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What Are The Defective Assumptions Made For ACO Implementation?

September 14, 2011

inDefective scientific studies, Disinformation and the healthcare system, EMR, Innovations in Healthcare, Medicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

It is going to be very difficult for physicians and hospital systems to develop integrated medical delivery systems in the present time frame.

Dr. Don Berwick and his associates have a naïve view of the ability of organizations to form and execute Accountable Care Organizations (ACOs). ACOs fit well into President Obama’s worldview of government controlling our healthcare system.

There are two problems:

The government is broke. It does not have the money to pay for a government takeover of the healthcare system.
New systems need participant cooperation to succeed.

President Obama and Dr. Don Berwick have overestimated the abilities of the healthcare system to respond to their hubristic assumptions.

“The ACO program is based on the hubristic assumption that the federal government can design the best organizational structure for the delivery of care, foster its development, and control its operation for the entire country."

Below are some of the defective assumptions made to implement ACOs.

Physicians and hospitals have little experience or control in managing risk. The experience with HMO’s in the 1980’s proved their inability to manage risk. Most physicians and hospital systems are not very interested in assuming this risk again. The risk of ACOs has been sugar coated by the administration.

Patients are the only stakeholders who can control their healthcare risk. All health policy wonks ignore the role of the patients in controlling and managing their healthcare risk.

Dr. Berwick thinks hospitals and physicians will be motivated to control patients’ healthcare risk with ACOs. He is wrong. I predict participation will be minimal. Those who participate in the ACO program will fail.

Healthcare policy should focus on how policy can provide incentives for patients to be motivated to control their own healthcare risk.

The implementation of electronic health records will be more challenging than President Obama and Dr. Berwick believe. The financial support from President Obama’s stimulus package is going to turn out to be a waste of money. The EMR’s cost more than the government subsidy.

EMR installation disrupts medical practices for at least six months. The incompatibility of information systems can only be overcome at great expense to both hospital and physician.

President Obama should be spending the stimulus money on the Ideal EMR. It would cost physicians and hospitals nothing. They would pay by the click. It would unify all the information systems nationwide. The Idea EMR would remove many of the barriers to achieving the goal of integrating medical data.

Data measurement imposes another difficult barrier to implementation of ACOs. I have wondered what date U.S. News and World Report used to name Parkland Memorial Hospital among the 100 best hospitals in the nation while Center for Medicare and Medicaid Services (CMS) used other data to disqualify Parkland Memorial Hospital from collecting Medicare and Medicaid reimbursement. I believe Parkland is a great hospital with a great CEO, Dr. Ron Anderson. Someone’s data is wrong.

Can physicians and hospital systems trust CMS to measure their performance and pay for performance based on the data used?

The challenge of collecting, analyzing, and reporting performance data will be the ACOs responsibility. CMS will evaluate the data collected and determine payment for performance.

Most ACOs will have difficulty developing the data and reporting capability with present EMR capabilities.

A goal of ACOs will be to implement standardized care management protocols. If successful it will commoditize medical practice. It will eliminate physicians’ judgment. It will destroy the patient-physician relationship.

I believe all physicians should practice evident based medicine (EBM). In the absence of tort reform physicians cannot avoid the practice of defensive medicine.

ACOs are not designed to align the stakeholders’ vested interests. I can visualize hospitals fighting with their physicians over money distribution and medical care decisions. Payments for medical care are going to be bundled. In order to save money and receive the shared saving bonus, patients may have medical care rationed.

ACOs are Primary Care Physician(PCP) centric. There is no requirement for specialists to limit their activity to a single ACO. Specialists will be critical to the effective performance of ACOs in order to qualify for the shared savings bonus.

Who will decide which specialist a PCP will refer patients to? There will be fights about fees to pay specialists. Obamacare’s ACOs make no attempt to align providers’ vested interests. It leaves it up to the providers. Since hospital administrators will control the money fighting is inevitable.

Patients must be the leader of the healthcare team. Obamacare and ACOs make no attempt to put patients in a responsible, leadership position. Patients and family members must participate in managing multiple, complex chronic conditions. Patients need to be taught to manage and take responsibility for their health and health care. They need to be taught to engage their family and have the family participate in medical decision-making.

Obamacare does not outline systems of care for chronic diseases for the potential ACO that might not have experience in team management.

ACOs may not have the necessary management and implementation skills required to improve care delivered to patients. Improvement in medical care will require team management of chronic disease. Patients must be the leader of their team. This will require aligning shared interests and rewards among the different providers. This is where physicians and hospitals will lock horns.

New regulations have to be coordinated with the Stark anti- kickback legislation. It will require costs that have nothing to do with direct patient care. Compliance with new regulatory requirements will require unprecedented and unmanageable levels of transparency and cooperation among hospital systems, physician organizations, and the payer.

There is too much emphasis on central data collection and managing the data. Much of medical management depends upon on the spot clinical judgment.

