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“What A Revoltin’ Development This Is !!”

February 6, 2013
inMedicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
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Stanley Feld M.D.,FACP,MACE

President Obama stated that he believes that deficit
spending is harmless. It follows that any amount of deficit spending will do no
harm.

President Obama rhetoric causes him to contradicts
himself.

 

The Life of Riley, with William
Bendix  in the title role as Chester Riley, was a
situation comedy on radio in the 1940s and early black and white television in
the 1950s.

Chester Riley always inserted his exclamation of indignation about a
situation he experienced into in the comedy,

"What a revoltin' development this
is!"

The statement became one of the most famous catchphrases in American popular culture.

 

 Americans find
themselves in a similar situation weekly just as Chester did in the 1950s

In the CBO's analysis of the
president's preliminary 2013 budget, the spending is $3.72
trillion. The CBO predicted that collections will be $2.5 trillion dollars. The
CBO predicted that there will be a $1.22 trillion dollar deficit added to
America’s debt in 2013.  

If the economy slows as many predict the projected deficit get
worse.

On February 5, 2013, a day after President Obama missed his budget
due date, the CBO revised its preliminary prediction.

The CBO said the deficit spending for 2013 would be reduced from a
predicted $1.22 trillion to “only” $845 billion dollars without a decrease in
unemployment, a decrease in government spending or an increase in the 1.2%
growth of the economy.

This decrease in deficit spending is a result of the increase in taxes
January 1,2013 to avoid the fiscal cliff.

The reality is that
President Obama is increasing government spending yearly.   

“Obama's yearly budgets are record-breaking.

Here's a
summary of a fact-check analysis: 

The correct figure to use is the CBO's analysis of the
president's 2013 budget, which clocks in at $3.72
trillion. 

So this is what we end up with: 

2008:  $2.98 trillion 

2009:  $3.27 trillion

2010:  $3.46 trillion

2011: $3.60 trillion

2012: $3.65 trillion

2013:  $3.72 trillion”

“Starting in 2008 as the base year and ending
with 2012, the compound annual growth rate for Obama's spending starting in
2009 is 5.2 percent.”

President
Obama's deficit-to- Gross Domestic Product
(GDP) ratio is huge. Democrats and the traditional media complained that George
W. Bush was overspending.

 George W.
Bush’s overspending was tame compared to President Obama’s.

“George W. Bush

2001-08 2.0
2002-09 3.4
Average 2.7

Barack Obama

2009-12* 9.1
2010-12 8.7
Average 8.9

*Fiscal 2012 ends Sept. 30, 2012, so this figure
is estimated”.

 The median annual income has dropped in the last 4 years under President Obama’s
reign.

“Using constant 2012 dollars (to adjust for
inflation), the median annual income of American households was $53,718 as of
June 2009, the last month of the recession.  Now, after 38 months of this
"recovery," it has fallen to $50,678 – a drop of $3,040 per
household.”

The
Senate, controlled by Democrats, voted unanimously against Obama's 2012 and
2013 budget proposals 0-97 and 0-99 respectively. The House of Representatives
voted 0-414.

Both the Senate and the House knew that
continuing deficit spending is economic suicide.

The U.S. government’s economic problems are
never solved by increased regulations.

Regulations costs the government billions of dollars
to write and execute. It also costs businesses additional billions to comply
with new regulations. This spending detracts from investments in economic
growth.

Regulatory costs have skyrocketed during the
Obama administration.

The costs of regulations have more than doubled since
President Clinton’s administration and tripled President George W Bush’s
administration.  The present regulatory
costs are almost double the combined costs of Presidents Clinton and Bush.

What does this have to
do with Repairing the Healthcare System?

The massive increases in healthcare regulations
are distorting the physician-patient relationship. They are commoditizing
medical care.

The result is large increases in healthcare
costs for consumers. The increases are occurring long before Obamacare has been
fully implemented.

The administration’s regulations have not
touched on the major causes of the rising costs in the healthcare system. The
top two causes are defensive medicine and the need for tort reform and
effectively challenging the abuse of the healthcare insurance industry.

The short-term effects will be devastating to
the delivery of medical care to patients.

The long-term effects are not being talked
about.                                             

Physicians
are blamed for the rising medical costs. Each year the government threatens
physicians with a 25-30% reduction in reimbursement.

Physicians
collect only 10% of the total healthcare dollars spent. A major question is
what is the rest of the money being spent for?

How
do you measure the value of physicians’ services? Medicare and Medicaid pay
physicians a small percentage of the value for their services. 

When
Obamacare is fully implemented payment to physicians will be lower. Physicians
will be responsible for their financial performance and penalized if
performance is poor.

“When people
don't get paid adequately, the quality of their work suffers over the long
haul.  The best and brightest would-be doctors won't sign up for medical school when they figure out they
won't get paid enough.”

Another option is that physicians will unionize.
They will hire effective negotiators to be paid their true value.

Obamacare’s hidden taxes are fudging our real
unfunded obligations. The ballooning deficit will slow our economic growth. Millions
will remain unemployed and uninsured.

The Independent Payment Advisory Board's cost-cutting measures will ration medical care. The board will decide what
treatment is worthy of reimbursement not the consumers of
healthcare.

“ Remember
the recent replacement refs for the NFL?  The NFL went downhill, and the
fans booed and demanded a change.

Imagine
replacement doctors in our medical care.”

Healthcare consumers are confused and angered
by swiftly rising premiums and high deductibles, according to focus groups in four U.S. cities conducted by researchers for the
Robert Wood Johnson Foundation.

These focus groups were likely to question
physicians’ recommendations and compare costs and quality information just like
shopping for a car or a TV set. They knew their costs “practically down to the
penny.”  

