Stanley Feld M.D.,FACP,MACE

A few weeks ago I had a terrific exchange with Steve Brachet M.D. who forwarded my blog to Steve Gregg.

“Stan,

I forwarded your recent blog featuring the five essential steps for HC reform to Stephen Gregg of Portland Oregon.

Steve Gregg is a former senior hospital executive, turned CEO of a managed care plan (successful in WA and OR), developer of alternative healthcare products, developer of patient care informatics, and thought leader in past 10 years on dimensions and confounding variables of health care in all its complexities.

He asked me to send the attached (very brief) piece recently published in the Oregon main media.

I don’t know if he expects a comment or two – but if you care to comment feel free to respond to Steve Gregg directly.

I take it that you are continuing to do your best to ‘right this HC ship’ that seems unlikely to improve on its own – nor with the help of the current Congress.

Steve Barchet M.D.”

I was fascinated with the article Steve Gregg wrote. I agree with many of the points he makes. I am publishing his article with Steve Gregg’s permission. I wrote back and said;

Dear Steve

I welcome your article.

My blog explains the elements needed to Repair the Healthcare System from a physician’s point of view.

As a result of the Internet and improved software, consumers have become king and are driving the consumer consumption market. Amazon and ebay have led the way. Opaque purchasing models have been replaced by price transparent purchasing.

Wal-Mart has been forced to close stores because of online purchasing to remain competitive.

A consumer driven transparent online purchasing model has replaced airline ticket purchasing through travel agencies.

Online banking is transforming banking services. Hardly anyone goes into banks anymore.

There is no reason that shopping for healthcare services cannot transform the healthcare industry with all its opacity.

Consumers must be put in a position to drive the healthcare system and be responsible for their health and healthcare dollars.

Our 2020 business model can transform the dysfunctional healthcare system that can align all the stakeholders’ vested interests by empowering consumers and letting them drive the system.

The result will be a decrease in cost. It will eliminate the entitlement mentality of healthcare consumers and create a competitive mentality for all stakeholders as it has done in the examples above.

All Obamacare is doing is trying to put a patch on a healthcare system whose demise has been accelerated since passage of the Affordable Care Act.

Your articles describe many essential premises that must be reexamined.

However, consumers must be involved and be the responsible party in the healthcare system. They have to be given financial incentive to be involved and responsible.

Thank you for letting me reprint your article.

Health Reform…What Next?

Steve Gregg

With the expensive collapse of Oregon’s Health Exchange, a New Year, and approaching changes at the Federal level, it is time to reconsider the formative assumptions driving health care reform.

Ten Game Changing Assumptions Shaping Health Reform:

1. The ideologies of the left and right will not sustain a reform solution grounded in compromise and “deal making”.   The endless search for consensus confuses the problem, and is a recipe for failure.

2. The State’s public bureaucracy is too conflicted with its own self interest to impartially govern health reform.

 3.The plethora of proposed actions to reduce demand will not reduce costs. “Supply” being a more important driver of costs than ”Demand”.

3. Sustainable reform cannot tolerate the variation in provider pricing to patients with differing sources of payment. Perhaps less than 15% of the typical hospital’s patients pay what the hospital bills.

5. It is wrong headed to view reform as a matter of amending the existing system.

6. Financial goals stabilizing health care costs cannot be achieved without prospectively stated and independently measured metrics.

7. Equal access is not a realistic expectation. Universal coverage must be.

8. Genuine Altruism is a deceptive and widely abused value of our non- profit institutions and trade associations.

9. The United States spends twice as much per capita on health care because our health care workers of all stripes (including insurance companies,hospital sytems, government and pharmaceutical companies) s(take out twice as much from the system.

10. The health care structures of other countries, while instructive, are not transferrable to the United States.

Bonus:

 The Oregon Healthcare Project rationing experiment was a colossal hoax that channeled billions of new dollars to Oregon’s health care interests. Never measured, never critically evaluated. It was a severe case of the “Emperor Wears No Clothes”.

Conclusion: Think in terms of 2-3 alternative systems reflecting differing ideologies: Liberal / Conservative / Libertarian.

What would this suggest for process?

• Form 3 small task forces assembled around three ideologies: Liberal, Conservative, and Libertarian to articulate assumptions, problem definition, and a broad solution compatible with each ideology.
• At the end of the process examine what consolidation can occur and if not presume the development of 3 systems available to the free will of people to chose.

Liberal: Socially and fiscally liberal

Conservative: Fiscally and socially conservative

Libertarian: Socially liberal / Fiscally conservative

 Note: The prospect of 3 systems capturing U.S. Healthcare, sounds daunting but in reality we have more than that now: Employer, Medicare, Medicaid, TriCare, Municipal, Insured, Self funded etc.

 Alternative List of Assumptions:

1. A sustainable health reform strategy cannot be achieved without the foundation of a well-conceived definition of the problem and formative assumptions.

2. Subsidized or “free” health care is inflationary and will overwhelm administrative protocols for cost reduction.

3. Genuine Altruism is rare and a widely abused cover for proprietary agendas.  Excessive profit is a measure of good management.