Learning systems must be built to have rapid cycle improvement in quality care. I suspect many physicians and hospital administrators do not know the importance of learning systems.

Developing cooperation among all the stakeholders to develop preventive medicine systems and systems of care for chronic disease does not develop overnight, especially when payment for those services are vague.

These are just a few of the defective assumptions made by President Obama and Dr. Don Berwick that will prevent ACOs’ success.

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

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Obamacare’s Magic Bullet (Accountable Care Organizations) Is Not On Target!

September 11, 2011

inDisinformation and the healthcare system, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Quality medical care measures, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACP

As we get closer to January 2012, the originally scheduled implementation date for Accountable Care Organizations (ACOs), the time has come to reexamine the showpiece of President Obama’s Patient Protection and Affordable Care Act (PPACA) of 2010.

The final rules for ACO’s are now scheduled for release on January 2012. The implementation was originally scheduled for January 2012. As the original rules are being studied and interpreted the program for ACOs implementation became more confusing. Dr. Don Berwick (CMS Director) has refused to discuss the final rules until they have been published in the Federal Register.

The federal government has big-footed health system reform. Although there is no one right way to organize care, the federal government (Dr. Don Berwick and President Obama) thinks it has found one—and exerts top-down, bureaucratic control through PPACA to implement it.”

ACOs are supposed to be organizations that improve coordinated care. If an ACO decreases the cost of care the ACO will share the savings with the government with a formula for sharing to be determined by the government. The formula is complicated.

ACOs will be required to accept responsibility for the cost and quality of care for defined patient populations. The government will define the population not the ACO or the patient. The goal is to prevent the ACOs ability to cherry pick a healthy population.

ACOs will have to meet targets defined by their previous 3 years of Medicare Part A and Part B experience in order to share savings.

Here is the first “Catch 22.”

If an organization such as Mayo Clinic did a great job with its integrated system in the past three years it would have to do better in the next year to receive any savings. Let us say it is not possible to do better because they are so great. The only risk benefit reward for Mayo Clinic is a penalty.

If an organization did poorly in the last three years its upside potential is great if it performs well.

Qualified ACOs can choose between 2 risk-benefit programs. The first involves upside potential from shared savings in the first 2 years, adding downside risk only in the third year of operation.

In the second risk-benefit program, ACOs share a greater percentage of the savings with the government but are responsible for downside risk from the onset of the program.

ACOs’ will be required to conduct quality improvement initiatives, care coordination, measure performance and develop infrastructure to meet government requirements to qualify to continue to be an ACO. The startup costs for a hospital system have been estimated to be $2 million to $12 million dollars.

Hospitals and physician organizations have had adversarial relationships in the past that have to be overcome. In order for ACOs to have a chance to work, cooperative relationships must be developed between the hospital and physicians. Hospitals will control the money. They must distribute it fairly to physicians. Past behavior is a predictor of future behavior. Hospitals have not had a successful record in the past of being fair to physicians.

Systems of continuing quality improvement will have to be developed and implemented. Both physicians and hospitals have not had to deal with these systems in the past. In is not part of the medical care systems’ culture. They will have to learn to adapt too quickly in Dr. Berwick’s timeline.

It will require a fundamental change in the U.S. healthcare system. It is not a bad thing to have systems of continual quality improvement. In my view the medical care system has to grow into it under steady but friendly pressure. The culture cannot be changed overnight. A consumer driven healthcare system can make it happen quickly. A government driven system will not be able to do it.

President Obama has stated over and over again that he is all ears for new ideas. Yet he does not listen to new ideas.

It is an error to try to create a HMO on steroids. HMOs failed once and they will fail again. Many medical outcomes are unpredictable. Physicians and hospitals are not insurance companies. President Obama is trying to shift the risk to physicians and hospitals. Physicians and hospitals are aware of the difficulty. Many are terrified by the potential penalty.

A recent report listed the 54 worse hospitals in the country as far as readmission rates after discharge in two out of three disease categories. President Obama has recognized some of these worst performing hospitals as having the best-integrated systems.

Among the hospital systems listed are the Cleveland Clinic, Beth Israel Deaconess Medical Center Boston, Barnes Jewish Hospital in St. Louis, MO, Northwestern Memorial in Chicago, University of Massachusetts Memorial Medical Center in Worcester, Henry Ford Hospital in Detroit, Johns Hopkins Bayview Medical Center in Baltimore and the University of Maryland Medical Center in Baltimore.

President Obama is going to impose a penalty starting at 1% for Medicare DRG discharges and readmissions after Oct. 1, 2012, increasing to 2% after Oct. 1, 2013 and to 3% after Oct. 1, 2014.

President Obama must be reminded that it is difficult to get cooperation from organizations when they are threated by penalty. The development of complicated regulations that cannot be followed and then granting waivers to some and not others intensifies the mistrust and uncertainty felt by the medical community.

