Stanley Feld M.D.,FACP,MACE

The mechanism the facilitator stakeholders use to slow down improvement, in my opinion, in the healthcare system, is to do pilot studies on innovative ideas and improvements using faulty criteria in the context of the present dysfunctional healthcare system. The results are usually contradictory to the expected result, statistically flawed, and confusing. However, pilot studies generate another funding source for academic institutions which perform the studies.

A recent article in the Archives of Internal Medicine stated that the measurement of quality indicators were no better in clinics with Electronic Medical Records than in those clinics without an Electronic Medical Record. The data was collected between 2003 and 2004. I will review the flaw in this data in the future. However, a big flaw in the data is that quality indicators (frequency of specific testing for specific diseases and screening testing) are not a direct measurement of clinical outcomes or the financial costs to achieve the improved clinical outcomes. I covered this topic in detail in my blog on the Ideal Electronic Health Record.

In 2004, the United Kingdom invested $3.2 billion in a new program to reward general practitioners for the delivery of high-quality care defined as adherence to quality indicators. The authors examine longitudinal data on quality and report that the incentive program may have prompted a modest improvement in the quality of care for two of the three chronic conditions they studied.

It has been clear for many years that an improvement in the measurement of quality indicators does not mean an improvement in quality care. Improving the clinical outcomes by acting on the findings of the quality measurement is the meaning of improving quality of medical care. The execution of the findings is dependent on the patient’s adherence to appropriate therapy recommendations. The only way to improve quality and clinical outcomes in my opinion is to create a competitive environment among physicians driven by patients owning and retaining their healthcare dollars. This will lead to transparent pricing and drive innovation and cost efficiency.

Yet, the entire pay for performance movement is based on grading physicians on the basis of their quality indicator measurements. This is the reason I said P4P is another complicated mistake.

I understand the reason policy maker advocate P4P. It is because they believe they can easily quantitate the quality of medical care. They will discover as the British have that they will be spending more money without improving clinical outcomes. It is the patient/physician relationship that must drive quality care and improve clinical outcomes.

These interim pilot studies take years to complete. They do not help move medical care into the digital age. If anything it slows medical care down.

Consumers must demand legislation to level the playing field. They must make it clear that they are the primary stakeholders and should be the drivers of the system. It is vital for us to create a true consumer driven healthcare system with the patient and the physician being responsible for the execution of medical care. Consumer driven healthcare would permit consumers to drive the system. The government and the insurance industry have failed, as Regina Herzlinger has pointed out in Who Killed the Healthcare System.

Pilot studies of innovative ideas in our dysfunctional system cannot predict the outcome of these ideas in a new system. Our government can not continue to protect old systems that do not work. Health insurance should mean what insurance means after a certain point of risk. Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Only then could we see if these innovative ideas would work.

In the last couple of years the President and Medicare have called for change. Their requests have gone nowhere because facilitator stakeholders to not want to change a system that is to their advantage. The system must be changed to the patients’ advantage.
The changes required have to be enacted simultaneously because single point change will permit secondary adjustments by the facilitator stakeholders. These changes include:

• Pre tax insurance guaranteed for all.
• Community based rating for premium pricing with government oversight.
• Total price transparency of the lowest negotiated prices for all based on cost and not fiction. The hospitals, the physicians and the insurance companies must be required to comply. This is critical. It would generate a competitive marketplace and force stakeholder to be innovative and develop more cost efficient systems.
• There should be guaranteed insurance coverage for all (universal coverage) with government subsidies. The subsidies should be full or partial for the people who can not afford insurance. The Massachusetts model is going to fail because it is built in a non consumer driven system to the advantage of the insurance industry.

• There should be the option for the Ideal Medical Saving Account and not the contaminated Health Savings Accounts built in favor of the insurance industry. Patients must have incentive to control their healthcare dollar. They must be allowed to retained the money they do not spend in a trust account for their retirement. If the patient has a chronic illness and he maintains good clinical and financial outcomes he should receive a financial reward.

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A single party payer system would impose a new and inefficient bureaucracy that would be devastating to the incentives and innovations necessary to Repair the Healthcare system. Innovations and incentive in a competitive entrepreneurial environment is what America’s greatness is all about.

