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The Future State Business Model For Repairing the Healthcare System

October 21, 2012
inHealth Savings Accounts vs Medical Savings Accounts, Medicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

Obamacare is going to lead to the demise of both the healthcare system and the medical care system in the United States. America is at a critical turn in 2012.  The evidence for the collapse is presented in the following links.

The business model for a successful repair of both the healthcre system and the medical care system are outline on the next slide.


Slide14

A consumer driven healthcare system is critcal to a successful repair of the healthcare system. Read this link to understand the full meaning and implications of a consumer driven healthcare system.

Consumers must drive the systems by being responsible for their own healthcare decisions and own their healthcare dollars even if they are subsidized by the government.

Another critcal element in business model for the future state is effective tort reform. Ideally defensive medical testing  has to be eliminated completely. Defensive medical costs the healthcare system between $300-500 billion dollars a year

A summary of the misalign insentives must be understood and examine . There is a way to align all the primary and secondary stakeholders incentives. It must be agreed too that consumers are the primary stakeholders and physicians are next. Most of the control and power in the system has shifted to the secondary stakeholder namely the government, the hospital systems and mostly the healthcare insurance industry.

The government must understand that the only way to reduce cost is to shift the responsibility of controlling costs from the government to consumers.

Consumer must be the leader of their healthcare team.

Consumers must be responsible for health and healthcare dollars.

Consumers must have effective financial incentives to become medically responsible to themselves. It is clear with the incidence of obesity, the increases in smoking and drug addictions, hearth attacks, and strokes from high blood pressure that the need to attain good health is not enough incentive.

My ideal Medical Saving Accounts are an excellent way of providing financial incentives to achieve good health in a consumer driven system. The achievement of good health will drive down the costs to the healthcare system. The incidence of costly complications of disease will be reduced.

My ideal Electronic Medical Record is an important innovation. It is inexpensive to physicians. The data belongs to patients and their physicians and set up in a way that it is not punitive to physicians. It should be a fully functional EMR.

All physicians know that medical care decisions making and judging the quality of medical care by electronic data is faulty. All the EMR's are expensive. They also put physicians in a vulnerable position to be judged by faulty data. My Ideal EMR helps physicians track their patients and improve their medical communications and care. 

It is important that consumer become responsible for their own Personal Medical Record. The ideal EMR permits patients to download their records with their tests to their own computer or flash drive. Consumers should carry their medical records at all times in case of emergency. 

Social Networking is the key to a consumer driven healthcare system. The possibilities are compelling.

Improved communication between patients and physicians will be driven by a consumer driven healthcare system connected to social networking. The motivations is financial when consumers own their healthcare dollars.

Education via the Internet must be an extension of physician care.

Government's Educational Responsibility:

Teach consumers to become intelligent healthcare consumers

Government must develop a program to effectively combat obesity. There must be a change in the food industry and farm policy.

Price Transparency

Price Controls Do Not Work.

Eliminate Medical Monopolies

Patient must learn to be and educated and responsible healthcare consumer.

There must be a decrease in medical entitlement programs. Consumers must have skin in the game in order to be educated and responsible consumers. Consumers need to be a financial risk.

This is the outline of the future state business model. The readers should click on each link to read the details of each bullet point.

This business model will enable America to have an affordable healthcare system for all which will become sustainable.

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

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Evidence For Impending Healthcare System Failure

October 17, 2012
inMedicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

The following are the links that is the evidence for the impending failure of the healthcare system in its present form and in the form that Obamacare is adopting.

Obamacare is piling on more regulations and restrictions to the present healthcare system. The present system is a failed system.The regulation will be impossible to comply with and impossible to enforce. They will create more opportunity for secondary stakeholder to extract more funds from monies needed for direct patient care creating a greater decrease in access to care for all .

The links follow the slides I presented in my last blog. Those links could not be opened because they were jpegs.

My hope is the links serve as an excellent reference to Repair The Healthcare System presently or when it collapses under it unsubstainable costs and the present system's inability to be executed.

The Etiology of Accelerated
Collapse

Slide03

Medicare 1965-1980 Fee for
service

Nixon
authorized HMO’s

Medicare Price Fixing Begins In 1980

Cost shifting Penalizes Private
insurance

HMO Fail Because Of Faulty Assumptions In 1990.

 Reasons for Hillarycare’s
Failure To Pass.

Distrust of Government
Increases.

Healthcare Insurance Companies
Raise Premiums.

Birth of Managed  Care: Another Compicated Mistake  

Managed Cares Fails. 

Managed Care Pricing And
Premiums Remain  High

2009 Obamacare And The Threat
Of Government Takeover To Freedom, Liberty and Choice.

Rationing Of Healthcare

ACOs Are HMO's On Steroids Combined With Managed Care Is Obamacare's Complicated Mistake. 

ACOs Will Fail At Great Costs To Everyone.

 Tort Reform And Defensive Medicine Are Ignored By Obamacare.

Medical Cost Escalate Out Of
Control And Then The Healthcare System Will Collapse.

The other major slide in the last blog was the barriers to the
Physician/Patient Relationship. This relationship is critical to the
theraputic index. It is almost destroyed and will be totally dstroyed in
Obamacare. Both physicians and patients will become commodities in a
bureaucratic healthcare system. Patients will not win.

 

Physician/ Patient Barriers to the Physicians/Patient Relationship

Slide08

 

The Physician/Patient
Relationship.