Creating new programs must provide adequate incentives not penalties. Penalties do not promote participation by providers.

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

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Nation’s Health Care Bill Predicted To Double By 2020

August 17, 2011

inHealthcare Insurance Industry, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Massachusetts has experienced a sixty percent increase in healthcare costs since “Romneycare” was enacted in 2006. The total cost of medical care in 2005 was $350,100,000. In 2009 the total cost of care had risen to $587,900,000. This represents an annual growth rate of 13.7% per year.

The Medicare Office of the Actuary reported it expects healthcare costs to increase from the $2.6 trillion dollars in 2011 to $4.6 trillion dollars by 2020 under President Obama’s Healthcare Reform Act.

“The Medicare Office of the Actuary estimated that health spending will grow by an average of 5.8 percent a year through 2020, compared to 5.7 percent without the health care overhaul. With that growth, the nation is expected to spend $4.6 trillion on health care in 2020, nearly double the $2.6 trillion spent last year.

I believe the Medicare Office of the Actuary growth rate estimate of healthcare costs is low. Obamacare is about expanding healthcare coverage for the uninsured. It is actually about driving the entire population into a “Public Option” which will be subsidized by the federal government. President Obama’s goal is to have total government control over the healthcare system.

The total rate of growth of healthcare costs will be greater than 5.8% per year. President Obama is not going to be able to decrease costs by insuring at least 30 million more people. Obamacare has done nothing to restrain the healthcare industry’s billing policies. The healthcare industry’s profit will escalate even further as the federal deficit escalates.

President Obama declared that Accountable Care Organizations, Pay4Performance and Electronic Medical Records would reign in costs. I believe this is a pipe dream. These programs are in the developmental stages and have an excellent chance of failing as the entitlement expands.

President Obama has continued to ignore an important healthcare cost generator. Defensive medicine generates between $300 billion and $700 billion dollars a year in costs. Tort Reform if done correctly could decrease the cost of defensive medicine to the healthcare system markedly.

“The federal health law, which will expand coverage to 30 million currently uninsured Americans, will have little effect on the nation's rising health spending in the next decade, a government report said today.’

I hope the American people do not let President Obama trick them again with his demagogary. Last week he told us he was going to decrease the federal deficit by 4 trillion dollars in ten years. It is not true because he is going to increase the federal debt by 9 trillion dollars or 4 trillion less than he had planned. Deficit spending continues unabated.

Everyone has to watch closely. He is bankrupting the country.

White House Deputy Chief of Staff Nancy-Ann DeParle tells us not to worry. "The bottom line from the report is clear: more Americans will get coverage and save money and health expenditure growth will remain virtually the same,"

She stated that the new programs that administration officials said they hope to implement would change the way Medicare and Medicaid pay doctors and hospitals. (ACOs, Pay4Peformance and EMRs). Doctor’s and hospitals are only part of the problem. A bigger part of the problem is the administrative service providers (healthcare insurance industry) expenses, the cost of government bureaucracy, and the increase in defensive medicine

“Meredith Rosenthal, a health economist at Harvard School of Public Health, said it is difficult to predict what impact the health law will have on slowing national health spending. "Many of the components of the law that are intended to control costs are still in draft form,"

The key to President Obama’s deception to the American people is to distract Americans from connecting the dots. Fifty per cent of employers will drop employer sponsored insurance programs and pay the penalty. Employees will buy insurance through the state insurance exchanges. States are refusing to participate in the insurance exchanges. The federal government is picking the ball up for the states and will have total control over the insurance exchanges.

Baby Boomers are joining the Medicare roles in increasing numbers by the minute. The cost of Medicare will escalate. Seniors are not going to be able to find physicians who accept Medicare because President Obama is going to decrease reimbursement by thirty percent January 1, 2012.

President Obama believes physicians are the problem. He refuses to believe the reality of the dysfunctional healthcare system. All the stakeholders are the problem. Some stakeholders donate more to his reelection than others. He has a strong record of playing favoritism to those that support him.

Americans are waking up to his tricks. The healthcare system has to be reformed. He has the wrong approach. I hope the electorate does not fall for his charm again.

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

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Mayo Clinic Rejects Accountable Care Organization(ACO) Provisions

June 15, 2011

inMedicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

The sooner President Obama’s Healthcare Reform Act (Obamacare) is repealed the faster we will be able to get on with healthcare reform that will work for all stakeholders. President Obama was figured that 30 existing and successful integrated medical care organizations would be in the first group of clinics to join and be included in his Accountable Care Organization (ACO) system of care.

ACOs are a critical part of Obamacare’s goal to provide affordable, universal and quality healthcare. ACOs are really HMO’s on steroids. ACOs are supposed to be better versions of HMO’s. The public and physicians despised HMO’s because of its control over patient choice and access to care. President Obama thinks Medicare will save over $500 billion dollars a year with ACOs. Unfortunately for President Obama, neither the CBO nor the Medicare actuaries believe it.