• An affordable Electronic Health Record must be available to all as described in the post the Ideal Electronic Health Record.

All of the above must be implemented at the same time for the new healthcare system to work. It will require strong and bold leadership. This bold leadership will only be precipitated by a very vocal demand by an informed public. In our evolving knowledge based economy this People Powercan be accomplished.

Stanley Feld M.D.,FACP,MACE

Our healthcare system is broken. It is not getting better. The dysfunction in the healthcare system increases as time goes by and nothing is happening to fix the system.

I have introduced some “big ideas” in the past year.

The goal is to increase understanding of how the system became broken and what we have to do it. If the ideas necessary to repair the healthcare system are going to work the ideas have to be enacted as a comprehensive package. Unfortunately, this is not the way politicians work unless we are in a meltdown situation. For example, real price transparency of negotiated prices has to be linked to an accurate assessment of quality which has to be linked to patients owning their healthcare dollar and having the ability to chose and evaluate their care. The patients have to be given the ability to negotiate the price with hospitals and physicians or chose an insurance company that will fight to protect expenditure of their healthcare dollars. Patients must be given the incentive to be an informed consumer and educated to spend their healthcare dollar wisely and be penalized if they do not.

Medical practices have to be given the incentives to develop their practices that are dedicated to chronic care of particular diseases (focused factories). The incentives for these focused care clinics must be adequate compensation for their care to make patients professors of their disease. These focused factories will help prevent the complications of chronic diseases. The complications of chronic diseases absorb 90% of the healthcare dollar. There has to be monetary incentives for medical practices to emphasis preventive medicine in order to avoid the onset of chronic disease.

The patients must be responsible for their care and their healthcare dollar. Access to care must not be restricted. Patients are capable of being responsible consumers of healthcare given the appropriate incentives.

Systems of care have already been developed to achieve these goals. I have explained how the Ideal Medical Savings Account as an insurance vehicle can achieve the goal. I do not believe the presently available Health Savings Accounts is a step in the right direction. Health Savings Accounts (HSA) will fail because they lack patient motivation and physician incentives. The failure of HSA’s will move us closer to a single party payer system as a proposed solution. In my view a single party payer system will be a terrible solution for the patients and the physicians.

We will need strong leadership. We need a leader who really understands the problems in the dysfunctional healthcare system. A leader who is not afraid to act contrary to the pressure of facilitator stakeholder vested interests There does not seem to be one around. We will need groups of citizens who are angry enough at the present system who will be willing to demand a consumer driven healthcare system. People power can demand that leadership. First they have to understand the problem and solutions.

Some of the comments I have received in the last few weeks express our generalized cynicism, pessimism and depression about the healthcare system from both patients and physicians.

Paula Hartzell, MD’s sad story in Medical Economics tells it all. It is truly a worthwhile read. I was directed to Dr. Hartzell’s story by KevinMD .Dr. Kevin Pho, a primarycare physician and internal medicine specialist who operates one the top 10 medical blogs in the country. He has a wonderful blog and is providing a great service for both the general population and physicians. If you want to know what is going on in healthcare and medicine read KevinMD. Kevin’s blog provides the information that exposes the ills of the healthcare system and will help stimulate the demand for change.

Richard H. Rowe M.D. is another Family Practitioner who confirms Dr. Hartzell’s story.
“Family practitioner Paula J. Hartzell’s “Medicine is a blame game” [“The Way I See It,” Apr. 20] is sobering. I agree with her commentary entirely.

After 32 years, I am totally disillusioned with medical practice and all the hassles associated with trying to care for patients. Let’s go down the list:
• The government and health insurers blame doctors for overcharging patients.
• The legal profession blames doctors for practicing poor-quality medicine—while these same lawyers are getting rich off the system.
• Regulatory agencies blame us for not doing enough or spending more time in the office.
• Liability insurers blame us for the ever-increasing number of lawsuits.
Meanwhile, organized medicine appears powerless, sitting on the sidelines. If the current trend persists, I am afraid we are heading for a medical meltdown. Perhaps future topics in Medical Economics will be: Where are all the doctors?”
Richard H. Rowe, MD
Mesa, AZ

Richard Rowe M.D. confirms the story as many others have. People must remember when they are sick they want a well trained physician who understands disease processes.

