have us ignorant. What they are saying to us, by opposing the disclosure of why they think their rate increases are justified, is that they want to keep us uninformed consumers.”

They sure do want to keep consumers ignorant. I hope the state officials are not intimidated by the healthcare insurance companies. I hope the state officials are supported by New York’s governor. Consumers are starting to understand their power. They need to drive the healthcare system. This issue is a good place to start.

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

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Is This The Change We Want?

July 18, 2010

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

This week Senate Republicans demanded to hear from Dr. Don Berwick, the physician President Barack Obama appointed during the July 4^th Senate recess to run the Medicare and Medicaid programs.

Dr. Berwick took office last week.

“Republicans on the Finance Committee, which has jurisdiction over the post, say that not holding a hearing with Berwick would “result in circumventing the open public review that should take place for a nomination of such importance” and “casts a shadow over his legitimacy and authority to serve as administrator during a critical time for CMS.”

President Obama did an end around on Finance Committee Chairman Max Baucus (D-Mont.). Senator Baucus said he was troubled that Dr. Berwick did not have a confirmation hearing.

“Senate confirmation of presidential appointees is an essential process prescribed by the Constitution that serves as a check on executive power and protects Montanans and all Americans by ensuring that crucial questions are asked of the nominee – and answered,”

After Dr. Berwick was installed in office, Senator Baucus said, “fully expects" new Medicare chief Donald Berwick to testify before the panel "in the near future."

Does President Obama have enough respect for the Senate or the American people to honor Senator Baucus’ request?

Why all the fuss?

There are two reasons:

1. “Dr. Berwick’s ideas on the design and purpose of the U.S. system of medicine aren’t merely about "change." They would be revolutionary.”

2. “One may agree with these views or not, but for the president to tell the American people they have to simply accept this through anything as flaccid as a recess appointment is beyond outrageous. It isn’t acceptable.”

Problem solving has three components;

a. Goals

b. Philosophy

c. Mechanisms.

All three must be kept in mind when evaluating decisions. There is no question that the mechanical aspects of healthcare and medical care must be changed in order to have a more cost effective, affordable system. I have discussed all of the areas of waste and abuse in the healthcare system previously. Many of these areas are not addressed in President Obama’s healthcare legislation.

Increasing the bureaucracy without developing a system of individual responsibility, individual choice, and individual accountability has not worked historically.

Yet Dr. Berwick’s many public statements reflect a new system that denies these freedoms and subjugates the individual’s freedom of choice to collective government decisions.

I am amazed at how few people are aware of the Dr. Berwick issue. I am again publishing his statements as Daniel Henniger did in order to bring more attention to the issue.

Excerpts are from past speeches and articles by Dr. Berwick:

"I cannot believe that the individual health care consumer can enforce through choice the proper configurations of a system as massive and complex as health care. That is for leaders to do."

"You cap your health care budget, and you make the political and economic choices you need to make to keep affordability within reach."

"Please don’t put your faith in market forces. It’s a popular idea: that Adam Smith’s invisible hand would do a better job of designing care than leaders with plans can."

"Indeed, the Holy Grail of universal coverage in the United States may remain out of reach unless, through rational collective action overriding some individual self-interest, we can reduce per capita costs."

"It may therefore be necessary to set a legislative target for the growth of spending at 1.5 percentage points below currently projected increases and to grant the federal government the authority to reduce updates in Medicare fees if the target is exceeded."

"About 8% of GDP is plenty for ‘best known’ care."

"A progressive policy regime will control and rationalize financing—control supply."

"The unaided human mind, and the acts of the individual, cannot assure excellence. Health care is a system, and its performance is a systemic property."

"Health care is a common good—single payer, speaking and buying for the common good."

"And it’s important also to make health a human right because the main health determinants are not health care but sanitation, nutrition, housing, social justice, employment, and the like."

"Hence, those working in health care delivery may be faced with situations in which it seems that the best course is to manipulate the flawed system for the benefit of a specific patient or segment of the population, rather than to work to improve the delivery of care for all. Such manipulation produces more flaws, and the downward spiral continues."

"For-profit, entrepreneurial providers of medical imaging, renal dialysis, and outpatient surgery, for example, may find their business opportunities constrained."

"One over-demanded service is prevention: annual physicals, screening tests, and other measures that supposedly help catch diseases early."

"I would place a commitment to excellence—standardization to the best-known method—above clinician autonomy as a rule for care."

"Health care has taken a century to learn how badly we need the best of Frederick Taylor [the father of scientific management]. If we can’t standardize appropriate parts of our processes to absolute reliability, we cannot approach perfection."

"Young doctors and nurses should emerge from training understanding the values of standardization and the risks of too great an emphasis on individual autonomy."

"Political leaders in the Labour Government have become more enamored of the use of market forces and choice as an engine for change, rather than planned, centrally coordinated technical support."

"The U.K has people in charge of its health care—people with the clear duty and much of the authority to take on the challenge of changing the system as a whole. The U.S. does not."

Is this what the American people want? If so, that is America’s choice. Americans must be given that choice with a televised transparent confirmation hearing.

Barack Obama cannot deny Americans the understanding of Dr. Berwick’s positions. Thankfully, Senator Baucus has spoken out.

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

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You Can’t Change The Practice Of Medicine With Demand-Side Reforms. Let Us Put An End To Pay For Performance (P4P) Initiatives: Part 1

January 25, 2009

inChronic Disese Management, Consumer Driven Health Care, Medicare, Medicine: Healthcare System, Pay for Performance (P4P), Quality medical care measures, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

I
have pointed out the folly of P4P initiatives as a methodology for improving the
quality of medical care. Quality
medical care has not been adequately defined. One definition could be to
maintain health at the lowest cost. Physicians have classically been trained to
fix things that are broken. The paradigm shift has been to prevent things from
becoming broken.

