The media has publicized ridiculously high charges for cardiac bypass and other complicated procedures. It ought to find out what the actual contracted reimbursement fee is.
It is important for the government and the healthcare industry to continue to blame physicians for being the villain in our dysfunctional healthcare system.
Remember physician receive only 10% of the healthcare dollars spent in our healthcare system. Who receives the other 90%? What value do the other recipient add to medical care?
The medias quoted prices are a scare tactic to keep government’s control of the healthcare system advancing.
What is going to happen after Obamacare is repealed?
There will still be millions uninsured.
There will still be millions who cannot buy insurance because of pre-existing conditions.
There will still be millions who choose not to purchase coverage.
There will still be inefficiency and waste in the healthcare system.
Stakeholders are adjusting to the potential restrictions of Obamacare. They are finding new ways to game the healthcare system.
Healthcare costs will rise and inefficiency in the healthcare system will increase whether we have Obamacare or not.
President Obama is trying to set rules and create regulations to eliminate potential solutions to our healthcare system’s problems.
He is trying to regulate and eliminate high deductible insurance plans and Health Savings Accounts. Under Obamacare it will be much cheaper for employers to pay the penalty than provide healthcare insurance for their employees.
Employees will be forced to buy insurance from President Obama’s health insurance exchange (Public Option). There will be no other options. At that point the government has full control of healthcare.
It wouldn’t be a bad thing if the government could afford another potentially inefficient entitlement program. President Obama is clearly trying to squeeze complete government control of healthcare through the back door.
It will not work!
What should be done?
The government must create a real marketplace for healthcare insurance. A marketplace constructed for the benefit of consumers and not secondary stakeholders’ vested interests. Stakeholders would adjust because of their competitive compulsion to get customers. They will compete for consumer business by lowering healthcare costs.
The mindset must change to a consumer driven system not a government driven system.
My Ideal Medical Saving Account would be an excellent way to provide full first dollar healthcare insurance coverage for unplanned medical expenses. It would also provide financial incentive for consumers to be responsible for their health and healthcare dollars.
These are some of the rules that government should have.
1. Healthcare insurance policies should be “guaranteed renewable.”
2. Healthcare policies should include a right to purchase insurance in the future regardless of pre-existing illness.
3. Healthcare insurance policies should follow you from job to job regardless of a move across state lines.
4. Individual healthcare insurance policies should have the same tax-deductible status as employer provided healthcare insurance policies.
The government could form a successful individual insurance market place with these simple rules or regulations.
“ Solicitor General Donald Verrilli explained as much in his opening statement to the Supreme Court: “The individual market does not provide affordable health insurance,” he noted, “because the multibillion dollar subsidies that are available” for the “employer market are not available in the individual market.”
My Ideal Medical Savings Account could apply to Medicare and Medicaid. It provides incentives and real healthcare insurance coverage. It allows the consumer to choose. It encourages consumers to be knowledgeable shoppers for healthcare.
The government is spending that money already. The mandate will not stop the emergency room use.
A consumer driven healthcare system using My Ideal Medical Saving Accounts would provide incentives for the indigent or those of modest means to try to save money for them by taking care of their health. The government provides those educational resources already. This might encourage its use.
The emergency room treatment expenses for indigent and uninsured are not the central reason for rising healthcare costs. Costs are rising because people, who do have insurance, and their doctors, overuse health services and don’t shop on price.
The Ideal Medical Savings Accounts should be fully tax deductible to both individual and groups. The healthcare system would then become consumer driven. Consumers would become price sensitive because of financial incentives. A competitive healthcare market would then be created. The result would be a decrease in the cost of healthcare. It certainly would be cheaper than the artificial, bizarre, government controlled healthcare market for we have today.
Enlarging government control would make the healthcare market more expensive and less efficient than the unsustainable government controlled healthcare system that exists.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
It would be important to know why this is true. Then figure out what could be done about it Stakeholders need to agree on a course of action.
It would be a good idea to understand what physicians think should be done.
“One percent of patients account for more than 25 percent of health care spending among the privately insured, according to a new study. Their medical bills average nearly $100,000 a year for multiple hospital stays, doctors’ visits, trips to emergency rooms and prescription drugs.”
The 1% and the 20% are suffering from complications of a chronic disease.
The incidence of chronic diseases is on the rise in the United States. A major precipitating factor for this is obesity.
The incidence of Type 2 Diabetes Mellitus is increasing in both adults and young children, as the incidence of obesity is increasing.
The incidence of complications of Diabetes Mellitus will increase in the future. The result will be an increase in the cost of medical care.
President Obama’s healthcare reform act will expand healthcare coverage to 32 million uninsured in 2014. Obamacare is forcing the healthcare insurance industry to change its business model in order in order to remain profitable.
Premiums are out of the reach of most businesses and individuals. Premium increases are not an option.
High-risk individuals are denied healthcare insurance coverage. High-risk patients automatically get coverage in corporate healthcare plans. The healthcare insurance industry simply raises premiums on corporate groups in order to maintain its profits.
Something must be done to decrease the increase in chronic disease and its complications.
The government cannot afford to insure its present patient obligations much less the 32 million uninsured.
“As the new federal health care law aims to expand care and control costs, the people in the medical 1 percent are getting more attention from the nation’s health insurers.”
Twenty percent of the population not 1% should be getting the attention of the healthcare insurance industry.
“Studies have already shown that Medicare spending is concentrated on a small group of individuals who are seriously ill.