I received some comments as a result of my post” We Are Not Healthcare Providers, We Are Medical Care Providers” saying “you doctors are only trying to protect your guild.” It sounds to me that healthcare providers think physicians are in a turf war with them. As I stated previously the healthcare providers should be called physician extenders. They should be joining the medical care team to provide a team approach to medical care through focused factories rather than trying to compete with physicians and devalue treatment.

I received this comment from a famous oncologist.
“Having worked for several years in a community in which nurse practitioners, physician assistants and oriental medicine physicians (“DOM”) are accorded primary care status by regulatory and insurance entities, I can tell you that they have no clue about disease process. This leads to an enormous number of esoteric laboratory studies and imaging studies in the search of some or ANY diagnosis to explain symptoms. Eventually the patients are referred to a medical specialist and with them come myriads of pieces of unfocused medical data. “..just what is the significance of the elevated serum zinc in the patient with chronic weakness and fatigue who has negative imaging studies?” Nada! Excess healthcare costs and healthcare providers, as opposed to medical care providers, always go together!”

Physicians are calling for leadership to save a broken healthcare system. However, the Democrats think physicians are all crooks. The Republicans seem to make healthcare more profitable for the secondary stakeholders, namely the hospital systems, the insurance industry and big Parma. No leader seems to realize that the patient is the most important stakeholder.

The perception of the people is physicians are making a fortune overcharging us, over testing us, and over treating us with medication that hurt us. They use treatments I can not afford or insurance company will not pay for. Unfortunately, this is the perception generated by all the stakeholders and encouraged by the medias need at sensationalism.

A person who is uninsured wrote; “ I am frightened that I will get sick. I will be stuck with an outrageous hospital bill that will bankrupt me. I am a hard working person who lost my job and can not buy affordable individual health insurance.” This needs to be fixed immediately.

My view is that the consumer of healthcare and the giver of medical care have to unite and force our politicians to do something logical and constructive to change all of this.
Pessimism never got anyone anywhere.

Harry Truman said.” A pessimist is one who makes difficulties of his opportunities. An optimist is one who makes opportunities of his difficulties.”

To the pessimists out there I say read my blog. To the optimist out there I say read my blog. With things as bad as they are, the opportunities for improvement and innovations are limitless and awesomely rewarding both emotionally and financially.

Winston Churchill said,” I am an optimist. It does not seem too much use to be anything else.

Franklin Roosevelt said, “The only limit to our realizations of tomorrow will be our doubts of today.”

Ronald Reagan said “There are no great limits to growth because there are no limits of human intelligence, imagination, and wonder.”

Finally, Dwight D. Eisenhower said “Pessimism never won any battle.”

Our most valuable possession is our health. We must be optimistic in the battle to save the medical care system by reformatting the healthcare system. A system needs to be developed that protects patients, the most important stakeholder in the medical care system, not a system that protects the vested interests of the facilitator stakeholders in the healthcare system. The facilitator stakeholders add little value to our medical care system.

Stanley Feld M.D.,FACP,MACE

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

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

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

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

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

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

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

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

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

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

Stanley Feld M.D.,FACP,MACE

The $2.1 billion is at the low end of a 1000 bed hospital’s total revenue. Bed fees are even higher than the $12,000/day average for cardiac patients with complications. This is called DRG creep. The hospitals have also managed to get the patients out of the hospital under the DRG cap. If not, they seem to find a way to extend the DRG cap. The cap means that certain illnesses are paid a flat fee and given number of hospital days. Let us say a DRG for an illness payment is $24,000 ($6,000/day for 4 day hospital stay). If the patient is in the hospital for six days the hospital gets the same $24,000. If the patient is in for three days they get $24,000. You can see why the hospital’s motto is get them out fast.

We are unable to know the hospital’s actual overhead. If we did, we could to find out what the hospital’s actual costs are. We could then calculate the hospital’s profit. These numbers are totally opaque.

