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How Are Accountable Care Organizations (ACOs) Doing?

January 23, 2013

inChronic Disese Management, Consumer Driven Health Care, Medicine: Healthcare System

• Leave a comment

Stanley Feld M.D.,
FACP, MACE

In a word the formation
of Accountable Care Organizations is doing poorly.

If one believes the CMS
press releases one would believe the formation of ACOs is doing well.

In the past, I have gone
into great detail on why I believe Accountable Care Organizations will fail.

I believe physicians and
hospital systems should be accountable for outcomes but only the outcomes they
can control.

They should not be
accountable for outcomes they cannot control.

ACOs are really HMOs on
steroids. Risk is transferred from the government to the healthcare providers.

HMOs failed in the 1980’s
and 1990’s because physicians and hospital systems realized that they could not
evaluate risk or manage risk.

It is impossible for
providers (physicians or hospital systems) to control patients’ behavior in
adhering to treatment for their disease.

It is almost impossible for
the government to commoditize reimbursement accurately for diseases unless the
government can weigh the risk of poor disease outcomes.

No one has figured out
the way to accurately risk weight the outcome of a patient’s disease and
treatment.

CMS believes by
increasing the number of codes in ICD-10 to 68,000 codes vs. ICM-9 18,00 codes, the old coding system, the
government will be able to weigh risk leading to accurate cost assessment.

I believe this is a
fantasy of healthcare policy wonks working for the Obama administration.

Many physician groups
and hospital systems believe they will lose money taking on these risks. These
are the groups that are holding back and not forming ACOs.

It is the reason the
Mayo Clinic and the Cleveland Clinic have refused to form ACOs.

Nevertheless on January 1^st CMS proudly announced that
it has nearly doubled the number of ACO programs in the country by adding 106
new ACOs to the existing 148 programs for a total of 254 programs to date.

The CMS announced its latest and
largest round of accountable care organizations under the Medicare
shared-savings program.

I would not be as proud as CMS is to applaud this level of
participation in the ACO program. ACOs are the keystone of Obamacare.

Complete national participation is supposed to occur by January
2014.

There are a total of 254 ACO’s signed up in 50 states or 5.08 ACO’s
per state. There are many more potential
ACOs per state than 5.08 per state.

“CMS said half of ACOs are physician-led and
care for less than 10,000 Medicare enrollees.”

This is not a good sign.
The success of the ACO program is defined as shifting the risk of medical care to
hospital systems and physicians.

What is the problem?

The problem is obvious.
The definition of insurance is,

“Insurance is the
equitable transfer of the risk of a loss, from one entity to another in
exchange for payment. It is a form of risk management
primarily used to hedge against the
risk of a contingent, uncertain loss.”

“An insurer, or insurance carrier, is a company selling the
insurance; the insured, or policyholder, is the person or entity buying the
insurance policy. The amount to be charged for a certain amount of insurance
coverage is called the premium.

“Risk management,
the practice of appraising and controlling risk, has evolved as a discrete field of
study and practice.”

Risk management is far
from an exact science. Risk management depends on a large number of people
paying premiums who are not at risk for disease.

Obamacare’s goal is to
have all the low risk consumers pay for the higher risk consumers.

However, President Obama
has provided low risk consumers an out. The penalty for not participating is
modest compare to the cost of the insurance. If a low risk consumer gets sick
he can immediately join the health insurance exchange program without
restrictions.

The increased cost of
illness is compounded when a large number of patients have chronic diseases.

A contributing factor to
developing chronic disease is obesity.

America has a national
obesity epidemic.

Patients with Diabetes
Mellitus are vulnerable to multiple diseases such as hypertension,
hyperlipidemia, kidney disease, eye disease and vascular disease.

Each might be at a
different stage of progression. The risk for costly complications is different
for each at each stage of disease progression.

The diabetic might or
might not adhere to the treatment regime outlined. It is difficult to risk
weight these patients. It is risky to take the responsibility for the medical
care outcomes for these patients.

In reality the principle
risk managers are consumers.

Healthcare policy
experts have not practiced medicine. They either do not understand these risks
or they want to place the risk with physicians and hospital systems and provide
undervalued reward.

Many medical outcomes are
dependent on patient responsibility for managing their own risk. Patients must
participate in their own care to receive maximum benefit and the best medical outcomes.

Patients must become
professors of their disease.

There are many reasons ACOs will fail

1. ACOs
do not empower consumers to be responsible for their own medical care.
Healthcare should be consumer driven with consumers controlling their healthcare
dollars. They will then make informed choices about their care and insurance
coverage.

2. ACOs create artificial
incentives to improve quality medical care and provider performance.

3. Consumer driven healthcare creates real
incentives to promote price competition by physicians and hospital systems. True
competitors will constantly work to improve their products, attract
consumers, and ultimately increase market share.

In a systems of ACOs consumers do
not play a role in stimulating completion. Consumers are passive recipients of
treatment from an assigned ACO.

4. Most physicians are reluctant
to assume accountability for patient outcomes. Physicians recognize that
most medical outcomes are directly under consumers behavioral control.

5. ACOs structure does not include consumers’
incentive to be responsible or accountable for their own medical care.

ACOs undermine any attempt to create a truly
accountable healthcare system that can drive down medical costs.

6. ACOs do not encourage provider
accountability. ACO’s shared savings incentive
does not seem to be adequate for the risk assumption.

Providers will continue to
be paid for each service they perform until the government provided
funds run out for that ACO.

7. There are also grave uncertainties and
practical complications of distributing government funds and savings if any
between the hospital system and physicians on the hospital systems staff.

8. ACOs create an
unfair competitive advantage for large organizations that are hospital system centric.
Eligibility requirements are vague and ambiguous. The eligibility
requirements suggest that larger organizations have an unspoken
eligibility advantage.

