Stanley Feld M.D. FACP,MACE

We have seen how inadequate the standards for eligibility for Medicaid are. The definition of poverty is inappropriate. The Bush administration talks a good game about our obligation to help the less fortunate. However his actions toward the less fortunate are not consistent with his words. Medicaid is a single party payer with poor benefits for patients and poor reimbursement for providers.

President Bush has vetoed the S-CHIP proposal twice. “The president had promised to veto it, saying the Democratic bill was too costly, took the program too far from its original intent of helping the poor, and would entice people now covered in the private sector to switch to government coverage.”
“Bush argued that the congressional plan would be a move toward socialized medicine by expanding the program to higher-income families.”

On one level the President is correct. It will expand another inefficient and ineffective bureaucracy (Medicaid). Medicaid needs to be restructured not expanded. The decisions for medical care will not be in the hands of the patients or the physician.

On the other hand people who can not afford healthcare insurance will not have healthcare coverage in are present system. The solution is not to expand the present single party payer system. The solution is to construct an effective system.

“Senate Majority Leader Harry Reid, D-Nev., decried Bush’s action as a “heartless veto.””

The basic principle in my concept of Repairing the Healthcare System is making patient responsible for their healthcare and healthcare dollar. A proactive consumer will create the market force environment needed to compete for the consumers’ healthcare dollar. This can be accomplished with my Ideal Medical Savings Account for employers, self employed and subsided needy. Our less fortunate citizens can be subsided on a sliding scale using a realistic means test.

Everyone would own his healthcare dollar and be responsible for its wise use. If people avoided the complications of chronic diseases they would receive a financial reward in addition to the reward of good health. The mechanisms for education and chronic disease management have to be supported financially. Financial incentives are effective.

Instead, neither President Bush nor his administration is thinking. They are not coordinating some of the good ideas for the repair of the system. He is focused on the enemy (the Democrats) and their attempt to sneak socialized medicine in through the back door.

S-Chip and Medicaid could be set up to avoid socialized medicine. Presently the government is the single party payer for S-Chip and Medicaid.

The new system should focus on insurance companies competing the patients’ healthcare dollar. The government should make the rules and then get out of the way. The government should enforce the rules in favor of the primary stakeholder the patient.

This is should be the focus of the presidential policy debates and not the issue that President Bush is heartless. The present bureaucratic institutions are heartless as demonstrated by the story of Moises and Medicaid. .

On the other hand, governors of many states are starting to understand that there has to be some effective benefits for the hard working less fortunate. We have seen the effort Mayor Bloomberg is making to redefine poverty to distribute aid more fairly and efficiently in New York City. We have seen the attempt that the State of Indiana is making. These are innovative. The problem in Indiana is the program is imbedded in the present system.

Rather than encouraging the development of these ideas the Bush administration seems to be doing everything it can to discourage innovation much to my disappointment.

“ The Bush administration is imposing restrictions on the ability of states to expand eligibility for Medicaid, in an effort to prevent them from offering coverage to families of modest incomes who, the administration argues, may have access to private health insurance.”

“The restrictions mirror those the administration placed on the State Children’s Health Insurance Program in August after states tried to broaden eligibility for it as well.”

Until now, states had generally been free to set their own Medicaid eligibility criteria.
The federal government is ignoring the threat the less fortunate pose to the local communities. The Bush administration should be able recognize the threat of terrorist activities and crime by the less fortunate from incidents the administration has seen worldwide.

“On Dec. 20, the Bush administration rejected a proposal by Ohio to expand its Medicaid program to cover 35,000 more children. Ohio now offers Medicaid to children with family incomes up to twice the poverty level, or about $41,000 a year for a family of four. The state had proposed increasing the limit to three times the poverty level, to about $62,000.”

