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President-elect Trump: Part 6

Stanley Feld M.D.FACP, MACE

There has been no mention of the importance of tort reform in your proposal to replace Obamacare. President Obama made no mention of tort reform either.

Without medical malpractice reform your administration will not be able to reduce the cost of healthcare and increase the quality of medical care.

It is very difficult to institute malpractice reform. It is in direct opposition to the vested interest of plaintiffs’ malpractice attorneys and malpractice insurance companies. These two group have very powerful lobbies.

I have estimated that there is at least one trillion dollars of waste in our healthcare system because of over-testing, over-treating and over diagnosing as a result of the threat of malpractice lawsuits.

Malpractice insurance and the time and money spent in litigation has to be include in the one trillion dollar estimate. Ezekiel Emanual M.D., Obamacare architect, proposed an artificial threshold of significant cost savings in order to form a policy.

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

One percent is arbitrary. It permits Dr. Emanuel to dismiss problems that cost the healthcare system less than $26 billion a year.

The validity of the data collection is of no concern to Dr. Emanuel. He says only $1.3 billion results in malpractice costs. He ignores over testing, and lawsuit costs.

He said,

“Health care spending in the United States typically increases by about $100 billion per year. Cutting a billion here or there from something that large is undetectable and meaningless.

 In health care, you have to be talking about tens of billions of dollars before you are talking about real money.

Dr. Emanuel has no difficulty in producing fake data to make his point to the unknowing.

 A study, closer to truth than just an opinion, disclosed:

The truth is a full accounting reveals that more than 10 percent of America’s health expenditures per year are spend on tort liability and defensive medicine.

This study concludes that $242 billion a year extra is spent because of the lack of tort reform.

The $242 billion is well above Dr. Emanuel’s fictitious threshold.

“Much of this waste is generated or justified by the fear of legal consequences that infects almost every health care encounter. The legal system terrorizes doctors. Fear of possible claims leads medical professionals to squander billions in unnecessary tests and procedures.

Physicians and nurses are afraid to speak candidly to patients about errors. They try to explain the risk reward ratio of treatments for fear of assuming legal liability. The result is the practice of defensive medicine and over testing to cover every possible contingency.

This legal anxiety is also corrosive to the therapeutic magic of the physician patient relationship.

It would be relatively easy to create new rules that would provide a reliable system of justice for patients harmed by medical treatments and procedures without encouraging costly litigation.

A new and effective tort reform system would decrease the costs of defensive medicine significantly. It would encourage physicians to use of clinical judgment rather than expensive tests. It would improve physician/patient relationships.

“ The good news is that it would be relatively easy to create a new system of reliable justice, one that could support broader reforms to contain costs.”

Everyone makes mistakes in every walk of life. The medical legal liability threat could result in further unnecessary errors. Physicians, nurses and hospitals are advised not to offer explanations about mistakes. Sometimes errors are concealed to avoid a legal ordeal. The hidden error could be compounded by additional mistakes.

“Even in ordinary daily encounters, an invisible wall separates doctors from their patients. As one pediatrician told me, “You wouldn’t want to say something off the cuff that might be used against you.”

There are cost multipliers created as mistrust accelerates between the patients and physicians. You would like physicians to adopt electronic medical records. Some physicians avoid using EMRs because the information could be misinterpreted and used against them.

The Electronic Medical Record available through hospitals systems or standalone physician practices is used by the government and the insurance industry to verify the treatment in order to guarantee treatment is best practice treatment.

Physicians are producing cut and paste reports to cover best practice observation by a third party rather than the actual encounter with the patient in order to avoid reimbursement penalty or possible liability.

There is an increasing use of second opinions. Every medical problem is requiring multiple unnecessary laboratory tests to rule out something that might have been missed in the evaluation of patients in order to avoid malpractice suits.

An example is a CAT scan done in Emergency Rooms for the slightest head trauma.

“Medical cases are now decided jury by jury, without consistent application of medical standards.

 According to a 2006 study in the New England Journal of Medicine, around 25 percent of cases where there was no identifiable error resulted in malpractice payments.

 The malpractice insurance companies want to settle the malpractice claims before the court charges mount.

“Nor is the system effective for injured patients — according to the same studies, 54 cents of every dollar paid in malpractice cases goes to administrative expenses like lawyers, experts and courts.”

These are some of the major tort reform issues that must be addressed in effectively.

They must be addressed to decrease wasteful expenditures in the healthcare system.

Malpractice lawsuits have been a growth industry for defense attorneys. The malpractice suits have also been a tremendous psychological and economic burden for physicians who have to defend themselves.

Politically is has been a tremendous economical burden to the healthcare system. In the past politicians have refused to acknowledge the economic burden to the healthcare system.

Malpractice reform is a threat to the vested interests of the defense attorneys and malpractice insurance companies.

Malpractice reform is essential to any meaningful healthcare reform.