9. This is the reason
hospital systems are trying to form ACOs. Hospital systems think they will make
money. I believe hospital systems will lose money. The government will have to
supplement payment for hospital systems to stay afloat.

10. When hospital systems lose
money they will fight with their staff physicians over the distribution of
government reimbursement.

The cost of hospital services will then
skyrocket further. Consumers will be the losers.

11. Groups of independent
practitioners as well as other types of small and mid-sized practices may
lack the infrastructure, information technology facilities, or other resources
needed to qualify for ACO eligibility.

12. They will be forced to join hospital systems.
Hospital systems have a long history of taking advantage of physicians
skills and intellectual property.

Tension between hospital systems and staff
physicians will be created. Hospital systems’ ACOs will crumble. The cost of
medical care will continue to increase further.

These are just a few of the reasons ACO’s will fail.

No matter how hard CMS tries to change the narrative
these are some of the reasons explaining the lack of hospital and physician participation
to this point.

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

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Business Model For Medical Care 2020. The Ideal Future State

October 28, 2012

inEMR, Health Savings Accounts vs Medical Savings Accounts, Healthcare Insurance Industry, Information Technology in Healthcare, Innovations in Healthcare, Medicine: Healthcare System, Summary Blogs

• Leave a comment

Stanley Feld M.D.,FACP,MACE

Please click on all the links to study
the references to each spoke. It will help you visualize the power of the business
model.

The ideal future state business
model for the healthcare system must include the execution of ideas in the specific spokes outlined below.. These spokes
will serve to align all of the stakeholders’ interests.

The business model must
contain appropriate rules for a consumer driven healthcare system, an ideal
electronic medial record, and an ideal medical savings account.

The ideal medical saving
accounts can work optimally when there is significant tort reform and patients
take full responsibility for their health and healthcare dollars.

Consumer education is critical to the business
model of the future. Educational modules can be available to consumers 24/7 via
the Internet. These educational modules must be an extension of consumers
physicians’ care in order to be effective. The education can become available
using a series of social networks.

Chronic disease self-management education can
be achieved by the use of interactive online teaching programs. Patients can be
linked to share their disease experience through private social networks.

Most believe that the healthcare system must
have greater integration of care. This integration of care can be done
virtually through a series of private integrated networks.

Effective integration can be achieved without
disruption of the entire healthcare system. Obamacare has been disruptive to
the entire healthcare system.

Obamacare is forced integration by the
government will be slow, costly and unsuccessful.

Physicians must be compensated for the presently
uncompensated time necessary to execute each one of the spokes of the wheel.

Each spoke is necessary to convert the
healthcare system into a system that once more makes the physician patient
relationship paramount.

The future business plan removes control of the
healthcare system from the government. It permits the patient to have the freedom
to choose his own healthcare course.

Tort reform is vital to the 2020 business model.
It will decrease costly over-testing to avoid frivolous malpractice suits.
There are many ways to set up a tort reform system that truly protects patients
from real harm while eliminating over-testing. It limits the malpractice
litigation system. Punitive damages must be lowered. Losers in lawsuits must
pay all fees. These two provisions will decrease lawyers’ incentive to sue.

Consumer driven healthcare will create a system
that promotes personal responsibility by the consumers’ for their health and
health care dollars.

The major spoke necessary to successfully
accomplish a consumer driven healthcare system is my ideal medical saving
accounts.

The ideal medical savings accounts would
provide the financial incentive for consumers to drive the healthcare system.
It would dis-intermediate the healthcare insurance industry’s grasp on first
dollar coverage and profits. The insurance industry would realize that its
profit margin would increase under this system.

In order for consumers to be in a position to
lower the cost of healthcare they must be taught to understand how to self
manage their disease and be responsible for the decisions they make in their
choices for medical care.

In order to decrease patients’ dependency on
the government and increase being
responsible for themselves, a system of education using information technology
as an extension of their physicians’ care has to be developed and put into
place.

Social networking is in its infancy at present.
It must be developed and used as an educational tool between physicians, patients
and physicians, and patients and patients.

All the social networking must be an extension of
the physicians’ medical care to their patients. Social networking must be
developed to enhance and promote the physician/patient relationship because
this relationship is critical, at its core, to successful medical treatment.

Social networking and information technology
can extend physician educational resources for patient care.

Systems of care for the self-management of chronic
disease as an extension of their physicians care have already been developed.
The unsuccessful chronic disease self-management systems are the programs that
are not an extension of physicians’ care. The reason these third party systems
are unsuccessful is because they undermine the patient physician relationship.

President Obama has done pilot studies using
those third party self-management companies to prove that chronic disease
self-management systems work. They have all failed to reduce the cost of care.

Therefore the administration has reached the
conclusions that self-management of chronic disease does not work. Nothing
could be further from the truth. The government simply does not understand the
magic of the physician-patient relationship.

In order to decrease the cost of medical care,
medical care must be integrated. At present, primary care physicians recommend
specialists. The primary care physicians know whether the specialists are doing
a good job by the specialists’ treatment results with their patients.

Most of the time physicians do not know their
specialists’ fees. These fees must be totally transparent to primary care
physicians and their patients. The primary care physicians can then be in a
position to help their patients choose appropriate specialists.

It will also reduce the specialists’ prices
because they will be forced to become competitive by the patients in a consumer
driven system.

Hospital fees must also be transparent. One of
the reasons I am opposed to hospital systems hiring physicians and paying them
a salary is the hospital systems would then be able to develop a monopoly in a
town or area of town. This would permit the hospital system to raise prices
without informing patients or physicians.

Hospital systems could erase physicians’ choices
and hindered patients from having the freedom to choose a hospital or
specialist of their choice with their primary care physicians. It devalues the
patient physician relationship.

