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Public Option vs. Ideal Medical Savings Account: Part 1

 

Stanley Feld M.D.,FACP,MACE

In response to my last post I received this note.

“Stan

This is interesting.  You may like this but it is very obvious that it is just another stall tactic.  If the current bill, with reconciliation, passes, we still have to address these points.  So where are this fellow’s solutions?”

I watched President Obama’s town hall meeting in Grand Junction on Saturday evening. He is a compelling and seductive speaker. If I thought his plan would work and at the same time be budget neutral I might be seduced.

It will not work for the consumer and it will not be budget neutral. He needs a better plan.

What is missing?

President Obama’s generalities are correct. The country needs a system that provides universal care at an affordable cost and an increase in quality. I believe his strategy is wrong. His strategy is reflected in his healthcare reform bill.

He is correct in pointing out that the healthcare insurance industry controls the healthcare dollar. His prescription to destroy the healthcare insurance industry is wrong because it will penalize patients. President Obama’s healthcare reform bill is not doing anything to limit the healthcare insurance industry 20% gross administrative fee whether we have a single party payer or a private insurance system.

He promises to get rid of the waste in the system. He claims eliminating the waste will pay for two thirds of the 1.1 trillion dollars his healthcare billion will cost in the next ten years. The remainder will be paid for by taxing people making over $250,000 a year. He needs to redo the math.

President Obama’s system sounds pretty simple. However, it seems the government hardly ever does anything efficiently. The costs are always underestimated. There are always uncontrolled abuses or unintended consequences.

President Obama is ready to create a massive new bureaucracy and employ approximately 110,000 new employees. Bureaucracy is always a prescription for inefficiency.

President Obama is ignoring the waste created by defensive medicine. The total cost of unnecessary testing is about $750 billion dollars a year. Nonetheless, tort reform is off the table. Defensive medicine is blamed on physicians wanting to generate more money for themselves. I think defensive medicine came first, and then physicians figured out how to generate more income in response to decreasing reimbursements for their services and an increase in malpractice lawsuits. Placing a cap on malpractice awards destroyed the malpractice business in Texas and California.

Where is the role of patients’ responsibility for their own health and healthcare. Patients with adequate healthcare insurance are satisfied. The healthcare inflation problem is the result of medical care costing little for the patient with insurance except for the deductibles.

Our healthcare system is a fix the sick system. The healthcare system is not geared to prevent an illness. The administration’s healthcare reform plan speaks of prevention but does not provide incentives to patients or physicians to prevent illness or even deal with the obesity epidemic..

Consumers are receiving quality medical care at little direct cost to themselves. This creates runaway costs that have to be addressed. But ill-advised reforms can make things much worse.”

The public has no great love for the healthcare insurance industry. Their protests about the healthcare reform bill are not to protect the healthcare insurance industry. It is to protect their freedom of choice. The public does not trust the government to make choices for them.

Both political parties have extremely low approval ratings. President Obama’s approval rating is sinking because of the perception of his half truths and a mounting distrust by independent voters.

“An effective cure begins with an accurate diagnosis, which is sorely lacking in most policy circles. The proposals currently on offer fail to address the fundamental driver of health-care costs.”

President Obama’s public option and increase in bureaucratic decision making is not going to solve our healthcare systems problems. He is not focusing on repairing the perverse incentives that are presently in the dysfunctional healthcare system.

Consumers must solve the healthcare system problems just like they solved the auto industries problems. Government role should be to provide the appropriate regulations to level the playing field.

“The health-care wedge is an economic term that reflects the difference between what health-care costs the specific provider and what the patient actually pays. When health care is subsidized, no one should be surprised that people demand more of it and that the costs to produce it increase.”

The solution is not a public option or a single party payer system. Consumer driven healthcare is the solution through the use of the ideal medical savings account.

“To pay for the subsidy that the administration and Congress propose, revenues have to come from somewhere. The Obama team has come to the conclusion that we should tax small businesses, large employers and the rich.”

President Obama’s plan will not work because the health-care recipients will lose their jobs as businesses can no longer afford their employees. The economy will get worse and the wealthy will flee to tax havens.

General anxiety will increase, patients will get sicker and the healthcare system will be overused creating more debt and more taxes.

A few economic self evident truths are:

  1. A free marketplace with appropriate rules encourages innovation and productivity.
  2. In the United States profitability is a strong market driver. If inappropriate rules are set up entities will try to figure out how to benefit from the rules to the disadvantage of others.
  3. The higher the taxes the lower the productivity. The lower the taxes the higher the productivity.
  4. The greater the bureaucracy the lower the added value productivity.
  5. Consumers will try to maximize their purchasing power.

“According to research I performed for the Texas Public Policy Foundation, a $1 trillion increase in federal government health subsidies will accelerate health-care inflation, lead to continued growth in health-care expenditures, and diminish our economic growth even further. Despite these costs, some 30 million people will remain uninsured.”

Rather than expanding the role of government in the health-care market, Congress should implement a consumer driven approach to health-care reform. A consumer driven approach focuses on the consumers being the policemen for their own healthcare dollar. If would focus on the doctor relationship and empower the patients and their physicians to make effective and economical choices.