As I have said over and over again the only thing that is going to be able to fix the system is consumer demand. In this Primary Season for presidential nominees we hear how powerful we the voters are. We should be demanding and debating the details of how they are going to fix the healthcare system rather than judging their sound bites

The Clinton and Obama race is fun to watch. Both candidates have created a smoke screen obscuring the eventual outcome of their pronounced policy on healthcare. Their resulting socialized medical system will intensify the dysfunction and cost of our healthcare systems.

Stanley Feld M.D.,FACP,MACE

President Bush keeps trying. I do not think he really understands the difference between poverty and unaffordability in America today. If he did his goal would be affordable healthcare insurance for all.

“The popularity of health savings accounts for the poor will be put to the test in Indiana under a program approved Friday by the Bush administration. Under the plan, someone making $20,000 a year could get health coverage for about $19 a week.”

Sounds good. However, the devil is in the details.

“Bush has long pushed health savings accounts as a way to slow the rising cost of medical care and extend basic coverage to the uninsured.

Under the Indiana program,eligible residents can pay up to 5 percent of their incomes into state-subsidized “Personal Wellness and Responsibility Accounts” that cover their initial medical expenses up to $1,100. Once that deductible is reached, private insurance purchased by the state kicks in.”

I have no quarrel so far. I see a few problems and questions. One problem is $1,100 does not get you much health coverage at retail prices. Private health insurance is still in charge of reimbursement and not a partner with the patient. What is the type of healthcare insurance coverage after $1,100? What are the co-pays? Only a few patients will have money remaining in their health savings account. There is nothing mentioned about giving patients incentives to stay well and potentially accumulate money for retirement.
Eligibility is limited to adults with incomes below twice the federal poverty level. The poverty level is now $10,210 for an individual and $20,650 for a family of four.

I looked up the actual eligibility criteria on their web site. I was curious to know if eligibility meant people making $41,300 a year would be qualified for the plan. The answer to this frequently asked question was;
The Healthy Indiana Plan (HIP) will provide health insurance for uninsured adult Hoosiers between 19-64 whose household income is between 22 – 200% of the federal poverty level (FPL), who are not eligible for Medicaid. Eligible participants must be uninsured for at least 6 months and cannot be eligible for employer-sponsored health insurance.

I was confused after reading this statement because of the absence of definitions. I asked the web site the following question.

Does this mean that people with a family of four making up to $41,300 a year can be eligible for this plan?
This feedback I got was as follows.

“The Healthy Indiana Plan (HIP) will provide health insurance for uninsured adult Hoosiers between 19-64 whose household income is between 22 – 200% of the federal poverty level (FPL), who are not eligible for Medicaid. Eligible participants must be uninsured for at least 6 months and cannot be eligible for employer-sponsored health insurance.”

The reply did not clarify a thing.

The eligibility limit is better than Medicaid but not as high as necessary to make it affordable. Moises would qualify in Indiana. He does not qualify in Texas. He makes $22,000 per year. An illness would destroy him and his family financially. He can not afford nor does he qualify to buy private insurance as an individual.

The limits for being qualified to receive benefits should be at least $50,000. The benefits packages should be developed by the insurance industry. The deductible must be higher than $1,100. Six thousand dollars is a realistic in order to provide patients with the appropriate incentive. It should be the Ideal Medical Saving Account formulation. It should be bought by citizens through the insurance industry on a competitive basis. It should not be run by the government as a single party payer. It should be subsided by the government for those who qualify for subsides. If the government finds that the insurance industry is taking advantage of patients or providers it should intervene and disqualify that insurance company from participating in the program. Patients of higher income should pay more for insurance than lower income people.

A mechanism for means testing should be developed. People below a certain income should receive government subsidies. Subsides should be regressive with lower income people receiving a higher subsidy than higher income people. The price of the insurance should be affordable and emphasize reward for good health, and prevention of disease. Both patients and providers should receive adequate incentive to achieve this goal. The Ideal Medical Savings Account could include both low income families and high income families. The high income families would pay a means tested surcharge to a certain amount.