Most hospitals are non profit hospitals. They can not post a profit at the end of the year? Therefore, they have to pour the extra money into something. Executive salaries and capital expenditures are a prime avenue for getting rid of their profit. A key question is how is the hospital’s overhead calculated? Maybe reducing costs to the consumer would be a good idea?
If a hospital makes capital expenditures with the capital they have to spend each year they receive added cash incentives. If a hospital has a house staff or nursing school there is sizable bonus received from Medicare for the professional training programs.

I received this comment from a knowledgeable follower of my blog

“Stan

Richard Dickey M.D. ,FACE”

If you would suddenly became ill and have to go to an emergency room, because you need help immediately, you can not shop for a hospital on the internet. You are stuck. Shouldn’t there be some rules that reflect the cost and value of the hospital service? If your life is saved, the fee charged is priceless if you had some way of paying for it.

The solution is not price controls or a single party payer. The solution is price transparency, and the creation of a price competitive environment among hospitals.

President Bush’s approval rating is at an all time low because of the Iraq war. However, his medical advisors understand the healthcare systems problems. He has called for price transparency. Congress, under the influence of vested interests, stopped him. He called for DRG reform on the basis of hospitals’ cost and not charges. Again congressional outcry influenced by vested interest stopped the process. I have a feeling Mark McClellan M.D., Director of CMS, quit because of the delay in DRG reform.

President Bush has been able to get through some insurance reform. The deductible limit on a Health Savings Accounts have been raised for an individual is now $5250 and 10,500 for a family. However, the HSAs are constructed in favor of the insurance industry and not the patient. They still do not have a community rating system in place. The insurance industry fought with 4 years of lobbying to stop a Medical Saving Account in favor of the patient.

This year President Bush proposed tax deduction of up to $15,000 per family to by insurance. Yesterday he told hospitals not to press their luck about prices and charges.

I know the President and his people know all the issues necessary for true reform and the repair of the healthcare system. They simply can not accomplish true reform piecemeal. The piecemeal approach to the entire needs for effective healthcare reform to occur is inot understandable to the goal of reform to the public, media or congress. Piecemeal reform will also get distorted by the vested interests (facilitator stakeholders) during the legislative delays.

Medicare has not hesitated to reduce physician fees. They will be reduced 5% again this year. Medicare is presently regulating the price it is paying the physicians. The government’s tactic seems to be to beat up the guy you can beat up the easiest.

Congressman Pete Stark has said all physicians game the system. They have to be stopped. Congressman Stark’s view is far from correct. However, if you instinctively know you have a product or service that is needed, and other stakeholders are taking undo advantage of a dysfunctional system, some feel they might as well try to get their share.

However, when Mark McCellan M.D. discovered that 90% of the healthcare dollar was spent on the complications of chronic disease. His goal was to improve chronic disease management to reduce complications.

The government declared in the Federal Register it was going to reduce the payment for Bone Mineral Density by 70% over the next four years. The medical profession made a feeble attempt to stop the reduction. A Bone Mineral Density can diagnose early osteoporosis. Early treatment can prevent future osteoporotic fractures.

When the government tried to change the DRG system to reflect the actual hospital cost of service as opposed to charges, Congressman came out the woodwork to delay and stop the process.

How come? The political system has nothing to do with common sense and logic. It is driven by the most effective vested interests.

Who should have the most important vested interests? We are supposed to have a government run by the people for the people and not the best lobbying group. People need to step up and speak out!! Eventually, the wisdom of the democratic process and the peoples’ interest will prevail. We do not have the time to wait. We must speak up now!

Stanley Feld M.D.,FACP,MACE

Paul Levy CEO of Beth Israel Hospital writes a blog called” Running a Hospital”. He has tried to justify his salary after the Boston Globe published his salary of over 1 million dollars per year.

Mr. Levy’s statement is a worthwhile read. He is justifying his salary on the basis of revenue generated, and donations received. He is also comparing his job to the jobs of CEOs of large corporations that make more than he does. His justification a well articulated as are most of the comments both positive and negative.

It is bizarre to me to read this kind of thinking at a time when most agree the healthcare system is broken.