So far at least 4 of President Obama’s premier integrated healthcare organizations have withdrawn from applying for ACO status. The stage 2 ACO regulations produced by CMS and CMS’s chief Dr. Don Berwick make clear President Obama’s intentions to control medical care and shift the risk of care to hospital systems and physicians.

Each organization has withdrawn with a slightly different excuse. It looks are if no one is going to show up at President Obama’s party.

“The Mayo Clinic says it will not be part of a critical piece of national health care reform under the government's proposed rules.”

The Mayo Clinic announced that the proposed regulations “conflict with the way it runs its Medicare operations.” Mayo treats about 400,000 Medicare patients a year. The bottom line is that Mayo figured out that they would assume too much risk, lose too much money and relinquish too much control over its processes to the federal government.

Dr. Douglas Wood, Mayo's chairman of health care policy and research said Mayo "is not going to participate in a Medicare accountable care organization under the circumstances proposed."

Mayo Clinic’s public reasons as expressed by Dr. Wood are;

Mayo does not want to significantly change what it believes is an efficient, patient-friendly program. President Obama has used Mayo’s program as an model.
The gap between Mayo's way of staying accountable and the government's regulations may prove too wide to bridge.

3. Mayo objects to the government's demand that patients be included on oversight boards to judge performance. Mayo doesn't do that now and is not eager to change. Dr. Wood said, "You don't have to have a [patient] on the board to make [treatment] patient-centered,"

4. The Mayo Clinic’s lawyers decided that the antitrust rules that are part of the ACO proposal would be violated. Mayo already provides most of the health care in most of Minnesota's rural counties. Dr. Wood believes it could not operate ACOs in those areas without violating the proposed regulations.

5. The Mayo Clinic objects to the way the government plans to measure effectiveness and quality of medical care. The effectiveness measures proposed by the government include such things as 30-day mortality statistics and the number of diabetes treatments.

The Mayo Clinic believes that the way CMS proposes to measure quality will be ineffective. They will only waste money without improving outcomes.

"They don't get you close to measuring health," Wood maintained. "The simplest measure for consumers is: How effectively did the organization keep me functioning?

6. Mayo Clinic also objects to the CMS’ way of assigning patients to ACOs.

Mayo is confident in its current approach to accountable care. It has asked CMS "to take an entirely different approach to implementation of ACOs in the country." Mayo wants the government to contract directly with groups that are already providing accountable care programs.

"We're not looking to intentionally give [health care reform] a black eye," Wood said. "We're working to implement accountable care."

President Obama’s healthcare team has stated that they are not going to be influenced by Mayo’s practical demands. They will decide on the correct course based on their theoretical ideology.

Elliott Fisher, director of population health and policy at Dartmouth Institute in New Hampshire as spokesman for the administration said,

"Every affected stakeholder said it's not good enough yet," Fisher said. "This is how the process is supposed to work."

Dr. Fisher is statement is meaningless and non-committal.

Michael E. Chernew, PhD is a Professor of Health Care Policy in the Department of Health Care Policy at Harvard Medical School. He is a disciple of Dr. Donald Berwick and a member of the Medicare Payment Advisory Commission (MedPAC), which is an independent agency established to advise the U.S. Congress on issues affecting the Medicare program. He is also a member of the Institute of Medicine’s Committee on Determination of Essential Health Benefits.

He said in response to Mayo’s announcement, "I don't think the success or failure hinges on one participant."

Mayo’s Clinic decision was the correct one. CMS wants to control every aspect of medical practice. It wants to shift the risk of care to the providers and control the criteria to judge providers. It is a no win situation for providers. “Cooperative” providers are finally starting to understand the trap President Obama has set.

The best way to win a war is not to show up.

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

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A More Logical Plan Than “Obamacare”

June 8, 2011

inConsumer Driven Health Care, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

I do not think President Obama understands basic healthcare economics. Patients and physicians will always drive spending for healthcare. The government will not be able to control spending centrally.

Forty to sixty cents of every healthcare dollar is spent on administrative costs. CMS claims that Medicare spends only 2.5% on administrative services. This 2.5% is the cost for CMS to outsource Medicare coverage to the healthcare insurance industry.

The healthcare insurance industry takes 40% to 60% of every healthcare dollar for their administrative fees. The law says they can only take 15% out of every dollar for administrative fees. Eighty five percent of the premium dollar must go to patient care.

The problem is the 85% includes many fees that are, in reality, administrative expenses such as certifying physicians for their plans and insurance sales fees among others. There is a profit margin for each of these “expenses.” President Obama has permitted these administrative fees to be included in the 85% category for direct healthcare costs.

Physicians get 15% and hospitals get 20% of every healthcare dollar. Where does the rest of the money go?

Forty percent gets taken off the top by the healthcare insurance industry. A good place to start is by setting up a system that creates competition among the healthcare insurance companies.