 The
physician/patient relationship.

 The Magic  of the Patient Physician Relationship  

 Patient and
Physician responsibility contract

 Patient should be the leader of the team

 Barriers for physicians in the Physician/Patient
Relationship

 

1. Tort
Reform/Defensive Medicine.

2. Restriction
of Physicians Clinical Judgment.

3. Medicine
is a calling not a business 

  4.  Constant
lowering physicians’ reimbursement.

 5. Physicians
are driven to decrease time spent with patients.

6. Government
rations care through panel of experts

7. Physician’s
treatments are driven by government regulations.

8. The
traditional media undermining physician credibility

9. Government
is attempting to commoditize medical treatment.

 

Patient Barriers To the Patient/Physicians Relationship

1. Patients are not in control of their own medical decisions.

2. Patients are not in control of their own healthcare
dollars.

3. Patients
do not have to be responsible for their treatment because they

receive
first dollar coverage.

4.  Education about chronic disease must be extension of
physician’s care  

5.  Internet can undermine the Physician/Patient
relationship..

6. Method of choosing a physician is random and must be
made clearer.

7. Portability of information about previous treatment
is difficult.

8. Patient must be responsible and in control of their
medical record.

9. Patient must endure poor communication by their
physician.

10.
Government and the healthcare insurance industry limit choice with

network
restrictions.

11. Patients should be responsible for their treatment
Management

America's healthcare system is at a critical turn in 2012.

Obamacare must be repeal.

Effective healthcare reform is essential. Both the primary and secondary stakeholders have abused a system. A system that is punitive.

Consumers must drive the system by being responsible to themselve and their healthcare dollars.

Obamacare is building a system of government dependency by all stakeholders (patients,physicians,hospital and healthcare insurance companies).

The healthcare system should be developed to create innovation and competions among stakeholders for the benefit of consumers and their indepent choice.

The government's inefficiency will create a healthcare system destined to doom at the expense of all of us taxpayers.

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

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There Is A Way To Fix The Healthcare System!!

October 14, 2012
inUncategorized
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Stanley Feld M.D.,FACP,MACE

The healthcare system cannot be fixed using a
broken business model.

It can only be fixed by changing the business
model to a consumer driven business model that would include personal
responsibility and individual freedom of choice.

President Obama believes the healthcare system
can be fixed by a single party payer system run by the government.

I do not believe the government has run things
very well. Many examples come to mind in many areas. Two recent examples are
the Fast and Furious scandal and the lack of security for the murdered ambassador
in Benghsi Lybia.

When things go bad with government policy it is
difficult to discover the reasons. I believe consumers are very hesitant to
trust the government to make their healthcare decisions for them. On the other
hand consumers would be happy to allow the government and taxpayers to pay for
their medical costs.

A cultural shift in the healthcare system must
occur.  The shift must be toward
individual responsibility. Consumers must be responsible for their health and
their healthcare dollars if Americans are to be healthier and the cost of
healthcare decreased. The government must allow and encourage the introduction
of innovative forms of healthcare insurance.

The role of government must be to educate
consumers maintain health and to be smart purchasers of healthcare insurance.
Government should make the rules so secondary stakeholder cannot take advantage
of the primary stakeholders  (consumers)
and then get out of the way.

Government should help those who are less well
off with subsidies and equal access to medical care. Consumers must be
financially incentivized to take responsibility for their health or healthcare
dollars. They must not be penalized if they do not take responsibility for
their health and healthcare dollars.

I presented a new healthcare business model a
few months ago. It deserves to be restated.

 
Slide03

This is the way the healthcare system looks
today.

 
Slide04

Since 1965, as a result of government intervention,
healthcare costs have escalated. This escalation has been the resulted of
increasing government intervention over the years. The path to accelerated
collapse of the healthcare system has started.

The result has been destruction of the patient-physicians
relationship. Effective medical care has been disrupted along with the
impersonal fragmentation of care.

 
Slide08

 
Slide09
All of the underlined headings represent links
to articles that explain these problems. I will publish functional links in the
next blog.

President Obama’s goal is to have a single
party payer healthcare system. He believes this is the only way to an efficient
system.

He realizes he cannot achieve this goal immediately.
He must do it one step at a time.

The methodology he is using will not work.  He is imposing an accountable care
organizations model onto hospital systems and large physician practices. He
plans to pay one fee for certain diseases based on financial outcomes.

The fee is to be divided between the
stakeholders. President Obama wants to collect data to evaluate and direct
physicians and hospital systems care.

It sounds good but it will not work because he
will encounter physician resistance.

He wants to make cost effective judgments about
patients care without giving patients the right to make their own decisions.

It is going to very difficult to divide the
shrinking pot of money between physicians and hospital systems.

President Obama refuses to admit that the
government outsources the administrative services to the healthcare insurance
industry. The healthcare insurance industry’s fee for this service is about 40%
of the healthcare dollar.

In a recent debate he again stated that CMS’s
overhead is very low at 2.5%

President Obama’s ACA (Obamacare) is proceeding
with the same business model that has failed except he wants complete control
and no competition. If the U.S. continues with the same business model the total
collapse of the healthcare system will accelerate.

Slide10

The healthcare system is at a critical turn.
The disadvantages of President Obama’s healthcare reform act are obvious. The present
healthcare systems model has lead to all of the disadvantages on the above list.