An analysis by the IMS Institute for Healthcare Informatics, the research arm of IMS Health, a health information company in Danbury, Conn., provides a rare glimpse into the medical problems of people with private health insurance that are under 65.
About three-quarters of them suffer from at least one chronic condition that could spiral out of control without proper care.”
Most of these people were obese.
The healthcare insurance industry cannot avoid these patients after 2014.
“Insurance companies will be required to enroll millions of new customers without the ability to turn them away or charge them higher premiums if they are sick. They will prosper only if they are able to coordinate care and prevent patients from reaching that top 1 percent.”
The healthcare insurance industry realizes it must fundamentally change its business model.
The healthcare insurance industry has a problem developing a new business model that would work. The industry does not want to lose control over patients, their physicians and the monies paid into the healthcare system.
The healthcare industry does not have a clue about how to actually repair the healthcare system. It is focused on its own bottom line rather than looking at business models that will be beneficial to everyone and align all the stakeholders’ incentives.
The healthcare insurance industry is planning on instituting programs that will tinker with the edges. It will not fix the problems.
The new business models will increase the percentage of money the insurance industry receives for direct patient care maintaining a Medical-Loss ratio of 15%. There is no interest in providing patients with financial incentives and a choice.
The net result will be higher costs and system failure. The weird thing is most of the healthcare insurance industry executives know it.
“The reality is if we don’t figure out how to get to the patients, we’re not going to get where they need to be,” said Dr. Lonny Reisman, the chief medical officer for Aetna.
The reality is that the system must be consumer driven with consumers in charge of their healthcare and their healthcare dollars.
At the moment patients have no incentive to decrease the cost of care. Hundreds of patients have told me that they go to the doctor to fix their illness. Medicare or their insurance pays. The patients have no idea of the costs they incur nor do they care. They have no interest in controlling their disease.
My ideal medical saving accounts would give the patients incentive to learn about their disease. They would be interested in self-managing their disease with the physician and his medical care team being the coach.
“The next challenge, say insurers, is to figure out how best to work with a person’s doctor. Because many of these patients seem to be seeing many doctors and taking many medications, there may be no one who is accountable for the patients’ overall health.”
Physicians have figured out what services get paid by the healthcare insurance industry. They do not get paid for educating patients about their disease.
The healthcare insurance industry and the government have developed a punitive bureaucracy.
Patients are responsible in large part for the onset of their medical problems and in controlling their medical outcomes. Physicians cannot be responsible for patients’ outcomes. It is the responsibility of the patient.
“Insurers are also still grappling with their understanding of human nature — why some people simply don’t take care of themselves or take their medicine or go to the doctor, even when it is clear that they should.”
Patient outcomes have nothing to do with human nature. It has everything to do with financial incentive and effective education.
Spokes 5 and 6 of my future state business model has everything to do with patients’ responsibility for caring for their disease and the physicians’ responsibility to the patients. It has nothing to do with physicians’ and patients’ responsibility to the healthcare insurance industry or government.
The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone
So we have now learned that high deductible plans are what people should be purchasing. We also learned that they should be self insuring for $10,000 which is the highest deductible insurance at the lowest price.
Over $10,000 is where are at the greatest financial risk. True insurance should cover our greatest risk.
I would like to know where is the business opportunity is for an Internet company that runs social networks?
Sincerely
Z"
I said the world belongs to young people 20-50 years old. They also understand the power and mechanics of social networking.
If there was a social network dedicated to describing the advantages and disadvantages of the healthcare insurance options available to the unemployed, self- employed and under insured there would be many members. If those members had the ability to have input it would grow even larger with appropriate marketing.
I have not figured out how social networking sites make money except through advertising. I imagine many companies would like to get the attention of these consumers who are seeking healthcare insurance advice.
It has been reported that people change their job up to 8 times during their career. More and more people are in start-up businesses and need healthcare insurance for their employees. Many people are becoming consultants and are self-employed. They all need healthcare insurance for their family.
President Obama’s answer to the problem is the government will provide the healthcare insurance for you. Healthcare insurance is a right as an American.
The business opportunity would be to teach the people who are self-insured or uninsured about the rip off of the healthcare insurance industry and to teach them how to save money.
How many start up companies do you guess are uninsured or under insured or not insured for catastrophic illness because they cannot afford the healthcare insurance premiums?
The chances are many start up employees will not get sick. True healthcare insurance should be a hedge against catastrophic illness.
If someone gets sick in a company, the company could pay the employee for the amount he spent before they reached the full deduction.
The high deductible individual policy is not tax deductible. If it were made tax deductible by citizen demand to congress through social networking the voice of the individual could be heard. Congress might be forced to act.
Start up companies and other companies would save money. These companies would be placed on the same playing field as companies who pay for employee insurance with pre tax dollars. The social network could even form an association of self-employed companies and enjoy the tax benefits and purchasing power of large corporations.
If you do the math for the government, the government would be saving much more money than it would collecting taxes.
An appropriate social network could stop the healthcare insurance industry's grotesque business model in its tracks.
It could save billions of dollars. It could create incentive for people to take better care of themselves.
Many large and small companies are self-insured. The law lets these companies deduct their healthcare insurance with pre tax dollars. These companies could offer my ideal medical saving account with a $7,500 trust account. They could then reinsure employees for over $7,500 with a reinsurance company.
Employees would obtain first dollar coverage after the deductible is reached.
I suspect even the traditional insurance companies would provide the re-insurance. These healthcare companies have already negotiated fees with physicians, hospitals and drug companies.
