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The Role Of Government In Healthcare

 

Stanley Feld M.D.,FACP,MACE

I believe in the power of the free market if the rules are fair to all.  Logic and common sense should determine healthcare policy. I am suspicious of the validity of pilot studies designed to test healthcare policy initiatives. The studies usually are defective in their design. 

The rules of the free market in healthcare should be in favor of the consumer driven healthcare model . Physicians will listen to patients if the patients control the healthcare dollar. The primary stakeholders (patients) should own their healthcare dollar and their employer should continue to pay for the healthcare benefit. The healthcare insurance industry should not be in control of the healthcare dollar.

The proposed healthcare reforms of both presidential candidates cannot work because the healthcare insurance industry  controls the healthcare dollar and therefore the healthcare system.

Neither Presidential candidate has a chance at constructive healthcare reform.

In order for America’s economy to grow and prosper, America must promote the growth of a strong working middle class. A nation without a strong middle class having an opportunity to enjoy upward mobility is a nation that is stagnating and on the way to bankruptcy. The middle class has experienced a lack of growth lately because they have been disadvantaged to the benefit of the wealthy. They have been disadvantaged in healthcare, housing, finance, education and other social systems that have been declared broken.  Our artificial free market economies have rules that promotes the growth of narrow vested interests and stimulates greed.

The middle class must have the opportunity be educated. It must be provided with incentives to be innovative. It must have affordable healthcare and housing. These incentives must be available for all Americans. Education and health are our most valuable assets. America must develop a cultural atmosphere to encouraged citizens to practice civic and self responsibility. The environment must be free of pollution to protect citizens from disease and illness. The air that we breathe and the food that we eat must not be influenced by the greed of special vested interests.

In recent weeks we have experienced bailout proposals for our financial system.  The proposal initially ignored the protection of the middle class. In my view the first draft of the Bush bailout proposal was an insult to America’s intelligence. It favored special vested interests and furthered citizen mistrust of the federal government. The terms of the initial bailout were for the protection of Wall Street and not the protection of Main Street. The protection of Wall Street was supposed to trickle down to Main Street. The final agreement will hopefully have protections for Main Street  as well as Wall Street with no pork. These dual protections should have been embodied in the initial proposal. We should not reward corporate executives’ failure.

I have written to both John McCain and Barack Obama about my thoughts on Repairing the Healthcare System. All I have gotten back is pleas from both campaigns requesting donations. My input has as many other citizens’ input been ignored by both campaigns.

The media has characterized the presidential campaign and debates as a boxing match. The media count who outscored who on points. I hear platitudes but no specific proposals on how to protect the middle class.

I hear John McCain say he is going to fight and fight hard for the middle class as he has done for 28 years. The few specific proposals he has presented protect wealthy vested interests.

Barack Obama says he is going to look after the middle class at the expense of the vested interested  high wage earners and investors. He does not tell us how he is going to go about it.

John McCain says he is opposed to regulations yet deregulation has gotten us in the position we are in. He reversed himself at twhen it was obvious our economy was about to collapse. A few days earlier he said our economy was basically sound. He did not project the perception of knowledge of economics to America. 

It sounds like Barack Obama wants to fix everything with regulations.  We have seen historically that regulating everything does not work. A simple example is the failure and perverse effects of price controls. A true market economy works if the correct rules are in place for the benefit of all. I am against government regulations that are oppressive to incentives and innovation.

Our legal system is also broken. It is not easy to enforce the law. Corporations, organizations, and citizens get around the law if they can afford the legal expense at the expense of the middle class. There is little penalty for misrepresentation. Congress is controlled by lobbying groups. Who are the peoples’ lobbying groups? The congress should be the lobbying group for the all citizens. Instead, Congress is lobbied and influenced by vested interests.

Government should make and enforce appropriate and fair rules. It should get out of the way and let consumers drive the system. Americans are smart enough to purchase the best products for themselves given the appropriate information. 

I have criticized the healthcare insurance industry. John McCain wants to give the control of the institutions of Medicare and Medicaid to the healthcare insurance industry in order to eliminate this entitlement. The healthcare insurance industry does nothing for the middle class and small businesses and everything for its own bottom line. Obscene healthcare insurance executives’ salaries and corrupt payoffs occur at the expense of ordinary people.

Once again, it is healthcare insurance contract time for hospital systems and employers paying for healthcare insurance. Again, there have been examples of difficulty between the healthcare insurance industry, hospitals physicians and employers. Once again Unitedhealthcare  is using the same tactics they used in the Denver market last year. Neither Congress nor the State Insurance Boards have taken action to protect the middle class.

 

The headline in the Kansas City Star reported that

“St. Luke’s Hospital system in Kansas City and UnitedHealthcare go their separate ways as the price of healthcare insurance goes up and the coverage goes down.”

“In July, after a year and a half of trying to come to agreement, the nonprofit St. Luke’s — which encompasses 11 hospitals and several physician practices in the region — said it was done negotiating and would stop accepting United benefits after Feb. 28, 2009”

“St. Luke’s perspective, negotiations had been going on for a year and a half without significant progress. It announced a firm split with United in July so patients and businesses would have ample time to find new coverage if they wanted to stay in St. Luke’s network

Bonner, who is senior vice president of business development for St. Luke’s, said the increase the hospital asked for would have brought reimbursement rates from United in line with other insurance carriers.”

I suspect both are wrong. I suspect the negotiating tactic UnitedHealthcare uses is the same used in Denver. They yield when they start losing subscribers.

United, which has 504,000 “members” in northwest Missouri and all of Kansas, would continue negotiating if St. Luke’s came back to the table, Tracy said, but he admitted reconciliation is highly unlikely.”