“The waiver in Indiana is the first of its kind for the Medicaid program, a state-federal partnership that provides health coverage to the poor and disabled.”

The punishing criteria for eligibility for Medicaid still exist. On close study I have concluded that the Medicaid program is a way the state can obtain a subsidy from the federal government. The criteria for eligibility is simply too restrictive.

“Indiana officials said they’ve already received inquiries from more than 1,000 people interested in applying.
This sound bite implies impending success of the program. I think it is a long way from success.
The program will be monitored closely because of the philosophical divide among lawmakers about the value of health savings accounts for the poor. Many say such accounts work best for healthier and higher-income people with low medical expenses.”

The enemies of Health Savings Accounts have an excuse to react negatively. I believe that most lawmakers do not understand the goal of Health Savings Accounts. They also do not understand that Health Savings Accounts are a bastardize form of Medical Saving Accounts to keep the healthcare insurance industry in control and accumulate unconscionable profits

“Judith Solomon, senior fellow at the Center on Budget and Policy Priorities, said she doubts that many people making $10,000 a year can afford to pay $500 for health insurance. She said that about 50,000 people lost Medicaid coverage in Oregon after that state got permission to raise insurance premiums to $20 a month.”

“You can say it’s better than nothing, but I just don’t see how many of those folks will be able to afford it,” Solomon said.

Judith Solomon is absolutely correct. People making $10,000 dollars can barely afford to put food on the table or a roof over their head. So many well intended programs are built to fail.

“This is a big step forward that will lead to approximately 120,000 uninsured Hoosiers having the peace of mind of health insurance,” said Indiana Gov. Mitch Daniels, a Republican who once served as Bush’s director of the Office of Management and Budget.

I believe Governor Daniels should check to see how many of these 120,000 uninsured are living under the poverty level. I would guess less than 50%. It is fun to listen to Governor Daniels’ advertisement. , He makes a false promise and a false hope with false information.
If the state and federal government really wanted to do something they should expand the eligibility level to $50,000 a year. They should subsidize the Ideal Medical Savings Account with the incentive for patients’ to accumulate money in their retirement fund if they spend their healthcare dollars wisely.

Healthcare programs such as the Indiana program continue to appear and are destined to fail. The consumer must force lawmakers to get serious about Repairing The Healthcare System.

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

Stanley Feld M.D.,FACP,MACE

Healthy Indiana Plan: http://www.hip.in.gov

Stanley Feld M.D.,FACP,MACE

I previously stated that Pay for Performance (P4P) is another way of decreasing physicians’ reimbursement using misleading medical claims data. The raw medical claims data is an easy but inaccurate way to judge physician performance. If someone really wanted to help patients understand quality of medical care in order to choose their physician it could be done correctly. The only concern of private insurers seems to be their bottom line.

I have been accused of having a vested interest in protecting physicians.

My interest is protecting consumers from dumb policies that will result in decreasing access to quality care and promoting a further gaming of the healthcare system by all stakeholders except the patient.
Immediately after the judge’s decision on releasing raw medical claims data, the insurance industry started rating physician on the basis of medical claims data.

New York Attorney General Andrew Cuomo sent letters to Aetna and Cigna warning them that the doctor-rating systems they use to guide consumers are confusing and could be considered deceptive. “ Health insurance companies create physician ranking programs to recommend certain primary care physicians and specialists to consumers. In his letter to Aetna and Cigna Healthcare, the Attorney General describes the problematic design of the physician ranking programs created by Aetna and Cigna Healthcare: the rankings are based on claims data, which is well-known to carry several significant risks of error when used to rank individual physicians; the insurers do not disclose the accuracy rate of their rankings; and insurers have a profit motive to recommend doctors who cost less, not necessarily those who are most qualified.”

Cuomo told UnitedHealth in July not to roll out its rating program in New York without his approval. “We’re not opposed to the ranking systems in and of themselves, but we think these may have problems,” spokesman Jeffrey Lerner told Health Blog.