Prevention
is a two way street. It is the patient who needs to prevent disease from
occurring. It is the physician who must teach the patient how to prevent disease
and its complications.

Punitive
measures will not encourage behavior change. The economist, John Goodman,
stated: “You
can't change the practice of medicine with demand-side reforms.” I have
said repeatedly it can only be changed with innovative and incentive driven
education for both patients and physicians. This will lead to behavior change
and a true increase in quality of care.

Quality medical care should not be judged on what tests are done for a
particular chronic disease in a given year. It should be judged on the basis of
maintenance of health of a patient with chronic disease. It should be evaluated
as a dual responsibility of both the patient and physician. If there is going to
be an increase reimbursement for performance, performance has to be judged
correctly and both physician and patient should be rewarded.

Quality medical care should be judged on the maintenance of health and
avoidance of the complications of chronic disease. The treatment of the
complications of chronic disease utilizes 80% of the healthcare dollar. If
complications of chronic disease are avoided the costs to the healthcare system
costs would be decreased to manageable levels and Americans would be healthier.

Several readers have challenged me on the use of the term “socialized
medicine”. One reader said “our healthcare system is socialized already. The
government through Medicare and Medicaid controls 40% of the expenditures for
healthcare.” This is true.

The term “ socialized
medicine” has been demonized. I believe most physicians’ and patients’
objection to “socialized medicine” is rooted in experiences they have had. It
has restricted access to care and freedom of choice, and it has dictated
permissible care of physicians. It has also produced an added layer of
inefficient bureaucracy.

Medicare
premiums for patients are becoming expensive. The premium is determined by
means testing. It can be as high as $14,000 per year. The government subsidizes
that amount with an additional $6,600. Medicare advantage costs the government
over $9,000 extra. Yet there is a decrease in access to care as the costs of
the system are spinning out of control.

The government has its heart in the right place in wanting to provide
universal care. Americans should have access to healthcare coverage. A few
changes in the tax rules can solve many problems. The self-employed should be
able to purchase healthcare insurance with the same pre tax dollars as
businesses. They should have the same negotiated price structure large companies
have. The self-employed should have the same guaranteed insurability as those
working in a large company without a premium penalty.

The healthcare system’s costs rise each year. The Medicare premiums rise each
year and patient’s out of pocket expenses rise each year. Medicare is going to
bankrupt the country. It will only be accelerated by putting everyone on
Medicare.

In order to reign in expenses someone came up with the idea of pay for
performance. It is a reasonable concept if a system could be devised that could
evaluate performance accurately and encourage improvement.

In order to test validity of any concept the government subsidizes
initiatives at a great expense. These initiatives are costly because of the
bureaucratic evaluation of the requests for proposals and the measurement
mechanism.

The list of government initiatives is long. The pilot studies are 3 to 5
years. There have been many cost overruns so that several outsourced study
vendors are dropping out of the management of the initiatives. Most initiatives
have been unsuccessful in proving cost savings.

The reason for lack of proof of cost saving to the healthcare system is
because of errors in design. The wrong questions are being asked and the imposed
bureaucracy is punitive to the healthcare entities. Below are initiatives that
are presently funded for pay for performance.

MEDICARE "PAY FOR PERFORMANCE (P4P)" INITIATIVES

“Medicare has various initiatives to encourage improved quality of care in
all health care settings where Medicare beneficiaries receive their health care
services, including physicians’ offices and ambulatory care facilities,
hospitals, nursing homes, home health care agencies and dialysis
facilities.”

HOSPITALS

1. Hospital Quality Initiative (MMA section 501(b))

2. Premier Hospital Quality Incentive Demonstration

PHYSICIANS OR INTEGRATED HEALTH SYSTEMS

1. Physician Group Practice Demonstration (BIPA 2000)

2. Medicare Care Management Performance Demonstration (MMA section
649)

3. Medicare Health Care Quality Demonstration (MMA section 646)

DISEASE MANAGEMENT/CHRONIC CARE IMPROVEMENT

Chronic Care Improvement Program (MMA section 721)

ESRD Disease Management Demonstration (MMA section 623)

Disease Management Demonstration for Severely Chronically Ill Medicare
Beneficiaries (BIPA 2000)

Disease Management Demonstration for Chronically Ill Dual Eligible
Beneficiaries

Care Management For High Cost Beneficiaries

So far the chronic disease management initiative have not been proven to save
money.

The pilot initiatives are not directed by physician in private practice.
Physicians are the stakeholders that will make these initiatives work. Nine
sites selected are either healthcare insurance companies or disease management
groups. Disease management groups can be successful facilitators of physician
care only if they are extensions of physicians care rather than physician
substitutes.

Help desks of the healthcare insurance companies do not work because they are
not an extension of the physicians care. Free standing chronic disease
management clinics do not work because they are not extensions of physicians
care. Many hospitals have tried to set up Diabetes Education Centers only to
have them close because physicians do not refer patients to the centers. The
center is not reimbursed adequately by the government or private insurers to be
profitable. The fees charged in hospitals are at least twice as much as the fees
the physicians charges. Once the physician knows the charges he is even more
hesitant to send the patients to the centers.

The following are the groups selected for the pilot phase: Humana in South
and Central Florida, XLHealth in Tennessee, Aetna in Illinois, LifeMasters in
Oklahoma, McKesson in Mississippi, CIGNA in Georgia, Health Dialog in
Pennsylvania, American Healthways in Washington, DC and Maryland, and Visiting
Nurse Service of NY and United Healthcare in Queens and Brooklyn, New York.

I believe we should give up on trying to produce a pay for performance system
that will reduce medical costs. The health policy wonks should concentrate on
something that will work.

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