The government always blames physicians for the waste. Physicians and patients drive healthcare expenses. Waste occurs as a result of perverse incentives and middlemen abuse. All the stakeholders are to blame. The healthcare insurance industry generates the most waste. Defensive medicine is the second leading cause of waste. Legislation using common sense could eliminate most of this waste.

"A 2005 report by the National Academy of Engineering and the Institute of Medicine found that 30-40 cents of every dollar spent on health care are spent on costs associated with "overuse, underuse, misuse, duplication, system failures, unnecessary repetition, poor communication, and inefficiency. Medicare is especially vulnerable to waste, fraud and abuse.”

Medicare spending must be decreased. The best way to decrease the spending is to provide incentives for seniors to drive the system rather than the system driving seniors.

“Unfortunately, the debate on Capitol Hill and in the media is too often fueled by partisan fear mongering instead of a thoughtful examination of the facts.”

No amount of price cutting or central-government dictates will mitigate these problems.

A consumer (seniors) driven healthcare system providing incentives for providers and patients is the only way to fix the system.

Accountable Care Organizations (ACOs) are being proposed and organized to harness the spending of the fee for service systems.

ACOs are systems in which doctors and hospitals team up to offer coordinated care. Both are held accountable for cost and quality in a disguised capitation system. “Quality” is not effectively measured.

Hospital systems and physicians have long had an adversarial relationship because hospital systems have leveraged its brick and motor value off the intellectual property and mechanical skills of physicians.

More and more physicians are realizing this fact. Physicians are building their own hospitals and outpatient surgical clinics. Physicians are consciously or unconsciously resistant to hospital systems dividing the money and participating in the reimbursement sharing judgments.

Neither group wants to be at risk for “poor outcomes” that might be the patients’ fault.

The incentives to form ACOs are too weak. The regulations are 400 pages too long and complicated. Physicians do not have the time or money to fully understand the regulations. “Trust me” does not work anymore. The major hospital systems have backed out of forming ACOs under the regulations because they put the hospital system at too great a risk.

Paul Ryan’s plan of “premium support” can potentially encourage formation of Accountable Care Organizations The ACOs have to be attractive enough for patients to choose to join them. Hospital systems would have to be successful in organizing them. Ryan’s plan is a “managed competition model.” The government would make defined contributions for beneficiaries depending on the beneficiaries’ means. The subsidy would be a total subsidy for the poor and a sliding scale subsidy for others.

Beneficiaries would have a choice from a variety of health plans with no discrimination based on health status or wealth. Standard coverage contracts understandable by ordinary people would be required to make comparisons possible. Internet FAQs would be made available.

Competition for consumer (seniors) business would drive health plans to innovate in ways that would cut waste and improve “quality.” The use of well-designed healthcare insurance exchanges would drastically reduce healthcare insurance company marketing costs. The completion by healthcare insurance companies in effective healthcare insurance exchanges could result in healthcare insurance companies not taking 40% off top as they currently do. The system could be set up so that consumers could buy the insurance across state lines.

The Ryan plan does not deal with defensive medicine. States could easily be presented with an ideal tort reform model to adopt or modify. In Texas the model is not ideal but it is effective and would be effective nationally. If a model included a “loser pays” clause it would decrease frivolous law suits and decrease defensive medicine testing dramatically. In most instances physicians do not receive increased compensation for the increase in testing. Therefore the motivation is not testing simply to make more money.

President Obama needs to understand the basics of healthcare economics before he goes on and totally destroys the healthcare system.

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

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Organized Medicine Is Out Of Touch With Practicing Physicians.

May 16, 2011

inMedicine: Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

There is a widespread discrepancy between the opinions of organized medical group leaders in the American Medical Association (AMA), the American Academy of Family Physicians (AAFP), the American College of Physicians (ACP), and practicing physicians. AMA, AAFP, and ACP are part of organized medicine.

These organizations supported the healthcare reform law in 2010 and continue to support the legislation. I believe they have taken this position because they want a seat at the table as implementation of the legislation moves forward. President Obama has not paid attention them so far and there is little evidence that he will in the future.

In March of 2010, Speaker of the House Nancy Pelosi famously said, "We have to pass the [health care] bill so that you can find out what is in it."

Most physicians are starting to realize the implications of President Obama’s Healthcare Reform Act (ACA) (Obamacare). They are terrified about the implications for the practice of medicine.

Organized medicine is still not disenchanted with President Obama’s Healthcare Reform Act. Charles Cutler, MD, chair of the ACP Board of Governors said recently, "The medical community recognizes that so much of the ACA is good."

Dr. Cutler is out of touch with the thinking of the practicing community. It is important for the public to know what practicing physicians are thinking.

In a January 2011 poll of practicing physicians conducted by Thomson/Reuters and HCPlexus. “Seventy-eight percent of physicians said the ACA (Obamacare) would negatively affect their profession, 74% predicted that the law would make physician reimbursement less fair, and 58% believed it would hurt patients care.”