The letters also describe how inaccurate physician ranking programs may cause financial harm to consumers. Some employers steer employees to the doctors preferred by the insurer by lowering co-payments or deductibles. Consequently, employees who choose not to go to the preferred doctors could pay more.

New York’s Cuomo further warns that rankings based on claims data can be badly flawed, and that the insurers have conflicts of interest. He’s asking the health plans for a “full justification.”

The stern letters follow a recent lawsuit filed by Connecticut doctors in Superior Court in Danbury. The Fairfield County Medical Association and a group of orthopedists accuse Cigna and UnitedHealth of libel, unfair trade practices, breach of contract and more for setting up the ranking programs.
All of this was totally predictable. It leads to more dysfunctional relationships among stakeholders in the healthcare system.

The key to the Repair of the Healthcare System is to align incentives by complete price transparency so that no one stakeholder can game the system. It is clear the health insurance industry has positioned itself to game the system for profit with the publication of inaccurate medical claims data at the expense of the patients and physicians.

We must create an environment that promotes mutual trust among all stakeholders. Mechanism designers commonly try to achieve the following basic outcomes: truthfulness, individual rationality, budget balance, and social welfare. The most efficient economic outcomes are systems designed in which everyone does the best for himself under fair and truthful sets of rules. This can be achieved by sharing information truthfully (real price transparency). It is easy to understand that some people can do better than others by not sharing information, distorting information or lying.

If everyone’s incentives are aligned, you have a much better chance for an efficient economic system. I believe the use of raw medical claim data without defining quality medical care properly and not risk weighting medical outcomes will result in misleading judgments. These judgments will hurt patients and physicians. The result will be a decrease in the quality of medical care. It will also lead to more mistrust between the insurance industry, government, consumer groups and physicians.

The only stakeholder who can align the other stakeholders incentives is the consumer, in a consumer driven healthcare system demanding that the government act fairly on setting appropriate rules.

Stanley Feld M.D.,FACP,MAE

The consumer must fix the healthcare system. None of the other stakeholders has been successful. In fact, of the last 30 years the healthcare system has been made worse by the insurance industry, government and policy makers.

All their systemic changes have failed, because they have, for the most part, been to the advantage of the facilitator stakeholders and not the primary stakeholder, the patient. Facilitator stakeholders’ profits have soared, insurance premiums have skyrocketed while access to care has plummeted. Patients, physicians, hospital systems and the government have adjusted to changes to the detriment of the patient. The facilitator stakeholder adjustments have resulted in further dysfunction in the healthcare system.

Presently, employers and all the stakeholders except for the insurance industry are in pain. However, the stakeholder most at risk is the consumer. Only 20% of the population is sick and interacts with the healthcare system at any moment in time. 80% of the population does not interact with the healthcare system. They think everything is fine. However, the entire populations’ health and well being is at risk! If we stay on the present course, I predict the system will break down completely. Access to care will be limited and rationed. Access to life saving medical advances will vanish. Future advances in medical care will disappear.

The goal of the healthcare system should be;
1. To provide patients
a. with access to good quality care
b. with education to judge quality care
c. with incentives to be motivated to be responsible for their care
d. with the freedom to judge and select the physician of their choice
e. with the information of their evaluations so it is truly portable
f. with choice of health insurance vehicles that are affordable to everyone
g. with education vehicles so they can become “Professors of their Disease” and be truly responsible for their care
h. effective and affordable drug insurance to enhance patient compliance with medication

2. To provide physicians
a. with a precise definition of the meaning of quality care for various diseases.
b. with incentives to provide quality care for both acute and chronic disease
c. with the educational opportunity and motivation to improve the quality of care they deliver.
d. with an actual vehicle developed by their peers to prove that they are delivering quality care.
e. with a mechanism for delivering care at a transparent price
f. with the ability to effectively communicate with patients electronically.
g. with the ability to improve the patient physician relationships
h. with the ability to enable patients to practice effective self-management techniques to prevent costly complications of chronic disease
i. with the ability to improve communication and access to patient information so as to reduce the cost of redundant evaluation and treatment

3. To decrease the overall cost of the system
4. To eliminate the 47 million uninsured
5. To align stakeholders’ incentives to provide satisfactory profit margins to hospitals, and pharmaceutical companies and insurance companies.