President-elect Trump the big question is.

“Do you have the will and the courage to take on the plaintiff attorneys and the malpractice insurance industry in order to correct the medical tort reform system?”

 Effective Malpractice reform must treat both injured patients and physicians fairly.

 

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Dear President–elect Trump Part 4

Stanley Feld M.D.,FACP, MACE

In 2008 I thought President Obama was the real deal.

I thought he cared about Americans and cared about repairing the healthcare system. I wrote six letters to him giving him suggestions on how to repair the healthcare system.

Then, I realized he was not interested in the improved delivery of healthcare to all Americans. He was interested in the central government controlling the healthcare system in order to control the people and limit their freedoms.

Obamacare was the answer to his goal. Most physicians did not agree with his plan. Many felt powerless to object. Many felt they should go along to get along.

Many in the healthcare industry figured that greater government involvement in healthcare financing would lead to its economic benefit.

Everyone has been deceived. Everyone is starting to believe that government managed healthcare leading to a better healthcare for all and a better healthcare system is a myth.

In my letters I tried to explain this to President-elect Obama. My explanation fell on deaf ears.

Dear President Obama Part 1

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/11/dear-president-elect-obama.html

Dear President Obama Part 2

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/11/dear-president-elect-obama-part-2.html

Dear President Obama Part 3

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/11/dear-president-elect-obama-part-3.html

Dear President Obama Part 4

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/12/dear-president-elect-obama-part-4.html

Dear President Obama Part 5

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/12/dear-president–elect-barack-obama-part-5.html

Dear President Obama Part 6

http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2008/12/dear-president-elect-obama-part-6-why-dont-you-listen-to-practicing-physicians.html

Over the last seven and a half years I have developed a simple but effective consumer driven healthcare system that should replace Obamacare after it is repealed.

Obamacare is missing the major ingredient necessary to create creating a successful healthcare system.

The healthcare system must be market driven, with consumers being responsible for their healthcare and healthcare dollars. The tool that will accomplish this is my Ideal Medical Saving Account. Please include reading the article  My Ideal Medical Savings Account Is Democratic! among all the articles in the group explaining My Ideal Medical Savings Accounts.

The Republicans in the House got many things right in its legislation to replace Obamacare. However they have left out the three most important elements necessary to Repair the Healthcare System.

The first is the revival of the physician/patients relationship.

Consumers must control their health and their healthcare dollars. America must have a consumer driven healthcare system.

Consumers can be taught to drive the healthcare system though public service education.

Consumers must be taught through public service education to change their eating and exercising habits. The emphasis must be on the health dangers of obesity and its development.

Secondly, consumers must be given financial incentives as outlined by my Ideal Medical Savings Accounts to control their own health and have access to available care available in necessary.

Third, there must be significant tort reform included in the replacement of Obamacare.

If the Republicans simply send you the bill they have passed in the house and you sign it you will have an impending disaster as large as Obamacare.

If you include my suggestions in your bill, you would excite consumers and physicians. All the people who have been hurt by the failures of Obamacare will cheer you.

The repeal of Obamacare is vital. It should only be replaced with a consumer driven healthcare system that I have outlined. It will be economically sustainable. It would win over all conservatives and independents. It would even make progressives rethink their ideology.

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

 All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Dear President-elect Trump Part 3

Stanley Feld M.D.,FACP, MACE

The following is Part 3 of my review of your healthcare reform platform. You have a viable alternative to Obamacare. Your alternative needs some vital additions.

In my last blog I omitted the link proving that only 1 million people signed up for Obamacare health insurance exchanges.

I apologize for the oversight. Today enrollment is only 2.3 million. I also noticed that the enrollment date was extended to January 30 from December 31 without fanfare. The site I omitted that follows daily enrollment is acasignups.net.

Obamacare is still a long way from the 20 million claimed and the actual 10 million enrolled for 12 months.

The Obama “experts” still believe that Obamacare is viable. They refuse to believe it has been a healthcare disaster as well as a disaster for America’s economy.

Your next proposal is;

  1. Allow individuals to use Health Savings Accounts (HSAs). Contributions into HSAs should be tax-free and should be allowed to accumulate.

Health Savings Accounts (HSAs) should be changed to Medical Savings Accounts (MSAs) to provide better financial incentives for people who choose this form of insurance. The Medical Savings Accounts can easily be customized so that consumers can choose the level of insurance they desire.

The cost of first dollar reinsurance for coverage after the deductible is met plus the MSA contribution is much cheaper than the first dollar coverage Medicaid coverage. The insurance vendor will still make a sizable profit by providing first dollar coverage reinsurance.

The contribution to the MSA should be flexible to provide an adequate amount of money to be put into the savings accounts to provide financial incentivizes to consumers to maintain their health.

Obesity is a huge problem to health maintenance of health. Obesity can be effectively cured behavioral change of consumers.