The patients would be proactive rather
than passive. The result will be an increase in efficiency in the healthcare system rather than a further decrease.

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

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The Unintended Consequences of President Obama’s Public Option

Stanley Feld M.D.,FACP,MACE

What is the problem with President Obama’s public option? It guarantees insurability to all Americans of any age with any pre-existing condition. Providing basic healthcare insurance to everyone might guarantee protection from financial disaster from healthcare expenses.

An actuary would say the public option is actuarially unsound.

At the heart of President Barack Obama’s health-care plan is a healthcare insurance program funded by taxpayers, administered by Washington, and open to everyone. The healthcare plan is modeled on Medicare.

The Medicare model has two important problems. The existing Medicare entitlement is unaffordable. It will have to be funded in the future by taxpayers with some kind of income tax increase.

If enacted, “the public option" will soon become the single dominant healthcare plan. This would represent an expansion of the Medicare entitlement program.

Republicans and Democrats agree that the government’s Medicare scheme for compensating doctors is deeply flawed. Yet Mr. Obama’s plan for a centrally managed government insurance program exacerbates Medicare’s problems by redistributing even more income away from lower-paid primary care providers and misaligning doctors’ financial incentives.”

The defects in President Obama’s public option are multiple. The unintended consequences are exponential. President Obama’s healthcare team is not analyzing the public option’s defects and its effects on the healthcare system. The public option goal is to provide healthcare insurance coverage for the uninsured.

The government would charge employees a monthly premium for healthcare coverage. The premium would probably be the same or more than Medicare. The premium would be means tested. It would be calculated from all income reported to the IRS.

It will be cheaper for employers to discontinue healthcare coverage for employees and pay a penalty than provide private healthcare insurance.

“Like Medicare, the "public option" will control spending by using its purchasing clout and political leverage to dictate low prices to doctors. (Medicare pays doctors 20% to 30% less than private plans, on average.)”

The Lewin Group, a health-care policy research and consulting firm, predicts enrollment in the public option will reach 131 million. It will be open to everyone. The premium will be similar to Medicare premium rates which are not cheap.

“Fully two-thirds of the privately insured will move out of or lose coverage as patients shift to a lower-paying government plan”

Medicare plans to lower physician reimbursement by 20% in 2010. Primary care physician are having difficulty financially with overhead increasing and revenue decreasing. It will only get worse under the public option. The primary care physicians’ only option would be to seek other sources of income.

“Physician income declines will be accompanied by regulations that will make practicing medicine more costly, creating a double whammy of lower revenue and higher practice costs, especially for primary-care doctors who generally operate busy practices and work on thinner margins.”

Physicians’ overhead will increase under President Obama’s healthcare reform plan. Electronic prescriptions and Electronic medical records (EMR) are mandated. The government is going to subsidize some qualified medical practices. The subsidy for the EMR is estimated, at the maximum, to be $40,000 per physician. A functional EMR costs $65,000 per physician plus a sizable yearly maintenance fee. This subsidy will still be out of reach for most self employed physicians.

“Doctors will face expenses to deploy pricey electronic prescribing tools and computerized health records that are mandated under the Obama plan.”

The government must create regulations and compliance rules in order to control potential abuse. Physicians will need to increased full time employees and documentation experts in order to comply with the new rules. The government promises a crackdown on fraud and abuse and severe penalties.

Sixty percent (60%) of physicians are self-employed. Some of those physicians will be driven into large groups or hospital owned practices to spread their overhead. Some of these newly formed groups are having problems. Some physicians will accept a salary and allow hospitals to deal with the government. The trend will further serve to commoditize medical care. It will destroy the therapeutic benefit of the patient physician relationship.

The primary care physicians who stay self employed will be driven to cram more patients into their schedule in order to increase their net profit. This will further decrease their ability to relate positively to patients and their illness.

The existing trends will increase wait times already high (18 days) for an appointment to see a Family Practitioner and 30 days for specialists. It will also decrease the length of time the physician can spend with patients. The result will be to drive patients into expensive emergency rooms.

Physicians will be forced to close their practices to Medicaid and Medicare (public option) patients when they discover government reimbursement is less than their expenses. This has already happened with Medicaid patients.

Some physicians will opt out of public insurance and only accept cash. The next step is obvious. The government will outlaw the private practice of medicine. This action would be a challenge to the Bill of Rights and the constitution.

I have described some of the unintended consequences of very good goals. The goals are universal healthcare coverage at an affordable cost, with improved quality. I agree with these goals. President Obama is going about accomplishing these goals the wrong way.

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

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I Don’t Get The Republican Leadership

Stanley Feld M.D., FACP, MACE

The media and Democrats in congress are stonewalling every initiative President Trump has presented whether or not it has merit. .

The American people have spoken. Donald Trump is President. Republicans control both the House of Representatives and the Senate.

I should think the Democratic leadership would realize they are not connecting with the people. They should fear for their jobs and the jobs of other party members.

Nancy Pelosi, chair of the House Democrats, said, “We are the opposition party and it is our job to be the opposition.”

