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Surprises For Physicians Coming With In Health Insurance Exchanges

May 8, 2013
inHealthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP, MACE

 Two
important components of Obamacare are Accountable Care Organizations (ACOs) and
Health Insurance Exchanges (HIEs).


The
adoption of both by medical communities and the states has been slow for good
reason.

I have
discussed the difficulties of setting up and the executing effective Accountable
Care Organizations.

Some hospital systems are trying to set up ACO’s. These hospital systems
are buying up physicians’ practices and trying to develop integrated care
organizations.

The hospital systems are buying the physicians’ intellectual property and
surgical skills sets. It will not work once physicians realize what happened.

The relationship between community hospital systems and practicing
physicians had always been tense. Physicians do not trust hospitals and hospitals
do not trust physicians.

Some physician groups are trying to develop their own ACOs. They are trying
to convert hospital systems from being providers of patient care to vendors for
their physician ACO.

If there are two hospitals in a community or town the hospital systems
might become competitive.

The huge problem for physicians is the assuming of risk. If healthcare
insurance companies cannot manage risk, why would physicians think they can
manage risk?

 A variable that cannot be controlled
in managing risk are patients. With all the obesity and the increase in
diabetes mellitus it seems patients do not have the incentives to manage their
own risks.

 Patients and physicians must be provided with appropriate financial
incentives if there is the slightest chance of managing risk and decreasing the
cost of healthcare.

 The adoption of ACOs has been slower than the Obama administration has anticipated.
  

 Adoption
of the Health Insurance Exchanges has been slow by states. Some states
recognize the financial risk the Obama administration is trying to force on
them.

This
risk is ever present even if the federal government is going to pay the entire
bill for the first three years.

As soon as physicians realize
the risk the Health Insurance Exchanges are going to impose on them, they will
not be willing participate.

These risks become more
apparent will each succeeding release of regulation.

Kathleen Sebelius said it two
weeks ago when she said there would be plenty of surprises ahead for physicians.

“Health
and Human Services Secretary Kathleen Sebelius, who told a gathering a few
weeks ago at the Harvard School of Public Health that she has been
"surprised" by the political wrangling caused so far by Obamacare,
there are likely to be plenty of surprises ahead.”

Physicians could face dramatic
financial challenges for treating patients who receive health coverage through
the Affordable Care Act's (ACA) Health Insurance Exchanges starting next year.

“ Insurance companies will not
process claims on patients who haven't paid their premiums in 3 months, leaving
doctors on the hook to recoup payment directly from the patients.”

Obamacare provides a 3-month grace
period to individuals who haven't paid their premiums for insurance purchased
through the Health Insurance Exchanges.

This provision will prove to be a
problem for physicians.

In Obamacare patients who fail to
pay their premium are free to sign up for another plan provided by the Health Insurance
Exchange.  

They can also start seeing another
physician without the insurance company or new physicians being aware of the
patient’s delinquent premium record.

"Why would a doctor sign up to treat these patients] if
they're going to be completely at risk and have to collect from the patient
directly for their care?"  "This
is a really bad provision in the bill, and we've got to get it fixed."


Under traditional insurance provided
by employers, the plan is still liable for paying doctors even if the patient
or employer hasn't paid their premiums,

Under the health insurance exchange
the individual is responsible for their monthly premium. If the patients
discontinue payment of their premium the healthcare insurer is not obligated to
pay the physician for the care provided.

Most of the time patients have stopped
paying premiums because they cannot afford them. Patients buying healthcare
insurance from the Health Insurance Exchanges are lower income producing
patients. 

 The
expected annual, out-of-pocket cost for an individual is estimated to be around
$6,400 and $12,800 for a family. This is not an insignificant expense for low
wage earners.

Recent premium estimates indicate
that the premium will be higher. This could be one of the surprises Kathleen
Sibelius is referring to.

Another potential shortcoming of the
Health Insurance Exchange is the reimbursement rates provided to physicians.
The Obama administration believes Medicaid rates are sufficient.

I wonder if any of President Obama’s
healthcare policy wonks ever questioned why so many physicians do not accept
Medicaid.

The answer is simple. The
reimbursement rate is less than the physicians fixed overhead to see the patient.

Medicaid physicians are driven to
see many patients a day to try to make a living.

It would be difficult maintaining a
physician patient relationship and a high quality of care seeing over 100
patients a day.

When their overproduction is
discovered these physicians are investigated for fraudulent practices.

 The rates the healthcare insurance industry
will pay physicians will not be set until late summer.

The big provider groups are negotiating with plans on their
payments. Small groups will only get a "take it or leave it" contract
from the health plans.

It seems obvious that fewer
physicians will sign up to accept patients receiving coverage through the
Health Insurance Exchanges once physicians understand what Obamacare is doing.

 This will result in a further physician
shortage.

 The simple question is what is Obamacare
trying to do to the healthcare system?

 Is Obamacare trying to destroy the
healthcare system?

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

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I’m Busted

April 2, 2013
inMedicine: Healthcare System
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 Stanley Feld M.D., FACP, MACE.