The incidence of chronic diseases in obese people is five times that of normal weight people. Financial incentives must be provided. The is also the area that social engineering might be helpful.

Obese children are becoming diabetic and hypertensive at a young age. This must be prevented because of the potential explosive cost effect of complications of both diabetes and hypertension on individuals. The overall costs to patients, Medicaid and society will be devastating.

Medicaid must be converted to a system where the recipients are responsible for their health with financial incentives. Only then Medicaid patients will not be treated as a commodity. Service will improve. .

  1. Require price transparency from all healthcare providers, especially doctors and healthcare organizations like clinics and hospitals.

Price transparency is an essential provision for individuals, businesses and groups in order to produce smart consumers of healthcare.

It is also necessary to require insurance companies to provide verifiable price transparency for their administrative costs and their direct patient care costs.

Consumers must be empowered to be responsible and shop for the best healthcare service value. They must look for the best prices for procedures, exams or any other medical related procedure.

The only way to decrease the cost of healthcare services is to produce smart and motivated consumers of healthcare.

The Healthcare System must be converted to a Consumer Driven Healthcare System.

Social networking should be used as the backbone for the establishment of consumer empowerment.

The success of Angie’s list, Trip Advisor and Open Table are a result of social networking.

All medical care is local. Local communities have their individual social networks that empower people in their neighborhood to know which vendors provide the best value in their community.

Healthcare consumers can use this simple procedure to decrease the cost of healthcare and medical care.

This could also be a place where government can lead the way in establishing accurate educational resources.

  1. Block-grant Medicaid to the states.

These block grants can be used by the states to fund MSAs without a threat of increasing state budget deficits or giving up states’ rights to the federal government.

Block grants for social networking should be used to provide incentives to help individual Medicaid patients seek out and eliminate fraud, waste and abuse of some of its local providers.

It would eliminate expensive big data collections that often times are inaccurate for policy making by central federal control.

  1. Remove barriers to entry into free markets for drug providers that offer safe, reliable and cheaper products.

Federal and state governments should help their citizens choose safe, reliable and cheaper products for the treatment of their diseases.

This would help with compliance and adherence to recommended treatment and also decrease the cost of care.

It would provide consumers with information to take responsibility for their own health and healthcare dollars.

  1. Encourage Congress to step away from the special interests and do what is right for America.

One example is allowing consumers access to imported, safe and dependable drugs from overseas. It will stimulate competition for consumer dollars in the U.S. and lower the cost of brand and generic drugs sold here. Drug prices are artificially high in the U.S.

This is only one example of many ways to decrease the cost of drugs in this country.

You have made many proposals to make a lot of important changes to the healthcare system.

Some are good proposals. Some are not very well thought out by your advisors.

You left out Tort Reform, which is one of the most important proposals. Effective Tort Reform will result in a precipitous decrease in the cost of medical care.

It is absurd to let Obamacare “experts” like Ezekiel Emanuel and Jonathan Gruber heckle your “non viable” healthcare reform plan.

However, you are missing the other important elements in reforming the healthcare system. Those elements are the elements of the use of consumer power, consumer initiatives, and consumer incentives.

 By utilizing these elements you will begin to “Drain the Healthcare Swamp.”

Your healthcare changes must include a consumer driven system with an ideal medical saving account. Otherwise, the healthcare system will remain an unmanageable, expensive and abused mess.

You have admitted these proposals are simply a start. You can easily fall into the trap of listening to academicians who have never practiced medicine in a private setting. You need people who understand patients’ needs.

Obamacare has been a disaster that is unsustainable. It is increasing the cost of care week by week, while rationing care and decreasing access to care.

You must repeal and replace Obamacare. No one wants it. You have outlined a viable proposal even if the progressives don’t like it.

It is a good start.

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

 All Rights Reserved © 2006 – 2016 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Dear President-elect Trump Part 3

 

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

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

His portfolio includes five industry-leading trade publications:

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

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

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

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

All the stakeholders are unhappy with Obamacare.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

  1. The Ideal Medical Savings Accounts (MSAs).

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

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

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

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

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

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

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

  1. The Importance of Tort Reform

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

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

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

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

  1. The Importance of Self-Management of Chronic Disease

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

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

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

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

  1. The Magic of the Patient/Physician Relationship.

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

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

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

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

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

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

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

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

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

  1. The Rule of Information Technology

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

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

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

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

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

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

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

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

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

 

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

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Simple, Viable Republican Alternatives To Obamacare

Stanley Feld M.D., FACP, MACE

There are many simple and viable alternatives to Obamacare which Republicans should start considering.

Republicans should seriously consider My Ideal Medical Savings Account as an alterative to Obamacare. It is logical, simple, does not require a large complicated infrastructure and aligns all the stakeholders’ incentives.

It is easy for consumers to understand.