She is wrong. The Democrats should be doing what is right for the American people.

Recent elections have proven Americans do not approve of the Democrats’ policies at federal, state or local levels.

President Obama’s Democratic court appointed judges are slapping temporary injunctions on some of President Trump’s executive orders for no logical reasons.

These injunctions are occurring despite the terrorist disruptions that have occurred in American cities.

President Obama and the Democrats did nothing to neither stop this loss of life nor decrease the fear these terrorists generated.

The judges are slowing his initiatives down until they get to higher courts.

Democrats are acting juvenile.

Paul Ryan and the Republican establishment are not helping President Trump fulfill his agenda. They seem to be tripping up President Trump at every turn.

At the same time they are making the Republicans look bad and the Democrats look good.

If some of President Trump’s executive orders need congressional approval the Republican leadership in both houses should start the legislative process to get that congressional approval.

It seems like the Republican establishment is doing everything to make President Trump an ineffectual president.

The Republican establishment is bickering over the fine points of the initiatives. They are not looking at the big picture.

The American public gave the Republicans both houses of congress in order to allow them to be effective. The nuclear option in the senate should guarantee legislative effectiveness.

President Trump has some good ideas to fix the healthcare system and create economic growth.

Paul Ryan is supposed to be a legislative genius.

Paul Ryan seems to be intimidated by the Democrats and the mainstream media. He has not been bold in stepping out and supporting President Trump’s initiatives.

He should realize that the majority of the American public is not paying attention to the mainstream media.

This is reflected in the decrease in readership of the New York Times and the viewership at CNN and MSNBC. The mainstream media should not be influencing Paul Ryan’s actions.

Everything President Obama did during his presidency slowed the economy and polarized the nation. Paul Ryan should be doing the opposite.

Everything President Obama did with Obamacare made the healthcare system less efficient and more dysfunctional. Paul Ryan should have had a Republican consensus plan ready to repeal and replace Obamacare.

It is embarrassing that he did not have a plan ready after seven years.

My advice to the Republican controlled congress is to give President Trump a break and give him some support.

Stop playing politics. You are playing right into the Democrats’ obstructionist hands.

Paul Ryan’s healthcare fiasco is the prime example. He wouldn’t be speaker if it would not for the election of members of the Freedom Caucus.

Paul Ryan should take the bill the house previously passed and send it to the Senate. If there are things in that bill that do not pass the sequestration test for the Senate to pass the bill with 51 votes modify the bill.

Ryan has not made it clear to the public what he thinks is wrong with the old bill. He has also been secretive about the ongoing negotiations to repeal and replace Obamacare.

Now Paul Ryan is delaying President Trump’s wall appropriation request. He seems to be delaying President Trump’s tax cut initiative until 2018 without explanation.

If it is because the healthcare bill is not passed then pass the old healthcare bill.

He and the establishment Republicans confuse me. I think the American people are confused. Maybe the Republican establishment has to be voted out of congress in order to get anything passed.

I believe what President Trump is trying to accomplish is pretty logical. President Obama and the Democrats messed us up over the last eight years.

Many Americans are hurting. Americans who are not hurting do not understand it. Perhaps they refuse to understand it.

It is time government starting working and trying new ideas.

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

All Rights Reserved © 2006 – 2017 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Why Republicans Need A Viable Healthcare Plan NOW

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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Republican Healthcare Proposal Executive Summary : Part 2

 

Stanley Feld M.D.,FACP,MACE

Modernizing the Medicaid Benefit and Protecting Medicare Beneficiary Choice

The health security for low‐income families and American seniors is threatened by the outdated formulas and exploding costs of Medicaid and Medicare. These vital programs require significant reforms to better balance value for those beneficiaries in greatest need and protection for U.S. taxpayers. The Patients’ Choice Act would make important improvements to both programs without limiting eligibility or benefits by:

• Integrating low‐income families with dependent children into higher‐quality private plans through direct assistance

What is the definition of higher-quality private plans? Who is going to judge quality? How is government going to fund these “higher quality private plans?”

Removing the stigma of Medicaid and providing access to the same coverage options available to all Americans

How will this be accomplished when Medicaid reimburses so poorly. There is a shortage of Medicaid physicians already. These physicians must do a volume business (Medicaid Mills) to make ends meet. These volume practices (Medicaid Mills) are being investigated for fraud.

Realigning responsibility between federal and state governments in order to better coordinate benefits by requiring the Medicare program to assume Medicaid responsibility of premiums, cost‐sharing, and deductibles for low‐income seniors

The above is just words. It almost sounds as if the federal and state government are going to be responsible for increased funding for private enterprise.

Rebalancing long‐term care services to ensure choice between institutionalized and home‐based care

Empowering Medicare beneficiaries with more choices and more power by reforming Medicare Advantage

Medicare Advantage is recognized as an insurance product designed to rid the government of the Medicare entitlement . The government under the Republican administration paid an extra $3,000.00 per person to outsource the responsibility for Medicaid from the state to the healthcare insurance industry. The cost is unsustainable. Excess profits flow to the healthcare insurance industry.