President Obama’s healthcare team does not want to recognize that the shortage of primary care physicians become worse as a result of Obamacare. The Healthcare Reform Act makes no attempt to decrease the present shortage. Sixteen million new enrollees in Medicaid will not be able to find a physician.

A recent membership survey by the Texas Medical Association (TMA) of Texas physicians reports that “59% of Texas physicians have an unfavorable opinion of Obamacare. Texas physicians described their feelings as disappointed (78%), anxious (74%), and confused and angry (62%).

A nationwide survey conducted by The Physicians Foundation last fall produced the same negative results.

Physician disapproval of President Obama’s Healthcare Reform Act is consistent among all medical and surgical specialties. Practicing physicians know it cannot work.

The Thomson/Reuters and HCPlexus survey showed that only 11% of primary care physicians thought Obamacare would have a positive impact on their profession. Only 14% of pediatricians and psychiatrists were optimistic. The optimism for success among cardiologists and surgeons was at 3% and 4%, respectively.

Organized medicine should at least try to hear what practicing physicians thinking.

Forty-eight percent of the general public disapproves of President Obama’s healthcare plan. I believe it will equal the disapproval ratings of physicians once the public experiences the full impact of this terrible law.

President Obama has tried to maintain public support by increasing benefits in the first two years of implementation of Obamacare before the 2012 elections. After 2012 the impact will be felt. It will be too late by then. The infrastructure will be built and money will be wasted. In 2013 and 2014 there will be increased taxes, decreased access to healthcare and decreased choice of care as a result of the Healthcare Reform Act.

President Obama promised a bonus to primary care physicians. The reality is the bonus is insignificant. I suspect with a 29.5% decrease in reimbursement scheduled to go into effect on January 1,2012. It will not only offset the bonus but decrease reimbursement significantly.

President Obama promised organized medicine a “Doc Fix.” Most believe the promise is bogus in light of the budget pressures.

No one is talking about the upcoming debate to make participation in Medicare a condition for renewal of medical licensure. President Obama is going to create a larger physician shortage than already exists with this move.

Accountable Care Organizations(ACOs) introduces another avenue of uncertainty. The process for providers to qualify for ACO status is costly. ACOs are going to increase the cost of healthcare rather than decrease the costs. ACOs will put physicians at risk for patient outcomes. Physicians will be penalized if outcomes are poor. Physicians know that clinical and financial outcomes not only depend on their care of patients but also the patients care of themselves. Few physicians are interested in assuming the patients’ responsibility for this risk. ACOs will fail.

The burden of mandated insurance is a clear attack on the states’ sovereignty and budgets. It is also a clear attack on individuals’ freedom to choose. I believe it is unconstitutional. It will be a few years before the Supreme Court rules on the issue. Mandated insurance only increases the uncertainty and ability to maintaining a medical practice.

Just as the federal government is supposed to be a government by the people for the people and not ignore the will of the people, organized medicine should not ignore the will of its constituents.

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

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How To Win A War; Don’t Show Up

May 4, 2011

inUncategorized

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Stanley Feld M.D.,FACP,MACE

A reader responded to my last blog, Why ACOs Will Fail, with the following comment.

"Stan

Let's keep our objections as simple as possible, so we can explain them better. The ACO's are a form of capitation. Why should doctors be at any financial risk for performing a service that the government and the public feel is absolutely necessary?

Sincerely

R.M. M.D."

The point I made was that the only way to repair the healthcare system is if patients are responsible for their healthcare dollars and for the maintenance of their health. Patients with the appropriate education with will force the healthcare system to be competitive (Consumer Driven Healthcare).

It is naïve to assume that physicians and hospital systems are interested in taking risks for patients’ behavior.

HHS head,Kathleen Sibelius, does not think I am correct according to her news release;

“Changing the way we pay hospitals will improve the quality of care for seniors and save money for all of us,”

Under the ACO initiative, Medicare will reward hospitals that provide high-quality care and keep their patients healthy.”

Dr. Donald Berwick CMS chief wrote in a Wall Street Journal op-ed;

“We announced another effort that will reduce costs by improving care: a proposed set of rules for doctors, hospitals and other providers who want to work together as Accountable Care Organizations, or ACOs. ACOs will coordinate better care for patients, improving communication and reducing duplicative tests and procedures that hassle patients and do them no good at all.

The ACOs will be held to a strict set of quality standards to ensure that they aren't lowering costs by cutting necessary care.”

The initial results from Medicare’s one year pilot studies of 10 Medicare Physician Group Practice sites and five Dartmouth/Brookings sites demonstrate the majority of the savings occurred from outpatient services and not inpatient services.

The sites in the pilot have not achieved the level of saving to share with Medicare.

CMS hopes 75 to 150 groups will apply and qualify as an ACO. The startup investment and first-year operating expense for a participant in the Shared Savings Program is estimated by CMS to be about $1.75 million per ACO. Many say this estimate is low.