The way President Obama is going about
developing a universally functioning electronic medical record is foolish and
costly. Most physicians cannot afford a fully functional electronic medical
record. This fact is being used to drive physicians into being employees of
hospital systems. The problem is hospital systems are paying hundreds of
millions of dollars for electronic medical records that are not fully
functional.

Many of these records are hard to use and
provide inflexible data. The inflexible data leads to healthcare policy
decisions that are wrong. The data is also used to commoditize medical care.

Commoditized medical care is not the best quality
of medical care.

If the government is so smart it should develop
a fully functional electronic medical record and provide it to all hospital
systems and practices for free.

The EMR should be put in the cloud. Providers
should be charged by the click. The government can service and upgrade the EMR
in one place and improve the quality of data collected. The data should be used
for educational purposes only and be owned by the patients and physicians. It
should not be used for punitive purposes. The inaccurate data is now used for
punitive purposes. The result has been a lack of physician cooperation.

The healthcare journey to an ideal future state
must begin in an orderly way. The principle goal is to be consumer centric. It
must be consumer driven and force the secondary stakeholders to be transparent
and competitive.

This journey will wring the excess costs out of the healthcare
system. It will create a democratic system affordable to all.

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

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Health Insurance Exchanges And The Federal Government

September 16, 2012

inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust

• Leave a comment

Stanley Feld M.D., FACP,
MACE

Health
Insurance Exchanges are supposed to be state-regulated
and standardized health care plans in the United
States, from which individuals may purchase health insurance
coverage eligible for federal subsidies.

All exchanges must be fully certified and
operational by January 1, 2014 under federal law.^[1]

The health insurance
exchanges in all states are not going to be operational on time.

However, Americans of
all income brackets are experiencing the increases in 20 hidden taxes in
Obamacare right now. The increase in taxes is supposed to amount to $1.2
trillion dollars.

The health insurance
exchanges, are supposedly one of the centerpieces of President Obama’s health care law,

Their formation is failing
despite President Obama’s publicity.

If they are created President
Obama will have a clear path to the Democratic Party’s cherished Public Option.

This will be a giant
step to achieving a single party payer healthcare system.

Unfortunately, the
single party payer system will in turn fail because it will be unaffordable for
America.

Individual states and
the healthcare insurance industry will do everything they can to undermine the
success of health insurance exchanges.

Federal officials never
thought they would end up running the Health Insurance Exchanges. President
Obama’s plan was to dump this formidable and complex task on the states. Half
the states have refused to participate.

“Obama
administration officials are getting ready to set up and operate new health insurance markets
in about half the states, where local officials appear unwilling or unable to
do so.”

“So far, Governors of 13 states with nearly
one-third of the United States population have sent letters to the Obama administration
saying they intend to set up exchanges. Complete applications are due on Nov.
16, 2013.”

In other words, 37 states have not signed up
yet. Once those 13 states that have signed up and start calculating their costs
for setting up and running the health insurance exchanges I suspect they will
also withdraw.

The Secretary of Health and
Human Services, Kathleen Sibelius’ plan was to complete the regulations for the
states to start the health insurance exchanges by January 1,2014.

The Secretary of Health and
Human Service has emphasized that states must meet her standards of transparency
and accountability.

The federal government requires
state exchanges to develop budgets and project operating costs, revenues and
expenditures to the central government’s satisfaction.

States must explain how the
revenue will be generated and how the exchange will address any financial
deficits.

The federal government wants to
set up the rules and require the states to execute these rules at the states
expense. President Obama promised to “fund” the exchanges for the states for
two years. After that they are on their own.

The health exchange programs
will be delayed because the government pledged to set up the health exchanges
in the states that opted out of the program. It has not started to set up these
exchanges.

Creation
of Health Insurance Exchanges is a complex and expensive task. States are
required to operate under a balanced budget. States cannot balance their
budgets with health insurance exchanges unless they further increase taxes.

“Federal and state officials and health policy experts expect that
the federal government will run the exchanges in about half of the 50 states.”

My
guess is it will be closer to 35 states. Federal officials are preparing to do
the job. It will be poorly executed and difficult politically.

President Obama knows the
public fears a federal takeover of the healthcare system. He realizes the
public understands the health Insurance exchanges are one more step toward a
federal takeover of the healthcare system.

The Obama administration
does not want to encourage that fear by taking over the Health Insurance
Exchanges.

Neither does the Obama
administration want to alienate state officials whose help they need to execute
the federally run healthcare exchanges.

The federal government
does not have the manpower to run all these exchanges. It is outsourcing the
work to private contractors.

We have seen the
disastrous abuse to physicians by outsourcing fraud and abuse investigations to
private contractors.

“The Obama
administration has invited advertising agencies to devise an elaborate
“outreach and education campaign” to publicize the federal exchanges and their
potential benefits for consumers.”

The Federal officials
are hiring private contractors to provide “in-person assistance” to consumers
and to operate call centers.

President Obama’s
administration has attacked Mitt Romney and Bain Capital for outsourcing of
jobs.

President Obama is now outsourcing
these jobs to a foreign company, while America desperately needs jobs here.
This is duplicity to its highest degree.

He better keep it out of
the mainstream media or Mitt Romney out to get it in the mainstream media
somehow.

Federal officials
have turned to the American subsidiary of a Canadian company, the CGI Group, to
provide information technology services to the federal exchanges under a
contract that could be worth $93.7 million over five years.

Kathleen Sibelius has demanded total transparency
of state health insurance exchanges yet planning for the federal exchanges has been done
almost entirely behind closed doors.

“We have gotten
little bits of information here and there about how the federal exchange might
operate,” said Linda J. Sheppard, a senior official at the Kansas Insurance
Department.