Allowing for the creation of Medicare Accountable Care Organizations that would improve payment to

physicians, hospitals, pharmacists, and nurses for demonstrable improvements in quality and patient satisfaction while reducing costs

This is a “pay for performance a system” that ultimately cannot work because of intrinsic defects in the pay for performance concept. Quality medical care has not been defined appropriately. Is it defined as medical outcomes, financial outcomes, number of test performed or disease discovery?

Requiring wealthy Medicare beneficiaries to contribute a little more for their care under Medicare Part D

Medicare Part D is a poorly constructed in the present form. It is written to the advantage of the healthcare insurance industry, the pharmacies and the pharmachuetical companies. It is not a patient centric plan.

Ensuring Compensation for Injured Patients

Our current legal system does a poor job at compensating patients for medical mistakes in a fair and efficient manner. Instead of nurturing an environment where medical professionals can openly learn from their mistakes, our legal system often forces doctors and patients into contentious courtroom disputes. The Patients’ Choice Act would reform this broken system that helps drive health care costs out of control by:

• Encouraging states to adopt a number of legal alternatives entirely run by the state that would include the establishment of expert medical panels to resolve disputes, creation of health courts, or a combination of both

This is logical. How are they going to encourage states to adopt legal alternatives when the law makers are lawyers? When there aren’t specific legislative action points nothing gets done.

Establishing Transparency in Health Care Price and Quality

For a vibrant health care market to function properly, patients must know what services cost and who provides the best service. Uniform and reliable measures of reporting quality and price information should be designed by the stakeholders in health care rather than the heavy‐hand of government. The Patients’ Choice Act would bring this much needed transparency into the health care market by:

Creating a Healthcare Services Commission that relies on a public/private partnership to enhance the quality, appropriateness and effectiveness of health care services through the publication and enforcement of quality and price information

Empowering the private sector – rather than Washington bureaucrats – to set standards on price and quality with the input from all major stakeholders in health care, as well as the general public

Ensuring that measures of effectiveness keep pace with innovation

This is the most logical proposal in the plan. It also contains specific action points. However it keeps the power in the healthcare insurance industry’s hands. It should put the power in the consumers’ hands. If the private sector (healthcare insurance industry) does not cooperate, it should be restricted from selling insurance by the state board of insurers.

There is the entire proposal. There is nothing new and no outline of action to accomplish any part of the proposal.

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

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Republican Healthcare Proposal Executive Summary : Part 1

 

Stanley Feld M.D.,FACE,MACE

It is not fair to criticize the Republican Party’s healthcare proposal without providing the reader with the source material. The source material comes from Senator Tom Coburn’s web site. My negative comments should be judged in light of the original proposal. The executive summary follows.

Preventing Disease and Promoting Healthier Lifestyles

· Critical investments in public health and disease prevention will go a long way in restraining

health care costs and improving the quality of Americans’ lives. The Patient’s Choice Act of 2009 would:

Encourage increased coordination of federal prevention efforts and bring long‐overdue accountability to these programs

Require CDC to undertake a national campaign highlighting science‐based health promotion strategies

Equip recipients of Supplemental Nutritional Benefits with easily understandable information about nutritious food options and target the use of food stamps to healthy food choices

Invest $50 million annually for increased vaccine availability and bonus grants to states that achieve 90 percent or greater coverage of CDC‐recommended vaccines

Provide incentives for states to reduce rates of chronic disease like heart disease and diabetes

All of the above proposals should be executed. How will they be implemented? The Republicans do not have a plan but not having a plan does not make the Democrat’s plan a good one.

Creating Affordable and Accessible Health Insurance Options

Our health care system should be easier to navigate and provide integrated care in a more equitable manner. A vibrant market for health insurance that is consistent and fair will allow all Americans access to health coverage.

How will Republicans make a vibrant market for healthcare insurance? How will people who cannot afford healthcare insurance pay for it? The tax credits might help a little. However, if you do not have the cash you cannot pay for the insurance.

The Patient’s Choice Act of 2009 would encourage states to establish rational and reasonable consumer protections, including the following:

Creates State Health Insurance Exchanges to give Americans a one‐stop marketplace to compare different health insurance policies and select the one that meets their unique needs

Gives Americans the same standard health benefits as Members of Congress, so all Americans have a wide range of choices

Protects the most vulnerable Americans to ensure that no individual would be turned down by a participating Exchange insurers based on age or health

What will the premium be for those with preexisting illnesses? Will the premiums be higher for patients with preexisting illnesses? The high risk pool premiums have been very expensive.

Creates a non‐profit, independent board to risk adjust among participating insurance companies to penalize companies that “cherry pick” health patients and reward insurers that encourage prevention/wellness and cover patients with pre‐existing conditions.

Expands coverage through auto‐enrollment at state and medical points of service, for individuals who do not select a plan at the beginning of the year

This is an empty statement. How will this be administered? The devil is in the details and there are no details presented.

Gives states the ability to band together in regional pooling arrangements, as well as the creation of robust high risk pools, reinsurance markets, or risk adjustment mechanisms to cover those deemed ‘uninsurable’

Risk pooling has been tried and has been unsuccessful. It has been an excuse to allow the insurance industry to spread the risk. The proposal also implies variable premiums.