Consumers are not stupid!

They are starting to say, as Reilly did on his
weekly sitcom,

“ What a revolting development this is.”

 

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



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Unintended Consequences Mount

February 3, 2013
inMedicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

On January 1, 2013, as part of the law
to delay the “Fiscal Cliff” congress and the President delayed the Doctor fix
for another year.

The Medicare Sustainable
Growth Rate (SGR) is a method currently used by the Centers for Medicare and Medicaid Services (CMS) in the United States to
control spending by Medicare on
physician services.

In the last several years
the SGR calculated reductions in physician reimbursements have been delayed.
The yearly percentage reduction has been cumulative over the last five or six
years.

The percentage reduction
for 2013 was supposed to be 29%. The cumulative reduction due in 2014 will be
over 30% unless the SGR is permanently fixed.

The formula for the yearly
SGR reduction is complicated and defective. Physicians’ reimbursement for
service has been reduced over the years so that a 29% reduction in Medicare’s
physician reimbursement would surpass physicians’ overhead costs for providing
their service. 

Physicians could not stay
in business if it cost more to service patients than they would be reimbursed.
Physicians accepting Medicare cannot charge more than the law permits.

Therefore, with the threat
of massive reductions, more and more physicians are opting out of Medicare.
These physicians will serve Medicare patients but the patients have to pay for
the services out of pocket.

In the past patients would
send their paid bill to Medicare and receive reimbursement for Medicare
allowable fees.

The administration’s goal
is to force all physicians to participate Medicare. A new administration
regulation eliminates direct Medicare reimbursement to patients for services
provided by physicians that do not participate in Medicare.

The losers are seniors on
Medicare.

I predicted there would be
a mass exodus of physicians from the Medicare program. if the “Doc Fix” were
not enacted for 2013. Physicians opting out of the Medicare program would put
an added burden on seniors.

Physicians are happy that the reimbursement cuts have
been delayed for another year because they want to be able to service their patients
without putting an additional burden on them.

The government postponing the cut for another year continues
to frustrate physicians because they have to face the same uncertainty next
year.

Neither congress,
physicians nor the administration support the present SGR formula. However the
government is unwilling to spend $200 million dollars to fix the SGR formula.

This year hospital systems are being
forced by the government to receive less Medicare reimbursement in order to pay
for half of the cost of the temporary “Doc Fix.” Hospital systems are not very
happy.

“Texas hospitals have already
faced painful cuts,” said Dan Stultz, president and chief executive officer of
the Texas Hospital Association.

“Although addressing the
Medicare physician payment formula is imperative, cutting reimbursement to one
health care provider to pay another is shortsighted.

These cuts come at a time when
hospitals are making significant investments in technology and facilities to
provide for an aging population.”

Hospital systems claim they continue to struggle with
past decreases in Medicare and Medicaid reimbursements.  Government reimbursement represents about 60
per cent of hospital system’s revenue. Hospital systems assert that decreasing
one healthcare providers (physicians) reimbursement to pay for delaying the
“Doc Fix” is coming at a time when hospital systems are struggling for survival.

“ These cuts come at a time
when hospitals are making significant investments in technology and facilities
to provide for an aging population.”

Patients who have recently been in the hospital
recently uniformly complain about hospital bills and hospital co-pays.

When patients study the “Explanation of Benefits (EOB)” carefully they complain about being
billed for procedures they did not receive.

Most hospital bills are impossible to interpret.

Patients also complain about the high salary of
hospital CEOs. These salaries are usually published in local newspapers.

 The high
salaries paid to the multitude of hospital administrators are not available to
consumers.

The way hospital systems report their expenses are
not available to the government or consumer protection groups either.

The government should not take the hospital systems
word that the hospitals are losing money because of expenses and low reimbursement.

I suspect there is a great deal of waste, overpayment
and duplication that the government could question.

If all of these expenses are justified the government
should reimburse hospital systems for expenses and provide them with a
reasonable net return. The government should not indiscriminately cut
reimbursement.

There are a lot of dysfunctional activities in the
healthcare system. The dysfunction is a result of massive regulations that are
unenforceable.

It is important to find the root causes of the
dysfunction. The administration should help hospital systems fix the dysfunction
rather than penalize them indiscriminately.

Hospital systems have already been adjusting to these
stresses. They are consolidating and forming regional monopolies in the name of
efficiency.

The result of eliminating hospital competition will
only increase the costs of hospitalization for patients.

Hospital systems are also buying physicians practices
at an alarming rate. Physicians want to practice medicine and not deal with all
the complicated regulations.

 Once these
physicians realize that their independence and intellectual freedoms are
compromised there will be further unintended consequences.

 If the
administration does not help fix the dysfunction hospital systems will figure
out a way to decrease the impact of the cuts.

The unintended consequence will mount. The cost of
the healthcare system will escalate while the healthcare system will become
more dysfunctional.

The burden of cost increases due to this dysfunction
will fall on Medicare and Medicaid recipients.

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

 

 

 

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Actions Contradicts Goals

January 30, 2013
inDefective scientific studies, Medicine: Healthcare System
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Stanley Feld M.D.,FACP,MACE

The
promise of Obamacare is to deliver quality medical care at an affordable price.
Prevention has been emphasized. Prevention will avoid costly complications of a
disease.

The talk about prevention is excellent. The healthcare
policy action falls short of the promise.

Despite strong efforts by the International Society
for Clinical Densitometry and other sister societies in the Fracture Prevention
Coalition, a provision to increase Medicare payments for DXA was not included
in the fiscal cliff legislation.

Congress adopted the American Taxpayer Relief
Act of 2012, HR 8, on January 1, 2013. The bill included a number of other
provisions affecting Medicare payments to physicians that have caused disappointment. The
bill did not include the need to incentivize the use of bone density for the
early diagnosis of osteoporosis.