If the healthcare insurance industry did not provide re-insurance its negotiated fees could be obtained easily.
The large corporations, who are self-insured, all have HR officers. The HR officers I have met either do not seem to have the bandwidth to investigate the possibility of the ideal medical saving account structure or they are trapped into outsourcing the details of the corporation’s self-insured healthcare plans to middlemen. I have a feeling the commitments of some with middlemen are long term.
If all this could happen it would be an important first step in the development of social networking in healthcare and medical care.
Consumers need education for the care of their chronic disease such as diabetes, asthma, chronic lung disease, heart disease and chronic gastrointestinal diseases. Many of these diseases are a result of obesity.
If social networking could discourage the ever-increasing incidence of obesity, society would decrease healthcare costs dramatically.
If patients learned how to manage their own disease the cost of medical care would decrease precipitously.
Consumers feel powerless at present. Empowering consumers through social networking will disrupt the entire healthcare systems supply chain for the better.
Consumers are up against a government that wants to tell them what they have to do. They are up against healthcare insurance companies that charge obscene premiums. They are up against hospitals, physicians and emergency rooms that have exorbitant charges.
Consumers are up against diseases such as obesity which precipitates many chronic diseases.
Consumers are frustrated and need leadership and guidance.
The phenomenal growth in social networking can give consumers the tool they need to control their health and drive the healthcare system.
Social networking is the only way to start a consumer driven healthcare movement. It has to happen before the medical care system is destroyed.
The young people expert (20-50 years old) in social networking have to become engaged.
Those young people have to understand physician mentality and the importance of the patient physician relationship.
I will be happy to help in any way I can.
The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone
My wife and I are 43 years old. We have a 7 year old daughter. All three of us are in excellent health. We have minimal medical bills and yearly checkups.
I just left an executive position in a company that had excellent healthcare insurance.
I am in the process of hunting for a new executive position. I am currently uninsured. I have the option to buy COBRA insurance for the next 18 months or until I get a job with good healthcare benefits.
The COBRA premium quoted to me to be $1600 per month or $19,200 per year. My former employer told me he was paying $15,000 for the same insurance.
I cannot afford $19,200 per year. Neither can I afford not to have healthcare insurance coverage for my family in case of catastrophic illness. I searched the Internet for the best option.
There were at least 97 healthcare insurance policies offered for individual coverage. After I got through understanding the fifth policy I was exhausted. None seemed to be a good deal.
I have been a reader of your blog and always say to myself thank God I do not have to deal with the dysfunction you describe. I could not believe I would be in this situation.
You seem to understand the problems in the healthcare system. What do I do next?
Thank you in advance for any help you can offer.
Sincerely
H”
I have received other letters of disbelief from young people. They did not appreciate how unfair, non transparent and truly dysfunctional the healthcare system was until they encountered the problems.
The future belongs to the 20 -50 year old age group not seniors. They are all consumers and potential patients. They are are going to need a viable healthcare system at some point in their life.
This age group must take an interest in developing an understanding of and take responsibility for getting involved in fixing the dysfunctional healthcare system now.
In general 20-50 year olds are not sick. Only 20% of the population is involved in dealing with the healthcare industry at one time. Eighty percent of the population does not interact with the healthcare system. When they do they realize how dysfunctional it is.
100% of the consumers must demand, simultaneously, the healthcare system become transparent and equitable.
The structure of Present Obama’s healthcare reform plan has not yet delivered nor does it have a chance to deliver is promises. In fact, it has made the healthcare system more dysfunctional and unfair.
Change in the system has to be consumer driven in order to force the government to reform the system so it is affordable and accessible to all. This means honestly eliminating waste at all levels.
President Obama’s waivers to favored groups and concession to vested interests political pressures will not improve the system.
I totally understand that when dysfunction affects the other guy, young busy unaffected consumers have no interest in being involved in actively changing the system. However, they are going to be the other guy at some point.
In answer to the reader’s question “What do I do?”
He could sign up for COBRA. The COBRA system is a flawed system. It is a dishonest promise. COBRA was accepted by congress and consumers without understanding its underlying consequences.
“The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families who lose their health benefits the right to choose to continue group health benefits provided by their group health plan for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in the hours worked, transition between jobs, death, divorce, and other life events. “
Nothing in the Department of Labor’s document covers how the premiums are determined by the healthcare insurance industry.
A consumer electing to take COBRA is charged the calculated premium for an individual healthcare plan. The premium is very high.
Actuarial calculation is designed to the benefit of the healthcare insurance industry. The calculation is not transparent. I suspect the government does not oversee the calculation.
COBRA is about the only option good for a 50 year old obese male with hypertension and hyperlipidemia who has a wife and a 7 year old child. He would be rejected for all private insurance plans.
The individual state’s “high risk pools’” premiums are even higher than COBRA’s premium. The high risk insurance coverage is less inclusive because it excludes any possible risk from underlying conditions.
I felt compelled to help this reader.
He needed coverage in case of a catastrophic illness in his family until he obtained a new position. At his age and health history he should not have any trouble getting accepted for a high deductible policy.
I told him to check which insurance company his family’s physicians accept. It was UnitedHealth.
The 8th plan down the list of UnitedHealth options for high deductible was a $10,000 called Plan 100. The premium would be $318.82 a month. The deductible was $10,000. The plan provides full first dollar coverage after the $10,000 deductible is met up to 1 million dollars.
UnitedHealth Plan 100 underwritten by Golden Rule also had a $7,500 deductible for $417.