These are ambitious goals. Processes must change in order for the United States to deliver effective health care to the population now and in the future. Consumers can not leave it up to the facilitator stakeholders and policy wonks to fix the system. Their policies have distorted the healthcare system to serve their vested interest. The patient or future patients must drive the process of change through appropriate demands on our politicians in order to repair our healthcare system.

In my view none of the politicians running for president have a clue. They will only wake up if we make appropriate demands. Patients can make effective demands for a healthcare system that works. They have to demand that they own their healthcare dollar and be responsible for their care!

Stanley Feld M.D.,FACP,MACE

The mechanism the facilitator stakeholders use to slow down improvement, in my opinion, in the healthcare system, is to do pilot studies on innovative ideas and improvements using faulty criteria in the context of the present dysfunctional healthcare system. The results are usually contradictory to the expected result, statistically flawed, and confusing. However, pilot studies generate another funding source for academic institutions which perform the studies.

A recent article in the Archives of Internal Medicine stated that the measurement of quality indicators were no better in clinics with Electronic Medical Records than in those clinics without an Electronic Medical Record. The data was collected between 2003 and 2004. I will review the flaw in this data in the future. However, a big flaw in the data is that quality indicators (frequency of specific testing for specific diseases and screening testing) are not a direct measurement of clinical outcomes or the financial costs to achieve the improved clinical outcomes. I covered this topic in detail in my blog on the Ideal Electronic Health Record.

In 2004, the United Kingdom invested $3.2 billion in a new program to reward general practitioners for the delivery of high-quality care defined as adherence to quality indicators. The authors examine longitudinal data on quality and report that the incentive program may have prompted a modest improvement in the quality of care for two of the three chronic conditions they studied.

It has been clear for many years that an improvement in the measurement of quality indicators does not mean an improvement in quality care. Improving the clinical outcomes by acting on the findings of the quality measurement is the meaning of improving quality of medical care. The execution of the findings is dependent on the patient’s adherence to appropriate therapy recommendations. The only way to improve quality and clinical outcomes in my opinion is to create a competitive environment among physicians driven by patients owning and retaining their healthcare dollars. This will lead to transparent pricing and drive innovation and cost efficiency.

Yet, the entire pay for performance movement is based on grading physicians on the basis of their quality indicator measurements. This is the reason I said P4P is another complicated mistake.

I understand the reason policy maker advocate P4P. It is because they believe they can easily quantitate the quality of medical care. They will discover as the British have that they will be spending more money without improving clinical outcomes. It is the patient/physician relationship that must drive quality care and improve clinical outcomes.

These interim pilot studies take years to complete. They do not help move medical care into the digital age. If anything it slows medical care down.

Consumers must demand legislation to level the playing field. They must make it clear that they are the primary stakeholders and should be the drivers of the system. It is vital for us to create a true consumer driven healthcare system with the patient and the physician being responsible for the execution of medical care. Consumer driven healthcare would permit consumers to drive the system. The government and the insurance industry have failed, as Regina Herzlinger has pointed out in Who Killed the Healthcare System.

Pilot studies of innovative ideas in our dysfunctional system cannot predict the outcome of these ideas in a new system. Our government can not continue to protect old systems that do not work. Health insurance should mean what insurance means after a certain point of risk. Insurance is a form of risk management primarily used to hedge against the risk of a contingent loss. Insurance is defined as the equitable transfer of the risk of a loss, from one entity to another, in exchange for a premium. Only then could we see if these innovative ideas would work.