Equalizes the Tax Treatment of Health Care, Empowering All Americans with Real Access to Coverage

Economic analysts across the political divide agree that the tax code is stacked in favor of the wealthy and those who get their health coverage through their employers, discriminating against the self‐employed, the unemployed, and small businesses. The Patients’ Choice Act of 2009 would restore fairness in the tax code and give every American, regardless of employment status, the ability to purchase health insurance by:

Providing an advanceable and refundable tax credit of $2,300 per individual or $5,700 per family

Improving the operation of Health Savings Accounts [HSAs] by allowing health insurance premiums to be paid with HSAs without a tax penalty

Allowing preventative services to be covered by High Deductible Health Plans

Increasing the amount of money an HSA owner may annually contribute to their account

Healthcare insurance premiums are $14,000.00 a year for a family. A $5,700.00 tax credit does not cover it. It also assumes the consumer has enough income to have a $5,700.00 be tax liability. Citizens are not subject to income tax if they make up to $38,000.00 year. HSA’s retain the healthcare dollar to be used for future spending on healthcare. The healthcare insurance industry retains control over the premium and the healthcare dollars. It is not a pro consumer proposal. It does not offer financial incentives to consumers .

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

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Republican Healthcare Plan Unveiled.

 

Stanley Feld M.D.,FACP.MACE

 

Republicans in Congress have introduced their health care reform plan. "The Patients’ Choice Act of 2009," has been introduced by U.S. Senators Tom Coburn, (R-OK) and Richard Burr (R-NC) and U.S. Representatives Paul Ryan (R-WI) and Devin Nunes (R-CA).

The proposal that relies heavily on private mechanisms does not contain an individual mandate to have healthcare insurance, It offers insufficient tax credits for families and individuals previously insured and not in a group insurance plan. It must be noted that people who make less than $38,000 per year pay no income tax. A tax credit is meaningless to them. These are the people who are uninsured.

Individuals not in a group insurance plan pay retail for healthcare insurance premiums with after tax dollars. Employers that have group healthcare insurance for employees, pay the insurance premiums with pretax dollars.

The new Republican healthcare plan would eliminate employers tax deductible benefit. This would discourage employers from providing healthcare insurance to employees. The plan is not dissimilar to the proposal championed by John McCain during the presidential campaign. His proposal was considered inadequate.

“The focus of the proposal is to push for a "guaranteed choice of coverage" in the private market through federal-state partnerships know as State Health Insurance Exchanges.

Individuals will have a "one-stop marketplace" to choose plans in the exchange, including the option of keeping their employer coverage and/or existing insurer.

The plan eliminates pre-tax dollar deduction for employers who provide health coverage to their employees. It provides a $5,710 tax credit to families and a $2,290 tax credit to individuals toward the purchase of health insurance coverage.

This is not enough of a tax credit to be effective for those who can afford to buy healthcare insurance. In reality it will save the government money. It would eliminate employer tax deduction. An unintended consequence will be an increase in thenumber of uninsured.

Healthcare insurance premiums average $14,000 per family and $7,000 per individual. The healthcare insurance industry cherry picks patients. It eliminates the sick and over 55 year olds with a high potential for illness. If its ability to cherry pick is eliminated the healthcare insurance premiums will be even higher.

The Republican healthcare plan does not state if the non insurable sick will be subject to the same or higher premiums.

"Participating insurers," meanwhile, would be required to "offer coverage to any individual — regardless of patient age or health history" though there is no mandate for an individual to purchase that insurance”.

Many things are wrong with the Republican party’s proposal. I am disappointed in Senator Tom Coburn. He is a “practicing M.D” he should know the real problems in the healthcare system..” The proposal has some good ideas but no suggestions on how to implement those ideas.

His plan ignores the real problems. The uninsured cannot afford to purchase healthcare insurance. Some young healthy people do not want spend the money for healthcare insurance. Many people are underinsured. Illegal immigrants are uninsured. They show up for care in our safety net hospitals. Our safety net hospitals are underfunded. The plan does not contain incentives for patients to work hard to remain healthy.

The reasons healthcare costs are so high are many. Price Waterhouse has calculated 1.1 trillion dollars is wasted dollars between defensive medicine and unnecessary administrative cost.

Medical care for the complications of chronic diseases absorbs 80% of the healthcare dollars. The complication rate can be reduced by at least 50% if patients became “professors of their disease” and they themselves prevented the complications. This can only be accomplished through education and financial incentives.

The proposal does not repair any of the abuses of the healthcare insurance industry, the government, the hospital systems or physicians.

The proposal gives employers a perfect excuse to drop insuring employees by the removal of their tax exemption for premiums. President Bush tried very hard to accomplish this and failed. .

The Republican plan would leave a greater number of Americans uninsured with no improvement in the health of the nation.

The Patients’ Choice Act contains many of the popular sound bites. It does not have a plan to achieve change. The only way change will occur is by leveling the playing field and providing incentives for patients. The plan keeps the healthcare insurance industry in control of the healthcare dollars.