Below is
a summary of how the various Medicare provisions were resolved in the act and
the bottom line for DXA:

1.  The new law blocks the 27% Medicare physician payment cut resulting
from the Sustainable Growth Rate (SGR) formula, freezing
Medicare payments at the 2012 level through calendar year 2013.  

2.  The automatic  "sequestration" cuts that would also
have reduced Medicare physician payments by another 2% are postponed
for two months until 3/1/12013.   

3.  The bill authorizes cuts to reimbursement for advanced
imagining services such as MRI and CT. These cuts do NOT apply
to DXA, which is not considered an advanced imaging service.

As a practical matter, the new payment rate for DXA in the office setting
dropped on 1/1/2013 from a national average of $56 to $50. 

I have written about the definition of quality medical care for osteoporosis.

Osteoporosis can be diagnosed early by bone densitometry (DXA). Osteoporosis
is a progressive disease.

Osteoporosis

 

Discouraging the use of DXA is not a step in the right direction for preventing
costly complications.

Osteoporosis affects the spine (vertebral column). It is initially manifested
by a decrease in bone density as determined by DXA. As osteoporosis progresses
patients develop compression fractures. Some compression fractures are painful
and some are not.

Osteoporosis 4

 

Patients lose height and develop a stooped posture.

Osteoporosis 3

The change in patients’ posture causes a change in the patients’ center
of gravity. The change in the center of gravity causes a change patients’
ability to balance herself against a fall.

If patients with osteoporosis fall they can put torsion on their hips.
The bone in the hip is thinned by the long process of developing osteoporosis.
Their hips can fracture.

Princ_rm_photo_of_bone_density_test

The mortality rate after a hip fracture is more than 20%. The morbidity rate
post- op is 40-50%. Very few patients return to having a normal quality of
life.

Patients may be forced to live in nursing homes.

If we look at elderly people around us we will notice that as many as 60%
of people over 70 years old have lost height and are have stooped posture. They
have osteoporosis.

Early osteoporosis starts manifesting itself at about 50 years in women
and 70 years old in men.   

Modern medicine can prevent the onset of osteoporotic fractures. Modern
medicine can also prevent further fracture by treating women and men after they
have developed osteoporotic fractures.

Preventing hip fractures would save the healthcare system billions of
dollars a year in healthcare expenditures. Prevention of further fractures
would also increase the quality of life in elderly osteoporotic patients.

Much has been written about the IPAB (Independent Physician Advisory
Board).  I have written about the
potential defects in the structure of this board and the defects and
functioning of its existing precursor the USPSTF (United States Preventative Services
Task Force).

The USPSTF recommendations are created from its review of the published
literature. Most of the committee members are non-specialists.  They do not have medical experience in
treating osteoporosis. The committee ignores the consideration of the natural
history of the disease.

Yet, the USPSTF recommendations have resulted in a yearly decrease in the
reimbursement by both private insurers and Medicare for bone densitometry (DXA).

In some cases private insurers and Medicare do not pay. This is the way
to restrict access to care and devalue physician' judgment.

Physicians have not done a good
job detecting and treating osteoporosis. The decrease in DXA reimbursement will
further decrease physicians’ interest in treating osteoporosis preventively.

A small short-term cost savings will result in increased long-term expenditures.
The result will be an increase in cost to the healthcare system.

This is the contradiction in Obamacare’s promise of prevention.

Prevention is the key to healthcare savings.

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

 

 

 

 

 

 

 

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The Promise Of Health Information Technology (HIT) Through Electronic Medical Records (EMR) Is Not Fulfilled

January 28, 2013
inEMR, Medicine: Healthcare System
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 Stanley
Feld M.D.,FACP,MACE

 In 2005 the
RAND corporation published a study stating the HIT through EMR can save the
Healthcare System $81 billion dollars a year in a short period of time.

In
2012 HIT and EMR have not come close to fulfilling the RAND study’s prediction.


EMRs
deployed effectively can deliver that promise.

In 2009 the administration’s
stimulus package put aside $19 billion dollars in the first two years and an
extra $50 billion dollars over the next five years to stimulate and subsidize
the adoption of Electronic Medical Records (EMR) to further development of
Health Information Technology (HIT).

The RAND corporation’s 2005 study predicted
a healthcare cost savings of $81 billion dollars a year.

The RAND corporation’s study was
wrong. In the interim healthcare costs have risen $800 billion dollars

 “In
our view, the disappointing performance of health IT to date can be largely
attributed to several factors: sluggish adoption of health IT systems, coupled
with the choice of systems that are neither interoperable nor easy to use; and
the failure of health care providers and institutions to reengineer care
processes to reap the full benefits of health IT.”

Many EMR software development companies have
reaped handsome benefits from the administration’s largess. These software
companies have a strategic defect in common.

These companies are trying to transform the
processes used in the practice of medicine into a process that permits the
government to commoditize the quality of medical care. 

If successful the government believes it
could then “judge quality of care”
and “pay for performance” accordingly.

The goal to ensure success should be aimed at
teaching physicians how to improve the quality of medical care rather than
judging physicians’ care.

The RAND corporation’s new suggestions are
repeating the same mistakes that have failed.

 “We believe that the original promise of
health IT can be met if the systems are redesigned to address these flaws by
creating more-standardized systems that are easier to use, are truly
interoperable, and afford patients more access to and control over their health
data.

Providers
must do their part by reengineering care processes to take full advantage of
efficiencies offered by health IT, in the context of redesigned payment models
that favor value over volume.”

In the meantime annual health care expenditures in the United
States have grown by $800 billion. 