It is going to take many years to get an
accountable care organization to effectively function if at all. It will take
many years to have a fully functional EMR installed in every hospital system
and physician’s office. If something is not done to correct the business model
we will experience total collapse of the healthcare system.

Slide11

 

Two things have to happen to change course. The
business model has to change to transfer power from the government to the
consumer.

Slide14

The healthcare system is good at curing
infectious disease and replacing kidneys, lungs, livers or hearts.

The big question is, “how does the healthcare
system prevent disease from occurring?”

The greatest expense is diseases that can be
prevented such as diabetes mellitus and heart disease. The root causes are not
preventable yet because they are genetic. The expression of the diseases and
its resultant and costly complications can be prevented.

Obesity causes the expression of these diseases.
The avoidance of obesity requires a drastic change in society’s food industry
and culture.

Americans have been programed over time to eat
more calories and do less activity. There is no quick fix for obesity. People
must eat less and be more active in order to lose weight.

The government has not devoted adequate
resources for education and innovation to change this culture.

Mayor Bloomberg had the right idea by
decreasing the size of the soda pop being sold in N.Y.C. but his approach is
wrong.

He must use education and provide real incentives.
He is trying to legislate behavior. It has never worked in the past.

Americans’ attitude toward food must change by creating
hype for decreasing intake and increasing exercise tied to financial
incentives. Penalties do not work. Incentives and freedom to choose does work.

This is the main problem with President Obama’s
business plan for the healthcare system. He is imposing his will on the
consumers, hospital systems and physicians.

It will not work. It must stop now because it
is unsustainable for taxpayers.

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

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The Healthcare System in Switzerland Works

September 28, 2012
inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld
M.D.,FACP,MACE

Paul
Krugman is starting to drive me crazy with all his fact free declarations about
the healthcare system.

He recently declared that consumer driven healthcare has
been a bust everywhere it has been tried. Paul Krugman as an “expert” has once
again made a declaration that contradicts the facts. He is clearly not
interested in being confused by facts.

Paul Krugman is against putting consumers in
control of the healthcare system. He feels,
as President Obama feels, that a central committee (IPAB) should be in charge
of deciding what to do with limited health care resources. 

He has said,

 "Consumer-based" medicine has been a
bust everywhere it has been tried. Medicare Advantage was supposed to save
money; it ended up costing substantially more than traditional Medicare.

Medicare Advantage costs the government more
money because the government gave the private insurance companies a $3,000 bonus
per senior to get Medicare out of the government’s hands.

This is one of the principle reasons I am not a fan of
Medicare Advantage.

In reality Medicare Advantage provides more
services at lower premiums and deductibles for seniors. Seniors with Medicare Advantage use
fewer services resulting in a lower cost of total services and more profit for the
healthcare insurance industry.

“America has the most "consumer-driven" health care
system in the advanced world. It also has by far the highest costs yet provides
a quality of care no better than far cheaper systems in other countries.”

Paul
Krugman is wrong.  Switzerland has the
most consumer driven healthcare system in the world and the Swiss government
pays far less than most countries while the Swiss get a high quality of care.

His ideology
blinds his mind. The healthcare system in Switzerland is a consumer driven
healthcare system that works for the Swiss. The Swiss government makes the
rules and then gets out of the way.

The
Swiss healthcare system can be used to start a constructive conversation about
healthcare reform in America that can satisfy both conservatives and liberals
and save the U.S. from bankruptcy resulting from expanding entitlements.

The
healthcare system in Switzerland is a consumer driven healthcare system in
which consumers have choice. It has resulted in a low income tax rate,
universal healthcare, and satisfied stakeholders

The
Swiss system could not be totally transformed into an American system because
of America’s embedded ideology and prejudices as well as stakeholder vested interests.
However it outlines the government’s role in a healthcare system and highlights
the power of a consumer driven system.

America’s
healthcare system must undergo significant changes. Most of these significant
changes have been ignored by President Obama in Obamacare. It empowers
government and not the consumer.

Paul Krugman has stated flatly, "Patients
are not consumers"

“Patients get illness that others (government) should decide on
whether it is cost effective to treat.”

This
attitude toward patients points out the disrespect for the intelligence and
judgment of consumers.

The elements
critical to meaningful reform of America’s healthcare system must include the
following changes.

1.
There must be significant and meaningful Tort Reform to decrease the practice
of defensive medicine.

2.
There must be significant reform of the healthcare insurance industry’s
financial rules to stop the industry from listing non-direct care expenses as
direct patient care.

3.
There must be regulations to cause the healthcare industry to be competitive
for consumers’ business. Government should not be the consumer of healthcare.

4.
There must be legislation to change the healthcare insurance industry’s incentives
for profitability in order to create innovative healthcare insurance products
that will reduce healthcare costs.

5.
There must be significant financial incentives for consumers to be motivated to
save healthcare dollars.

6.
Consumer must responsible for their health and healthcare dollars. The
entitlement mentality must be eliminated.

7.
Hospital systems should be competing for patients’ healthcare dollars and not
government healthcare dollars.

8.
Physicians must be responsible to consumers and not hospital systems or the
government.

9.
Insurance costs must be community rated.

The
healthcare system must be a consumer driven system just as purchasing
groceries, automobiles, computers and televisions are. If the product is poor
the company will go out of business.

America’s goals should be universal healthcare
coverage with freedom of choice, and reduction of healthcare costs.

It is worth understanding the Swiss healthcare
system as a starting point to meaningful reform of the American healthcare
system. 