CEO of the large hospital systems and group practices are starting to understand the financial trap ACO’s represent.

“I think there’s a very high bar that’s set in these regulations,” says Thomas Graf, MD, chairman of Community Practice Service Line for Geisinger Health System in Danville, PA.

“They’re very detailed, and somewhat prescriptive, although there’s a mention that if there’s an alternate idea, and you can show how your proposed alternative meets these goals, they would consider it.”

The Geisinger Health System, one of the 10 Physician Group

Practice demonstration sites plans to stay with the PGP model for another two years, especially since the new rules for the second portion of that program were just released.

Dr. Graf also notes that some organizations will have to endure a

25% withhold, which means that in order to make sure new ACOs

are able to manage any losses, they’ll retain one-quarter of shared

savings. “To the extent you’re a startup ACO, you have to put in

costs now, presumably something to improve the care that you’re

delivering on both the quality and cost side. You incur costs on

Day 1”.

Dr. Graf explains: “Let’s say that in the first year, you qualify for

shared savings of $2 million. [CMS says] we’ll pay you $1.5 million

and we’ll retain half a million in case in the second year you have

$300,000 of losses, which will come out of the $500,000.”

CEOs are realizing that an effective plan must include smaller organizations. Local markets must be represented because all medical care is local. The hospital system CEOs also are beginning to recognize that patients must be central to determining their own healthcare needs. Consumers must be responsible for their own care for a healthcare system to be effective.

Craig Samitt, MD, president and CEO of Dean Health System in Madison, WI. says,

“There are many complexities and process-based requirement in ACO s.”

Large investments will be needed for most organizations to be high-performing ACOs”

Some don’t think ACOs equitable or practical. ACOs will not

know which Medicare beneficiaries they will be judged on until at

least a year after the program is under way.

Many have expressed concern that there just isn’t enough time between now and Jan. 1 for the final regulations to come out. There is not enough time for them to apply and be approved. It will be impossible for them to have all the pieces in place for a highly functioning ACO.

Chris Van Gorder president and CEO of Scripps Health expressed that concern, among others. “The government is trying to put a politically correct managed care

system of healthcare together requiring the hospitals or the ACO to assume both financial and quality responsibility for patients without even letting them know who those patients are prospectively.”

Chris Van Gorder says “he’ll hold his system back from applying for

Medicare ACO status unless the regulations undergo significant

change.” “Frankly, I was surprised. I thought there would be more

carrots, not so much stick.”

He emphasized that rather than this flawed ACO model, CMS would get better results by expanding bundled payment incentives to include hospital care. “That will get faster and maybe better results than by trying to push the ACO too fast.”

He also says that “he was quite surprised the regulations

impose a penalty for lack of performance on cost controls “right

at the beginning of this grand experiment. That was expected

over time, but [not] for a startup program that is extremely

complicated and far-reaching. One would have thought the

feds would have done all they could to attract and incentivize

healthcare providers and suppliers to take this risk.”

That sentiment was echoed by Richard A. Hachten II, president

and chief executive officer of Alegent Health in Omaha, NE.

“It’s appropriate that we’re going to be managing people’s

health differently going forward; it’s the financial risk part of it

and not being able to do that as effectively as one could if you

knew which patients you were working with, and could do a more

effective job in coaching the use of healthcare resources,” he says.

“So we think there’s a significant amount of unmanageable risk

built into the way it’s set up currently.”

Jay Cohen, MD, executive chairman of Monarch Healthcare in Orange County, CA says;

The negatives on the flip side outweigh the positives in the proposed regulations, and may prevent his organization from opting to be an ACO. “The way the proposed regulations are written will not work.”

George Halvorson, chairman and chief executive officer of

Kaiser Foundation Health Plan and Kaiser Foundation Hospitals,

which has 8.8 million members nationally, says his system does

not plan to apply and will stay with prepaid Medicare Advantage.

Kaiser, he says, already has a much more advanced team approach to care that goes beyond the four walls of the system. “We’re already there and we’re giving great care. We’re cutting the number of heart attacks in half; we’re cutting the number of broken bones in half.”

There you have it. “The Art Of War”. The healthcare organizations Dr. Donald Berwick was depending on are not going to show up to his ACO party.

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

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Here We Go Again.

March 16, 2011

inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Last year’s “Doctor Fix” was passed the last week congress was in session in 2010. This was after the medical profession was held in suspense for 9 months.

The “Doctor Fix” was supposedly the result of President Obama making a deal with the AMA for the AMA’s support. He was going to pass a real “Doctor Fix” in 2011 by repairing the defective sustainable growth rate formula (SGR). Nothing has been done about this by President Obama in 2011. The cumulative physician reimbursement reduction of 25% was suspended until January 2012.