4. The community’s health care pathology is infinite and those making a living and profits from health care will seek to capitalize on that.

5. Our health care system in the main is a proprietary endeavor with millions of economic interests seeking to protect or increase revenues. Any initiative that threatens that cash flow will be vigorously resisted.

6. Does the system tilt toward choice and self – determination or equalness, limited choice, and a central authority?

7. “Nearly half of all care delivered produces no medical benefit” is in obvious conflict with a prevailing view of vast health manpower shortages.   Does increasing supply reduce prices and the costs of health care?

8. If the national will demands universal coverage, the utility of competing traditional insurance companies should be called into question.

9. The reformed system must promote individuals seeking care from the “best” provider of care as early as possible in the development of any adverse health care condition.   Forcing patients into an inferior food chain of care is unethical and probably more costly in the end.

10. There is something wrong with a requirement to select a health plan, provider network, and insurance in advance of acquiring a dire condition, and then being locked out of access to the “best” provider.

Steve

I do not see consumers playing an active role in your assumptions to Repair the Healthcare System.

Obamacare is wasting money developing an entitlement system that cannot work. The only stakeholder that can develop a healthcare system that can work is a system driven by consumers.

Consumers can force the secondary stakeholders to be competitive and transparent, as they have done in other industries.

It would be cheaper for the government to invest in empowering all consumers using the revolution in information technology and providing financial incentives to all using My Ideal Medical Saving Accounts.

Everyone could be insured as I have described in my article The Ideal Medical Saving Account Is Democratic.

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

 All Rights Reserved © 2006 – 2015 “Repairing The Healthcare System” Stanley Feld M.D.,FACP,MACE

Stanley Feld M.D.,FACP,MACE

Director of CMS, Dr. Don Berwick, has the same central government control philosophy as President Obama. They have different reasons for central control.

Dr. Berwick is going to feel disappointed and deceived when he fails to effect meaningful change or reduce medical costs. President Obama’s healthcare reform law is going to increase the cost of Medicare and Medicaid, restrict access to care and result in rationing of care.

President Obama wants to increase quality and decrease cost of healthcare with more efficiency. Everyone has the same goal. President Obama is going about it the wrong way

Dr. Berwick has stated that he loves the British National Healthcare System. He was hired as a consultant to that system by Tony Blair. The goal was to modernize Britian’s centralized system. He failed to reduce their costs. Britain is now decentralizing its healthcare system.

Dr. Berwick thinks in systems terms using the concepts of Fredrick Taylor. In a 2009 speech Dr. Berwick said,

“The idea of a system is neither a frill nor a fine point if we are to get reform right,” “System of healthcare lies at the very center of the scientific and political challenges that stand between us and the care we seek. With a proper understanding of systems, authentic health care redesign is feasible and socially productive. Without that understanding, ‘reform’ will likely do more harm than good.”

Our healthcare system does not coordinate care using teams. If they did the patient must be at the center of the team not the government.

All the stakeholders must be members of the team. They all must be accountable to each other. Members include patients, physicians, hospitals, healthcare insurers, and the government. Dr. Berwick is only considering physicians and other healthcare providers. He is giving the healthcare insurance industry a pass. The healthcare insurance industry is the biggest villain in our dysfunctional healthcare system..

Patients and physicians are the most important members of the team. Physicians are the managers, patient are the workers.

In order for a system to work, team members first have to know the elements of the system. The team members should then be provided with incentives so they are motivated to make the system work.

Dr. Berwick is not considering incentives for patients and physicians. He does not believe in the value of the free market. I believe his attitude will be a huge problem in his attempt to convert medical care to Taylor’s principles of scientific management..

I do not doubt his ability to create systems of care. I disagree with his punitive system of fulfilling systems of care. It will not work.

“Health care reform without attention to the nature and nurture of health care as a system is doomed,” Berwick said. “It will at best simply feed the beast, pouring precious resources into the overdevelopment of parts and never attending to the whole — that is care as our patients, their families and their communities .”

Dr. Berwick has criticized physicians care. He does not criticize patients lack of adherence to recommended care or their lack of compliance to healthy lifestyles. There has been little discussion on where money is wasted in the healthcare system. The healthcare insurance industry, hospitals’ or government’s role in the dysfunction of the healthcare system is not being discussed.

His has focused on waste created by the deficiencies in safety, effectiveness, patient-centeredness, timeliness, efficiency, and equity. There is no doubt the healthcare system’s needs the scientific management approach in each area. However, this is not where the bulk of the waste is.

“The improvement of health and health care depends on systems thinking and systems redesign,” Berwick said. “ ‘Reform’ without systems thinking isn’t reform at all.”

I agree we need systems of care. This philosophy is expressed in AACE’s System of Intensive Self-Management for Type 2 Diabetes Mellitus. I was the chairman of the task force for these guidelines. I ask develop of system of care for the diagnosis and treatment of osteoporosis.

President Obama favors a single-payer system with central control. Central control does not increase efficiency.