Some feel it is about to implode. Paul Levy has figured out how to have his institution survive in a broken healthcare system. I cannot understand how he would have the guts to brag about how much he is worth rather than do something to help fix the broken system. He could hire more nurses. He could provide preventative management care to the community to decrease the incidence of the complications of chronic disease.

Remember, the complications of chronic disease cost the healthcare system 80% of the healthcare dollars spent. Effective disease management using evidence based medicine can decrease the complication rate by at least 50%. The net savings to the healthcare system would be 40% or more.

What about the patients who can not afford insurance? What about the opacity of hospital prices charged for services? Remember Denise’s letter to Kinky Friedman and her problem with hospital pricing? What about the overcharging of hospitals through a faulty DRG system? What about the constant shortage of nurses because of low salaries?

What about the continuing decreases in payments to physicians by Medicare and the insurance industry?

Linda Halderman M.D. wrote an essay entitled “How Much is Your Doctor Worth?”. It is also worth reading. The subtitle should be, “How Much is Your Doctor paid?” The answer after the long essay is $59.50 for this complicated office visit. Dr. Halderman would only have to see 168,067 patients in one year or 744 patients a day to generate a gross revenue of $1,000,000 before expenses.

What is more valuable to the healthcare system? A CEO’s salary based on revenue generated incentives and fund raising or good quality medical care?

Family Practitioners and Internists are struggling to survive.

Some have experienced that their overhead is greater than their revenue. Some have had to hold two jobs. The American College of Physicians published a White Paper declaring that the specialty of Internal Medicine is in grave danger. Patients cannot afford their medication. If they do not take their medication they will accumulate more and more complications of chronic diseases. Complications of chronic disease are good for the hospitals’ bottom line. This should result in more revenue for Paul Levy’s hospital. By his reasoning he will be entitled to a greater performance bonus at the end of the year.

Dr. Donald Seldin, the legendary Chief of Internal Medicine at University of Texas, Southwestern Medical School imbedded in our brains, when we were residents of Internal Medicine, that the practice of medicine is a princely profession. We, as physicians, have the privilege of caring for the sick. Hospital administrators, as facilitator stakeholders, should feel the same obligation. They have an obligation to the community to make medical care available and affordable. The mission should not be to enhance the hospitals’ bottom line in order to increase the performance bonus of the CEO.

Remember hospitals such as Beth Israel Hospital in Boston are tax exempt community hospitals because they have this community obligation. These tax subsides and others tax subsides are opaque to the public. However, the public pays for these subsides. They contribute to the hospitals bottom line and Mr. Levy’s bonus.

Kevin,MD Medical webblog (A wonderful medical blog) picked up Paul Levy’s blog. Mary Lu, a fellow hospital administrator, commented in Kevin’s blog a sentiment expressed many people.

“Kevin, this guy gets the brass ones award for being so forthcoming– It will be interesting to follow how this affects his perception of himself. As a fellow administrator, who is paid a hell of a lot less, I can only wonder what in the hell possessed him to write this. But… it’s going to be interesting!
# posted by Mary Lu : 6:11 AM”

I think you can start seeing what medical care system, the healthcare system, and the American public is up against. Single party payer will simply result in more abuse to healthcare delivery. l

The solution would be easy if we can force the political system to respond with common sense. The logical response does not happen often in our political system.

Patients have to take charge of the system now!! The patients must control their healthcare dollar with the Ideal Medical Saving Account System. I believe this is the only way we can set up a price competitive system.

The politicians will not do it on their own. The political system can do it with pressure from you, the people, on your State Governments.

We have a lot of work to do. First, we must understand the issues.

Stanley Feld M.D., FACP, MACE

The solution should be pretty clear to all following my blog. I advocate the American way! I believe a consumer market driven system with government making rules for the benefit of all members of the society. When one stakeholder takes advantage of another stakeholder to the harm of the other stakeholder the government has to intercede.

Richard Swersey Columbia College Class of 1959 has a college degree in the ability to think! He also has a post graduate mining degree and masters of business administration. He wrote “You referenced Adam Smith in your blog on dirty coal plants. People need to be reminded that: (1) there is a large section of “Wealth of Nations” entitled “The Role of the Sovereign”. Even Adam Smith recognized that the market can’t do everything; and (2) there has never been a time in recorded history where commerce (or markets, or industry) was totally free of government intervention.”