Physicians face a 29.5% Medicare Pay Cut in January 2012. Four and one half percent was added to last year’s cumulative physicians reimbursement reduction. The reduction was calculated into the CBO’s cost score for President Obama’s Healthcare Reform Act.

Last week an official with the Centers for Medicare and Medicaid Services unveiled the 29.5% rate reduction for 2012 in a recent letter to the Medicare Payment Advisory Commission. This will become another distraction for physicians and the media as President Obama stalls for time.

“Leaders of the American Medical Association and other medical societies have warned that such a huge pay cut would force physicians to turn away not only seniors but also military families whose TRICARE coverage is based on Medicare rates.”

President Obama is stalling for the development and implementation of Accountable Care Organizations. His goal is to deal with big hospital systems, clinics, and not 600,000 individual physicians.

President Obama is ignoring the fact that Accountable Care Organizations (ACOs) are difficult to organize and impossible to execute efficiently and effectively. ACOs will fail for the reasons I have outlined previously.

It will end up costing the federal government more rather than less than the present system does. Hospital systems are excited because they think they will own the physicians and make a killing on Accountable Care Organizations. They think they will own physicians intellectual property. They cannot be more mistaken. They can expect a lot of fighting and grief.

At the same time, President Obama is dispiriting the physician workforce with his duplicity. He is increasing physician mistrust for government control over medicine.

President Obama’s proposed budget for fiscal 2012 calls for delaying the next cut from January 1, 2012, until January 1, 2014, freezing rates in the meantime.

Why doesn’t he fix the SGR? It is a screwy way to do business.

The healthcare system needs to be repaired. President Obama is going about it the wrong way.

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

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Why Is Congress So Thick?

February 23, 2011

inMedicaid, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Congress is not focused on the main problems in the healthcare debate. It is focused on the vested interests of secondary stakeholders. The people with the most money always win.

It is time for the people to speak out for their vested interests. They are trying via the Tea Party. For some reason the media is threatened by the Tea Party. The media has tried to marginalize the Tea Party. I do not think the media will be successful.

The American healthcare system has many problems. Accountability for medical care is one of them.

Millions of dollars have been spent by hospital systems trying to form an Accountable Care Organization. Why? Everyone thinks that is where the money is going to be. Accountable Care Organizations will not be the answer.

Effective repair of the healthcare system can only be accomplished when all the stakeholders are accountable for their part in the delivery of medical care. Those stakeholders include patients, physicians, government, healthcare insurance companies, and hospitals.

Accountable Care Organizations hold physicians and hospitals accountable for making patients healthy. Patients are the stakeholders who must be accountable for their own healt care. Patients are the only stakeholder that can force the other stakeholders to be accountable for their part in the healthcare system.

Accountable Care Organizations (ACOs) are in reality a rehashed version of the failed HMO model of the 1980s. The government must reduce the cost of healthcare. It would like to eliminate waste in the system. Electronic medical records will help except the government is wasting money trying to implement the electronic medical record. It will fail using the present implementation system.

The government’s thinking is Accountable Care Organizations will integrate the healthcare delivery system and eliminate waste. The government would rather deal with one organization rather than individual physicians. The government will give millions of dollars to private hospital systems. The hospital systems will hire physicians. It will then call itself an integrated system. The integrated system will be rewarded financially when it keeps patients well.

Ignored is the fact that the distribution of funds will be a source of bitterness between physicians and hospital systems. Hospital systems are going to own physicians skills and intellectual property. Physicians are becoming wise to the scheme. This conflict will create waste and increase costs to the healthcare system.

Once the federal dollars dry up, these entities will fail under the weight of their own bureaucracy. Patients are now being given a free ride at the taxpayers’ expense. They will develop an insatiable demand for free medical care. The administrators of these failed entities will stash away their generous salaries and add no value to the delivery of medical care. This is what happened with HMO’s. The public and physicians have not forgotten this experience.

Medicaid is a failed model. Yet 16 million more people will be added to its role under President Obama’s healthcare reform act and be taken care of by ACOs.

We will create a larger underclass of people dependent on the failed Medicaid system. Rather than being a nation of hard working independent people responsible for their own well-being, America is increasingly becoming a nation of people expecting hand outs the national budget cannot afford.

The purpose of an effective healthcare system is to keep our citizens healthy. You accomplish this by promoting the principles of good health and giving incentives to citizens to be responsible for their health and healthcare. It will not be accomplished by making people dependent on the government and its inefficient bureaucratic structure.

America must develop a healthcare system that:

1. Provides education about maintaining good health and early recognition of disease.

2. Diagnoses disease early with efficient testing.

3. Develops a treatment strategy that educates patients to participate in their care.

4. Encourages good health and healthcare choices to minimize the need for more health care.

This can be accomplished in a consumer driven healthcare system using the ideal medical savings account. It will be less costly and more efficient than the complicated structure President Obama’s healthcare reform act is in the process of creating through Accountable Care Organizations.

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