 

 

 

 

As
we get closer to 2014 and the scheduled full implementation of Obamacare
conditions in the practice of medicine are getting worse.

I
have described how most of the major programs initiated by Obamacare,

(such
as the Accountable Care Organizations, the Electronic Health Record
initiatives and the Health Insurance Exchanges development), are failing or off
to a slow start.

 A detailed critique of the Obama
administrations’ Obamacare can be found using the search engine in my blog.

If
you receive my blog by email (RSS) double click on the blog title or go to the
web site http//:stan.feld.com.

Search
for the topic in the search engine in the top right corner of the blog post.

The
shortcomings of Obamacare are becoming obvious to many citizens. Most physicians
and hospital systems are finding Obamacare’s new programs difficult to execute.

A
reader wrote

"Dear Dr. Feld,

Once it becomes so painful for the
average voter, Obama will simply say, “a single payer system is the only way to
fix this insurance company mess.”  He’s doing exactly what he planned to
do, he’s just not telling the truth about it.

X"

It
is becoming more apparent that President Obama’s goal has been to destroy the public
and private sector healthcare systems. In reality the money in both the public and
private healthcare system has been controlled by the healthcare insurance
industry and not by the government.

The
Obama administration is building the infrastructure to easily convert the
healthcare system to a single party payer system. The majority of Americans are
opposed to a single party payer system. It eliminates choice.

The
expense of Obamacare has been and will be enormous to all stakeholders with 300
new agencies and 20,000 new regulations.

The
new healthcare taxes are scheduled to take effect almost monthly.

At
present at least 40% of the healthcare system is a single party payer system
when considering the government healthcare plans in place.

The
Obama administration will have two major problems converting America totally to
a single party payer.

The
public will be outraged when it becomes aware of that the direct costs to them,
the lack of availability of medical care and restriction to access to care
caused by Obamacare.

There
are two possible solutions. Either repeal Obamacare and start from square one
or let the government control the entire system.  

The
government will not be able to afford a single party payer system. It will have
no choice but to increase taxes further to support the healthcare system.

The
other major problem Obamacare will have with a universal single party payer system is the
healthcare insurance industry will continue to control the money in the system.

The
government does not have the infrastructure to provide the administrative
services and to adjudication claims. There are many hidden cost in the movement
of money that most are unaware of.

 

The entire situation reminds
me of Ray Charles’ song “I’m busted.”

  

 

http://youtu.be/D_Ew-768xmk

In 2008, after President
Obama was elected I wrote him six letters explaining how he could reduce the
costs of medical care in America by introducing cost savings initiatives.

Dear President Obama Part 1

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

Dear President Obama Part 2

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

Dear President Obama Part 3

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

Dear President Obama Part 4

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

Dear President Obama Part 5

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

Dear President Obama Part 6

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

I took a Willie Sutton
approach. “ Go where the money is.” 

If the government provided incentives to decrease
wasteful spending, the healthcare system would self correct without the myriad rules
and regulations    that
will not work and cannot be enforce.

Simple things such as:

  1. Incentivize individual responsibility with Medical
    Savings Accounts,
  2. Encourage the use of a Universal Electron Health
    Record with a fully functional EHR in the cloud. Physicians and hospitals would
    pay for its use inexpensively by the click. It would be sort of like a toll way
    fee without capital expense. The EHR could be upgraded and serviced at no
    expense.
  3. Create a healthcare system that is consumer driven
    with consumer owning their healthcare dollars and being responsible for their
    healthcare choices.
  4. A Tort Reform System that eliminates the need for
    defensive medicine that over tests patients to avoid law suits.
  5. Chronic Disease Management Systems to teach patients
    to be the professor of their disease in order to avoid costly complications of
    their disease.
  6. Develop patient educational systems available on the
    Internet 24/7 as an extension of their physicians’ care.
  7. Help develop disease specific Social Networks. The development
    of a disease specific community can serve to solve some problems patients have.
  8. Eliminate secondary stakeholder waste, fraud and
    abuse.
  9. Eliminate the purchase of first dollar healthcare coverage
    from the healthcare insurance industry  

I believe if all of the
above was done correctly it would save $750 billion to $1 trillion dollars a
year for the healthcare system.

President Obama has ignored
every point I have tried to make. Obamacare has not included any of the real
cost drivers in a non-punitive way.

He has simply added a huge
bureaucracy with rules and regulations that are expensive, difficult to execute
and more difficult to enforce.

If my recommendations were initiated
and executed properly America would have a sustainable healthcare system.

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

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Another Big Mistake!

July 18, 2012
inMedicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

On July 1, with great fanfare, CMS announced that 89 organizations have been chosen to serve the healthcare needs of some 1.2 million Medicare beneficiaries in CMS’ Accountable Care Organizations (ACO) program.

Many of the premier integrated health systems, such as Mayo Clinic, Cleveland Clinic, Geisinger Health System, and Intermountain Healthcare had rejected an invitation to participate in the program in June 2011.

Among the reasons for rejecting the government’s offer to be a participant were the complex, contradictory and burdensome rules, the risk in shared savings, and the need for participating patients to be included in oversight boards.