“I was on a panel at
Rockhurst University here, and I was asked, ‘Where is the Web site for the
federal exchange?’ I chuckled. There really isn’t any federal exchange Web
site.”

In New Hampshire, Thomas
M. Harte, the president of Landmark Benefits, which arranges health insurance
for 300 employers of all sizes, said:

“Nobody has any idea
what the federal exchange will look like. There has not been much communication
between officials drafting plans for the federal exchange and the people who
will use it: consumers, employers, brokers and insurers.”

Administration officials
have not set forth a budget for the federal exchanges.

“They said they
intended to charge “user fees” to the participating health insurance plans.

It is unclear whether
the fees are subject to approval by Congress or whether insurers could pass the
costs on to consumers.”

The Federal Government
is not telling us what they are going to do. It is not following its call for transparent
regulations.

It is pretty clear to me
this will be one of many steps toward the destruction of the healthcare system.
The healthcare system will self implode. At that point everyone will be begging
the government to take over.

It will be impossible
for President Obama to take over a business the government cannot afford.

A key to Repairing the
Healthcare System is to decrease the outsourcing and bureaucratic complexity.

It is to let Americans
be independent, own their healthcare dollars and their health and not be
dependent on government complexity, inefficiency and rationing of care.

Entitlements do not save
money!

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

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Health Insurance Exchanges And The Federal Government

August 8, 2012

inDisinformation and the healthcare system, Medicine: Healthcare System, Stakeholder Mistrust

• Leave a comment

Stanley Feld M.D., FACP,MACE

Health Insurance Exchanges are supposed to be state-regulated and standardized health care plans in the United States, from which individuals may purchase health insurance eligible for federal subsidies.

All exchanges must be fully certified and operational by January 1, 2014 under federal law.^[1]

It is not going to happen on time. However the 20 hidden taxes in Obamacare are happening right now.

The health insurance exchanges, are supposedly one of the centerpieces of President Obama’s health care law,

Their formation is failing.

President Obama will then have a clear path to a Public Option and a single party payer healthcare system.

Unfortunately, the single party payer system will fail because it will be unaffordable for Americans and the federal government.

The states and the healthcare insurance industry will do everything they can to undermine its success.

Federal officials never thought they would end up running the Health Insurance Exchanges. Their plan was to dump this formidable and complex task on the states. Half the states refused to participate.

“Obama administration officials are getting ready to set up and operate new health insurance markets in about half the states, where local officials appear unwilling or unable to do so.”

“So far, Governors of 13 states with nearly one-third of the United States population have sent letters to the Obama administration saying they intend to set up exchanges. Complete applications are due on Nov. 16, 2013.”

Stated another way, 37 states have not signed up yet. Once those 13 states that have signed up calculate the cost to setting up and running the health insurance exchanges I suspect they will withdraw.

The Secretary of Health and Human Services, Kathleen Sibelius’,plan was to create regulations for the states to develop the health insurance exchanges by January 1,2014. She has emphasized that states must meet her standards of transparency and accountability.

The federal government requires state exchanges to develop budgets and project operating costs, revenues and expenditures.

There are a great many regulations attached to qualify as a state exchange.

States must explain how the revenue will be generated and how the exchange will address any financial deficits.

The federal government wants to set up the rules that require the states to execute these rules at the states expense after the federal government funds the exchange for two years.

The health exchange program will be delayed because the government pledged to set up the health exchanges in the states that opted out of the program.

Creation of Health Insurance Exchanges is a complex and expensive task. States have to operate under a balanced budget. States cannot afford this undertaking.

“Federal and state officials and health policy experts expect that the federal government will run the exchanges in about half of the 50 states.”

My guess is it will be closer to 35 states. Federal officials are preparing to do the job but it will be a difficult political task.

The public fears a federal takeover of the healthcare system. This takeover is one more step by the government to increase its control over the healthcare system.

The Obama administration does not want to encourge that fear with its takeover of Health Insurance Exchanges.

The Obama administration does not want to alienate state officials whose help they need in the execution of the federally run healthcare exchanges.

The federal government does not have the manpower to run all these exchanges. It is outsourcing the work to private contractors.

We have seen the disastrous abuse to physicians by outsourcing fraud and abuse investigations to private contractors.

“The Obama administration has invited advertising agencies to devise an elaborate “outreach and education campaign” to publicize the federal exchanges and their potential benefits for consumers.”

The Federal officials are hiring private contractors to provide “in-person assistance” to consumers and to operate call centers.

President Obama’s administration has attacked Mitt Romney and Bain Capital for outsourcing of jobs.

President Obama is now outsourcing these jobs to a foreign company, while America desperately needs jobs here.

Federal officials have turned to the American subsidiary of a Canadian company, the CGI Group, to provide information technology services to the federal exchanges under a contract that could be worth $93.7 million over five years.

Kathleen Sibelius has demanded total transparency of state health insurance exchanges yet planning for the federal exchanges has been done almost entirely behind closed doors.

“We have gotten little bits of information here and there about how the federal exchange might operate,” said Linda J. Sheppard, a senior official at the Kansas Insurance Department.

“I was on a panel at Rockhurst University here, and I was asked, ‘Where is the Web site for the federal exchange?’ I chuckled. There really isn’t any federal exchange Web site.”

In New Hampshire, Thomas M. Harte, the president of Landmark Benefits, which arranges health insurance for 300 employers of all sizes, said:

“Nobody has any idea what the federal exchange will look like. There has not been much communication between officials drafting plans for the federal exchange and the people who will use it: consumers, employers, brokers and insurers.”

Administration officials have not set forth a budget for the federal exchanges.

“They said they intended to charge “user fees” to the participating health insurance plans.

It is unclear whether the fees are subject to approval by Congress or whether insurers could pass the costs on to consumers.”

I get it.