The new RAND study blamed the underperformance on several
factors,

 “Including: sluggish adoption of HIT systems, along with
balky systems that are hard to use and aren't interoperable; and a failure by
providers and hospitals to adjust care processes to better benefit from
HIT. “

The RAND corporation is looking at the EMR problem
from 30,000 feet. On the ground many private practices and hospital systems had
previously installed information systems that cost them dearly and eroded those
providers’ net revenue.

Money is the main
impediment especially when reimbursement for physicians and hospital systems is
decreasing. Presently, physician groups and hospital systems are struggling to
remain solvent. This is partly from decreased reimbursement and partly from the
cost of ineffective non-functional information systems.

A new capital expenditure
of $65,000 dollars per physicians and $200 to $500 million dollars for hospital
systems is unrealistic even with the government’s partial subsidy. The cost
increases when maintenance fees are added.

 Many hospitals simply do not have the capital
to buy systems that can cost $20 million to $200 million, especially when so
many are struggling to remain solvent. Hospitals also worry about high
maintenance costs, an uncertain payoff on their investment, a lack of staff
with adequate technical expertise and resistance from doctors.

 In 2009 only 1.5 percent of
3000 hospitals had a comprehensive and fully functional electronic medical records
system “ comply with meaningful use criteria.”

The meaning of meaningful
use is all major clinical units in a hospital must perform 24 functions deemed
important by a panel of experts.

The EMR should incorporate
data points. It should include physicians’ and nurses’ notes in data point
format.

The EMR must have the ability
to order laboratory and radiological tests.

It must include clinical
guidelines defining criteria for treating various conditions. It should contain
alerts to avoid dangerous drug interactions and 20 other functions.

It is cookbook medicine all
over again. The goal is to eliminate physician judgment.

On January 1,2013 only 11
percent of the hospitals had even a basic EMR system in at least one major clinical
unit that performed 8 of the 24 functions.

Physicians have been slow to cooperate. Intuitively they
know that a functional EMR might collect data that will be used against them,

The question is will the data improve medical outcomes,
result in less medical complications and less morbidity and mortality? Will it
increase or decrease physicians work hours or increase or decrease physicians’ net
revenue?

“Pamela McNutt, senior vice president/CIO at Dallas-based Methodist
Health System, says HIT advocates were a little naïve early in the
process. 

"There was a bit of over-simplistic thought that if we just purchased
and installed some software that suddenly everyone would start connecting and
talking and it is premature," McNutt says. "Even people who have met
high levels and are ready to meet Meaningful Use Stage 2 still have to work to
get efficiencies."

McNutt
says the whole idea of "efficiencies" in HIT is undefined.

"We
have to talk about what are the efficiencies we are looking for," she
says. 

Accumulating
data to judge performance should not be the goal.  Judging performance does not necessarily increase
efficiency.

The
EMR should improve the physician-patient relationship. It should be for the
patients’ benefit. It should not be for data collection to commoditize medical
care..

The
ideal EMR should be constructed through the eyes of practicing physicians and
not through the eyes of bureaucrats and computer software companies. 

It
should be an EMR that is interoperable and compatible with physicians and
patients needs not the administration’s needs.

The
EMR should be cloud based.

It
should be secure and protect patients’ privacy. 

It
should not result in a capital expenditure by physicians or hospital systems.

Provider
would pay by the transaction.

It
should not provide a financial burden to physicians and hospital systems.

It
could be updated and maintained at no cost to providers.

It
would turn an expense into a profit center for the government.

Why can’t the
administration’s healthcare policy makers figure this out?

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

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How Are Accountable Care Organizations (ACOs) Doing?

January 23, 2013
inChronic Disese Management, Consumer Driven Health Care, Medicine: Healthcare System
• Leave a comment

Stanley Feld M.D.,
FACP, MACE

 In a word the formation
of Accountable Care Organizations is doing poorly.

If one believes the CMS
press releases one would believe the formation of ACOs is doing well.

In the past, I have gone
into great detail on why I believe Accountable Care Organizations will fail.

I believe physicians and
hospital systems should be accountable for outcomes but only the outcomes they
can control.

They should not be
accountable for outcomes they cannot control.

ACOs are really HMOs on
steroids. Risk is transferred from the government to the healthcare providers.

HMOs failed in the 1980’s
and 1990’s because physicians and hospital systems realized that they could not
evaluate risk or manage risk.

It is impossible for
providers (physicians or hospital systems) to control patients’ behavior in
adhering to treatment for their disease.

It is almost impossible for
the government to commoditize reimbursement accurately for diseases unless the
government can weigh the risk of poor disease outcomes.

No one has figured out
the way to accurately risk weight the outcome of a patient’s disease and
treatment.

CMS believes by
increasing the number of codes in ICD-10  to 68,000 codes vs. ICM-9 18,00 codes, the old coding system, the
government will be able to weigh risk leading to accurate cost assessment.

I believe this is a
fantasy of healthcare policy wonks working for the Obama administration.

Many physician groups
and hospital systems believe they will lose money taking on these risks. These
are the groups that are holding back and not forming ACOs.

It is the reason the
Mayo Clinic and the Cleveland Clinic have refused to form ACOs.

Nevertheless on January 1st CMS proudly announced that
it has nearly doubled the number of ACO programs in the country by adding 106
new ACOs to the existing 148 programs for a total of 254 programs to date.

The CMS announced its latest and
largest round of accountable care organizations under the Medicare
shared-savings program.

I would not be as proud as CMS is to applaud this level of
participation in the ACO program. ACOs are the keystone of Obamacare.

Complete national participation is supposed to occur by January
2014.

There are a total of 254 ACO’s signed up in 50 states or 5.08 ACO’s
per state.  There are many more potential
ACOs per state than 5.08 per state.