Consumers want to have choices. The dysfunction of our healthcare system has gotten to the point where most consumers don’t have a choice. Consumers simply do not know they lost their freedom of choice and access to care until they get sick.

Consumers think they have adequate healthcare coverage until they get sick. Only 20% of the population gets sick.

The other 80% of the population refuses to think about the problem.

When they do experience illness, the dysfunction in the healthcare system makes them furious. They want to blame someone. Physicians are usually the targets of their frustration.  

Most physicians are trapped in a situation that causes them to fight for their own survival for all the reasons I have previously enumerated. This creates a more dysfunctional healthcare system.

All the stakeholders fight for their own vested interests. These vested interests have become misaligned. The vested interest of the government is to control of the system and decrease its costs.  

Costs cannot be controlled by regulations without consumer involvement.   Consumers of healthcare must understand the effectiveness of their care is dependent on their involvement in their own medical care.

Consumers’ adherence to treatment is a key component in the effectiveness of medical care.

Medical costs cannot be controlled by government price fixing.

Medical costs cannot be controlled by government restrictions to access of care. Consumers will become sicker resulting in a higher cost illness.

Consumers must be empowered to be intelligent, motivated and responsible consumers of medical care. Only then can healthcare costs be controlled.

A functional healthcare system must provide financial incentives to consumers in order for them to want to be empowered to control costs. Consumers should not be dependent on the government to control costs.

The government must repair the actuary and accounting rules of the healthcare insurance industry. Insurance reserves should not be scored as a loss to justify premium increases.

The healthcare insurance industry takes 40 cents off the top of every insurance dollar that is spent. Consumers with both private insurance and government insurance are only getting 60 cents value for every healthcare dollar spent. The healthcare industry is allowed to do some strange accounting with their required reserves.

If this accounting method were repaired, premium costs would decrease.

Effective malpractice reform would result in a significant decrease in healthcare costs. The Obama administration refuses to believe tort reform is needed.  

Many of the rules written into Obamacare, Medicare, and Medicaid are so screwy they defy common sense and penalize consumers. One glaring rule is Medicare permitting hospitals to admit Medicare patients to the hospital for observation for 48 hours.

Medicare does not pay for Observation admissions. Patients have to pay out of pocket for these admissions.

Consumers must become aware of these screwy rules and protest them. These rules have been written by the Obama administration to save the government money. These rules penalize patients the government professes to help.

Consumers are the only stakeholders that can motivate President Obama and congress to fix the significant points of waste in the healthcare system. Consumers have the power to vote.

I do not believe that President Obama has an interest in repairing the healthcare system. All of his actions signify that he wants the healthcare system to fail. After it fails people will beg the government to completely take over and have a single party payer.

Does anyone trust the government to take over our most valuable asset, our healthcare?

The government take over will also fail because dependent consumers will figure out how to game the system just as food stamp recipient have figured out how to game that inefficient system.

The goal of a sincere administration and congress is to figure out how to motivate consumers to be “PROSUMERS” (productive consumer) with an economic interest in the healthcare system.

Airlines, banks, bookstores, entertainment venues have all figured it out. Why can’t the government help consumers figure it out?

My blog entitled “My Ideal Medical Saving Account Is Democratic” presents a consumer driven healthcare formula. It gives every socioeconomic group the opportunity to be an effective “Prosumer”.

It gives all Prosumers the incentive to be responsible for their health and healthcare dollars.

Below is the blog My Ideal Medical Savings Account Is Democratic!

My Ideal Medical Savings Account Is Democratic!

Stanley Feld M.D.,FACP,MACE

A reader sent this comment; “My Ideal Medical Savings Account (MSA) “was not democratic and leads to restriction of medical care for the less fortunate.'

This comment is totally incorrect. I suspect the comment came from a person who has “an entitlements are good mentality.”

I believe that incentives are good. They lead to innovation. Innovation leads to better ideas.

Healthcare entitlement leads to ever increasing costs, stagnation, restrict freedom of choice and decrease in access to care.

The excellent example of increasing costs, decreasing choice, and decreasing access to care is Medicaid.

The fact that someone is covered by healthcare coverage does not mean they have access to medical care.

 I have written extensively about the virtues of My Ideal Medical Savings Accounts (MSAs). They are different than Health Savings Accounts (HSAs).

HSAs put money not spent in a trust for future healthcare expenses. MSAs take the money out of play for healthcare expenses. MSAs provide a trust fund for the consumer’s retirement.

MSAs provide added incentives over HSAs to obtain and maintain good health.  Obesity is a major factor in the onset of chronic diseases. Consumers must be motivated to avoid obesity to maintain good health. MSAs can provide that incentive.

The MSA’s can replace every form of health insurance at a reduced cost. It limits the risk to the healthcare insurance industry while providing consumers with choice.

This would result in competition among healthcare providers. Competition would bring down the cost of healthcare.