In the last couple of years the President and Medicare have called for change. Their requests have gone nowhere because facilitator stakeholders to not want to change a system that is to their advantage. The system must be changed to the patients’ advantage.
The changes required have to be enacted simultaneously because single point change will permit secondary adjustments by the facilitator stakeholders. These changes include:

• Pre tax insurance guaranteed for all.
• Community based rating for premium pricing with government oversight.
• Total price transparency of the lowest negotiated prices for all based on cost and not fiction. The hospitals, the physicians and the insurance companies must be required to comply. This is critical. It would generate a competitive marketplace and force stakeholder to be innovative and develop more cost efficient systems.
• There should be guaranteed insurance coverage for all (universal coverage) with government subsidies. The subsidies should be full or partial for the people who can not afford insurance. The Massachusetts model is going to fail because it is built in a non consumer driven system to the advantage of the insurance industry.

• There should be the option for the Ideal Medical Saving Account and not the contaminated Health Savings Accounts built in favor of the insurance industry. Patients must have incentive to control their healthcare dollar. They must be allowed to retained the money they do not spend in a trust account for their retirement. If the patient has a chronic illness and he maintains good clinical and financial outcomes he should receive a financial reward.

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A single party payer system would impose a new and inefficient bureaucracy that would be devastating to the incentives and innovations necessary to Repair the Healthcare system. Innovations and incentive in a competitive entrepreneurial environment is what America’s greatness is all about.

• An affordable Electronic Health Record must be available to all as described in the post the Ideal Electronic Health Record.

All of the above must be implemented at the same time for the new healthcare system to work. It will require strong and bold leadership. This bold leadership will only be precipitated by a very vocal demand by an informed public. In our evolving knowledge based economy this People Powercan be accomplished.

Stanley Feld M.D., FACP, MACE

The control of the healthcare system is dominated by the insurance industry, the government, hospital systems and pharmaceutical companies.

One of the reasons hospital systems bought physicians practices was to have control over ancillary services generated by the physicians’ intellectual property. These ancillary services are laboratory services, CT scans, MRI scans, cardiac catheterization labs and ECGs.

The business of medicine had become too complicated for most physicians. Physicians who sold their practices to hospital systems did not realize they could not make a living without the revenue from ancillary services. Physicians retreated to the safety of hospital guaranteed salaries without realizing they were giving away their intellectual property the only property they had to sell. Physicians reacted when they realized that the hospital systems were generating undo profit from their intellectual property. Physicians also realized that hospital systems were inefficient in operating some of the ancillary facilities. These services were more convenient for their patients in physicians’ offices. The result was inefficient care to their patients.

On the other hand, many hospital systems learned they could not make any money from physician productivity. The hospital systems guaranteed the physicians the salary they had generated before the practice buyout. The hospital systems are now giving the physicians back their practices. The hospital systems lost their cash buyout of the physicians’ practice. It would not be surprising to me that this loss was billed back to the patient in the form of cost of service. We cannot figure out the actual cost of services.

The focus of the hospital systems was changed from ownership to management of the back office duties such as billing, hiring, firing, and paying the rent. Hospital systems also demanded that the physicians used their hospital facilities.

Another round of physicians’ reaction is in the offering. Physicians are starting to realize that the hospital system is overcharging physicians for back office services. Hospital systems require physicians to use the hospital systems inpatient facilities.

The large physician groups now own the revenue generated by several ancillary services. They are benefiting from the use of their intellectual property. However, physicians are realizing they are not getting their fair share of the revenue they are generating. In many cases their practices are being overcharged for overhead, payroll, rent and administrative services. The thinking by hospital systems advisors was that younger physicians would not be as interested as older physicians are in how the business is handled. I think the hospital systems are going to be in for a big surprise. A sleeping giant is slowly awakening. Especially when the younger physicians are realizing that the hospital systems are under coding and under collecting for their physician services and not billing a professional fee for ancillary services. The result will be that physicians will demand they control their overhead and their billings. The problem for the hospital systems is that management of physicians’ offices was a nice profit center. With less inpatient services needed and the increase in brick and mortar investment over the last ten years, hospital systems are going to be in a cash flow bind.

