Stanley Feld M.D.,FACP,MACE

Once again, President Obama is being disingenuous. He told the nation’s governors he was willing to amend his healthcare reform act. He said he would give states the ability to opt out of its most controversial requirement the mandate for citizens to buy insurance in 2014.

Last week he started his speech by spinning his charm at the National Governors Association meeting by saying:

“I am aware that I have not convinced everybody here to be a member of the Affordable Care Act fan club,"

He said he understood that the majority of the public were not members of the Affordable Care Act fan club either.

He did promise “to give states the power to determine their own health-care solutions.” His qualifications to state power are the deal breaker.

President Obama’s qualifications to state power change in his healthcare reform act as it relates to Medicaid are:

1. The Administration retains the power to decide which states deserve a waiver.
2. The state would still need to cover the same number of uninsured.
3. Its coverage would still need to include the same comprehensive benefits.
4. It must be as "affordable" as determined by the Administration.
5. States could opt out of some consumer or employer mandates. This is a minor concession.
6. In reality, his conditions leaves no room for the states to innovate.
7. Innovations such as;
   1. Straight tax deduction or credit to purchase individual coverage.
   2. Alternative insurance designs such as;

              i. The high-deductible ideal medical savings accounts,

              ii. Plans that can be bought across state lines.

1. Even if the change was approved, it could be difficult for states to meet the federal requirements for the waivers.

Mr. Obama also asked the governors to come up with a bipartisan group to find ways to reduce Medicaid costs. There is no way to reduce Medicaid costs under the structure of President Obama’s healthcare reform act. The structure is defective.

President Obama must have stayed up all night trying to figure out ways to fake out the State Governors. President Obama is trying to reposition himself to the political center issues in the wake of the drubbing his party took in the November midterm elections. This proposal will not do it.

He has once again used smoke and mirrors.

This is not a shift. The mandate in particular is under fierce attack in the courts, where federal judges have issued conflicting opinions on its constitutionality. The mandate is also a rallying cry for conservatives and Tea Party supporters, who regard it as a prime example of overreaching by the federal government.

President Obama will not allow states to cut Medicaid rolls to ease their fiscal distress.

President Obama said. “I am not open to refighting the battles of the last two years,” he said, “or undoing the progress that we’ve made.”

Gov. Rick Perry of Texas, chairman of the Republican Governors Association said. “Pretty much all he did was to reset the clock on what many of us consider a ticking time bomb that is absolutely going to crush our state budgets. The states need more than that.”

Indiana’s Mitch Daniels and 20 other Governors recently wrote to President Obama requesting a genuine relaxation of the waiver standards. He has also asked for states to have the ability to be innovative and control each individual Medicaid program.

"Healthy Indiana" the Medicaid reform Governor Daniels initiated in Indiana is run because of special federal permission. The program has been a huge success. Federal support for the program is about to disappear.

The Health and Human Services(HHS) department does not like the Healthy Indiana program because it features health savings-like accounts. Healthy Indiana decreases federal control over the Medicaid system in Indiana. The program puts the healthcare dollars under patients’ control.

‘The reality is that the liberals who wrote this bill really do think they have a monopoly on good ideas, and they do not include markets. Democrats are more than happy to give the states more freedom, as long as the states use it to impose comparable government control.’

That may be why we hear that White House health staffers Stephanie Cutter and Nancy-Ann DeParle have been privately telling liberal interest groups that this is a way to increase centralization—for instance with a state-based "public option" or even single payer.

President Obama’s “flexibility” is a shame. He is telling the states you can do anything you want. However, you must do what we want you to do. We will determine what we will approve.

The list is defined arbitrarily by unelected bureaucrats and a non- congressional approved head of CMS (Don Berwick) who refuses to answer any congressional questions directly.

I believe President Obama wants the healthcare reform act to fail. He wants the federal government to get complete control over the entire healthcare system.

He is stalling for time with his most recent tactic. It is essential to him to get all new 256 agencies up and running. Then it will be difficult to close down new agencies.

I hope the state governors are not faked out by his charade.

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

Stanley Feld M.D.,FACP,MACE

An interesting debate occurred in the Washington Post between Michael Leavitt was the former secretary of Health and Human Services, and a member of the Medicare Board of Trustees from 2005 to 2009, and Dr. Don Berwick, the director of CMS.