Some people might not like MSA’s because they are liberating. They provide consumers of healthcare with freedom of choice. They also give consumers the opportunity to be responsible for their healthcare dollars while providing them with incentives to take care of their health.

MSAs could be used for private insurance purchasers, group insurance plans, employer self- insurance plans, State Funded self-insurance plans and Medicare and Medicaid.

In each case the funding source is different. The cost of the high deductible insurance is low because the risk is low. 

If it were a $6,000 deductible MSA, the first $6,000 would be placed in a trust for the consumer. Whatever they did not spend would go into a retirement trust.  If they spent over $6,000 they would receive first dollar healthcare insurance coverage. Their trust would obviously receive no money that year.

The incentive would be for consumers to take care of their health so they do not get sick and end up in an expensive emergency room.

If a person had a chronic illness such as asthma, Diabetes Mellitus, or heart disease with a tendency to congestive heart failure and ended up in the emergency room they would use up their $6,000.

If they took care of themselves by spending $3,000 of their $6,000 trust their funding source could afford to give their trust a $1500 reward. The benefit to the funding source is it saved money by the consumer not being admitted to the hospital. The patient stayed healthy and was more productive.

President Obama does not want to try this out. He wants consumers and businesses to be dependent of the central government for everything.

MSAs would lead to consumer independence from central government control of our healthcare. MSAs would put all consumers at whatever socioeconomic level in charge of their own destiny.

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

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Republicans who really want to repair the healthcare system should take notice of these suggestions. They should stop proposing complicated alternatives to Obamacare that will not work.

Republicans should start trying to understand the real problems in the healthcare system.

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

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Going In The Wrong Direction

Stanley Feld M.D.,FACP,MACE

                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   Strange things happen in California.  

In 1975,California Governor Jerry Brown signed into law the Medical Injury Compensation Reform Act (MICRA). It converted California from the worst state in the union to practice medicine into the best state to practice medicine by changing the limit on economic and non-economic damages to $250,000.

Malpractice insurance rates dropped, as did malpractice lawsuits. MICRA ruined the litigation business for California’s plaintiffs’ attorneys.

 Many malpractice attorneys and a number of researchers say that of the various med-mal tort reforms, the caps on noneconomic damages have had the greatest impact. (Anderson says that to be successful, a cap must be around $250,000.)”

In 2003 Texas followed, lowering economic and non-economic damages to $250,000. It decreased the malpractice business for defense attorneys in Texas.

Twenty-six states have now followed California’s lead. 

In 1975 physicians and consumers applauded Jerry Brown as a hero for this minimal reform.

Physicians stopped leaving California after the cap was placed on economic and noneconomic damages. The cost of medical care declined in 1975.

This year Jerry Brown is governor of governor of California and running for an unprecedented fourth term.

The California’s plaintiff attorneys are pushing for the cap on damages to be lifted to $1.1 million, from $250,000. Its provisions are embedded in Proposition 46. Proposition 46 also includes physician drug testing.

The malpractice insurance companies, hospitals and physician groups are warning that consumer healthcare costs will soar and doctors will flee to other states.

 Paul Phinney, a pediatrician and former president of the California Medical Association, said drug testing is a legitimate issue, but the proposal before voters is not the answer.

Phinney and other opponents have pointed to the disclosure that the testing provision was included as a political sweetener, with the intent of making Proposition 46 more appealing.

He said the initiative was designed to trick voters into supporting “something the consumer attorney lobby has wanted to do for a long time,” lifting a ceiling on damages for clients that has been in place since the 1970s. The lawyers “stand to benefit, personally and financially,” he added.

Dr. Ezekiel Emanuel, an author of Obamacare, believes tort reform is not necessary because it has little impact on healthcare costs. Dr. Emanuel ignores the facts just as Paul Krugman and many Obamacare advocates do. Dr. Emanuel has never been in private practice.

He says,

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

One percent is arbitrary. It permits Dr. Emanuel to dismiss tort reform as a significant issue.

 Dr. Emanuel says only $1.3 billion results from the lack of tort reform. His source is not given. He also ignores physician over-testing, actual cost of malpractice insurance, the cost of lawsuits and the emotional impact on practices physicians and their practices.

He says,

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

A study, closer to truth than just an opinion, disclosed:

The truth is a full accounting reveals that more than 10 percent of America's health expenditures per year are spend on tort liability and defensive medicine.

This study concludes that $242 billion a year extra spent because of the lack of tort reform.

The $242 billion is well above Dr. Emanuel’s fictitious threshold.

Physicians have admitted to over testing in the Massachusetts Medical Society survey . Physicians fear having to defend themselves against frivolous malpractice suits for potentially missing a diagnosis. The result is expensive over testing.

Most physicians love practicing medicine but cannot understand the unbelievably wrong direction President Obama is taking to reform the healthcare system.