These are the major features
of the Swiss Healthcare System:

1.Swiss citizens
buy insurance for themselves.

2.There are no
employer-sponsored or government-run insurance programs.

3.Insurance
prices are transparent to the beneficiary and community rated.

4. The
government defines the minimum insurance benefit packages that must be offered.
 Everyone must have the minimum
healthcare insurance coverage.

5. All
packages require beneficiaries to pick up a portion of the costs of their care
(deductibles and coinsurance) in order to incentivize citizens to be
responsible for their health and the control of healthcare dollars spent.

6. My ideal
medical savings account would provide a positive incentive by rewarding
citizens who did not spend the first $6,000 dollar to keep that money in a
retirement account.

7. Patient
incentive is a critical element in healthcare reform because incentives provide
consumers with a reason to take care of their health and healthcare
dollars 

8.The Swiss government
subsidizes health care for the poor on a graduated basis, with the goal of
preventing individuals from spending more than 10 percent of their income on healthcare
insurance.

9. Citizens
can be responsible for a significant component of healthcare costs in Switzerland.

10. Consumers
often opt for the cheaper healthcare insurance packages. They have freedom of
choice.  Many Swiss consumers choice chose
minimal insurance plans combined with high-deductible insurance plans.

11. Citizens
are free to choose comprehensive insurance coverage or some form of
supplemental coverage. It is not a one size fits all system.

12. Ninety-nine
percent (99.5%) of Swiss citizens have health insurance.

13.There are
about 100 different private insurance companies in Switzerland with multiple
healthcare insurance plans.

14. It is clear
that the government has made the rules and then has gotten out of the way. The
rules have set up a market driven competitive healthcare system.

15. The result
has been that healthcare insurers are competing for consumers’ business on
price and service. Consumers gravitate to the best price and service that fits
their needs.

16. The Swiss
healthcare system not only helps to curb health care inflation but most
beneficiaries have complete freedom to choose their doctor.

17. The setup
of the system has resulted is low waiting times for physician and hospital
services with a minimum of bureaucratic slow downs. 

18. The Swiss healthcare
system aligns all the stakeholder incentives by empowering the consumer while
helping less fortunate consumers.

19. Government
spending on health care in Switzerland is only 2.7 percent of GDP, by far the
lowest in the developed world.

U.S.
government spending on health care was 7.4 percent of GDP in 2008 and will
exponentially grow under Obamacare.

 “ If the U.S. could move its state health spending to Swiss
levels, it would save more than $700 billion a year.”

Dr. Regina Hertzlinger has an excellent description of the
Swiss healthcare system in the following You Tube.


 

http://youtu.be/E5bsz_oewDA

Switzerland’s
healthcare system cannot be superimposed on the U.S. healthcare system. It can
be used as a starting point to empower consumers to drive the healthcare system
and be part of the solution. 

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

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Supreme Court and Healthcare

June 24, 2012
inMedicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

This week the Supreme Court is going to rule on whether President Obama’s Healthcare Reform Act is constitutional or not.

The traditional media and blogosphere has spent many hours speculating on the Supreme Court’s decision.

The Supreme Court probably recognizes the many strange issues involved in the passage of Obamacare and the many tricks President Obama played in its passage. It also recognizes than only 32% of the population approves of the plan.

The Supreme Court has cleverly picked the two most important issues dealing with the constitutionality of President Obama’s Healthcare Reform Act. These two issues are intermingled with the multitude of issues that are wrong with the law.

There are two key issues.

One key issue is whether it is constitutional for the central government to mandate that Americans and American companies must purchase healthcare insurance from a private healthcare insurance company. If Americans do not purchase the healthcare insurance, can the federal government fine them?

The second key issue is whether it is constitutional for the federal government to force states to increase the number of people eligible for Medicaid or do the states have the right to determine who they can and should cover at their expense.

 The two core issues are freedom of individual choice and central government control over states rights. Does the federal government have the power under the constitution to limit these constitutional rights?

Once the constitutionality of these two issues are decided by the Supreme Court, Obamacare still has the healthcare system’s original dysfunctional problems.

Obamacare institutes none of the necessary rules or regulations to repair the healthcare system. It adds a patch onto a dysfunction healthcare system.

Effective repair of the healthcare system must be incentive driven with alignment of all of the stakeholders. The primary stakeholders are the patients and physicians.  It must not be a system that is punitive to stakeholders.

The healthcare system must not be an entitlement program. It can be a subsidized program that is consumer owned and driven. Consumers must have financial incentive to be responsible for their health and healthcare dollars.

Any system that promotes government dependency will fail.

The list of initiatives that could repair the healthcare system is large. Obamacare does not include any of them.  

Obamacare omits the need for patients’ responsibility, expands entitlements and promotes government dependency.