The Federal Government is not telling us what they are going to do because they probably want to follow its non-transparent regulations.

It is pretty clear this will be one of many steps toward the destruction of the healthcare system. The healthcare system will self implode. At that point everyone will be begging the government to take over.

It will be impossible for President Obama to take over a business system it cannot afford.

A key to Repairing the Healthcare System is to decrease the outsourcing and bureaucratic complexity.

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

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Safety Net Hospitals Are Methodically Being Destroyed.

July 25, 2012

inMedicaid, Medicare, Medicine: Healthcare System

• Leave a comment

Stanley Feld M.D., FACP,MACE

Safety net hospitals have played a vital role in the care of America’s indigent population for over one hundred years.

Over the past few years’ safety net hospitals throughout the country have gone out of business. Fifteen percent of the hospitals in the United States are publically owned safety net hospitals. These are city or county hospitals.

“The urban public hospitals are often associated with medical schools.^[7] The largest public hospital system in America is the New York City Health and Hospitals Corporation, which is associated with the New York University School of Medicine.”

These hospitals receive funding from local, state, and federal government. They are also allowed to charge Medicaid, Medicare, and private insurers for the care of patients that have these forms of insurance.

Poor uninsured patients receive their care free from safety net hospitals.

Public hospitals, especially in urban areas, have a high concentration of uncompensated care. Their association with medical schools as teaching hospitals is an additional funding source provided by the federal government.

“The federal government provides funding to hospitals that treat indigent patients through the Disproportionate Share Hospital (DSH) payments.”

About 2,000 hospitals receive this funding. The problem is these DSH payments are highly concentrated.

Sixty-three percent of total DSH payments go to large teaching hospitals in urban areas.

DSH funding method is political and bureaucratic. Payments are manipulated. Medicaid eligibility and coverage vary widely across states and change the distribution of funds.

DSH payments have been distributed unevenly across geographic areas and away from rural safety net hospitals.

The uneven distribution is toward large urban safety net hospitals in the Middle Atlantic, South Atlantic, and Pacific regions. Those hospitals account for 60 percent of all DSH payments but only account for 46 percent of Medicare discharges.^[2]

The result is public safety net hospitals in America are closing at a much faster rate than hospitals overall.

“ The number of public hospitals in major suburbs declined 27% (134 to 98) from 1996 to 2002.”

As the number of uninsured and indigent patients has increased, their expenses in providing uncompensated care have drained the suburban and rural public hospitals funds.

Treating patients without receiving compensation has also drained urban non teaching hospitals.

Public and non-profit rural hospitals form a large part of the health care safety net for the indigent and uninsured in the U.S.^[9]

Several large safety net hospitals have gone into bankruptcy because cities and states could not afford to fund them.

Two prominent examples are Martin Luther King in Los Angeles and Grady Memorial in Atlanta. Grady Memorial in Atlanta has gone into bankruptcy twice only to be rescued the citizens of the city of Atlanta.

Non-profit community hospitals can collect federal funds if they treated a certain percentage of indigent and Medicaid patients.

In order to reach that percentage the federal government has allowed community hospitals to eliminate certain beds from its total hospital bed count. The hospitals can eliminate outpatient observation beds, skilled nursing swing beds and ancillary labor/delivery services beds from its total bed count.

It inflates the percentage of charity beds a non-profit hospital counts toward government subsidy. This is a totally political maneuver.

In effect it decreases federal funding to city and county safety net hospitals.

In October 2012, Obamacare is starting to adjust federal hospital payments based on quality of care. One of the primary metrics will be patient experience rating that covers everything from the communication skills of doctors and nurses to their promptness in responding to complaints about pain.

A new study in the Archives of Internal Medicine finds that this change may add to the financial troubles of safety net hospitals, which primarily serve poor patients. The safety net hospitals tend to get poorer marks from patients than do other hospitals.

“On average, they drew top ratings from 63.9 percent of patients while the hospitals that treated the fewest poor people got top ratings from 69.5 percent of patients.”

The gap has gotten widen over time. It means that the non-profit hospital will get a larger share of the federal money than the safety net hospitals.

I have written several articles on how the federal government has been destroying these safety net hospitals throughout the country.

In the first year of the Hospital Value-Based Purchasing program that starts this October, patient experience scores will determine 30 percent of the bonus.

The rest of the bonus will be determined by how hospitals adhere to basic guidelines for clinically recommended care.

The hospitals that perform best will receive a higher bonus. Those that lag in their scores will end up with less.

Many safety net hospitals do not have the funds to buy adequate information technology to record the required treatment protocols.

It means that non-profit hospitals will receive additional bonus money and safety net hospitals will be penalized.

To add insult to injury the vital safety net hospitals’ decrease in federal funds could push them “closer to bankruptcy.”

President Obama’s program will make it even worse for safety net hospitals in October 2013.

Obamacare will start reducing special payments to hospitals that treat disproportionately large numbers of indigent patients. Safety net hospitals are the hospital treating a disproportionately larger number of indigent patients.

Without this funding the safety net hospitals cannot improve quality or provide services to indigent people.

The questions to ask are,

Are the measurement used to determine quality care wrong?
Is President Obama trying to destroy the safety net hospital system on purpose?
Does he not realize that many indigent Americans depend on safety net hospitals?

What is going on here?

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

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America Is An Innovative And Exciting Nation

May 23, 2012

inInformation Technology in Healthcare, Innovations in Healthcare, Life's Experiences, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

I had several wonderful intellectual experiences last weekend. These experiences served to confirm my thinking that intelligent Americans are less interested in politics, rhetoric and empty promises and more interested in innovative solutions to all the ills that our bureaucratic political processes have brought upon us.