Michael Leavitt wrote a scathing article criticizing President Obama’s Medicare Reform Act calling it an illusion. Don Berwick wrote a rebuttal to Michael Leavitt’s article.

Michael Leavitt starts off his article by stating, “Despite the report from Medicare’s trustees this month that the hospital insurance trust fund will not be depleted until 2029, 12 years later than was predicted just last year, Medicare is no better off than it was a year ago. “

The Medicare Trustees Report was strange. Nothing was done to change anything and all of a sudden, the hospital insurance fund was extended 12 years. I thought it was funny arithmetic.

Medicare Trustees is supposed to be an organization independent of the administration. Shortly afterward Richard Foster, Chief Actuary for Medicare, who is independent of both the Medicare Trustees and the administration, wrote an “Alternative Report.” He report received little coverage in the traditional media.

I wrote an article about Mr. Fosters report.

“The Medicare Chief Actuary Alternative Report: Richard Foster

After the Medicare Trustees Report was published, Richard Foster the Chief Actuary for Medicare warned “the projections in a Medicare Trustees Report “unreasonable” and “implausible.”

He encouraged everyone to ignore the report and view instead an “Illustrative Alternative” report. He said, “The projections shown in the report do not represent the “best estimate” of actual future Medicare expenditures.”

“Noting that the formal Trustees report assumes Medicare physician fees will be reduced by 30% over the next three years, Chief Actuary Richard Foster says that’s “implausible.” In addition, the Trustees report assumes Medicare fees will fall below Medicaid rates by 2019 and fall further and further behind private payment rates in future years, as the following chart shows:”

In his April 22 report, Richard Foster laid out the implausible aspects of the math. President Obama has used funny arithmetic to get his healthcare reform bill passed with a promise of budget neutrality. Foster said;

• Cuts in Medicare spending of $575 billion over the next decade.

• 7½ million members of Medicare Advantage plans to lose their coverage and cause another 7½ million to face higher premiums and benefit cuts.

• About one in seven facilities — hospitals, skilled nursing facilities, home health agencies, and hospices — to become unprofitable and possibly drop out of Medicare altogether.

• Many doctors to quit seeing Medicare patients entirely.

The public no longer believes President Obama and his projections. They understand his motives.”

President Obama constantly claims his healthcare reform law will “Bend the Cost curve” According the Chief Medicare actuary report it will bend the curve in the wrong directions.

In his rebuttal, Dr. Don Berwick uses the Medicare Trustees Report as a given truth to defend President Obama’s healthcare reform law.

“The Medicare Board of Trustees estimated last month that the Affordable Care Act produces savings that extend the life of the Medicare Hospital Insurance Trust Fund for 12 years, to 2029. The actuary of the Centers for Medicare and Medicaid Services (CMS), an independent office, reached the same conclusion.”

Dr. Berwick has misquoted Richard Forster, the chief actuary of the Centers for Medicare and Medicaid Services.

Dr. Berwick goes on to say, the Congressional Budget Office has estimated that the law will reduce the federal deficit by more than $100 billion over the next 10 years and more than $1 trillion in the following decade.

Those real savings help today’s and tomorrow’s Medicare beneficiaries.

The problem with that statement is that is what the CBO said before the bill was passed. The CBO was given assumptions by Nancy Pelosi, Harry Reid, and President Obama.

After the bill was passed in May 2010, the CBO revised the estimate. Rather than decreasing the deficit, it will increase the deficit by $115 billion dollars over ten years.

The problem begins with double counting. The Congressional Budget Office estimates that the health law will reduce Medicare spending by about $450 billion over 10 years. But all of those savings, plus massive tax increases, are used in the new law to pay for an expansion of Medicaid and a new entitlement program to subsidize insurance premiums for low-income households.

Dr. Berwick explained the double counting away by pointing out that Medicare cuts can be used to improve the government’s capacity to finance benefits in the future or to pay for another entitlement.

If there are cuts to Medicare payments of $450 billion dollars over 10 years how are Medicare benefits going to improve. The CBO and Medicare’s actuary said the $450 billion dollars could not be used for both Medicaid and Medicare. More importantly, congress has already committed those funds to other projects.

Dr. Berwick says this is not double counting. It sounds like double counting to me.

“Some, including Leavitt, claim these savings are "double counted." This argument is inaccurate and oversimplifies what is really going on.”