These are the initiatives that must be included in a healthcare system that will work:

  1. Eliminate defensive medicine by effective Tort Reform.
  2. Individual patients’ responsibility for their healthcare dollars using the Medical Saving Accounts.
  3. Individual patients must become responsible for their health.  Obesity and the avoidance and control of chronic diseases and complications are in large measure the patient’s responsibility. Financial incentives for effective health along with educational programs to avoid chronic diseases and the complications of chronic diseases should be available.
  4. Dis-intermediate the healthcare insurance industry’s ability to extract 40% of every healthcare dollar for both public and private healthcare insurance sectors: Medical Savings Accounts.
  5. Eliminate the vague regulations and confusing regulations restricting innovative direct medical care programs.
  6. Make all healthcare insurance programs, corporate, small business and individual programs, tax deductible. 
  7. Administrative waste is expanded in Obamacare. Over 250 new agencies have been created already.  
  8. Effective system to implement Electronic Medical Records. The present stimulus is inadequate and will not achieve its goal. It can be done much less expensively.
  9. The hospital reimbursement system must be revised.  The government should institute regulations that monitor transparent real costs of a service and transparent negotiated charges. This should be available to patients and physicians in order to make educated choices.
  10. The government should provide on-line information to patients and physicians about reimbursement for services and need for services based on evidence based medicine recommendations.
  11. The government should help patients save their own money by helping patients decide what are necessary diagnostic tests and treatment.
  12. It should be the patient’s decision and not the government’s decision on necessary treatment.  
  13. Patient should be a Pro-sumer ( Productive Consumer). Patients must learn to be responsible for their care and healthcare decisions.
  14. The central government should stop trying to control the healthcare system and forcing consumers to be dependent on government. This is the Road To Serfdom.  
  15. The government should streamline regulations, eliminate paperwork, and make the healthcare system interaction a pleasant one.
  16. The government should eliminate bureaucracy. The government must approach healthcare reform from the patients’ and physicians’ point of view.

 

 There are many more initiatives I could list that are needed to the repair of the healthcare system. All the initiatives are based on maintaining individual freedoms and promoting individual responsibilities. The initiatives are not based on forcing everyone to be dependent on government.

These are exactly the problems the Supreme Court is considering.

As a society we have been acculturated to accept an entitlement society and central government dependency.

We are also noticing that entitlement societies do not work as witnessed by European socialism.  

America is in a Catch 22 situation. If you want to be fiscally responsible you cannot live beyond your means. America cannot maintain the entitlements any longer because the central government cannot afford them.  

After a finite time a nation runs out of other peoples’ money.

 

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

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Permalink:

A Real Marketplace For Healthcare.

May 2, 2012
inHealth Savings Accounts vs Medical Savings Accounts, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Reform Act is all about government control of 19% of the U.S. economy.

The media has publicized ridiculously high charges for cardiac bypass and other complicated procedures. It ought to find out what the actual contracted reimbursement fee is.

All the stakeholders are at fault for the lack of transparency, misinformation, administrative waste, misuse of taxpayers’ dollars and the manipulation of the media.

It is important for the government and the healthcare industry to continue to blame physicians for being the villain in our dysfunctional healthcare system.

Remember physician receive only 10% of the healthcare dollars spent in our healthcare system. Who receives the other 90%? What value do the other recipient add to medical care?

The medias quoted prices are a scare tactic to keep government’s control of the healthcare system advancing.

What is going to happen after Obamacare is repealed?

There will still be millions uninsured.

There will still be millions who cannot buy insurance because of pre-existing conditions.

There will still be millions who choose not to purchase coverage.

There will still be inefficiency and waste in the healthcare system.

Stakeholders are adjusting to the potential restrictions of Obamacare. They are finding new ways to game the healthcare system.

Healthcare costs will rise and inefficiency in the healthcare system will increase whether we have Obamacare or not.

President Obama is trying to set rules and create regulations to eliminate potential solutions to our healthcare system’s problems.

He is trying to regulate and eliminate high deductible insurance plans and Health Savings Accounts. Under Obamacare it will be much cheaper for employers to pay the penalty than provide healthcare insurance for their employees.

Employees will be forced to buy insurance from President Obama’s health insurance exchange (Public Option). There will be no other options. At that point the government has full control of healthcare.

It wouldn’t be a bad thing if the government could afford another potentially inefficient entitlement program. President Obama is clearly trying to squeeze complete government control of healthcare through the back door.

It will not work!

What should be done?

The government must create a real marketplace for healthcare insurance. A marketplace constructed for the benefit of consumers and not secondary stakeholders’ vested interests. Stakeholders would adjust because of their competitive compulsion to get customers. They will compete for consumer business by lowering healthcare costs.

The mindset must change to a consumer driven system not a government driven system.

My Ideal Medical Saving Account would be an excellent way to provide full first dollar healthcare insurance coverage for unplanned medical expenses. It would also provide financial incentive for consumers to be responsible for their health and healthcare dollars.

These are some of the rules that government should have.

1. Healthcare insurance policies should be “guaranteed renewable.”

2. Healthcare policies should include a right to purchase insurance in the future regardless of pre-existing illness.

3. Healthcare insurance policies should follow you from job to job regardless of a move across state lines.

4. Individual healthcare insurance policies should have the same tax-deductible status as employer provided healthcare insurance policies.

The government could form a successful individual insurance market place with these simple rules or regulations.

 “Most pathologies in the current system are creatures of previous laws and regulations.”

“ Solicitor General Donald Verrilli explained as much in his opening statement to the Supreme Court: “The individual market does not provide affordable health insurance,” he noted, “because the multibillion dollar subsidies that are available” for the “employer market are not available in the individual market.”

My Ideal Medical Savings Account could apply to Medicare and Medicaid. It provides incentives and real healthcare insurance coverage. It allows the consumer to choose. It encourages consumers to be knowledgeable shoppers for healthcare. 

The main argument for a mandate before the Supreme Court was that people of modest means can fail to buy insurance, and then rely on charity care in emergency rooms, shifting the cost to the rest of us.