Todd Siler, Phd

My first stop was a visit with Todd Siler, Phd. Todd is a famous American multimedia artist, author, educator, and inventor. He is equally well known for his art and for his work in creativity research.

Todd’s analytic skills and creativity are uncanny.

The following quote is from one of his web sites,

“In 1890, the psychologist and philosopher, William James, described “Cerebralists” as “those who combine the sensual and spiritual, the physical and intellectual” in their creations. “

Clearly, we’ve lost sight of the broader meaning and reality of this practice.

Cerebralism encompasses all forms and expressions of art. Through art, we can connect and transform everything (information, knowledge, ideas, experiences), to create new meanings and purposes for everything. Art makes life meaningful. It inspires wonder, while challenging the limits of our vision and imagination."

Please click on to Todd’s imaginative art. http://www.toddsilerart.com/index.html

In our rapidly changing world, where it seems, to many, confusing and scary Todd’s message is brilliant and enlightening. His course “Think Like A Genius” is enabling. It enables people to think expansively through art and science to develop strategies and actions that are innovative. He promotes mutual respect, trust and love.

One of Todd’s trademark symbols is;

It would serve everyone well to “Think Like a Genius” rather than think selfishly and try to take advantage of others.

http://www.thinklikeagenius.com/

My wife and I met Todd three years ago through an introduction from my son Brad (both MIT graduates). Since then Todd and I have been in constant communication via Skype. Last week was special.

Thanks, Todd.

Nextera Healthcare

My next visit was to Nextera Healthcare. Nextera Healthcare is a new model for delivering healthcare. It follows many of the principles embodied in my ideal medical savings account model. It delivers compassionate care at an affordable cost.

Nextera Healthcare combines the compassionate practice of medicine with advanced information technology. My impression is that the founders have fire in their belly for delivering the best medical care for their patients.

I will explain more about Nextera Healthcare in the near future.

The reason I am so high on Nextera Healthcare is that it closely fits a model of healthcare delivery that I believe will work. It will increase the quality of medical care and decrease the cost of healthcare.

Nextera Healthcare has the potential to permit the patient to be responsible for managing their health and their healthcare dollars.

Nextera Healthcare has the potential to reduce healthcare cost to individuals, employer sponsored self insured plans, associations and even the government while permitting consumers to make their own healthcare decisions.

http://www.nexterahealthcare.com/

TechStars

Next I stopped in at the TechStars fancy new dungeon. TechStars was co-founded by my son Brad Feld and David Cohen in Boulder, Colorado in 2007. It has been a very successful start up accelerator.

TechStars has expanded to Boston, New York, Seattle, and San Antonio. TechStars also has a number of affiliates in many cities in the U.S. and throughout the world.

Bloomberg TV has a special about TechStars concepts in 2011. TechStars business model is compelling to me.

I show up at TechStars Boulder’s office every year with permission from Brad and David. The goal is see if the 10 selected companies can explain their company’s business model to me is a way that I can understand.

It is a fascinating experience for me to see how these start-up companies hone their product and their story for Demo Day. Each company is mentored for three months to develop their model and hone their presentation.

On Demo Day Brad and David invite venture capitalist from all over the country to listen to these technology start-ups’ story and have the opportunity to invest in them.

The success rate for investment has been very high each year and at every site.

Last Thursday was the second day of the new session in Boulder. It was the first Demo Day practice session.

The first practice sessions blew my mind. I think the kids are getting smarter, more articulate and more creative each year. Someone told me it was harder to get into TechStars than it was to get into Harvard Business School.

GoldLab’s 3^rd Annual Symposium “Time: Tempus Fugit”

The purpose of the trip was to attended GoldLab’s 3^rd Annual Symposium “Time: Tempus Fugit” at the Colorado University as an invited guest.

Dr. Larry Gold is a legendary Biotechnology guru. His mission for these Symposia is to synthesize the confluence of science and humanity. His goal is to stimulate the thinking of bench scientists, practicing physicians and social scientists to understand progress and thinking in each discipline.

Once the participants are stimulated they are encouraged to focus on actionable solutions to the complex problems society faces through each discipline’s lens.

“This was a symposium that truly, truly, truly engaged all four organs of the participants — the head, the heart, the gut and the hoo-ha organ (ah-ha) organ. Larry Gold’s Symposium “Time: Tempus Fugit” did so it in grand style.’

It was certainly an invigorating weekend for me. The levels of intellect and the abilities to “Think Like a Genius” are very high.

I am certain the younger generation is not going to let President Obama get away with his “Obamacare” and other government controlling baloney he is pushing.

The challenge is going to be how to get their attention now and not later when the disintermediating task will be much harder.

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

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Health Policy Wonks Confused By Physicians Resistance To Adopting Electronic Medical Records (EMRs).

April 24, 2012

inEMR, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

Electronic Medical Records (EMRs) for physicians’ offices and hospital systems could be great for patients’ care and physicians’ education. Remember, patients and physicians are the primary stakeholders in the healthcare system.

If the deployment of EMRs were directed toward the benefit of patients and physicians, they would be more readily adopted. If they were used to teach physicians how to be better doctors and patients to be more educated about their disease physicians would accept EMR’s more readily.

Instead, the fully functional EMR is designed to be punitive to physicians and patients.

President Obama’s motives are obvious to me. He wants to have total control over the healthcare system. Obamacare will be punitive to physicians, hospital systems and patients when fully implemented. The fully functional EMR will be a principle tool.

The government has tried to spin the news about EMR adoption.

“The most recent CDC data would seem encouraging for EMR adoption. It claims EMR use has finally been adopted by 50% of physicians and hospital systems.”

Actually less than 11% of physicians and hospital systems have adopted fully functional EMRs. The fully functional EMR is so vital to President Obama and his Healthcare Reform Act and government control over the healthcare system.