The physicians’ goal is to practice the best medicine they can while earning a living consistent with the value of their intellectual property is worth. The level of mistrust that physicians have for hospital systems is simply going to intensify when they find out what is happening to them financially. The hospital system- physician relationship will shift from bad to worse.

Physicians’ control of their overhead, in my opinion, is good shift during the changes healthcare undergoing. In the changing environment toward consumer driven health care and the patients owning their healthcare dollar, the physicians controlling their own practice overhead, the result can be an enhanced relationship between the primary stakeholders the patients and the physicians. Competition for patients will create physician incentives to force physicians to become more efficient. Physicians will adopt EMR’s more rapidly in an attempt to increase the level of efficiency and service.

Competition will motivate physicians to increase quality and lower price. Focus factories will develop in Family Practice offices. New mechanisms for building healthcare teams for the creation of systems of care to prevent the complications of chronic disease will occur. The result will be a decrease in complications of chronic diseases. Prevention of chronic disease will also be increased because patient will demand preventative services. They will compensate physicians for the preventive care. I can envision physician being compensated telemedical communication systems to avoid frequent office visits and hospitalization. I can imagine an increased compliance with treatment and a demand for effective patient education when the patients understand that they own their healthcare dollar.

Presently, there is no insurance mechanism to compensate physicians for preventative care. I see a bright future for patients, physicians, the physician extenders and the secondary stakeholders. The losers will be the administrative waste and avoidable and expensive services rendered for the complications of chronic disease.

Stanley Feld M.D.,FACP,MACE

The hospital systems and the insurance industry have archaic and unscientific methods of determining price. The combination of the methods of pricing and the excess cushion built into the price leads to the excessive profits, salaries to executives and excessive building and remodeling. I look at this as creating a perfect opportunity for creating a competitive environment on pricing between hospital systems and between hospital systems and physicians practices. It also is a perfect environment for insurance companies to compete with each other. The result would be lower premium prices. If one insurance company made a move to lower prices, increase efficiency and decrease consumer grief, the others would follow. The insurance industry has some leeway on pricing because of their excess profits. Naturally, hospital systems and insurance companies do not want to give up this profit advantage. This is the reason hospital systems and insurance companies have lobbyists in State Governments and in the Federal Government. When consumers are in charge of their healthcare dollar and can profit from its wise use, they will force the insurance industry to lower prices.

All that is need is to pass a few rules and regulations by the politicians in government to create this price competition. The rules would include present price transparency, reporting on the methods used to determine the prices for hospital services and the price of premium creation, as well as the patients’ access to this pricing mechanism. If the politicians in government had the courage to act on these suggestions the mess in the healthcare system could clear up very quickly.

The people and not the insurance industry should have control of their healthcare dollar. If the people use the control over their healthcare dollar wisely, the money saved would grow in a tax free trust account each year to be used at retirement. This concept is embodied in my ideal medical savings account. The insurance companies would adjudicate the claim. However now it would be done instantly decreasing administrative costs for the insurance companies, the hospital system and the physicians. They would continue to negotiate the best fees for the patient. If they did it poorly the people would move to another insurance company. They would receive the privilege of holding the insurance premium and the trust account money. They would provide pure insurance if an illness cost more than $6,000.

Community rated group insurance would be available to all with pre-tax dollars. People would can not afford insurance would be supplemented by the government. This form of insurance would also apply to Medicaid and Medicare. It would be universal healthcare in a consumer driven and controlled system rather than universal health care in a single party payer system.
Doing all this at once would force the hospital systems, the insurance industry and physician to be more efficient. It would accelerate the development of the ideal EMR and decrease money wasting inefficiency in the healthcare system.