The government is spending that money already. The mandate will not stop the emergency room use.

 A consumer driven healthcare system using My Ideal Medical Saving Accounts would provide incentives for the indigent or those of modest means to try to save money for them by taking care of their health. The government provides those educational resources already. This might encourage its use.

The emergency room treatment expenses for indigent and uninsured are not the central reason for rising healthcare costs. Costs are rising because people, who do have insurance, and their doctors, overuse health services and don’t shop on price.

The Ideal Medical Savings Accounts should be fully tax deductible to both individual and groups.  The healthcare system would then become consumer driven. Consumers would become price sensitive because of financial incentives. A competitive healthcare market would then be created. The result would be a decrease in the cost of healthcare. It certainly would be cheaper than the artificial, bizarre, government controlled healthcare market for we have today.

Enlarging government control would make the healthcare market more expensive and less efficient than the unsustainable government controlled healthcare system that exists.

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

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Permalink:

Healthcare Insurance Industry’s’ New Business Model Is Wrong.

February 29, 2012
inConsumer Driven Health Care, Healthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

One percent of the people spend 25% of the healthcare dollars. Twenty percent of the people spend 80% of the healthcare dollars.

It would be important to know why this is true. Then figure out what could be done about it Stakeholders need to agree on a course of action.

It would be a good idea to understand what physicians think should be done. 

“One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.”

The 1% and the 20% are suffering from complications of a chronic disease.

The incidence of chronic diseases is on the rise in the United States. A major precipitating factor for this is obesity.

The incidence of Type 2 Diabetes Mellitus is increasing in both adults and young children, as the incidence of obesity is increasing.

The incidence of complications of Diabetes Mellitus will increase in the future. The result will be an increase in the cost of medical care.

President Obama’s healthcare reform act will expand healthcare coverage to 32 million uninsured in 2014. Obamacare is forcing the healthcare insurance industry to change its business model in order in order to remain profitable.

Premiums are out of the reach of most businesses and individuals. Premium increases are not an option.

High-risk individuals are denied healthcare insurance coverage. High-risk patients automatically get coverage in corporate healthcare plans. The healthcare insurance industry simply raises premiums on corporate groups in order to maintain its profits.

Something must be done to decrease the increase in chronic disease and its complications. 

The government cannot afford to insure its present patient obligations much less the 32 million uninsured.

“As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.”

Twenty percent of the population not 1% should be getting the attention of the healthcare insurance industry.

“Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill.

An analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance that are under 65.

About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.”

Most of these people were obese.

The healthcare insurance industry cannot avoid these patients after 2014.

“Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent.”

The healthcare insurance industry realizes it must fundamentally change its business model.

The healthcare insurance industry has a problem developing a new business model that would work. The industry does not want to lose control over patients, their physicians and the monies paid into the healthcare system.

The healthcare industry does not have a clue about how to actually repair the healthcare system. It is focused on its own bottom line rather than looking at business models that will be beneficial to everyone and align all the stakeholders’ incentives.

The healthcare insurance industry is planning on instituting programs that will tinker with the edges. It will not fix the problems.

The new business models will increase the percentage of money the insurance industry receives for direct patient care maintaining a Medical-Loss ratio of 15%. There is no interest in providing patients with financial incentives and a choice.

The net result will be higher costs and system failure. The weird thing is most of the healthcare insurance industry executives know it.

“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” said Dr. Lonny Reisman, the chief medical officer for Aetna.

The reality is that the system must be consumer driven with consumers in charge of their healthcare and their healthcare dollars.

At the moment patients have no incentive to decrease the cost of care. Hundreds of patients have told me that they go to the doctor to fix their illness. Medicare or their insurance pays. The patients have no idea of the costs they incur nor do they care. They have no interest in controlling their disease.

My ideal medical saving accounts would give the patients incentive to learn about their disease. They would be interested in self-managing their disease with the physician and his medical care team being the coach.

“The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health.” 

Physicians have figured out what services get paid by the healthcare insurance industry. They do not get paid for educating patients about their disease.

The healthcare insurance industry and the government have developed a punitive bureaucracy.   

An attempt is being made to penalize or reward physicians for medical outcomes. Pay for Performance (P4P) is a punitive payment system. It will fail. 

Patients are responsible in large part for the onset of their medical problems and in controlling their medical outcomes. Physicians cannot be responsible for patients’ outcomes. It is the responsibility of the patient.

“Insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.”

Patient outcomes have nothing to do with human nature. It has everything to do with financial incentive and effective education.

Spokes 5 and 6 of my future state business model has everything to do with patients’ responsibility for caring for their disease and the physicians’ responsibility to the patients. It has nothing to do with physicians’ and patients’ responsibility to the healthcare insurance industry or government.

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

Please send the blog to a friend

 

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How Could A Social Networking Company Make Money In Healthcare?

February 22, 2012
inChronic Disese Management, Consumer Driven Health Care, Medicine: Healthcare System
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Stanley Feld M.D.,FACP, MACE

My last blog about individual healthcare insurance policies generated a lot of comments from young people starting up a business and individuals operating their own business at home. I also received several from entrepreneurs looking to start a business.

One person wrote,

"Dear Dr. Feld

So we have now learned that high deductible plans are what people should be purchasing. We also learned that they should be self insuring for $10,000 which is the highest deductible insurance at the lowest price.

 Over $10,000 is where are at the greatest financial risk. True insurance should cover our greatest risk.