I made the same point in the blog on the TXU proposed dirty coal plants. Adam Smith’s treatise also applies to the healthcare system. The function of government is to promote civility (civil right) for the benefit of all and not to build bureaucracies that can not possibly work effectively.

Dick is absolutely correct. The function of government in a democracy should be to function for the people by the people. The operative words are for the people and not to the disadvantage of the people.

Entrepreneurship and obtaining a competitive advantage is the engine that drives innovation in America. Our problem in medicine right now is some the facilitator stakeholders have large vested interests they need to protect. They are very busy protecting their vested interest by various political means. Unfortunately government is not acting for the benefit of the people. The advantaged stakeholders are so short sighted that they can not see that the system they are protecting is falling apart right in front of their eyes. In fact, it is about to blow up. We, the primary stakeholders (patients and physicians) can not see what does not hurt us. We are waiting for the Katrina effect. The mentality of what we can not see can not hurt us has to stop. We have to act know and demand change.

In my view price transparency and the consumer (patient) being in control of their own healthcare dollar can go a long way to transform medical services into a competitive market place.
Some of the insurance companies are talking a good game. Aetna has feigned price transparency in Cincinnati. They published only the price of the top thirty procedures for customers that bought HSAs. This is good start but never expanded to my knowledge. I called this blog Another Smoke Screen.

Wal-Mart made an innovative advance with its generic drug initiative. They are charging $4 for a thirty day supply of generic drugs. They have 340 drugs in the formulary. Physicians feel comfortable using some generic drugs. They also want to help their patients. Patients can also demand generic drugs. Most physicians will use generic drugs if there is not a clear cut difference between the generic and brand name medication.

Wal-Mart can not keep the drugs in stock. They also can not keep people out of the store. Wal-Mart is not losing money on the drugs either. The result will be an increase in net profit to Wal-Mart and a consumer driven market benefit for the patient. It will also force brand name drugs to come down in price. Wal-Mat’s initiative will created a clear market driven economy for buying drugs.

Who needs Medicare Part D and its $10 co pay along with its ominous $2200 doughnut? Wal-Mart is also setting up competitive price wars among CVS, Walgreens Rite Aid. Wal-Mart has good chance of winning because it has the mentality to engage in these kinds of innovative programs. The CVSs will get there as it works its way through their hierarchical bureaucracy. The end result will probably be too little too late for CVS.

The most of the uninsured who could buy insurance have had no choice but to not buy insurance.
They have chosen take their chances. When they get sick someone has to pay or not get paid. This is the point. It gets painful and costly for all the stakeholders. The Canadian model of Universal Health Care with a single party payer does not work. The costs rise, access to care is restricted and patients die.

The main question is how do we fix the problems. We have to exercise some common sense. We need to be equitable. The vested interest empires (facilitator stakeholders) have to start to understand that our most precious possession is our health and not their profit. A healthy nation is a strong the nation. They have to stop fight the Repair of the Healthcare System.

Price transparency, reform DRG on cost and not charges are very important. We must stop the bonus to hospitals or insurance companies for supposed cost overruns at the end of the year. We must provide incentive for disease management training to all patients with chronic disease. We must make the patient responsible for their healthcare and healthcare dollar in a price transparent environment. We must motivate the patient to care for their chronic disease by rewarding prevention of complications of disease.

We must eliminate hospital and insurance company administrative waste. We must neutralize defensive medical practice by malpractice reform. We must revolutionize the adjudication of claims system to a system of instant payment.

We must provide and institute an EHR universally that can measure outcomes. The outcomes we must measure are the medical outcomes. The medical outcomes must be relational to the financial outcomes and patient and physician input as to the value of the outcome.