Leaders of all four organizations praised the ACO concept but criticized the proposed implementation.  Geisenger Health System said “

 “It seems to be very prescriptive and restrictive with a fair amount of administrative and regulatory oversight."

 

The recent CMS press release makes it sound as if the ACO program is off to a good start.

Totally false!

There are 35 million seniors and disabled persons presently on Medicare. The program will include 1.2 million Medicare patients.

  • 1.2 million Medicare enrollees represent less than 3.4% of patients on Medicare.
  • The number of organizations enrolled does not represent validation of the acceptance of the ACO process by the medical community.
  • It does not represent validation of the contention that routing Medicare patients through ACO’s will save money. 

The growth in the cost of care’s baseline, on which an ACO organization will be measured, is not defined. The participating ACO organization cannot possibly know what the downside risk is.

It looks like CMS waived the downside risk temporarily for 84 of the 89 ACO’s who signed up. The waiver will not last forever. When it ends it will be too late for these ACO’s to get out.

CMS delayed the original start date from January 1,2012 to July 1,2012. This was an ominous sign. As far as I can tell no one has any idea how many of the groups signed up are integrated care groups.

 SUMMARIES OF ACOS SELECTED FOR JULY 1, 2012 START DATE[1]

http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4405&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

I have written several articles explaining why I believe ACO’s will be a gigantic waste of government money, which will add to America’s deficit.

 “The more I study ACOs the worse they look. Dr. Berwick’s goal is redistribution of wealth. This is exactly what ACOs are going to do. Patients, taxpayers and physicians are going to get the short end of the distribution.

Hospital systems are spending a ton of money trying to form ACOs. They are going to lose big. I have concentrated on the obvious defects and difficulties in forming ACOs in the past. Here are some more traps.”

 "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 three major problems:

  1. The government is broke. It does not have the money to pay for a government takeover of the healthcare system.
  2. New systems need participant cooperation to succeed.
  3. Creating a fully integrated healthcare system is difficult to nearly impossible unless the system has salaried physicians and a fully transparent hospital/physician provider organization. This will not happen soon in the current hospital and physician cultural milieu.

“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."

Physicians and hospital system will not cooperate because: 

  • Physicians and hospitals have little experience or control in managing risk.
  • Physicians and hospital systems experience with HMO’s in the 1980’s proved their inability to manage risk.
  • It was a painful financial experience for both.
  • 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 predicted participation would be minimal.

Physicians take on enormous risk taking care of patients presently. The risk increases when patients do not follow physicians’ treatment recommendations.

 Physicians are in no mood to take on financial responsibility and malpractice risk for actions that might fail because of patients’ non-adherence. Patients have to be motivated with health and financial incentives to comply.

Those physicians and hospital systems participating in the ACO program will lose financially and professionally.

There are several other key points for the lack of success of the ACO program

  1. " Obamacare uses Medicare reimbursement as an incentive to create accountable care organizations (ACOs), which the federal government has decided are the way to deliver quality care at lower cost.
  2. Proposed regulations by the Centers for Medicare and Medicaid Services (CMS) are largely confusing, impenetrable, and inconsistent.
  3. They give CMS detailed control over ACOs and the providers who participate in them, including censorship of ACO communications with Medicare beneficiaries.
  4. Medicare beneficiaries are assigned to ACOs without their knowledge or consent.
  5. Membership, in reality, is a retrospective bookkeeping entry relevant only to financial dealings between CMS and the ACO. ACOs may even have to pay money back to Medicare if they do not meet CMS goals for savings.
  6. The incentives offered to ACOs are diffuse and speculative, entailing intrusive regulation of ACOs and providers.
  7.  ACOs as defined by Obamacare are fatally flawed and cannot be fixed by merely changing the proposed regulations."

 This is neither a Democrat nor Republican issue. It is an issue of developing a healthcare system that will work. The cost of developing this government controlled healthcare system that is doomed to fail is enormous.

The Mayo Clinic, Cleveland Clinic, Kiesinger Health System, and Intermountain Healthcare are probably the most integrated healthcare systems existing in America. They visualized the lack of potential for success in ACO’s present structure.  

Thirty-six organizations signed up for the Pioneer Demonstrations ACO 6 months ago. The list and details can be found on the CMS fact sheet. The details of the deal they made are not easily available.

innovations.cms.gov/Files/fact…/Pioneer–ACO-General-Fact-Sheet.pd

 

 It is worth studying all of the organizations that were selected for the Pioneer ACO program. These organization must believe they are in a no lose situations. They will find out that they will lose and it will be too late to get out.

All of the organizations represent a very small percentage of practicing physicians.  These physicians take care of a very small portion of Medicare patients.

It will take several years and much money to decide the ACO’s will fail. The only healthcare system that will align all the stakeholders’ incentives is my Ideal Medical Savings Account.

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

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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:

  1. The government is broke. It does not have the money to pay for a government takeover of the healthcare system.
  2. 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 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.

 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
• Leave a comment

 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;

 

  1. 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.
  2. 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.

 

 

 

 

 

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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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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
• Leave a comment

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.