The government accounting rules opaquely cook the books and increase the deficit. Medicare’s estimated saving is credited to the Medicare Trust Fund. The Medicare Trust Fund buys treasury bonds. The government uses the bond proceeds to fund other projects. When Medicare needs the money, they sell the treasury bonds. The government prints more money without congressional approval. The increased funds will then pay for Medicaid expansion.

It is double counting.

Many Americans have a hard time following these manipulations.

I must warn President Obama and Dr. B
erwick that Americans’ are interested now. There is a developing mistrust for the administration and the increasing budget deficits. The mistrust is growing especially since nothing is being accomplished except bigger government control over the healthcare system.

This is all smoke and mirrors with patients and physicians being the victims

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

Stanley Feld M.D.,FACP,MACE

The New York Times wrote an editorial “Medicare Scare-Mongering.” The editorial contained no facts proving its proposition.

“It has been frustrating to watch Republican leaders posture as the vigilant protectors of Medicare against health care reforms designed to make the system better and more equitable.”

Both Democrats and Republicans know that Medicare is unsustainable in its present form. Both parties are posturing for the public and political power. Neither are attacking the problems in the healthcare system to make the system sustainable.

Why? Repairing the healthcare system threatens the vested interests of secondary stakeholders that fund politicians’ election.

“ This is the same party “Republicans” that in the past tried to pare back Medicare and has repeatedly denounced the kind of single-payer system that is at the heart of Medicare and its popularity.”

Both parties are trying to pare back Medicare because Medicare is unsustainable. Each party’s methodology is different.

“For all of the cynicism and hypocrisy, it seems to be working. The Republicans have scared many older Americans into believing that their medical treatment will suffer under pending reform bills.”

Seniors have evaluated the Democrat’s proposals. They understand the implications of the various proposals. Seniors are convinced that the implications are going to have a negative impact on their present level of care. They mistrust the political rhetoric and understand bureaucratic inefficiency. .

“The general public believes that, too. The latest New York Times/CBS News poll of 1,042 adults found that only 15 percent believe changes under consideration would make the Medicare program better, while 30 percent think they would make it worse.”

It would be very simple for the New York Times editorial board to explain how the Democratic proposals would improve Medicare coverage. The editorial does not do this. It is more rhetoric.

“The Obama administration and Congressional leaders are hoping to save hundreds of billions of dollars by slowing the growth of spending in the vast and inefficient Medicare system that serves 45 million older and disabled Americans.

If Medicare is inefficient, how is the administration going to do to make it efficient? It cannot do it by increasing bureaucracy. 

The Obama proposals are ignoring the two most wasteful aspects of Medicare, defensive medicine and the healthcare insurance industry’s abuse of outsourced administrative services.

The inefficiency in Medicare will only increase when the government controls healthcare coverage of an additional 45 million people.

There is only one logical way for the government to reduce costs. It must ration care. Reducing Medicare payments by $500 billion dollars over the next few years is not going to decrease bureaucratic inefficiency.

The editorial also complains about Medicare Part D and Medicare Advantage. Both programs were terribly constructed. They rip off both patients and the government. Complaining about them and throwing money at them will not make them more efficient. Medicare Advantage must be eliminated and Medicare Part D must be redone in a logical way and not to the advantage of the healthcare insurance industry.

“by enhancing their drug coverage, reducing the premiums they pay for drugs and medical care, eliminating co-payments for preventive services and helping keep Medicare solvent, among other benefits.”

Why isn’t the editorial board attacking the healthcare insurance industry that is making billions of dollars from Medicare Part D at the government’s expense? Why isn’t the NYT editorial board demanding that the government negotiate the same drug price it pays for military and veterans administration drugs?

The House legislation, the only bills in near-final form, would reduce and ultimately eliminate a gap — the so-called doughnut hole — in Medicare drug coverage that currently forces more than three million beneficiaries to pay for drugs entirely out of their own pockets once they hit specified spending levels.

It will create a great government deficit.

Republicans are not the villain. The current proposals are the villain. The proposals will restrict access to care, ration care, and waste $1.1 trillion dollars on top of the yearly loss presently.

But the Republicans have done far too good a job at obscuring and twisting the facts and spreading unwarranted fear. It is time to call them to account.

The New York Times editorial board does not present a stitch of evidence for the statement below. I think liberals are so tired of the senseless debate that they will accept any declaration.

What the Republicans aren’t saying — and what the Democrats clearly aren’t saying enough — is that in important ways, coverage for a vast majority of Medicare recipients, those in traditional Medicare, should actually improve under health care reform.