“CMS said half of ACOs are physician-led and
care for less than 10,000 Medicare enrollees.” 

This is not a good sign.
The success of the ACO program is defined as shifting the risk of medical care to
hospital systems and physicians.

What is the problem?

The problem is obvious.
The definition of insurance is,

“Insurance is the
equitable transfer of the risk of a loss, from one entity to another in
exchange for payment. It is a form of risk management
primarily used to hedge against the
risk of a contingent, uncertain loss.”

“An insurer, or insurance carrier, is a company selling the
insurance; the insured, or policyholder, is the person or entity buying the
insurance policy. The amount to be charged for a certain amount of insurance
coverage is called the premium.

“Risk management,
the practice of appraising and controlling risk, has evolved as a discrete field of
study and practice.”

Risk management is far
from an exact science. Risk management depends on a large number of people
paying premiums who are not at risk for disease.

Obamacare’s goal is to
have all the low risk consumers pay for the higher risk consumers.

However, President Obama
has provided low risk consumers an out. The penalty for not participating is
modest compare to the cost of the insurance. If a low risk consumer gets sick
he can immediately join the health insurance exchange program without
restrictions.

The increased cost of
illness is compounded when a large number of patients have chronic diseases.

A contributing factor to
developing chronic disease is obesity.

America has a national
obesity epidemic.

Patients with Diabetes
Mellitus are vulnerable to multiple diseases such as hypertension,
hyperlipidemia, kidney disease, eye disease and vascular disease.

Each might be at a
different stage of progression. The risk for costly complications is different
for each at each stage of disease progression.

The diabetic might or
might not adhere to the treatment regime outlined. It is difficult to risk
weight these patients. It is risky to take the responsibility for the medical
care outcomes for these patients.

In reality the principle
risk managers are consumers.

Healthcare policy
experts have not practiced medicine. They either do not understand these risks
or they want to place the risk with physicians and hospital systems and provide
undervalued reward.

Many medical outcomes are
dependent on patient responsibility for managing their own risk. Patients must
participate in their own care to receive maximum benefit and the best medical outcomes.

Patients must become
professors of their disease.

 

There are many reasons ACOs will fail

1. ACOs
do not empower consumers to be responsible for their own medical care. 
Healthcare should be consumer driven with consumers controlling their healthcare
dollars. They will then make informed choices about their care and insurance
coverage.

2. ACOs create artificial
incentives to improve quality medical care and provider performance.

3.  Consumer driven healthcare creates real
incentives to promote price competition by physicians and hospital systems. True
competitors will constantly work to improve their products, attract
consumers, and ultimately increase market share.  

In a systems of ACOs consumers do
not play a role in stimulating completion. Consumers are passive recipients of
treatment from an assigned ACO.

4. Most physicians are reluctant
to assume accountability for patient outcomes.  Physicians recognize that
most medical outcomes are directly under consumers behavioral control.

5.  ACOs structure does not include consumers’
incentive to be responsible or accountable for their own medical care.

 ACOs undermine any attempt to create a truly
accountable healthcare system that can drive down medical costs.

6. ACOs do not encourage provider
accountability.  ACO’s shared savings incentive
does not seem to be adequate for the risk assumption.  

 Providers will continue to
be paid for each service they perform until the government provided
funds run out for that ACO.

7.  There are also grave uncertainties and
practical complications of distributing government funds and savings if any
between the hospital system and physicians on the hospital systems staff.

 8. ACOs create an
unfair competitive advantage for large organizations that are hospital system centric.
Eligibility requirements are vague and ambiguous. The eligibility
requirements suggest that larger organizations have an unspoken
eligibility advantage.

 9.  This is the reason
hospital systems are trying to form ACOs. Hospital systems think they will make
money. I believe hospital systems will lose money. The government will have to
supplement payment for hospital systems to stay afloat.

10. When hospital systems lose
money they will fight with their staff physicians over the distribution of
government reimbursement.

 The cost of hospital services will then
skyrocket further. Consumers will be the losers.

11. Groups of independent
practitioners as well as other types of small and mid-sized practices may
lack the infrastructure, information technology facilities, or other resources
needed to qualify for ACO eligibility.

12.  They will be forced to join hospital systems.
Hospital systems have a long history of taking advantage of physicians
skills and intellectual property.

 Tension between hospital systems and staff
physicians will be created. Hospital systems’ ACOs will crumble. The cost of
medical care will continue to increase further.

These are just a few of the reasons ACO’s will fail.

No matter how hard CMS tries to change the narrative
these are some of the reasons explaining the lack of hospital and physician participation
to this point.

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

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The Real Problems

January 19, 2013
inDisinformation and the healthcare system, Medicine: Healthcare System
• Leave a comment

Stanley Feld M.D.,FACP,MACE

I
am becoming weary of the continuous political games President Obama and
Congress are playing.

President
Obama does best on playing the blame game.

Republicans
do not know how to deal with President Obama.  

As
we approach another Debt Ceiling increase neither the President, congress or
the press are discussing the major problems the country faces.

One
of the major problems is government waste in all departments and all agencies.

The
waste is reproduced by multiple agencies creating an increasing number of bureaucracies
leading to additional regulations. Some regulations are difficult to understand
and many impossible to enforce.

The
inability to enforce regulations leads to more agencies and greater waste.

The
unsustainable entitlement spending for Medicare, Medicaid and Social Security
are the key drivers of America’s deficit spending.

If
these entitlements were originally constructed properly they would be cost effective
and sustainable. They would not be a threat to America’s solvency.

They
would be actual trust funds. They are presently virtual trust funds. The
government borrows the money collected in the name of the trusts from the trust
funds in order fund increased government spending.