It states; “ the Act transforms health care in America: strengthening the relationship between the

patient and the doctor; using the forces of choice and competition rather than rationing and restrictions to contain costs; and ensuring universal, affordable health care for all Americans.”

I am disappointed in the Republican proposal. It is a proposal of empty words. The public will not be fooled. The public wants change. I will publish the executive summary so readers can judge for themselves.

Under the Republican plan, instead of a competitive marketplace for healthcare coverage I can visualize a market place dominated by a few healthcare insurance companies. The result will be further increase in cost of premiums. The healthcare insurance industry would continue to own the healthcare dollar and be non transparent.

The healthcare insurance industry would continue to abuse patients, physicians, hospitals and the government.

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

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Americans Should Be Listening

Stanley Feld M.D.,FACP,MACE

Bernie Sanders and the progressive Democrats are not interested in learning from other countries’ mistakes.

Their ideology blinds them to the fact that socialized medicine does not work. I vividly remember John Kerry and Barney Frank telling President Obama that the Affordable Care Act needs a Public Option. The Affordable Care Act would fail if it did not have a Public Option. With a Public Option included they said America would be well on its way to a single party payer system.

They said a single party payer system is the only healthcare system that would work

President Obama told them he had a clandestine “Public Option” built into Obamacare. However, he was never able to bring it about.  

Progressives believe deeply in their ideology. They do not consider past history, present reality or facts. 

Neither does the American College of Physicians. In a position paper it recommended Medicare for All. It was followed up with a letter published in the New York Times with 2,000 signatures out of the 159,000 members advocating Medicare for All.

“In a separate but related move to the ACP’s announcement, more than two thousand physicians on Monday announced an open letter to the American public, prescribing single-payer Medicare for All, in a full-page ad in The New York Times that will run in the print edition on Tuesday, January 21, 2020.”

https://www.nakedcapitalism.com/2020/01/in-historic-shift-second-largest-physicians-group-in-us-has-new-prescription-its-medicare-for-all.html

I wonder how many of these signatories have any idea of what the economic impact of “Medicare for All.” I really wonder how many members out of the 159,000 would support the position. I know I do not support the ACP’s position.  

All progressives have to do is look at what is happening to socialized medicine all over the developed western world and notice it is unsustainable and its citizens are dissatisfied with it.

Healthcare systems in the developed world are failing even as the ideologs believe it is succeeding.

America’s healthcare system is also having many problems. Americans are dissatisfied with our healthcare system. The healthcare system has gotten worse since Obamacare was passed. The government is responsible for making our healthcare system worse. It has not done the things I have suggested to repair our healthcare system.

 The Commonwealth Fund (a private progressive foundation) with a focus on healthcare is certain that a single party payer system is the only viable healthcare system.

The report ranked healthcare systems throughout the developed western world.  In its 2014 published ranking the National Health Service of Great Britain was considered the best medical system among the 11 of the world’s most advanced nations, including Canada, France, Germany, Switzerland and Sweden.

 The United States came in last.

 Few “experts” have the time or patience to read the complete report or pick out the defects in the report.

Most people read the summary. The summary in this report does not reflect the truth about the evidence present in the report.

The Commonwealth Fund’s rankings of countries is contradicted by objective data about access and medical-care quality in these countries in peer-reviewed academic journals.

The Commonwealth Fund’s methodology is defective. Its conclusions relied heavily on subjective surveys about “perceptions and experiences of patients and physicians.”

Kenneth Thorpe made an important point by examining differences in disease prevalence and treatment rates for ten of the most costly diseases between the United States and the ten European countries with a single payer system.

He used surveys of the non-institutionalized population age fifty and older. Disease prevalence and rates of medication and treatment are much higher in the United States than in these European countries.

Why would that be?

There are many reasons for this finding. The main one is the availability of care in the United States compared to the ten socialized western countries.

Another is lifestyle and incidence of obesity in the United States. Both lead to the onset of chronic disease and increased treatment.

 “Efforts to reduce the U.S. prevalence of chronic illness should remain a key policy goal.”

“Americans are diagnosed with and treated for several chronic illnesses more often than their European counterparts are.”

Americans diagnosed with heart disease receive treatment with medications and procedures more frequently than patients in Western Europe.

In the past local peer review was all that was needed along with confidence in the treating physician’s judgment. This confidence in physicians’ judgment has been destroyed by excessive media sensationalism. The real percentage of abuse is small and easily discoverable by peers and the use of social media.

Cancer treatment survival rates in America are far greater than the survival rates in Britain, and countries in western Europe.

The reasons for the higher cure rates is the availability of early detection and treatment.

Cancer treatment costs are high. The government should look into the reasons for this high cost and try to lower the cost.

The Commonwealth Fund’s report does not consider any of these factors.

“Over a quarter of a million British patients have been waiting more than six months to receive planned medical treatment from the National Health Service, according to a recent report from the Royal College of Surgeons. More than 36,000 have been in treatment queues for nine months or more.