I would like to know where is the business opportunity is for an Internet company that runs social networks?

 

 

 Sincerely

Z"

I said the world belongs to young people 20-50 years old. They also understand the power and mechanics of social networking.

If there was a social network dedicated to describing the advantages and disadvantages of the healthcare insurance options available to the unemployed, self- employed and under insured there would be many members. If those members had the ability to have input it would grow even larger with appropriate marketing.

I have not figured out how social networking sites make money except through advertising. I imagine many companies would like to get the attention of these consumers who are seeking healthcare insurance advice.

It has been reported that people change their job up to 8 times during their career. More and more people are in start-up businesses and need healthcare insurance for their employees. Many people are becoming consultants and are self-employed. They all need healthcare insurance for their family.

President Obama’s answer to the problem is the government will provide the healthcare insurance for you. Healthcare insurance is a right as an American.

There are several problems with this statement. The government cannot afford to provide adequate healthcare insurance for the entire population.

Britain has proved it. They are reverting back to a pay for service system. The socialist democrats in Europe have proved that. Each country is going bankrupt.

The business opportunity would be to teach the people who are self-insured or uninsured about the rip off of the healthcare insurance industry and to teach them how to save money.

How many start up companies do you guess are uninsured or under insured or not insured for catastrophic illness because they cannot afford the healthcare insurance premiums?

The chances are many start up employees will not get sick. True healthcare insurance should be a hedge against catastrophic illness.

If someone gets sick in a company, the company could pay the employee for the amount he spent before they reached the full deduction.

The high deductible individual policy is not tax deductible. If it were made tax deductible by citizen demand to congress through social networking the voice of the individual could be heard. Congress might be forced to act.

Start up companies and other companies would save money. These companies would be placed on the same playing field as companies who pay for employee insurance with pre tax dollars. The social network could even form an association of self-employed companies and enjoy the tax benefits and purchasing power of large corporations.

This would represent a threat to the healthcare insurance industry. They would do everything to stop. So would the government.

If you do the math for the government, the government would be saving much more money than it would collecting taxes. 

An appropriate social network could stop the healthcare insurance industry's grotesque business model in its tracks.

It could save billions of dollars. It could create incentive for people to take better care of themselves. 

Many large and small companies are self-insured. The law lets these companies deduct their healthcare insurance with pre tax dollars. These companies could offer my ideal medical saving account with a $7,500 trust account. They could then reinsure employees for over $7,500 with a reinsurance company. 

Employees would obtain first dollar coverage after the deductible is reached.

In the worst case the company would save $6,000 per employee. In the best case it would save $13,000 per employee.

http://www.lijit.com/search?uri=http%3A%2F%2Fwww.lijit.com%2Fusers%2Fstanleyfeld&start_time=&p=g&blog_uri=http%3A%2F%2Fstanleyfeldmdmace.typepad.com%2F&blog_platform=&view_id=&link_id=7386&flavor=&q=ideal+medical+savings+accounts&x=0&y=0 

I suspect even the traditional insurance companies would provide the re-insurance.  These healthcare companies have already negotiated fees with physicians, hospitals and drug companies. 

If the healthcare insurance industry did not provide re-insurance its negotiated fees could be obtained easily.

A bank or a mutual fund could adjudicate the claims instantly.

The large corporations, who are self-insured, all have HR officers. The HR officers I have met either do not seem to have the bandwidth to investigate the possibility of the ideal medical saving account structure or they are trapped into outsourcing the details of the corporation’s self-insured healthcare plans to middlemen. I have a feeling the commitments of some with middlemen are long term.  

If all this could happen it would be an important first step in the development of social networking in healthcare and medical care.

Consumers need education for the care of their chronic disease such as diabetes, asthma, chronic lung disease, heart disease and chronic gastrointestinal diseases. Many of these diseases are a result of obesity.

If social networking could discourage the ever-increasing incidence of obesity, society would decrease healthcare costs dramatically. 

If patients learned how to manage their own disease the cost of medical care would decrease precipitously.  

Why?

Because 80% of the healthcare dollars spent on direct patient care are spent on the complications of chronic diseases that are not well managed by patients.

Many drug companies and medical device companies would advertise on these social networking sites.  

Consumers must drive the healthcare system in order for the healthcare system to be repaired. Not government or the healthcare insurance industry.

Consumers feel powerless at present. Empowering consumers through social networking will disrupt the entire healthcare systems supply chain for the better.

Consumers are up against a government that wants to tell them what they have to do. They are up against healthcare insurance companies that charge obscene premiums. They are up against hospitals, physicians and emergency rooms that have exorbitant charges.

Consumers are up against diseases such as obesity which precipitates many chronic diseases.

Consumers are frustrated and need leadership and guidance.

The phenomenal growth in social networking can give consumers the tool they need to control their health and drive the healthcare system.

Social networking is the only way to start a consumer driven healthcare movement. It has to happen before the medical care system is destroyed.

The young people expert (20-50 years old) in social networking have to become engaged. 

Those young people have to understand physician mentality and the importance of the patient physician relationship.

I will be happy to help in any way I can.

 

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

Please send the blog to a friend

 

 

 

 

 

 

 

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I Left My Job: What Do I Do Now For Healthcare Insurance Coverage?