“United’s insurance-carrier competitors said they are seeing a windfall. Since St. Luke’s announcement this summer, Humana has been writing about 40 policies a month for companies leaving United, said David Miller, president of Humana in Kansas and Missouri.

The losers are the middle class who would buy insurance if they could afford the premiums. The State Insurance boards must develop and enforce real  transparency rules for the healthcare insurance industry. If the rules are not followed the healthcare insurance company should lose its license to sell insurance in the state.  The rules must be made and enforced by the insurance board and state hospital boards before negotiation comes to this point. Presently, there is no simple mechanism for adjudications. State boards of insurance and hospital systems’ mandates must have effective consumer protection.

Patients are not included in the free market determination of price. They are the victims of a market price controlled by the healthcare insurance industry (secondary stakeholders).

Permalink:

Is Barack Obama Any Different Than Other Politicians? Part 1

 

Stanley Feld M.D.,FACP, MACE

No! He is not.

In the weeks to come I am going to point out the deficiencies in both
candidates thinking about healthcare. It is clear that neither has received
input from practicing physicians. Please click on the highlighted phrases for
more details on each subject.  

I will start with Barack Obama because the Democratic convention is first.

I am astonished by the lack of scholarship and thoughtfulness on the part of
either Presidential candidate. The issues have been reduced to sound bites. The
pronouncements are picture words that generate false hope. Neither political
party is confronting the real issues and the necessary repairs. If any of their
proposals are passed into law it will simply be a patch. In the process the
proposals will destroy the vital and good elements of our entire healthcare
system.

Both the Medicare and the Private Healthcare Insurance system have failed.
They have neither decreased costs nor improved medical outcomes. They have been
both economic and medical care disasters. The United States can no longer afford
the present course. Academically the reasons for the disaster are clear.

1. Price
controls do not work!

2. Price
transparency is essential to create a free market economy!

3. There are too
many monetary incentives in the healthcare system to maintain an inefficient
system for all stakeholders
. (primary and secondary stakeholders)

4. Punitive
measures
directed at the weakest stakeholders (primary stakeholders) to
correct inefficiencies do not work and lead to greater inefficiencies.

5. The healthcare system must be constructed and run
for the benefit of the primary stakeholders
.

6. The
primary stakeholders must drive the healthcare system for their medical and
financial benefit. (Consumer driven healthcare)
.

7. Secondary
stakeholders should be facilitators for the primary stakeholders.
(patients).

8. Profit
derived from the system should be the result of efficiency and not the result of
political influence to protect secondary stakeholder vested interests
.

9. Consumers
as the primary stakeholders must be responsible for their health, and medical
care.
Appropriate government subsidy must be provided, if warranted.

10. The
government must set up rules to protect the consumer from the healthcare
insurance industry, hospital systems, drug companies and physicians

10. Actions should be taken by government across all areas of society (War
on Obesity
) to educate
consumers to decrease the incidence of chronic disease
.

The consumer must fix the healthcare system. None of the other stakeholders
has been successful. In fact, in the last 30 years the healthcare system has
been made worse by the insurance industry, government and policy makers.

All their systemic changes have failed because they have, for the most part,
been to the advantage of the facilitator stakeholders and not the primary
stakeholder, the patient. Facilitator stakeholders’ profits have soared,
insurance premiums have skyrocketed while access to care has plummeted.
Patients, physicians, hospital systems and the government have adjusted to
changes to the detriment of patients. The facilitator stakeholder adjustments
have resulted in further dysfunction in the healthcare system.

Presently, employers and all the stakeholders except for the insurance
industry are in pain. However, the stakeholder most at risk is the consumer.
Only 20% of the population is sick and interacts with the healthcare system at
any moment in time. 80% of the population does not interact with the healthcare
system. They think everything is fine. However, the entire populations’ health
and well being is at risk! If we stay on the present course, I predict the
system will break down completely. Access to care will be limited and rationed.
Access to life saving medical advances will vanish. Future advances in medical
care will disappear.

The goal of the healthcare system should be;

1. To provide patients

a. with access to good quality care
b. with
education to judge quality care

c. with incentives
to be motivated to be responsible for their medical care

d. with the freedom
to judge and select the physician of their choice

e. with the information
from their healthcare providers that is truly portable

f. with choice
of healthcare insurance vehicles that are affordable

g. with education
vehicles to become “Professors of their Chronic Disease” and be truly
responsible for their care

h. effective
and affordable drug coverage designed to enhance patient compliance with
treatment

2. To provide physicians

a. with a precise definition of the meaning of quality care for various
chronic diseases
b. with incentives to provide quality care for both acute
and chronic disease
c. with the educational opportunity and motivation to
improve the quality of care they deliver.
d. with an actual vehicle developed
by their peers to prove that they are delivering quality care.
e. with a
mechanism for delivering care at a transparent price
f. with the ability to
effectively
communicate with patients electronically
.
g. with the
ability to improve the patient physician relationships

h. with the
ability to enable patients to practice effective self-management techniques to
prevent costly complications of chronic disease
i. with the ability to
improve communication and access to patient information so as to reduce the cost
of redundant evaluation and treatment

3. To decrease the overall cost of the system

4. To eliminate the 47 million uninsured

5. To align stakeholders’ incentives

6. To provide satisfactory profit margins for hospitals, pharmaceutical
companies, insurance companies, and physicians.

These are ambitious goals. Processes must be changed in order for the United
States to deliver effective health care to the population now and in the future.

Consumers can not leave it up to the facilitator stakeholders and policy
wonks to fix the system. Their policies have distorted the healthcare system in
the past to serve their vested interests. Patients today and in the future must
drive the process of change through appropriate demands on our politicians in
order to repair our healthcare system and install an effective consumer driven
healthcare system.