The
Social Security and Medicare Trust Fund receive unsecured government obligation
bonds the trust funds cannot call.

Essentially
the two funds are left to pay their obligation on a pay you go basis. As
Medicare and Social Security rolls increases and longevity increases there will
be more recipients than funders of Medicare and Social Security.

Our
“under-informed society” is not aware of these facts. No one has explained it
clearly enough to create a consumer reaction.

 “It is an
unfortunate fact that these programs cannot be modified for the long-term
without the cooperation of both houses of Congress and the White
House.”  

“There is
absolutely no interest on the part of the Democrats in the Senate or Obama, in
being serious about any meaningful reform, except to demagogue these issues.”

The
media discusses everything but the causes of the problems. The public remains
uninformed.

The
administrative waste in Medicare has been estimated to be $250 billion dollars
in 2008. None of this waste has vanished.

Instead
the bureaucratic structure under Obamacare is causing the waste to increase.

Below
is the new bureaucratic structure being developed by Obamacare.


 

Each one of
these agencies creates rules and regulations. There have been 22,000 new healthcare regulations to date and
still counting.

Most of the
regulations pretend to add value to the healthcare system. However they all
make the healthcare system more complex and complicated. The regulations
decrease the ability of physicians to help patients get well and stay healthy.

The
regulations create industries for secondary stakeholders. These secondary
stakeholders make more money from the bureaucratic healthcare system.

America has
been warned before. Listen to the following You Tube

 

 


 

John Mackey,
CEO of “Whole Foods” is warning us again. The media has obfuscated his point by
jumping on him because he used the word fascist.

The media has
blamed him for calling President Obama a fascist. He did not call President
Obama a fascist. However the “media is the message” and his real message has
been obliterated.

He is
promoting his new book ”Conscious Capitalism: Liberating
the Heroic Spirit of Business.”

 
http://live.huffingtonpost.com/r/segment/john-mackey-whole-foods-/50f802b678c90a0f500001ba 

His position
is capitalism creates value. Capitalism with higher value creates more value.

He is against total
government control over commerce. He state there are two kinds of government
control.

  1. Government controls the system by regulations and owns the
    means of production.
  2. Ownership of the systems is privatized. Production is
    privatized to private companies but production is totally controlled by
    excessive government regulations. This leads to inefficient production.

Mr. Mackey’s
point is neither system works. Free enterprise works because it creates
competition. Free enterprise “capitalism” should have a conscious.  Free enterprise businesses must have a higher
purpose.

Why do
physicians exist?

Physicians’
higher purpose is to make people well. Making money should be secondary and is
in most cases. However they should be compensated for their skills.

A plumber
should have a higher purpose rather than just making money.

The higher
purpose cannot be forced on the individual by government. It can only be
adopted through competition in a consumer driven healthcare system.

Mr. Mackey
wrote a beautiful article in the WSJ in 2009. President Obama and his
administration have ignored Mr. Mackey’s WSJ 2009 advice.

 I think it is time our government starts
listening to our successful entrepreneurs.

Government
must be honest and transparent and inform the public with correct information.
Only then can America be in a position to balance the budget and eliminate
waste.

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



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Everyone Has A Hidden Agenda

January 16, 2013
inUncategorized
• Leave a comment

 Stanley Feld M.D.,FACP,MACE

 

In my last two blogs I
covered several points. I also asked readers to consider  the unanswered questions.

"Why would a business (the healthcare insurance industry) facing loss of
its customers because of high premiums increase premiums even further?"

"Why, if the traditional media has published articles stating that the
cost of healthcare has been decreasing would a premium increase be justified?"

"Why do consumers’ deductibles continue to increase
each year?"

"How can Medicare be losing money?"

"Where is the extra money going?"

It seems obvious to me that
the Obama administration wants to put healthcare insurance companies out of the
business of selling private insurance.

An Obama administration
regulation created a “user fee” on every healthcare insurance policy sold
through the Health Insurance Exchanges.

In January 2014 Health
Insurance Exchanges will be the only vehicle through which healthcare insurance
can be sold.

At present less than half
the states have signed up to develop State Health Insurance Exchanges.

States are not signing up
because the exchanges will put a tremendous financial burden on individual
states after the second year.  In the end
states will have little say in developing operating rules for the exchanges.

States will also be losing
their independence and freedom.

President Obama’s
administration has said the federal government will run the Health Insurance
Exchanges if states refuse for form their own exchanges.

It looks as if the
healthcare insurance industry is in check-mate. The industry’s response was to
not only pass the 3.5% tax “user fee” for every policy sold but to raise
premiums by double digits.

"My question is why would an
industry having problems holding on to its customers because present premiums
are unaffordable raise premiums?"

I believe the healthcare
industry has lost interest is selling private healthcare insurance.

At present the healthcare
insurance industry sell its administrative services to the government to run
Medicare, Medicaid, Tricare and Government workers Medicare.

The healthcare insurance
industry will continue selling its administrative service to the government for
the new government run Health Insurance Exchanges. Ultimately these exchanges
will be selling National Healthcare Insurance 
(“The Public Option”).

The healthcare insurance
industry is raising premiums now to set a new standard for the fees it will
charge the federal government in the future.

These fees are not
transparent.

President Obama’s
administration claims the government’s overhead for  Medicare is 2.5%. That statement is true. It
will go up to 5% with all the new Obamacare bureaucracies.

However, the 2.5% only
covers the cost for the bureaucrats that out source administrative service to
the healthcare insurance industry. The processing and    adjudication of claims are the administrative
services done by the healthcare insurance industry.

The fees for those services
are anywhere between 30 and 50% of every healthcare dollar spent.

Some of the healthcare
insurance industry’s true “overhead” and expenses are  counted as a direct medical care expense.