I thought this was the plan for this family. Their routine healthcare costs were less than $1000 year. The premium for the $7,500 deductible is $5004 per year. Total savings vs. COBRA is $19,200-$6004= $13,196.
If there was a catastrophic illness in his family and it cost more than $7,500 his total cost would be $7500 plus $5004 for his premium for a total cost of $12,504. He would still save $6,696 (19,200 for COBRA vs. $12,504= $6,696).
The big disadvantage is his premium costs are not tax deductible as it would be for an employer. At a 30% tax rate this consumer would have to earn $27,429 in order to pay $19,200.
The adjudication of claims is simple. The physicians send the bill to UnitedHealth. UnitedHealth allows physicians their negotiated fee. The consumer is then sent an explanation of benefits for allowable fees.
Since the consumer has not reached the deductible, he is required to pay the physician’s allowable fee. This fee is credited toward his $7,500 deductible.
When the deductible is reached the full allowable amount for services is paid. This is the best deal under the present healthcare insurance options for this family of three.
He bought the high deductible Plus 100 insurance. He also complained about the confusing array of options and prices, the lack of transparency about these options, and difficulty in easily understanding the options.
He said he is a pretty smart fellow. He had difficulty in figuring out what to do and was ready to pay for COBRA coverage.
He asked, “How could people of average intelligence figure it out?
It would be easy if there were a questionnaire that would automatically determine consumers’ healthcare policy needs and direct them toward healthcare insurance policies that would fix their needs.
I told him the game is rigged. The insurance industry does not want you to figure out what policy is best for you. It wants you to buy the most expensive policy that might not address your needs.
The opinions expressed in the blog “Repairing The Healthcare System” is, mine and mine alone
“If any innovations and innovative activities are excluded you end with a “stationary state.”
Schumpeter's theory is that “the success of capitalism will lead to a form of corporatism. In turn corporatism will foster values hostile to capitalism. He contends this is especially true among “intellectuals.”
The intellectuals and the social climate must allow entrepreneurship to thrive. If not capitalism will be replaced by socialism in some form.”
The hero of his story is the entrepreneur.
We are seeing this now as corporations are trying desperately to hold on to their power using obsolete technology and suppressing entrepreneurship with the government’s help.
The Internet has provided people with information, a choice and a voice. It has stimulated entrepreneurship and the current software revolution.
The government is making a big mistake in attacking freedom. I do not think it will get away with it because of the power of the Internet.
The hero of my story about "Repairing the Healthcare System" will be the software entrepreneur.
Technology has caused legacy business models to be replaced by innovative software models. These innovative software models have reduced costs and provided more choice for consumers at a cheaper price.
America cannot afford socialized medicine. A paradigm shift must take place. This shift will occur as a result of innovative software. The challenge is who will get there first.
Britain, Canada and Europe’s socialized medical systems are failing financially. These countries are changing their healthcare systems from government controlled socialized systems to private systems.
Entitlement healthcare systems do not work because patients are not responsible for their healthcare dollars. Patients overuse the system because they are not responsible for payment.
When governments are overextended financially they restrict access to medical care.
Secondary healthcare stakeholders are fighting to maintain the “stationary state” because they receive 90% of the healthcare dollars.
Secondary stakeholders use a hollow excuse for maintaining control over the healthcare dollars. They maintain that consumers are too stupid and too powerless to take care of themselves.
Software companies are trying to improve the healthcare system. They have failed because they are focused on the wrong customers.
Secondary stakeholders are a giant hairball between the patient/ physician relationship. This hairball must be disrupted.
Much of the software necessary to disrupt the hairball is available. It is not focused for the benefit of patients and physicians.
An innovator is going to come along and disrupt this hairball just as Steve Jobs disrupted the music industry.
Dis-intermediating software can only become viral and effective if it enhances the patient physician relationship.
Consumers are starting to realize that they must become responsible for their own medical care and control their healthcare dollars. The government is too unreliable.
Patients are the customers/consumers of heaslthcare. Consumers must learn to manage their health and medical care dollars wisely. They must be provided with education and financial incentives to become responsible for their own health and healthcare choices.
What are the areas in which innovative software can dis-intermediate the failing structures in the healthcare system?
Ideal Electronic Medical Record.
Ideal Medical Saving Account.
Chronic Disease Management.
Tort Reform
Patient Education as an Extension of Physicians Care.
Integrated Care Between Family Practitioners and Specialists.
Patient Responsibility: Health and Healthcare Dollars.
Consumer Driven Healthcare.
No one likes to be forced to do anything. President Obama’s Healthcare Reform Act is forcing patients and physicians to do things they do not understand or do not approve of. Americans are refusing to buy into his system.
In the words of the great singer/philosopher Leonard Cohen, ”Everybody knows.”
A software innovator with a prepared mind between the age of 20-50 years old is going to come along and initiate a software revolution in healthcare. It will improve medical care for all. It will decrease healthcare costs and increase patient satisfaction. It will restore the patient physician relationship.
I will be happy to help anyone who will listen.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone
Government, hospital systems, pharmaceutical companies, pharmacies, pharmacy middlemen, and healthcare insurance companies are secondary stakeholders in the healthcare system.
The primary stakeholders are patients and physicians. They also comprise the medical care system. Without the primary stakeholders there would be no need for a healthcare system.
The secondary stakeholders have long ago taken over the healthcare system. All businesses and the government deal with the hand they are dealt using their best judgment. The people running the business or government pursue their vested interest. The difference between businesses and government is businesses work to make as big a profit as possible. Government, depending on the political party in power, pursues fulfillment of its ideology.