Physicians are becoming disillusioned by politicians’ stated intentions to create a better healthcare system.

Two specific issues consistently agreed on by physicians were malpractice concerns with the need for tort reform and the lack of cohesive leadership among all physician groups to represent the vested interests of physicians and their patients.

The lack of tort reform is reflected in the percentage of healthcare costs by the Massachusetts Medical Society survey.

The amount of money wasted on defensive medicine can be extrapolated from this survey.

 I have written a series of blogs analyzing the impact of the Massachusetts Medical Society’s survey.

The extrapolated costs turn out to be about $700 billion a year. The real cost of defensive medicine is somewhere between $242 and $700 billion dollars a year.

 In 2003, Texas Governor Rick Perry and the Texas legislature unenthusiastically changed tort reform laws in Texas.

Rick Perry and the Texas legislature rewrote the medical malpractice laws, ending plaintiff attorneys’ practice of venue shopping for friendly judges. They also put a cap of $250,000 on noneconomic damages.

These reforms have changed the malpractice legal climate in Texas. The reforms limited plaintiff’s attorneys profitability on frivolous liability claims.

Texans believe that because of these reforms and the lack of a state income tax, Texas is the country's best state for economic growth and job creation.

A Perryman group report concluded,

“Perhaps the most visible economic impact of lawsuit reforms is the benefits experienced by Texans who have better access to high-quality healthcare.

Doctors and hospitals are using their liability insurance savings to expand services and initiate innovative programs; those savings have allowed Texas hospitals to expand charity care by 24%.”

The medical malpractice business for plaintiff’s attorneys has dried up in Texas. They are moving to other states. Physicians are applying for licenses to move to Texas away from high medical malpractice states. 

 “In 2001, according to the American Medical Association, Texas’ ranking in physicians per capita was a dismal 48th out of 50.”

“Beginning in 2003, physicians started returning to Texas. The Texas Medical Board reports licensing 10,878 new physicians since 2003, up from 8,391 in the prior four years.”

 “Dr. Perryman, subsequent to the issuance of his Report, informed TLR Foundation that at least 1,887 of those physicians are specifically the result of lawsuit reform.”

 The Texas Hospital Association reported a 70% reduction in the number of lawsuits filed against the state’s hospitals.

Medical liability insurance rates declined. Many doctors saw average rates drop between 20% to 50%.

The Perryman Group during the course of this study suggests that premiums are declining even further in 2008.”

The American Medical Association removed Texas from its list of states experiencing a liability crisis; marking the first time it has removed any state from the list.

 A survey by the Texas Medical Association also found a dramatic increase in physicians’ willingness to resume certain procedures they had stopped performing, including obstetrics, neurosurgical, radiation and oncological procedures during the Texas malpractice crisis.

Two simple changes in the tort laws made malpractice suits unprofitable for plaintiff’s attorneys.

Rick Perry has been so impressed with the results of his tort reforms that he now wants to extend his state's impressive tort reform record.

Mr. Perry is proposing a British-style "loser pays" rule, which would require plaintiffs to pick up the legal costs of their targets if they lose their suits.

 Almost all of America's economic competitors in the world follow this standard. “Loser Pays” as a deterrent to law suits decreases the cost of doing business resulting in lower prices and a competitive advantage for business. “Loser Pays” would deter frivolous lawsuits.

If President Obama really wanted to do something sensible about lowering the cost of healthcare, Texas style tort reform should become the law of the land, including loser pays all.

I hope California votes down Proposition 46. It is going in the wrong direction. It will not Repair the Healthcare System for California.

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

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Incentives and Mechanism Design

Stanley Feld M.D.,FACP,MACE

Why are Obamacare’s initiatives failing? There are several reasons.

1. Government is inefficient. It outsources all of its administrative services.  

The contractors, in turn, subcontract out most of the work. The overhead for each function increases non-transparent costs. The execution of tasks decreases.

2. President Obama’s healthcare policy advisors are academics. They have little clinical experience. It is clear they have little experience in the trenches.

The healthcare policy advisors have no idea how to create incentives for physicians and hospitals.

They have no idea how destructive to clinical practice the lack of tort reform is.

3. Without clinical experience the policy advisors do not know how to create effective incentives for patients.

I have emphasized that patients must be responsible for themselves and their diseases. They must become professors of their diseases. They have to be provided with adequate incentives to become professors of their diseases.

Physicians must be provided with incentives to teach patients to be professors of their diseases.

4. The government outsources the administrative services to adjudicated Medicare and Obamacare billings. The government has little idea of the actual profits built into the fees the insurance companies charge the government. At intervals insurance companies are required to enter another bidding process. The government probably picks the lowest bidder.

It is not an efficient way to pick an insurance company. This is especially true when the government guarantees the insurance company‘s profit. The government does not know what the insurance company’s profit actually is. The profit is about 40% of the healthcare dollars.