The law mandates that 80% of
healthcare dollars are spent on direct patient care and 20% can be for
healthcare insurance expenses.

The problem is direct
medical care expenses include creating provider networks, administering those
networks, negotiating a very complex web of allowable fees and reserving unpaid
claims.

The healthcare industry’s
recent response to the new “user fee” has been,

“Health plans share the
goal of affordable health care coverage for all Americans. Arbitrarily capping
premiums without addressing underlying cost drivers will not move the country
closer to that goal.”

The healthcare insurance industry
claims they are for affordable care for all Americans.

Data show that premiums are increasing
because of the unsustainable rise in medical costs, new benefit mandates that
make coverage more expensive, and the effect of younger and healthier people
forgoing insurance because of a slow economy.

My question is where is the
data? The administration has told us that the costs of medical care is .4% as
opposed to a 2.7% rise in the GNP. The implied claim is Obamacare is bending
the cost curve

“Moreover, the health care
reform law imposed new rate review requirements and a federal cap on health
plan administrative costs and profits, further suggesting that rising premiums
are being driven by increased spending on medical care”.

America’s Health Insurance
Plans association response is lame and unbelievable. The traditional media has
taken the response at face value.

“Focusing on affordability
is critical as the reform law is fully carried out in 2014. That is why policy
makers should address provisions that will further increase premiums, like the
health insurance tax, and take steps to ensure broad participation in the
system.

KAREN IGNAGNI
President and Chief Executive
America’s Health Insurance Plans
Washington, Jan. 7, 2013”

 

Karen Ignagni has a very difficult job.
She is at times effective. Her current response is a nice gentle way of saying
the government is to blame for the rising premiums.

 

As I see it both the government and the
healthcare insurance industry are not telling the exact truth. The hope is to
let the rise in premiums slip by the public notice.  

All President Obama has to
do is raise taxes once more to cover the increases he did not anticipate in his
takeover of the healthcare system.

The healthcare insurance industry
will continue to walk away with unconscionable profits.

The victims will be
consumers who feel powerless already.

The dirty little secret is
consumers are not powerless. Consumers simply have to wake up.

Then loud and effective consumer
protests must be organized. These organize orderly protests will get the President's and the congresses' attention.

If nothing is said the
President and the Democratic congress believe consumers are happy with all the tax
increases, premium increases, the deterioration in health care coverage and failures to form new bureaucracies.

It will only get worse for everyone as consumers remain silent.

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



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Permalink:

Socrates Is A Man

January 13, 2013
inDisinformation and the healthcare system, Medicare, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld
M.D.,FACP,MACE

 

All Men Are Mortal

Socrates Is A Man

Socrates Is Mortal

This is the classical syllogism. Syllogisms are a
form of decisive logic that leads to a certain conclusion.

“A
syllogism (Greek: συλλογισμός – syllogismos
– "conclusion," "inference") is a kind of logical
argument in which one proposition
(the conclusion) is inferred from two or more others (the premises)
of a specific form. “

In my last blog I reported the 3.5% tax the Obama
administration is levying on the healthcare insurance industry for ever
healthcare insurance policy it sells through Obamacare’s health insurance
exchanges. 

In 2014 the healthcare insurance industry is going to
be required to sell healthcare insurance policies through the health insurance
exchanges.

The healthcare insurance industry will also be
required to sell plans that comply with the rules and regulations of the Obama
administration.

The 3.5% tax “users fee” was published on a Friday
afternoon at the end of November. The tax received little media attention. I
said the healthcare insurance industry would pass this “users fee” on to the
consumer.

At the end of December the healthcare insurance
industry did better than that. It increased healthcare insurance premium rates
by double digits.

“Health
insurance companies across the country are seeking and winning
double-digit increases in premiums for some customers, even though one of the
biggest objectives of the Obama administration’s health
care law was to stem the rapid rise in insurance costs for
consumers.”

The consumers most affected by the higher rates are
small businesses and consumer who must purchase insurance on their own.  

"In California, Aetna is proposing rate increases of
as much as 22 percent, Anthem Blue Cross 26 percent and Blue Shield of
California 20 percent for some of those policy holders.

The rate requests are in
addition to the 39% increase in rates last year.

In other states, like Florida and Ohio, insurers have been
able to raise rates by at least 20 percent for some policy holders. The rate
increases can amount to several hundred dollars a month.

 In 2010 the
increase in healthcare insurance premiums increases provided springboard for
public opinion sympathy of the Affordable Care Act (Obamacare).

Obamacare will go into full effect in 2014. 

Why would a business (the healthcare insurance
industry) facing loss of its customers because of high premiums increase
premiums even further?

Why, if the traditional media has published articles
stating that the cost of healthcare has been decreasing would a premium
increase be justified?

 “A report issued by the Department of
Health and Human Services today includes findings that might surprise
some people.


“During
the fiscal year that ended Sept. 30, 2012, the amount Medicare spent per beneficiary
rose by just 0.4 percent. That's three percentage points less than the economy,
as measured by gross domestic product, grew during that same period.”

 If Medicare spending has risen only
.4% why would Medicare premiums increase by at least 33% while private healthcare
insurance premiums are increasing by 10-30%?

Annually physicians’ reimbursement continues to
decrease.

Why do consumers’ deductibles continue to increase
each year?

It is illogical. The numbers do not make sense. The
actions do not follow the syllogistic logic.

How can Medicare be losing money? Medicare premiums
are means tested and represent a redistribution of wealth.

 The average
premium for Medicare with after tax dollars for a couple with a reasonable
pension fund is $15,000 dollars.

The average direct cost of care per Medicare patient
is $6,600 dollars.