Since 1942 and the Economic Stabilization Act of President Roosevelt the market place for medical care has been distorted. In 1946 healthcare insurance was introduced. At that time the interaction between the primary stakeholders, physicians and patients, started to be destroyed by secondary stakeholders.
The cost of healthcare has progressively increased since the government passed the Medicare and Medicaid in 1965. Costs increased further in 1980 when the government said we couldn’t keep paying these increasing costs and instituted price controls for Medicare and Medicaid.
This led to cost shifting of the difference to the private healthcare insurance sector. Businesses providing healthcare insurance for their employees accepted the resulting premiums associated with cost shifting until 1985. At that time they said, “stop.”
The healthcare insurance industry asked corporations what percentage of your gross revenue could you afford for healthcare insurance benefits. The healthcare premiums were 18% of gross revenue.
The corporate answer was they could afford up to 12% of gross revenue. The healthcare insurance industry’s response was, no problem.
HMO pricing became the most economical option for corporate employers. HMO fixed healthcare cost for corporations and healthcare insurers.
HMOs shifted the risk to physicians and hospitals. HMOs failed because physicians and hospital did not know how to assess risk. They accepted risk initially because they were afraid to lose patients.
Hillarycare failed to become law because of the potential for patient abuse, restrictions of access to care, rationing of care and loss of freedom of choice. Patients did not want the government to dictate their medical decisions.
Obamacare was passed by a Democrat controlled congress with a very liberal ideology.
Many congressmen did not read the entire document or debate the potential unintended consequences.
The difference in ideology between liberal and conservative is easy to understand.
The healthcare system is not a true marketplace. The healthcare marketplace has been continuously distorted by government regulations and adjusted regulations since Medicare passage in 1965.
All the stakeholders have distorted the market even further by adjusting to government regulations in order to purse their vested interest.
If real repair of the healthcare system is to occur a real marketplace has to be created. Obamacare is another adjustment in an already distorted marketplace. Obamacare is accelerating the dysfunction in the healthcare system until it implodes and results in increasing costs not savings.
The healthcare insurance industry controls costs. Many Democratic healthcare policy experts have ignored the facts. The healthcare insurance industry’s goal is to maximize its profit. It takes 30% of the healthcare dollars off the top.
The healthcare insurance industry should not be in control of the economics of the healthcare system.
Personal medical care decisions should not be left to the munificence of the government. The government has never done anything efficiently.
Private and Medicare insurance has kept control of medical decisions out of consumers’ hands. Consumers purchase healthcare insurance individually or from Medicare. Consumers also can receive healthcare insurance from their employers as a job benefit.
The healthcare insurer directs consumers to use physicians and hospital in its network. The insurer negotiates reimbursement rates for the insured with hospitals and physicians.
Consumers are given little or no information about the comparative cost or quality of any particular doctor or hospital. Consumers go to a doctor in their network.
Physicians do a history and physical exam and order tests and procedures on patients’ behalf. When the test and procedures come back physicians prescribe the appropriate medication after a follow-up visit.
The healthcare insurance company reimburses physicians.
Patients receive a copy of the bill from the insurer with patient portion of the co-pay. The explanations of benefits are impossible to interpret.
This is not a marketplace transaction. Patients have no control over the reimbursement. Patients and physicians have little incentive to restrain overuse of the healthcare system. They have no incentive to even scrutinize the bill. Patients’ have no incentive to control costs.
The use of healthcare services is divorced from marketplace forces that constantly assess cost benefit ratios. Neither physicians nor patients have incentive to get the best care at the lowest price with the best quality.
As healthcare costs increase each year the source of the increase remains opaque. The increasing costs are made to appear to be the result of patients’ and physicians’ overuse of the healthcare system.
The increase in cost could be the result of the healthcare insurance industry and the pharmaceutical industry’s increased profits.
All stakeholders pursue their vested interests. The only way to align vested interests is to have consumers be responsible for thei health and healthcare dollars.
Only then will a true market place exist. Entitlements and price controls do not work. The cost of healthcare will skyrocket with Obamacare and create a larger budget deficit.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
I wonder how many Congressional Representatives and Senators read HR3200. It is amazing that our representatives would permit the federal government to restrict our freedoms so severely.
This morning I received this You Tube from a reader. It describes the restrictions on our freedoms created by President Obama’s healthcare reform plan. The restrictions have not be publicized by the traditional media.
I was reminded of the blog I wrote on July 30,2009. Below is the link to the original bill and a copy of my 2009 blog.
It is easy to forget all the restrictions imposed on Americans’ freedoms by this piece of legislation.
On Thursday, Oct 20, 2011 at 8:52 AM a reader sent this You Tube and comment
"This has to be one of the scariest pieces I've seen. If you have the stomach, take the few minutes to review. Maybe even compare the statements with the actual bill." Here's the link to HR3200:
I have compared the You Tube to the original bill. Obamacare is defective. Americans will not tolerate centralized control over our lives and choices once they understand the concepts in the bill.
President Obama has been effective in manipulating the media to keep Americans in the dark.
The House of Representatives Healthcare Bill is 1018 pages long. Many Representatives and Senators did not read the entire economic stimulus bill because “we did not have time” before we experienced a severe economic recession. They claimed to be saving us from another great depression.
I have read a good portion of HR3200. The provisions are unacceptable and sinister. It represents a complete government takeover of our healthcare system. It is not in the interest of the consumer. It is not in the interest of our precious freedom of choice.