February 19, 2012
inHealthcare Insurance Industry, Medicine: Healthcare System, Patients Problems
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Stanley Feld M.D.,FACP,MACE

“Dear Dr. Feld

My wife and I are 43 years old. We have a 7 year old daughter. All three of us are in excellent health. We have minimal medical bills and yearly checkups. 

I just left an executive position in a company that had excellent healthcare insurance.

 I am in the process of hunting for a new executive position. I am currently uninsured. I have the option to buy COBRA insurance for the next 18 months or until I get a job with good healthcare benefits.

The COBRA premium quoted to me to be $1600 per month or $19,200 per year. My former employer told me he was paying $15,000 for the same insurance.

I cannot afford $19,200 per year. Neither can I afford not to have healthcare insurance coverage for my family in case of catastrophic illness. I searched the Internet for the best option.

There were at least 97 healthcare insurance policies offered for individual coverage. After I got through understanding the fifth policy I was exhausted. None seemed to be a good deal.

I have been a reader of your blog and always say to myself thank God I do not have to deal with the dysfunction you describe. I could not believe I would be in this situation.

You seem to understand the problems in the healthcare system. What do I do next?

Thank you in advance for any help you can offer.

Sincerely

H”

I have received other letters of disbelief from young people. They did not appreciate how unfair, non transparent and truly dysfunctional the healthcare system was until they encountered the problems.

The future belongs to the 20 -50 year old age group not seniors. They are all consumers and potential patients. They are are going to need a viable healthcare system at some point in their life.

This age group must take an interest in developing an understanding of and take responsibility for getting involved in fixing the dysfunctional healthcare system now.

In general 20-50 year olds are not sick. Only 20% of the population is involved in dealing with the healthcare industry at one time.  Eighty percent of the population does not interact with the healthcare system. When they do they realize how dysfunctional it is.

100% of the consumers must demand, simultaneously, the healthcare system become transparent and equitable.

The structure of Present Obama’s healthcare reform plan has not yet delivered nor does it have a chance to deliver is promises. In fact, it has made the healthcare system more dysfunctional and unfair.   

Change in the system has to be consumer driven in order to force the government to reform the system so it is affordable and accessible to all. This means honestly eliminating waste at all levels.

President Obama’s waivers to favored groups and concession to vested interests political pressures will not improve the system.  

I totally understand that when dysfunction affects the other guy, young busy unaffected consumers have no interest in being involved in actively changing the system. However, they are going to be the other guy at some point.

In answer to the reader’s question “What do I do?”

He could sign up for COBRA. The COBRA system is a flawed system. It is a dishonest promise.  COBRA was accepted by congress and consumers without understanding its underlying consequences.  

“The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. “

Nothing in the Department of Labor’s document covers how the premiums are determined by the healthcare insurance industry.

A consumer electing to take COBRA is charged the calculated premium for an individual healthcare plan. The premium is very high.  

Actuarial calculation is designed to the benefit of the healthcare insurance industry. The calculation is not transparent. I suspect the government does not oversee the calculation.

COBRA is about the only option good for a 50 year old obese male with hypertension and hyperlipidemia who has a wife and a 7 year old child. He would be rejected for all private insurance plans.

The individual state’s “high risk pools’” premiums are even higher than COBRA’s premium. The high risk insurance coverage is less inclusive because it excludes any possible risk from underlying conditions.  

I felt compelled to help this reader.

He needed coverage in case of a catastrophic illness in his family until he obtained a new position. At his age and health history he should not have any trouble getting accepted for a high deductible policy.

I told him to check which insurance company his family’s physicians accept. It was UnitedHealth.

The 8th plan down the list of UnitedHealth options for high deductible was a $10,000 called Plan 100. The premium would be $318.82 a month. The deductible was $10,000. The plan provides full first dollar coverage after the $10,000 deductible is met up to 1 million dollars.

UnitedHealth Plan 100 underwritten by Golden Rule also had a $7,500 deductible for $417.

I thought this was the plan for this family. Their routine healthcare costs were less than $1000 year. The premium for the $7,500 deductible is $5004 per year. Total savings vs. COBRA is $19,200-$6004= $13,196.

If there was a catastrophic illness in his family and it cost more than $7,500 his total cost would be $7500 plus $5004 for his premium for a total cost of $12,504. He would still save $6,696 (19,200 for COBRA vs. $12,504= $6,696).

The big disadvantage is his premium costs are not tax deductible as it would be for an employer. At a 30% tax rate this consumer would have to earn $27,429 in order to pay $19,200. 

The adjudication of claims is simple. The physicians send the bill to UnitedHealth. UnitedHealth allows physicians their negotiated fee. The consumer is then sent an explanation of benefits for allowable fees.

Since the consumer has not reached the deductible, he is required to pay the physician’s allowable fee. This fee is credited toward his $7,500 deductible.

When the deductible is reached the full allowable amount for services is paid. This is the best deal under the present healthcare insurance options for this family of three.

He bought the high deductible Plus 100 insurance. He also complained about the confusing array of options and prices, the lack of transparency about these options, and difficulty in easily understanding the options.

He said he is a pretty smart fellow. He had difficulty in figuring out what to do and was ready to pay for COBRA coverage.

He asked, “How could people of average intelligence figure it out?

It would be easy if there were a questionnaire that would automatically determine consumers’ healthcare policy needs and direct them toward healthcare insurance policies that would fix their needs.

I told him the game is rigged. The insurance industry does not want you to figure out what policy is best for you. It wants you to buy the most expensive policy that might not address your needs.

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

Please send the blog to a friend