President Obama’s ideological goal leads to these errors. His only concern is for the government to control the healthcare system.

Government control of a healthcare system has not been successful. The V.A. healthcare system is on example. Medicaid and Medicare’s increasing deficits has been another example.

None of the countries in the developed world have a financially viable universal healthcare system except Switzerland.

A few years ago I learned about “Mechanism Design.”  My first reaction was “what is that?”

Leoid Hurwicz, Roger Meyerson and Eric Maskin received a Nobel Prize was  for this economic theory in 2007.

Mechanism Design is a brilliant economic theory. If the theory was applied to the healthcare system it could solve much the system’s dysfunction.

When I wrote about Mechanism Design I felt that few people understood it.  

What is it?  Mechanism Design is the art and science of designing rules of a game to achieve a specific outcome, even though each participant may have a separate vested self-interest.

The design of the game is to align all the stakeholders’ vested self-interests.  

 Each stakeholder has an incentive to behave as the game designer intends. The game can then implement the desired outcome.

 The strength of such a result depends on the solution concept used in the game.  

None of the stakeholders’ vested interests are aligned in Obamacare except the vested self-interest of President Obama and his ideology.

The healthcare insurance industry thinks it has President Obama over a barrel.

Some of the hospital systems have figured out that they will be at the mercy of Obamacare.

 Physicians already feel they are at the mercy of President Obama’s ideology.

Medical device companies and pharmaceutical companies have figured out they are dead already. It is only a matter of time until they cannot move. They are working around the system to come back from the dead.  

None of the stakeholder’s vested interests are are aligned. This non-alignment will lead to destruction of the healthcare system.

Mechanism designers commonly try to achieve the following basic outcomes for stakeholders: truthfulness, individual rationality, budget balance, and social welfare.

 With those four outcomes for stakeholders in the healthcare system one could get close to aligning stakeholders incentives.

Lodi Hurwicz’ point is the way to get as close to the most efficient economic outcomes is to design mechanisms 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 in the short term. It will not serve all the stakeholders’ vested self-interest in the long term.

If everyone’s incentives are aligned you have a much more efficient economic system.

The example given in the military is defense contracting. If you agree to pay on a cost plus basis you have created incentives for the contractor to be inefficient.  

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.

Many have observed that Obamacare has not been transparent or truthful.

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.  

Hurwicz observed, as had others, that the dispersion of information was at the heart of the failure of a planned economy.

He observed that the free market economy can get us closer than central planning to incentive compatibility because in the end the consumer can drive the discovery of truthful information

A free market economy is by no means immune to the Pareto efficiency concept.

However, the free market mechanism was far less afflicted than central planning bureaucracy. A consumer driven system serves to force truthfulness.

Empowering consumers is the key to an efficient system. Customers determine 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.

How does Mechanism Design relate to the Repairing The Healthcare System?

The rules of the games can align all the stakeholders’ incentives without one stakeholder taking advantage of another.

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. These Nobel Prize winners in economics have proven this fact.

A  consumer driven healthcare system using the ideal medical saving account. Will be a good start in achieving alignment of all the stakeholders.

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

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Physicians’ Barriers To Practice Their Profession

 Stanley Feld M.D.,FACP,MACE

Over the past 30 years practicing physicians have seen their revenue fall. As Medicare deficits have increased the government has lower physicians reimbursement.

Who is responsible for the deficit increase if physician reimbursement has decreased?

Private Insurance premiums have increased because of advances in technology and increases in specialization leading to increases in testing and physician visits.

Private insurance reimbursement to physicians has decreased in an attempt to keep premiums as low as possible for the private employers who need to be able to afford insurance for their workers.

Physicians have tried to compensate for this decreased reimbursement by seeing more patients. Despite seeing more patients physicians’ incomes have fallen.

Physicians’ overhead has increased. The need for more full time employees has increased. As government regulations have increased many practices have had to hire full time employees to do coding for care and paperwork. Physicians have tried to buy fully functional computer systems but they have failed.  Computer systems are expensive and not completely functional.

“Physicians have seen their incomes fall, their clout with insurers shrink, and their practices weighed down by a plethora of new requirements.

What is the value of a physician’s service? What is the value of secondary stakeholders in the healthcare system?

These are hard questions to quantify. The goal of healthcare policy makers is to reduce the national healthcare costs.

The healthcare system is fragmented, complex and unbalanced. Many physicians feel their skills have been devalued by payers, hospital systems, policy makers.  These groups have become more powerful than the representatives of physicians’ organizations.

Healthcare has become a gigantic industry costing our society 2.9 trillion dollars a year.

Healthcare has, unfortunately, become all about money with the third party payers making the rules. Effective medical care has been stifled.

Physicians barriers’ to effective medical care are,

1. Lack Of Malpractice Reform

Government has estimate the value of malpractice reform incorrectly. It thinks malpractice costs the healthcare system 3 billion dollars a year.