Every Americans, especially our Senators and Representative must know what is actually in the bill before it is passed. President Obama’s generalities do not cover the details of HR 3200.
Mr. Schweikart evaluated 498 of the 1107 page bill. The summary of one half HR3200 is frightening. His summary is a good reference guide to the appreciation of the harshness of the bill. It also explains President Obama’s urgency in getting a bill passed before anyone realizes the implications of the bills contents.
Representatives who vote for this bill should not be reelected. They are not representing their constituents’ rights or protecting their freedoms. Your healthcare, health and freedoms are at stake.
You can check the reviewer’s summary against the actual bill at the link below.
“Take a look at what actually is in the Health Care bill. Obama makes disingenuous comments like "You'll still keep your doctor" or "You'll keep your existing health care."
Pg 22 of the HC Bill mandates the Government will audit books of all employers that self insured. Can you imagine what that will do to small businesses? Everyone will abandon “self insurance” and go on Government insurance. So when Obama says that there will still be private health care, it’s simply a lie: this mandate will force employers to abandon their private plans.
Pg 30 Sec 123 of HC bill – a Government committee will decide what treatments/benefits a person may receive.
Pg 29 lines 4-16 in the HC bill – YOUR HEALTHCARE WILL BE RATIONED!President Obama has been saying healthcare is to be rationed all along in code.
Pg 42 of HC Bill – The Health Choices Commissioner will choose your HC Benefits for you. You will have no choice!
Pg 50 Section 152 in HC bill – HC will be provided to ALL non US citizens, illegal or otherwise.
Pg 58 HC Bill – Government will have real-time access to individual’s finances and a National ID Healthcard will be issued! Government has real-time access to your tax return presently and means test Medicare recipients’ premiums
Pg 59 HC Bill lines 21-24 Government will have direct access to your bank accts for election funds transfer. A further impingement on freedom and privacy.
Pg 65 Sec 164 is a payoff subsidized plan for retirees and their families in Unions & community organizations (read: ACORN).
Pg 72 Lines 8-14 Government will create an HC Exchange to bring private HC plans under Government control.
Pg 84 Sec 203 HC bill – Government mandates ALL benefit packages for private HC plans in the Exchange.
Pg 85 Line 7 HC Bill – Specifics of Benefit Levels for Plans = The Government will ration your Healthcare!
Pg 91 Lines 4-7 HC Bill – Government mandates linguistic appropriate services. Example – Translation for illegal aliens.
Pg 95 HC Bill Lines 8-18 The Government will use groups, i.e. ACORN & AmeriCorps, to sign up individuals for Government HC plan.
Pg 85 Line 7 HC Bill – Specifics of Benefit Levels for Plans. AARP members – your Health care WILL be rationed.
Pg 102 Lines 12-18 HC Bill – Medicaid Eligible Individuals will be automatically enrolled in Medicaid. No choice.
Pg 124 lines 24-25 HC No company can sue Government on price fixing. No "judicial review" against Government Monopoly.
Pg 127 Lines 1-16 HC Bill – Doctors/ AMA – The Government will tell YOU what you can earn.
Pg 145 Line 15-17 An Employer MUST auto enroll employees into public option plan. NO CHOICE.
Pg 126 Lines 22-25 Employers MUST pay for HC for part time employees AND their families.
Pg 149 Lines 16-24 ANY Employer with payroll $400k & above who does not provide public option pays 8% tax on all payroll.
Pg 150 Lines 9-13 Businesses with payroll between $251k & $400k who don’t provide public option will pay 2-6% tax on all payroll.
Pg 167 Lines 18-23 ANY individual who doesn’t have acceptable HC according to Government will be taxed 2.5% of income.
Pg 170 Lines 1-3 HC Bill Any NONRESIDENT Alien is exempt from individual taxes. (Americans will pay.)
Pg 195 HC Bill -officers & employees of HC Admin (the GOVERNMENT) will have access to ALL Americans’ finances and personal records. Big brother will be watching your every move.
Pg 203 Line 14-15 HC – "The tax imposed under this section shall not be treated as tax" Yes, it says that.
Pg 239 Line 14-24 HC Bill Government will reduce physician services for Medicaid. Seniors, low income, poor affected. Kill off the poor and elderly.
Pg 241 Line 6-8 HC Bill – Doctors – doesn’t matter what specialty – will all be paid the same.
Pg 253 Line 10-18 Government sets value of Doctor’s time, professional judgment, etc. Literally, value of humans.
Pg 265 Sec 1131Government mandates & controls productivity for private HC industries.
Pg 268 Sec 1141 Federal Government regulates rental & purchase of power driven wheelchairs.
Pg 272 SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS – Cancer patients – welcome to rationing!
Pg 280 Sec 1151 The Government will penalize hospitals for what Government deems preventable readmissions.
Pg 298 Lines 9-11 Doctors who treat a patient during initial admission that results in a readmission – Government will penalize you.
Pg 317 L 13-20 OMG!! PROHIBITION on ownership/investment. Government tells Doctors what/how much they can own.
Pg 317-318 lines 21-25,1-3 PROHIBITION on expansion – Government will mandate hospitals cannot expand.
Pg 321 2-13 Hospitals have opportunity to apply for exception BUT community input required. Can you say ACORN?!
Pg 335 L 16-25 Pg 336-339 – Government mandates establishment of outcome-based measures which of course forces health care rationing.
Pg 341 Lines 3-9 Government has authority to disqualify Medicare Adv Plans, HMOs, etc., forcing people into Government plan.