Long waits for care are endemic to government-run, single-payer systems like the NHS. Yet some U.S. lawmakers want to import that model from across the pond. That would be a massive blunder.”

https://www.forbes.com/sites/sallypipes/2019/04/01/britains-version-of-medicare-for-all-is-collapsing/#d1df33b36b89

The NHS has a waiting list of 3.2 million people for admission to the hospital. In London alone over 500,000 patients are on a waiting list for diagnosis and treatment.

A large percentage of patients triaged as urgent after being diagnosed with suspected cancer have a 62-day wait time to receive therapy.

Consider how long it takes to get care at the emergency room in Britain. Government data show that hospitals in England only saw 84.2% of patients within four hours in February. That’s well below the country’s goal of treating 95% of patients within four hours — a target the NHS hasn’t hit since 2015.

Now, instead of cutting wait times, the NHS is looking to scrap the goal.

Wait times for cancer treatment — where timeliness can be a matter of life and death — are also far too lengthy. According to January NHS England data, almost 25% of cancer patients didn’t start treatment on time despite an urgent referral by their primary care doctor. That’s the worst performance since records began in 2009.

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And keep in mind that “on time” for the NHS is already 62 days after referral.

Unsurprisingly, British cancer patients fare worse than those in the United States. Only 81% of breast cancer patients in the United Kingdom live at least five years after diagnosis, compared to 89% in the United States. Just 83% of patients in the United Kingdom live five years after a prostate cancer diagnosis, versus 97% here in America.

The British Health and Social Care Act 2012 authorized the use of the small private sector of healthcare to help the NHS with its problems.

The share of NHS-funded hip and knee replacements by private doctors increased to 19% in 2011-12, from a negligible amount in 2003-04. Each year there is an increase in NHS funded care by the private sector.

It sounds like the VA Healthcare System’s solution to its problems.

The NHS also routinely denies patients access to treatment. More than half of NHS Clinical Commissioning Groups, which plan and commission health services within their local regions, are rationing cataract surgery. They call it a procedure of “limited clinical value.”

It’s hard to see how a surgery that can prevent blindness is of limited clinical value. Delaying surgery can cause patients’ vision to worsen — and thus put them at risk of falls or being unable to conduct basic daily activities.

It’s shocking that access to this life-changing surgery is being unnecessarily restricted,” said Helen Lee, a health policy manager at the Royal National Institute of Blind People.

Many Clinical Commissioning Groups are also rationing hip and knee replacements, glucose monitors for diabetes patients, and hernia surgery by placing the same “limited clinical value” label on them.

Patients face long wait times and rationing of care in part because the NHS can’t attract nearly enough medical professionals to meet demand. At the end of 2018, more than 39,000 nursing spots were unfilled. That’s a vacancy rate of more than 10%. Among medical staff, nearly 9,000 posts were unoccupied. Many physicians have left the NHS and have gone into private practice. Many do both NHS service and private practice.

These shortages could explode in the years to come. In 2018, the Royal College of General Practitioners found that more than 750 practices could close within the next five years, largely because heavy workloads are pushing older doctors to retire early.

English people who can afford private care and private healthcare insurance to avoid the NHS are switching to private insurance even though they have to pay $3,500 for each man, woman and child in a family into the NHS.

Physician shortages are the result of inadequate funding. The cost of the NHS with all these restrictions are unsustainable.

The single party payer system (NHS) is struggling with unsustainable costs even though we hear from progressives how great socialized medicine is in England.

The key ingredient missing in all these systems is patient responsibility for their health and their healthcare dollars. Both are powerful motivators for healthy living and detecting disease early.

Copywrite 2006-2020  

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



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Mechanism Design and the Repairing the Healthcare System


Stanley Feld M.D., FACP, MACE.      

On November 11, 2007, I published the following blog: “Incentives and Mechanism Design.” The authors Leoid Hurwicz, Roger Meyerson and Eric Maskin were awarded the Nobel Prize in Economics for the concept in 2007.

http://stanfeld.com/?s=mechanism+design

 I suspect few politicians know about Mechanism Design in 2019. I am certain Bernie Sanders and the “Medicare for All” crowd do not know anything about Mechanical Design.

In my last blog, I described how politicians and the mainstream media use Confirmation Bias to try to put the government in control of healthcare against the will and welfare of the public.  

https://en.wikipedia.org/wiki/Confirmation_bias

I think Donald Trump either studied the use of Mechanism Design and its mechanics or he intuitively uses its principles in his thinking.

Mechanism Design is a concept that tries to put science into social science. It mathematically evaluates vested interests of stakeholders in order to eliminate confirmation bias and line up all the stakeholders’ vested interests for the greatest good. It assumes all the stakeholders have expressed their vested interests truthfully.

The Democrats want to hold onto (fix) Obamacare. However, the Democrats understand Obamacare is not viable in its present form. I believe “Medicare for All” with central government control of healthcare will be a disaster as it has been in most single party payer systems.

I do not believe Obamacare is fixable. I believe President Obama and the Democrats believed that Obamacare would fail. Then the nation would beg either his public option or Medicare for All.

I think President Obama believes “Medicare for All” and the total government control of healthcare is the ideological solution to the problems in our healthcare system.