Several good studies estimates the lack of malpractice reform costs somewhere between $200 billion to $750 billion dollars a year without including the cost of the wear and tear on physicians and patients.

2. Problems Trying to Increase Reimbursement

3. Lack of Negotiating Clout

4. Being Turned Into Captives of the Insurance Industry and the Government

Physicians do not have the ability to modify charges on the bases of costs. Medicare and Medicaid won't allow physicians to negotiate reimbursement rates. Physicians must take the reimbursement fees or refuse to participate in Medicare or Medicaid. More and more physicians are leaving the Medicare/Medicaid system.

Private insurers have forced physicians to sign contracts limiting charges. Individual physicians and physician groups have little negotiating power or ability to have loss leaders as do hospital systems with multiple hospitals in a regional area.

Physician organizations have not negotiated for physicians. Some organizations have teaching courses that teach physicians to get around the loopholes in the healthcare system.

Physicians have no incentive to add innovative programs. These programs can increase their overhead without being reimbursement.

All of this is to the disadvantage of patients and patient care as insurance premiums rise and access to care falls.

Intuitively physicians know that the medical care contract is between physicians and patients. Third party interference has stood in the way of this interaction. It has disrupted and/or destroyed patient/physician relationships.

More and more physicians are dropping out of Medicare, Medicaid and private insurance because they cannot deal with the third party interference with the practice of medicine financially or emotionally.

Rob Lamberts, MD, an internist in Martinez, Georgia  said "Doctors have been turned into tools of the insurance industry,"  "You always work for whoever pays you. When you work for an insurer, you are constantly under pressure to do a lot of things that don't improve the care of the patient."

Dr. Lamberts became a concierge medicine doctor.

Concierge medical practices need fewer full time equivalents, do less paperwork, deal with less regulations, have more time to practice medicine and more time to spend with their patients.    

5.Being Pressured to Sell Healthcare as a Commodity

6. Being Force Into Abandoning Clinical Judgment

There are many physicians complaining about the commoditization of healthcare.  They are complaining about the constant need for authorization of care demanded by the government and the healthcare insurance industry.

Physicians complain that insurers and other corporate interests have too much control of healthcare. They are dictating what clinical decisions physicians can make. Physicians are becoming accountable not to their patients but to what other interests decide. The system is forcing doctors to give up their medical judgment in favor of clinical practice guidelines.

The clinical guidelines are used to determine prior authorizations. These guidelines are used to determine reimbursement in many pay4performance contracts and shift the risk burden onto physicians.

Several studieshave questioned the validity of guidelines. Close to half the physicians in the 2012 Medscape survey said quality measures and guidelines will have a negative impact on care.

Mark Shelley, MD, a family physician from Port Allegany, Pennsylvania, decried what he calls the "commoditization" of healthcare. "The art of medicine has been turned into the business of medicine". "Rather than trying to make patients functional and happy, the physician gets caught up in financial issues, such as whether Medicare will pay for a wheelchair."

 Dr. Shelley said. "I know doctors who earn a lot of money and are absolutely miserable."

7. Being Captives Under Hospitals' Thumb

8. Being Shunted Aside by Policymakers

9. Being Shunted Aside by Entrepreneurial Management Companies

Many physicians believe that by being employed by hospitals they are at risk of being co-opted by the hospital's vested interests. In many cases this has been proven to be true.

Many employed physicians have passively aggressively undermined the hospital and its vested interests. Rather than making money from physicians intellectual property hospital systems have claimed that they have lost money.

Hospital employment has been attractive to young physicians just completing residency training. They do not have to make an investment in a medical practice and fear the uncertainty of the future of medical practice.

These physicians’ goals are to have regular and predictable office hours in an outpatient practice setting with adequate coffee and lunch breaks. They do not follow their patients in the hospitals.  They have no connection to patients, their anxiety or fears. Patients are interchangeable and seen by the next available physician as in the VA system. A physician patient relationship does not develop.

This is bad for patients.

Another problem is many physicians believe that policy makers have not been listening to the physicians’ perspective about the problems in the healthcare system. Policy makers are trying to solve the problems of our dysfunctional healthcare system from their perspective and not from the physicians or consumers’ perspective.

“Obamacare is often cited as an example of when policymakers turned a deaf ear to physicians' interests. As many physicians see it, the law lacks substantive tort reform, failed to repeal the sustainable growth rate, and doesn't improve healthcare.

Obamacare ignores patients’ responsibility in keeping themselves healthy and staying healthy after being treated. It assumes physicians are responsible for maintaining patients’ health.

Ignoring this point alone will cause Obamacare to fail. There are many other issues involved in Obamacare’s ultimate demise at a great cost to our country and our healthcare system.   

America healthcare system is in trouble. Obamacare is causing more trouble for America’s healthcare system. 

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

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