Pg 354 Sec 1177 – Government will RESTRICT enrollment of Special needs people!
Pg 379 Sec 1191 Government creates more bureaucracy – Telehealth Advisory Committee. Healthcare by phone.
Pg 425 Lines 4-12 Government mandates Advance Care Planning Consultations. Think Senior Citizens end of life prodding.
Pg 425 Lines 17-19 Government will instruct & consult regarding living wills, durable powers of attorney. Mandatory!
Pg 425 Lines 22-25, 426 Lines 1-3 Government provides approved list of end of life resources, guiding you in how to die. EVERYONE on Social Security, (will include all Senior Citizens and SSI people) will go to MANDATORY counseling every 5 years to learn and to choose from ways to end your suffering (and your life). Health care will be denied based on age. 500 Billion will be cut from Seniors healthcare. The only way for that to happen is to drastically cut health care, the oldest and the sickest will be cut first. Paying for your own care will not be an option.
Pg 427 Lines 15-24 Government mandates program for orders for end of life. The Government has a say in how your life ends.
Pg 429 Lines 1-9 An "advanced care planning consultant" will be used frequently as patients’ health deteriorates.
Pg 429 Lines 10-12 "advanced care consultation" may include an ORDER for end of life plans. AN ORDER from the Government to end a life!
Pg 429 Lines 13-25 – The Government will specify which Doctors can write an end of life order.
Pg 430 Lines 11-15 The Government will decide what level of treatment you will have at end of life.
Pg 469 – Community Based Home Medical Services/Non profit orgs. (ACORN Medical Services here?)
Pg 472 Lines 14-17 PAYMENT TO COMMUNITY-BASED ORGANIZATION. 1 monthly payment to a community-based organization. (Like ACORN)
Pg 489 Sec 1308 The Government will cover Marriage & Family therapy. Which means they will insert Government into our marriages.
Pg 494-498 Government will cover Mental Health Services including defining, creating, rationing those services. You’d better speak up now before you are on the "advanced care consultation" list.
It gets worse: the Health Care Reform bill that is now about to come up for a vote will absolutely eliminate private health care options. Do not kid yourself: They are going to say that they aren't going to interfere with your right to go to your "own doctor" or have your own "private health insurance." But there won't be non-government doctors or private health insurance if the government mandates them out of existence.
Even still, I hear people who want to "get past all this partisanship." Sorry, but GROW UP.
Our system from the beginning has pitted one group against another out of fear of the very giant government that is metastasizing before our eyes. James Madison didn't like "parties" or "factions," but he finally admitted that they were absolutely necessary to fragment power.
For our system to work there has to be a clear choice, not a mushy middle, because the mushy middle always, always, always gravitates left. There is a "presumption of power" on the left –conservatives, by nature, do not like government, don't trust it, and do not want to use it to advance their ends, which they see as advanced through liberty, individual achievement, and entrepreneurship.
It is hard to read H3200 and comprehend its implications. However, a careful reading leads me to similar conclusions to those of Mr. Schweikart.
Do you think your representatives have studied the bill? If they have and vote for it they should lose your vote. If they have not read it and vote on party lines they should lose your vote.
This bill is not going to Repair the Healthcare System. It will make the healthcare system more complex, restrict access to care, restrict the delivery of care, ration care, limit freedom of choice, and increase the deficit.
Let your Senators and Representatives know the proposals are unacceptable. Write, fax, call, email, twitter. Tell them:
“We do not want the government to control our lives. We want affordable, universal healthcare coverage that does not limit access to care. We want control over our healthcare dollars. We do not want government to control our lives and our money.”
We all agree the healthcare system is dysfunctional. As Obamacare works its way toward full implementation the dysfunction has intensified and healthcare costs have increased. It is important for all of us to recognize why Obamacare is a disaster.
Obamacare will not only destroy our healthcare system. More importantly It will destroy our freedoms.
On October 19th 2011, President Obama said his administration has done everything correctly. It just hasn’t worked out yet.
Does anyone believe him?
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone.
This mutual distrust must be overcome and price transparency achieved before any progress can occur in Repairing The Healthcare System.
In order to achieve Pareto efficiency in the healthcare system all the stakeholders must agree to price transparency. The advantage of Pareto efficiency is that all the stakeholders will be better off in the long term while some might have to yield to some issues in the short term.
Lodi Hurwicz introduced the idea of incentive compatibility. His point is the way to get as close to the most efficient economic outcomes is to design mechanism in which everyone does best for himself or herself. He says this can be achieved by sharing information truthfully (Price Transparency). It is easy to understand that some people can do better than others by not sharing information or lying.
The lack of interest in price transparency by the healthcare insurance industry was demonstrated in New York State in the last few weeks.
Benjamin M. Lawsky, the state superintendent of financial services, whose new agency oversees the state insurance division said,
“How these companies are setting these rates is vital for the public to know, and should not be treated like a state secret,” “Transparency will promote healthy competition and enable the public to rigorously comment on proposed rates, two goals that all of us should favor.”
The state insurance division issues permits to healthcare insurance companies to sell insurance in the state. If a healthcare insurance company does not want the state to publish the reasons for its insurance premium increases they should not be issued a permit to sell healthcare insurance in that state.
Mr. Lawsky has ordered that the memos be made public. His decision will go into effect by the end of November unless the companies obtain a court injunction.
The healthcare insurance industry has held the advantage over consumers in the past under the long-standing “trade secret” exemption. The state legislature should have the courage to eliminate that exemption.