In 2014 Medicare premiums are scheduled to increase
to more than $20,000 for full Medicare insurance coverage.

Seniors have paid for Medicare insurance in payroll taxes
continuously for the last 47 years.

There is something wrong with the numbers. They do
not add up. Where is the extra money going?

Consumers must start becoming aware of these facts.

Only consumer protest will bring out the truth about
these illogical numbers.

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



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Permalink:

The Destruction of Private Healthcare Insurance

January 9, 2013
inHealthcare Insurance Industry, Medicine: Healthcare System, Stakeholder Mistrust
• Leave a comment

Stanley Feld M.D., FACP, MACE

One of these days Americans
are going to pay attention to how President Obama is destroying private
healthcare in America.

Many people will fine this
hard to believe because he is such a nice guy and many people like him.

He is making the healthcare
insurance industry destroy itself by forcing them to increase healthcare
insurance rates.

The destruction is so well
designed that the public cannot take notice. The healthcare system will not be
more affordable or accessible to anyone in the nation.

The changes will provide
President Obama with another tool to redistribute wealth and increase the individual’s
dependence on the federal government. This defines President Obama’s goal in affecting
all areas of our life.

Americans are on the Road To
Serfdom.

I remember Barney Frank and
John Kerry saying that healthcare reform would not work without a “Public Option.”
I also remember President Obama saying we can make it work without a “Public Option.”

President
Obama’s original plan was to eliminate private insurance. Americans would have
no choice but a “Public Option.”  (National Health Plan)

 

 Kathleen
Sebelius, the secretary of health and human services
said, she “retains authority to make the
final decision” on insurance rates if she finds that a state acted in an
arbitrary or capricious way in denying a rate increase sought by a nationwide
health plan.

 

This is the first time I
have seen President Obama’s administration use the words “National Health
Plan.”

It was obvious President
Obama was not truthful when he said “if
you like your physician you can keep him” and “if you like your healthcare insurance you can keep it.”

Congress made a gigantic while
passing Obamacare and transferring all healthcare policy decision making power
to the executive branch of government.

President Obama’s goal is to
have complete control over the healthcare system. He wants to force the private
healthcare insurance industry out of business. He wants to socialize the entire
medical care industry into a single party payer system.  The government will be the single party payer.

Healthcare will then be a
ubiquitous entitlement program that the government cannot afford unless it increases
taxes entire population according to the taxpayers means.

This is the pattern behind many
of the articles written in isolation by the traditional media.

The unintended consequences
resulting from each policy change will be overwhelming.

I have been fascinated by President
Obama’s negotiating strategy.  

Americans are going to wake
up to the fact that President Obama has increased taxes for the funding of
Obamacare by $1 trillion dollars over the next ten years aside from the tax
hikes effective January 1st.

Americans are going to wake
up and feel deceived by President Obama when they realize they are getting
little for their increased taxes except government control over their freedoms.

I predict President Obama’s
plans will blow up in his face.

Consumers will protest when
they recognize the impact these multiple new taxes will have on their
discretionary income. President Obama will not get the funding he needs from
congress.  

His physician workforce will
not cooperate. Hospitals are starting to wake up and are seeing they were
deceived. They thought they would do better because they have bought physician
practices.

Recently they automatically
received cuts in reimbursement while the doctor fix was extended for another
year. Physician reimbursement will be cut and the physician workforce will
dwindle.

On Friday afternoon November
30th 2012 the Obama administration pulled a stunt on the healthcare
insurance industry.

“The Obama administration
said Friday that it would charge insurance companies for the privilege of
selling health insurance to millions of Americans in new online
markets run by the federal government.”

The cost of these “user
fees” can be passed on to consumers. The proposed fees could add 3.5 percent to
premiums for private health plans sold in insurance exchanges operated by the
federal government.

The "user fees" are another tax to consumers.

The government is
disregarding the fact that healthcare insurance premiums are too high for
employers to provide healthcare insurance for employees now.

Employers are opting to drop
healthcare insurance coverage and pay the government penalty. Some are dropping
healthcare insurance and avoiding the penalty by decreasing the number of
employees to under 50 employees or decreasing employees work hours to under 30
hours per week.

This will increase, not
decrease the tax burden on the consumer.

The exact effect of the
health insurance exchange on the healthcare industry is muddled.

It looks as if President
Obama is rapidly moving toward a “Public Option.”

Consumer advocates, insurers,
and some state officials had expressed concern about delays in publication of
the rules for this new proposal.

President Obama has used
this is the same tactic before. Consumers and agencies must accept the changes
before the rules are published.

Consumers and state
governments do not trust President Obama. They are afraid to say yes when they
do not know what they are saying yes to. In the end it  looks like the state governments and the
consumers will get stuck with the bill and the federal government will have
complete control over the healthcare system.

CMS said. “These plans will
be offered by private insurance companies under contract with the United States Office of Personnel Management. The agency already provides insurance to eight
million federal employees, retirees and dependents.”

The scary part is the administration said,
“It (the government) retains
authority to make the final decision” on rates if it finds that a state acted
in an arbitrary or capricious way in denying a rate increase sought by a
nationwide health plan.”

The term “Nationwide Health Plan” and “final authority” sounds as if the
government is taking over.

The federal government will
also have control over physicians and hospital fees.  It will also control access to care and the
rationing of care.

It is almost too late for
consumers to wake up.

No one can say President
Obama didn’t tell us.

It can only be said the plan
was so obfuscated, final rules so delayed and unsubstantiated promises made and
not publicized on a Friday afternoon the week after Thanksgiving that the
public did not understand what was going on and could not express an opinion.

The games President Obama
and his administration play are dizzying. The irresponsibility of our elected
congressional officials who are supposed to be our surrogates is
unconscionable.

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



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