His confirmation bias overrules all of the examples of “Medicare for All” failed examples at home (Vermont California and Colorado), as well as Denmark, Sweden, England, and France.  

In 2017, the Republicans with a slim majority in the Senate refused to repeal Obamacare. Whether the Republican failure to repeal Obamacare was because of intramural revenge or ideology is best to question is which system is best for the common good.

If our politicians understood the principles of Mechanism Design and were diligently working for the people who elected them benefit, America would be on the way to “Repairing the Healthcare System.”

Against this backdrop of a hostile Democratic Party, in control of the House of Representatives, Donald Trump and his administration is slowing working its way to “Repairing the Healthcare System” using the principals of Mechanism Design.

In November 2007, pre the Obama administration, I wrote:

Last month the Nobel Prize in economics was awarded to Leoid Hurwicz, Roger Meyerson and Eric Maskin. They were awarded the Nobel Prize for developing the economic theory of “Mechanism Design.” My first reaction was “what is that?”

https://en.wikipedia.org/wiki/Mechanism_design

After some research, I discovered the power of Mechanism Design. It is a brilliant economic theory that could solve many economic problems. Mechanism Design applied to our healthcare system could solve the healthcare systems problems.

What is it? “In economics, mechanism design is the art and science of designing rules of a game to achieve a specific outcome, even though each participant may be self-interested. This is done by setting up a structure in which each player has an incentive to behave as the designer intends. The game is then said to implement the desired outcome. The strength of such a result depends on the solution concept used in the game. It is related to metagame theory, which is the theory of games the play of which consists of developing the rules of another game.

Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. However, it is impossible to guarantee optimal results for all four outcomes simultaneously in many situations, particularly in markets where buyers can also be sellers [1], thus significant research in mechanism design involves making trade-offs between these qualities. Other desirable criteria that may be achieved include fairness (minimizing variance between participants’ utilities), maximizing the auction holder’s revenue, and Pareto efficiency. More advanced mechanisms sometimes attempt to resist harmful coalitions of players.”

Lodi Hurwitz contributed to the idea of incentive compatibility. His point is the way to get as close to the most efficient economic outcomes is to design a mechanism in which everyone does best for themselves. 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.

If everyone’s incentives are aligned, you have a much more efficient economic system. An example is defense contracting. If you agree to pay on a cost-plus basis you have created an incentive for the contractor to be inefficient. If you agree to pay a fixed price you can come close to an efficient price if you have all the truthful information. If you do not you have incentives aligned and truthful information you create the incentive to be overcharged. Most people can do better by not sharing truthful information. If the rules of the game require truthful information you can get close to an efficient market-driven solution.

The concept of Pareto efficiency means no one can be made better off without someone becoming worse off. Therefore, the incentive is to maintain your dominance by not being truthful at the expense of others. Hurwicz observed as others had that the dispersion of information was at the heart of the failure of a planned economy. He observed that there was a lack of incentive for people to share their information with the government truthfullyThe free market mechanism was far less afflicted than central planning bureaucracy by such incentive problems. The free market economy was by no means immune to this defect. He observed that the free market economy can get us closer than central planning to incentive compatibility because the end consumer can drive the discovery of truthful information.

The customer creating rules of engagement in a market-driven economy can get you closer to the ideal of Mechanism Design. Since the customer determines success of an enterprise by creating demand in a transparent environment, they can get closer to incentive efficiency. They create the rules of the game for compatible incentive.

Roger Meyerson contributed the revelation principle, a mathematical model that simplifies the calculation to create the most efficient rules of the game. The mathematical model gets people to reveal their truthful private information leading to aligned incentives.

Eric Maskin’s breakthrough was in perfecting Mechanism Design with his “implementation theory.” His theory clarifies how to design mechanisms that heighten incentive alignment and efficiency.

How does Mechanism Design relate to the Repair of The Healthcare System? We have to set the rules of the games so that we align all the stakeholders’ incentives without one stakeholder takes advantage of another. The insurance industry is taking advantage of the patients, doctors and hospital systems. The hospital systems are taking advantage of the patients, doctors and insurance companies. Doctors are taking advantage of the insurance companies, hospital systems, patients and the government. The government is taking advantage of the hospital systems, the doctors and the patients. Employers who pay the insurance bills for their employees are taken advantage of by the insurance companies. The drug companies are taking advantage of patients and unduly influencing physicians.

In our healthcare system, everyone is pursuing his vested interest in a game that has rules that do not lead to “incentive compatibility.”

Some politicians think central planning will straighten out the rules. Historically, central planning has not worked. The winners of this year’s Nobel Prize in economics have proven this fact.

I believe consumers can fix the rules of the game so that all the incentives are compatible. Consumers have to have incentives to force politicians to fix the rules of the healthcare game. Consumer-driven healthcare system will achieve the alignment (incentive compatibility) using the ideal medical saving account.

Twelve years have passed since 2007. America has not gotten closer to the solution to Repair the Healthcare System even though the solution is staring us in our eyes.

www. stanfeld.com

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



Copywrite 2006-2019

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