Dr. Don Berwick believes that the only efficient way to develop a process of scientific management in healthcare is central control with a single-payer system.

There are multiple defects in his notion.

1. Medical care should not be a set of algorithms that are centrally dictated. Algorithms should be a guide to care. Physicians must use clinical judgment.

2. The patient physician relationship must be nurtured. A large part of the therapeutic effect is that relationship. Medical care is not a commodity.

3. Clinical judgment is vital to successful patient outcomes.

4. Systems of care, with an interdisciplinary team approach, should be taught in medical schools and post graduate courses.. Presently, all disciplines are taught in isolation. When physicians go into practice, they realize the importance of interdisciplinary relationships. Models for interdisciplinary treatment approaches must be promoted and incentivized.

5. Dr. Berwick’s approach assumes that politicians and politics do not play a role in forming healthcare policy. Few believe this notion. Politics plays a big role in dictating agency policies.

6. In 1945, Friedrich Hayek pointed out that the command approach to dictating work flow is doomed to failure. Commanders do not receive accurate information about what is happening on the ground. This results in faulty central decisions.

7. Technocrats, like Dr. Berwick, may believe they can marshal statistics to optimize the health-care system. Statistics on outcomes and treatment plans have been misleading..

8. Statistical analyses rely on too many assumptions and too much unreliable data. These are the reasons government programs often result in colossal amounts of waste, fraud, and abuse.

9. The interaction of all the stakeholders must be considered. If the abuses of all the stakeholders are not considered and eliminated, the decision reached by the technocrats could be incorrect.

President Obama believes technocrats (Dr. Berwick) can solve the problems in the healthcare system. Dr. Berwick sees the problems in the healthcare system from 30,000 feet.

Our healthcare problems will only be solved by consumers at ground level along with disintermediation of the middlemen in favor of consumers.

Repair of the healthcare system can be achieved with consumer driven healthcare and ideal medical saving accounts. Consumers must be empowered by the government to take care of their health and their medical care individually with the appropriate incentive.

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

Stanley Feld M.D.,FACP,MACE

President Obama has to understand the differences between Taylorism and Disintermediation. He would then understand the difficulties Americans are having with his healthcare reform law.

President Obama must combine the advantages of Taylorism with the advantages of Disintermediation in order to Repair the Healthcare System. The system must be for the benefit of consumers.

The disadvantages of Taylorism combined with central government bureaucracy will destroy healthcare in America.

President Obama’s only concern is to increase centralized government even if America cannot afford it.

Dr. Berwick is the right technocrat for President Obama. Dr. Berwick’s only concern is to convert the practice of medicine and the delivery of medical care to Frederick Taylor’s Principles of Scientific Management.

Taylorism

Frederick Taylor published his monograph The Principles of Scientific Management in 1911. Henry Ford utilized Taylor’s concepts in mass producing the automobile.

Taylor believed that decisions based upon tradition and rules of thumb should be replaced by precise procedures developed after careful study of an individual work process. Its application is contingent on a high level of managerial control of the worker.

He stated that central authority must provide detailed instruction and rules to each worker. Managers have to supervise and grade workers in the performance of their tasks. The managers plan the work. The workers actually perform the tasks.

Taylor was convinced that productivity efficiency lies in scientific management, rather than in searching for extraordinary creative workers to perform the work. .

Scientific management commoditizes products and lower cost of production. Medical care should not be a set of algorithms and rules that are centrally dictated. Algorithms should be a guide to help physicians’ with clinical decisions.

The problem with President Obama and Dr. Berwick’s plan is it disregards the role the healthcare industry plays in the inefficiency and cost for healthcare. It disregards the cost and inefficiency created by 160 new bureaucratic agencies to create new rules and regulations. It disregards the waste created by defensive medicine.

Disintermediation

Disintermediation is a term used in the “science of economics.” It is the elimination of the intermediaries in a supply chain. Simply put it cuts out the middlemen.

President Obama and Dr. Berwick are not eliminating the biggest middleman with their plan, the healthcare insurance industry.

Michael Dell of Dell Computing and Jeff Bezo of Amazon.com are the masters of disintermediation. They have eliminated the middlemen and revolutionized the computer industry and the publishing industry. Steve Jobs did the same to the music industry with the IPOD and ITUNES.

Consumers are empowered by market transparency. The middlemen were bypassed. Disintermediation has liberated consumers and reduced costs.

Wal-Mart uses the same disintermediation principle with its effective use of information technology. Wal-Mart passes the saving produced by eliminating the middlemen on to consumers. Wall-Mart has revolutionized retailing.

Healthcare reform should include systems of care. It should also include a disintermediation system to bypass the healthcare care insurance industry. Disintermediation in the healthcare system can empower patients to control of their health and healthcare dollars.

President Obama wants to increase quality and decrease the cost of healthcare by increasing the efficiency of healthcare delivery.

Everyone has the same goal. President Obama’s route is wrong.

Our healthcare systems problems can be solved by combining Taylorism with Disintermediation.

This can be achieved with consumer driven healthcare and ideal medical saving accounts.

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