State Insurance Department has received hundreds of consumer protests over proposed premium increases, many of them double-digit percentages without justification except that it must be done. The State Insurance Department now has the power to reject proposed rate increases. The question remains as to whether they have the courage to reject the increases.
United Health/Oxford wrote, “This matter is of critical importance to us.” It called the information “proprietary.”
Aetna wrote, “Public disclosure in this format will provide ready and easy access to comprehensive pricing, product and marketing strategies,” and warned of “substantial and irreparable injury to Aetna.”
Independent Health said, “It had spent “well over $700,000 developing the trade secret documents” and estimated that the value of keeping them confidential was much higher.
It sounds as if both Aetna and Independent Health are threating the state with legal action. If they do not like the state rule they should move on and not sell insurance in that state.
The state’s obligation is to protect its consumers from abuse. The state should simply deny permits to the healthcare insurance company to sell healthcare insurance in the state.
Moreover, other companies argued, the filings are too technical to be understood by consumers.
“Several of the exhibits to the rate application as well as the actuarial memorandum contain not only trade secrets as noted above, but esoteric actuarial pricing precepts best understood by fellow actuaries and health plan competitors,” Sean M. Doolan, a lawyer representing Excellus, Empire, Connecticut General, and Capital District Physicians’ Health Plan wrote to state officials.
“These documents, often speaking of concepts such as morbidity and anti-selection, could cause not only confusion, but also unnecessary alarm to the layman policyholder.”
These are excuses. They are lame and patronizing. Consumers are not as dumb as the insurance industry thinks.
Elisabeth Benjamin is vice president for health initiatives at the Community Service Society of New York and a founder of Health Care for All New York, a coalition of 100 groups working for more affordable medical care. She said the group has hired its own actuaries.
“The only way the public will find out whether these outlandish price hikes are justified is if we can see the underpinnings,” she said. “They would like to have us ignorant. What they are saying to us, by opposing the disclosure of why they think their rate increases are justified, is that they want to keep us uninformed consumers.”
They sure do want to keep consumers ignorant. I hope the state officials are not intimidated by the healthcare insurance companies. I hope the state officials are supported by New York’s governor. Consumers are starting to understand their power. They need to drive the healthcare system. This issue is a good place to start.
Mechanism Design has demonstrated that the most efficient systems are created when everyone’s vested interests are aligned.
“An example is defense contracting. If you agree to pay on a cost plus basis you have created incentive for the contractor to be inefficient.
The defense contractor will build enough extra into a fixed price system to account for cost overruns. The cost overrun would be permitted in the rules if the price was transparent. If there were no cost overruns the contractor’s profit would be increased. It would provide incentive to be efficient.
“If you agree to pay a fixed price, you can come close to an efficient price if you have all the truthful information.”
A reader wrote’
Stanley:
History has proven over and over again that only the market mechanism of willing sellers and willing buyers is the optimal way to allocate economic resources. This presumes an informed buyer, and a willingness of sellers to compete for buyers. Adam Smith was clear on this in the Wealth of Nations.
If incentives are aligned and truthful price information is available an efficient system is created. Most stakeholders think they can do better by not sharing truthful information. If the rules of the game require truthful information the system can become an efficient market driven solution.
The healthcare system must become market driven. At present the healthcare system is an artificially distorted free market system. Government intervention has distorted and made the free market inefficient.
The distorted free market has led to higher prices.
The concept of Pareto efficiency implies one stakeholder has to yield something which makes another stakeholder better off. The reality is in an efficient system the first stakeholder is worse off than he/she theoretically could be.
The first stakeholder yielding makes him/her better off than he/she is but still worse than he/she could theoretically be. The temptation is to not be truthful in order to maintain dominance at the expense of others.
The free market mechanism was far less afflicted than central planning bureaucracy by such incentive problems. The free market economy was by no mean immune to this defect.
He observed that the free market economy can get us closer than central planning to incentive compatibility because the end consumer can drive the discovery of truthful information.
Consumers creating rules of engagement in a market driven economy can get closest to ideal Pareto efficiency.Since customers determine success of an enterprise by creating demand in a transparent environment, they can get closer to an efficient system.
Consumers can create the rules of the game for compatible incentives. Consumers must have the appropriate financial incentives to maintain their health. They must also own their healthcare dollars.
The government should help consumers design the rules of the game and then get out of the way. The rules should be designed so the patient is first.
At present the insurance industry is taking advantage of the patients, doctors and hospital systems. The hospital systems are taking advantage of the patients, doctors and insurance companies. Doctors are taking advantage of the insurance companies, hospital systems, patients and the government. The government is taking advantage of the hospital systems, the doctors and the patients. Everyone is pursuing his or her own vested interest at the expense of other stakeholders.
The insurance companies take advantage of employers. The drug companies are taking advantage of patients and unduly influencing physicians.
In our healthcare system everyone is pursuing his vested interest in a game that has rules that do not lead to “incentive compatibility.”
Some politicians think central planning can result in producing effective rules and appropriate controls.
Historically, central planning has not worked.
Before effective healthcare reform can take place, rules acceptable to all the stakeholders must be in place. Stakeholders must create price transparency and understand the value of compromise.
It must be understood why it is important that consumers drive the healthcare system and not the central government. Only consumers can create an undistorted efficient market driven system.
Consumers have to have be empowered and given incentives to align all the stakeholders’ incentives. The best and easiet program to achieve this goal is my ideal medical saving account.