If the VA systems’ EMR and the Kaiser systems’ EMR were excluded, the percentage is lower than 11%. The administrations of the VA system and the Kaiser system have full control over how medical care is delivered in their system.

Their computer system’s purpose is to direct physicians’ care and tell them what they can and cannot do.

A “fully functional EMRs mean the payers’ (government or healthcare insurance company) can have full control over the physician’s work-flow. A fully functional EMR along with 68,000 ICD-10 codes (vs. 18,000 codes in ICD-9) and adoption of the 5010 billing system would put the government in full control of patient care.

I do not think physicians and hospital systems have fully thought out President Obama’s fully functional EMR.

They know from their installation of non-functional EMRs that EMRs are disruptive to workflow at first. They know EMRs do not increase their quality of care and have not decreased the cost of their care.

A major reason for non-adoption is physicians and hospital systems cannot afford the $60,000 per physician for a fully functional EMR plus the annual maintenance and services fees.

The government is using a carrot and stick to get physicians to adopt the fully functioning EMR.

The stick is the threat of decreasing physician reimbursement if they do not adopt the EMR.

“Important! For 2015 and later, Medicare eligible professionals, eligible hospitals, and CAHs that do not successfully demonstrate meaningful use will have a payment adjustment in their Medicare reimbursement.”

The carrot is President Obama’s $19 billion dollar meaningful use incentive program. His meaningful use incentive program will not come close to paying for a functioning EMR.

“Eligible professionals can receive up to $44,000 over five years under the Medicare EHR Incentive Program. There's an additional incentive for eligible professionals who provide services in a Health Professional Shortage Area (HSPA).

Eighty-eight hundred dollars a year for 5 years will not hack it when you have to pay at least $60,000 upfront. The only way it will work is if the government had the ability to take away a physician’s license to practice medicine if they did not comply with the government’s wishes.

President Obama included funding for this program in his economic stimulus package (trick play) and not toward the cost of Obamacare.

Why? If deployed the meaningful use incentive program is a key element in its ability to control physicians’ behavior and judgment. It will restrict also patients’ access to care.

Jonathan Bush, the Founder-CEO of AthenaHealth (a major EMR supplier) said,

“It’s healthcare information technology’s version of cash-for-clunkers,” and because it is actually all about control.”

“The goal of EMRs is to wrestle control of healthcare away from the doctor-patient relationship into the hands of third parties who can then implement their policies by simply removing a button or an option in the EMR.”

If a treatment option is not available in the computer program physicians can’t select it. If the appeal process is difficult and time consuming the tendency for physicians is to not fight the system.

Patients will only be able to get the healthcare that they “qualify” for according to a bureaucracy and a non-elected committee. (IPAB)

Physicians will become the instrument of government rationing of care by the use of a fully functioning EMR.

It will eliminate physicians’ need to think. It will destroy the physician patient relationship. It will increase the cost of running the practice and in turn the cost of medical care.

The ideal fully functioning EMR should be provided free to physicians and hospital systems. The software should be cloud based with physicians having the option to own the data or keep it stored privately in their offices.

It should be a teaching tool for physicians and not a tool that threatens punitive actions if physicians do not get the coding right.

Most physicians might not have consciously thought out the threat to their clinical judgment and the physician patient relationships. They nevertheless subconsciously feel something is wrong.

Once President Obama understands this reasoning he might understand the resistance of the medical community.

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

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Chronic Disease Management And Education As An Extension of Physicians’ Care.

March 11, 2012

inChronic Disese Management, Consumer Driven Health Care

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Stanley Feld M.D.,FACP,MACE

All the Spokes in my Future State healthcare business model should be attended to simultaneously to be effective.

My vision ignores the barriers of the journey to implementing the changes in this discussion. There will be many barriers. Legacy vested interests find it difficult to see a better way when those interests are struggling to survive in the present system.

The healthcare system must be consumer driven. Consumers must be put in control of their healthcare dollars. The other stakeholders will then be forced to cater to the consumer.

When this happens all the stakeholders’ vested interests will become aligned. It will result in a decrease in healthcare costs and an increase in stakeholders’ satisfaction.

Patients will accept responsibility for the management of their health. Physicians will become more efficient in their delivery of care..

The music industry fought Apple after ITunes dis-intermediated its legacy business model only to find its profit increased.

Consumers must have a way to obtain adequate chronic disease management education. They must have transparent healthcare costs and understand treatment choices. Physicians must be actively involved in their patients’ education.

Chronic disease management education must be an extension of the physicians’ care. It is part of patients’ medical care. Physicians must be motivated to provide this care.

Effective chronic disease management is dependent on patients managing their chronic disease. Patients will take control only after appropriate incentives and educational methods are in place.

The goal is to decrease the onset of complications of a chronic disease. Patients can control their disease and decrease the occurrence of chronic complications. Eighty percent of the cost of medical care is spent on treating these complications.

Physicians must teach patients to become the professor of their chronic disease. The educational vehicle must be available 24/7 for patients to be able to review concepts they did not understand completely.

Physicians must have knowledge of current evidence based medical care to teach patients properly.

Much of the infrastructure is in place. It tends to be provided by secondary stakeholder and undermines the patient physician relationship. The infrastructure is not utilized properly.

Patients need to be responsible for controlling their disease. Chronic disease management is not an entitlement. It is a patient responsibility.

Patients are dependent of the government or the healthcare insurance industry to pay their bills. They have first dollar healthcare coverage

My ideal medical saving account would solve this issue. It would probably cost the government and the healthcare insurance industry less if they provided patients with $7,500 in a trust fund, provided the incentives for keeping money not spent and provided first dollar coverage after the patient spends $7,500 dollars.

Patients will then be converted to Prosumers (Productive consumers) and become intelligent consumers of healthcare.