We need to start getting serious about all of these issues in unison. We have to concentrate on the cost of complications of chronic disease. We must create financial incentives for preventative services. We have to teach the patient the “Professor of their Chronic Disease”.
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2006/06/do_complication.html

We must motivate the patients to be responsible for their chronic care. If they are not they will have a financial loss as well as a medical loss. We must put the patients in control of their healthcare dollar. I believe if we did all of this our healthcare system would not be in trouble. All of this can be accomplished with the Ideal Medical Savings Account. The structure of the current HSA system will not accomplish all of these key initiatives

If the government wanted to subsidize something it would be the purchase of the ideal medical savings accounts for all the uninsured who could not afford to buy insurance. This would eliminate all the waste in Medicaid. The concept of universal healthcare with the government as a single party payer is a sham because it does not address any of these important initiatives.

Stanley Feld M.D.,FACP,MACE

To me, a true entrepreneur is a person, who can see patterns that others can not see and act on those patterns to create an opportunity that no one thought existed.

KKR has a long history of success is discovering these patterns and investing in them in a leveraged way. A current purchase was Hospital Corporation of America. My guess it is the purchase was not through a process of intensive study of endless data and pilot studies. It is through a process of considering information and then visualizing the trends and patterns of the times. Once visualized, then you act and follow through. It is a no brainer unless there are bumps in the road.

Oceans of good and bad information are available about the healthcare system and its ills. In fact there are many nonsensical rules and regulations that distract physicians from their duty of delivering medical care. The easiest thing to do is for physicians to ignore the obligation we have to try and fix the system. At first glance, with all of the healthcare system’s complexity and all of the suggestions to fix the complexity it seems impossible to generate effective change.

It seems that everything that is done to improve the system ends up harming it even further. The most recent example is the windfall the 1983 DRG method created for hospitals. Now, implementation of a new DRG system based on cost rather than charges is delayed for one year. Dr. Mark McClellan resigned as director of CMS. My guess implementing the new system will be delayed even longer with his departure.

Recent examples are plentiful. One is the Medicare Part D benefit. The benefit was developed to help people of Medicare age. A $2,500 doughnut hole has been inserted to the disadvantage of the patient and the advantage of the pharmacy. The details are of the advantage are madding.

Another governmental error is the conversion of the concepts of Medical Savings Accounts into Health Savings Account by the congress who wants to fix the system. The Health Saving Account is a small deductible of $1000 as opposed to the original Medical Saving Accounts deductible of $6000 which gave the patient incentive to spend his dollar wisely. The Health Saving Account is to the advantage of the insurance company and not the patient. Additionally self employed older people can hardly afford or qualify for insurance if they could qualify. If qualified they would have to buy the insurance with after tax dollars rather the pre-tax dollars the employer pays.

In order to be an educated and wise consumer, one needs to know the price of the item. So far, hospitals, insurance companies, pharmacies, and pharmaceutical companies have refused to reveal the price of their services or payments in a transparent way. The government has published their reimburse schedule but you have to be a coding expert to figure it out. Then you have to know what codes the physicians and hospitals will use. Total opacity remains. It is in the hands of State licensing boards to insist of transparency. So far, not one governor has stepped up to the plate. President Bush has call for transparency but it has generated no action because a deadline has not been set.

The Commonwealth Fund just published a preliminary document advocating the government as the single party payer. We have just listed errors the government has made in the past. Imagine if everyone was insured under Medicare, how difficult and inefficient the system might be. I noticed the Chairman of the Commonwealth Fund study is the CEO of Partners Health in Massachusetts. John Monagan has been awarded a salary of over $2 million dollar for the profitable job he has done for Partners Health. I suspect his success is from his figuring out the reimbursement system from the old DRG system.

I truly believe the government wants to help the people. What is the pattern that creates these misfired initiatives? They misfire because of the inefficiency in hierarchical bureaucracy. The hierarchical bureaucracy is imbedded in all of our government agencies and in the body politic. Decisions are influenced by vested interests lobbying and not by common sense.

In the book High Noon, J Rischard points the way of coming to reasonable decisions for all the vested interests. Everyone needs to participate in the decision making process. It is by network problem solving for the common good and not hierarchical bureaucracy influenced by vested interests.

We, the people, can overcome this archaic structure. A system can be repaired that will cost less money. It would be is a system by the people for the people. There are lots of very smart people in America, who can figure out lots innovative solutions.

We, the people, have to be angry enough in order to have the will to act.