The New York Times editorial board is clearly pro Obama and has done a poor job analyzing the content of the proposals.

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

Stanley Feld M.D.,FACP,MACE

Medicare is partially funded through payroll taxes of the workforce for the benefit of seniors. The unfunded liability of the government for seniors is enormous. It gets bigger each year. As baby boomers reach Medicare age the government unfunded liability is going to escalate more rapidly.

President Obama and the Democratic controlled congress are ignoring the Medicare trustee annual report of Medicare’s unfunded liabilities. They keep promising us the public option will provide the same insurance the congress receives under Medicare Part C. The only way to fix the unfunded liabilities is to decrease services or increase taxes or both. These reports are public information.

Medicare is funded by a combination of dedicated revenues (payroll taxes, beneficiary premiums, and state payments) and general revenues.

“Medicare’s Hospital Insurance (HI) trust fund, (Medicare Part A) financed by payroll taxes, is currently running a deficit and is projected to be exhausted by 2019” according to the 2005 Medicare trustee report.

“Conversely, the Supplementary Medical Insurance (SMI) trust funds’( Medicare Part B and Part D ) which cover outpatient services and prescription drugs, never face a deficit nor become exhausted, because annual adjustments are made each year—mainly drawing more from general revenues—to match expected costs.”

Nevertheless, with projected increases in demands on the Medicare program by retiring baby boomers and rising health costs, growth in program expenditures, which are already heavily reliant on general revenues, will soon require additional taxpayer funding.

The projection in unfunded liability in the next 75 years increased from $12.7 trillion in 2005 Medicare Trustee report to $34.2 trillion in 2007. The 2008 report estimated the unfunded liabilities will increase to $100 trillion in 75 years. These numbers are estimates for seniors only. If President Obama extends Americans covered under the public option the unfunded liability will be higher. The only way to cover these costs is to increase taxes, decrease coverage or both.

In 2006, total Medicare expenditures were $408 billion, or approximately 3.1 percent of GDP. But as a share of GDP, Medicare expenditures are projected to double to 6.5 percent by 2030 and nearly quadruple to 11.3 percent by 2081.

This was a 2007 estimate. In 2008 the estimate doubled. President Obama’s healthcare reform plan will knock the ball out of the park. $1 or $2 trillion dollars is a lot of money. $100 trillion dollars is unimaginable.

“The Medicare Trustees report shows that Medicare poses the single greatest challenge to taxpayers of all government programs.”

In 2005 Senator Judd Gregg R-NH, President Obama’s choice for Secretary of Commerce expressed the need for fiscal responsibility while the U.S. Comptroller General could not express the urgency in more graphic terms.

[W]e as a Congress has an obligation to try to fix [those entitlement programs] today so that they don’t end up bank­rupting our children and our children’s children tomorrow.

—Senator Judd Gregg (R–NH)[1]

There is no way we are going to deliver all the Medicare promises that have been made. No way.

—David M. Walker, U.S. Comptroller General[2]

Now we are hearing from President Obama that we cannot afford not to spend the money. The common invective about the Democratic Party is they are the tax and spend party. President Obama is turning the invective around. He plans to spend and then tax.

The administration is not testing reality. Government estimates are usually notoriously underestimated. In recent weeks the CBO estimated a $1 trillion dollar increase in the next ten years if the government adopts Ted Kennedy’s plan. $1trillion dollars is a big number. I believe the Congressional Budget Office is being kind to Ted Kennedy’s bill and the estimate of costs of the public option.

The Centers for Medicare and Medicaid Services (CMS), the agency that runs the Medicare program, gen­erated its own estimate in 2003 and has continued to do so every year since the bill’s enactment. Though not made public until 2004, the CMS’s 2003 estimate was $534 billion dollars in unfunded liabilities for the period 2004 to 2013. In CMS’s February 2005 estimate, the 10-year price tag of the drug provision is $724 billion dollars for the period 2006 to 2015.

Americans are being numbed by the numbers. A trillion here, several trillion dollars there and everything will be alright. Today the Medicare estimated unfunded liability will increase by $2 trillion in just one year without President Obama’s healthcare reform.

If the government really wanted to reform the healthcare system, be able to afford universal care and increase the quality of care to increase the health of the nation he would focus on the real problems in the healthcare system as I have outlined them.

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