Consumers would then encourage or force their physicians to provide appropriate chronic disease management education.

The formation of social networking on multiple levels could enable physicians to provide this education inexpensively and effectively.

For example, all of a physician’s diabetics patients can be members of his social network for diabetics. The information to learn about diabetes can be provided by his social network. Testing of patients’ understanding of core principles of diabetes can be done with direct feedback to the physician. This would provide the physician with insight to emphasize topics the patient did not understand.

The core information could also default to a more detailed explanation of the topics misunderstood.

It could be done for many chronic diseases such as asthma, COPD, heart disease, GI diseases, and joint diseases.

This education would promote the physician patient relationship. It would demonstrate than their physicians care about their care.

If there is a contradiction in the education between the physician’s thinking and the core information, a separate social network connected to the core information for physicians only can serve as a platform for debate between physicians. Continuing medical education could even be provided to give physician incentive to participate.

There are many innovative mechanisms to use to promote the patient-physician relationship, educate patients to be professors of their disease, and to be responsible for their own disease management.

The utilization of information technology through social networking will repair the healthcare system. It will enable access to education and affordable care.

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

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Healthcare’s Impending Software Revolution

January 11, 2012

inInformation Technology in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

It is clear to me why the healthcare industry has not experienced the same transformation resulting from software innovation that the publishing industry, the music industry and the movie industry have experienced.

After practicing Clinical Endocrinology for 30 years as the founding partner of Endocrine Associates of Dallas P.A. and as President of the American Association of Clinical Endocrinologists, I believe I understand the reasons the healthcare industry has not be able to break through and enjoy the economies of scale offered by the software revolution.

I have formed these opinions by dealing with local and national hospital administrators, healthcare insurance executives, pharmaceutical executives, healthcare policy wonks and government bureaucrats.

Most of these executives are focused on the wrong customer. Most are too busy trying to solidify their perceived position of power in the healthcare system.

Those executives who understand who the customer is have kept quiet in order to maintain or advance their position in various organizations.

The result is software innovators have been chasing the wrong customer. The result has been greater dysfunction in the healthcare system.

There are also many healthcare system issues making it very difficult to stay focused on the main problem.

I have been fascinated by my son Brad Feld’s insight into the software industry. His tutoring has helped me learn how to critically think about software development and its transformational potential.

My brother, Charlie Feld, has also helped me through his insight into pattern recognition and the use of information technology to solve the problems of various industries.

I have followed the progress of medical software innovation for the last three decades. I am still far from expert but believe I have a better grasp on the problem than most.

I have a good feel for the potential offered by this software revolution for the practice of medicine and how to use it.

If the software industry understood the physician mentality and understood the real customer, the needed breakthrough could occur.

The result would be a large decrease in the cost of healthcare.

Waste, abuse and overuse would be decreased and the therapeutic effect of the patient physician relationship would be restored.

I believe the medical software is available right now. It has to be manipulated and synthesized as Steve Jobs, Jeff Bezos and Mark Zuckerberg have done in their respective software areas.

Brad is not interested in healthcare system software innovation. He dealt with physicians and dentists when he ran Feld Technologies in 1985 while a student at MIT.

He built an interoffice and intra-office network for my practice Endocrine Associates of Dallas P.A. in 1985. He hired MIT students to write software with him and Dave Jilk.

The network these kids built was the sturdiest Medical Systems network in Dallas. The network lasted from 1985 until 2002. There are still remnants of this software in the practice today.

When he finished my software project he pledged to himself he would never deal with physicians again. He concluded that they are all a pain.

Not true. Physicians know what they want and need. They have an awesome responsibility for their patients’ lives and privacy.

Secondary stakeholders have frequently taken advantage of the medical profession and its intellectual property. Physician mistrust of secondary stakeholders is monumental.

Much of the “data collected” from information systems has been used against them even if the data is incorrect or incorrectly interpreted.

Healthcare policy has been formulated on inaccurate data and inaccurate conclusions.

These conclusions have been used to devalue physicians and to destroy the patient physician relationship.

Healthcare software companies are paid by secondary stakeholder to create innovative software. The software companies do not realize that the real customers are patients and physicians. These companies do not understand why they cannot get patients and physicians to cooperate.

When data collected is wrong, incomplete or misunderstood physicians protest. They are ignored. The typical response is that this is the only data available.

Healthcare policy should not be formulated on the bases of false data.

Is it any wonder that physicians are not interested in cooperating with the powers that be in the healthcare system’s use of inaccurate data?

The medical transaction must be between the patients and physicians. All of the secondary stakeholders have jumped into the center of this transaction to control the healthcare system. The secondary stakeholders only add value at the edges of the patient physician transaction.

Our health is our most precious asset. Americans are willing to pay as much as necessary for medical care. They want everything done especially if they are not responsible for paying for it.

If physicians do not think something should be done they can get sued. The knee jerk reaction is to do everything.

Physicians only receive between 5-10% of the healthcare dollars.

Where is the money going? Secondary stakeholders are ripping off the healthcare system as they undermine and undervalue the patient physician relationship.

Third parties have taken control of the healthcare system. They have assumed responsibility for the healthcare of patients. They are also in the process of dictating access to care. The present increased healthcare costs are unsustainable.

All the secondary stakeholders are like a giant hairball destroying the viability of patient physician relationships.

Innovative software used properly can disassemble the elements of the hairball and drive them to the edges of the healthcare system where they belong.

Proper software innovation can accomplish the goal of decreasing costs and increasing the quality of care by restoring the patient physician relationship.

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

Please send the blog to a friend

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Stanley Feld M.D., FACP,MACE

TechStars

GoldLab’s 3rd Annual Symposium “Time: Tempus Fugit”

GoldLab’s 3^rd Annual Symposium “Time: Tempus Fugit”