The most important stakeholder in the healthcare system is the patient. Somehow, the patient has been converted from a person with an illness and needs medical care, to a person who is a potential financial asset to the facilitator stakeholders. It is not uncommon, in the halls of facilitator stakeholders to hear patients referred to as clients, lives and eyeballs. “The more lives you have in your healthcare system, the greater the revenue and the greater the profit.

Without patients there would not be a healthcare system. The conversion of patients to economic entities is partly a result of the advances in technology and partly the dysfunctional evolution of the healthcare system. CAT scans, MRI scans, and stress echocardiograms and others have served to make the patient a commodity. All these test procedures generate revenue. The organization performing the testing generates the revenue. If patients owned their healthcare dollar, prices for services were transparent, and physicians’ offices were able to compete with hospital systems for procedures that are presently not permitted in the physician offices, all the stakeholders would be driven to more accurate pricing and more efficient care. The price of care would drop. The Lasik procedure is a perfect example of prices dropping in a consumer driven competitive marketplace.

At the same time, the government and the insurance industry are complaining that the physician does not practice evidence based medicine. Patients ought to have a mammogram once a year, a colonoscopy every five years, and a bone mineral density every two years, to name a few preventative screening tests.

The reality is that the increased technology has lead to increased accuracy in early diagnosis and early treatment. The result is a decrease in complications of chronic disease. The complications of the disease absorb 90% of the healthcare dollar. The technology has increased the diagnostic skills of the physicians. However, with the restrictions imposed by the facilitator stakeholders to not allow the physicians to do the testing in the office, and the inefficiencies of getting a hospital system scheduled procedure prevents the physicians from consistently practicing evidence based medicine. The implication is if the physician was permitted to do the test in his office, the physician would over test. This implies physicians are crooks and will take advantage of the patient. Ninety eight percent of physicians aren’t crooks despite what Pete Stark (D-Cal) says. It is easy to stop that 2%. However, the inefficiency in the healthcare system does not permit the physician to give appropriate preventive care to the patient.

Cognitive services are essential to accurate diagnosis and treatment. Yet, the skills these cognitive services have been devalued in recent years. In fact, if payment for cognitive services was the only revenue a physician could generate he would not be able to pay his overhead. This is presently a crisis Family Practitioners are now facing. It seems obvious, that in order to increase ones revenue, one must do indicated ancillary procedures. The counter argument is the physician will be given the incentive to over test. If a test is done in the hospital systems the cost of the procedure is usually higher than when it is done as an office procedure. (remember Dr.David Westbrock’s example). Physician office testing would drive the hospital system prices down if the hospital system wanted to be competitive. It is in the vested interest of the hospital system not to permit a competitive environment. If purchasing of healthcare services was in the hands of the patient they could choice the provider and force a competitive environment.

Physicians have the privilege of helping patients who are ill get well. They also have the obligation to prevent disease. It is not only a privilege, it is an awesome responsibility. Physicians are medical doctors that provide medical care. Medicine is a princely profession. Physicians must be given to tools to provide efficient and effective care at an affordable price. The marketplace through patient control should decide the price. Hospital systems and insurance companies arbitrarily made up the price in the past. This has to stop.

Stanley Feld M.D.,FACP,MACE

Physicians have been slow to adopt Electronic Medical Records (EMR) even though most physicians are computer savvy. There are reasons for physicians to be slow adoptors.

They are told that the EMR will increase their quality of care. However, quality of care has not been adequately defined by those who proclaim EMRs’ virtue. Physicians have negative experiences with information technology. The insurance industry and government have used IT against physicians to decrease the fees. Physicians know much of the data collected by the insurance industry and government has been formatted to answer the wrong questions. The potential of the EMR simply stimulates more mistrust and suspicion on the part of the physician against these entities.

Those knowledgeable about EMRs would say “Dr. Feld you have it completely backward.” Perhaps I do. I do not think so. I have expressed the perception of many physicians. Perception translates to the reality of resistance by physicians.

I understand the advantages of a functioning and effective EMR. If done correctly the physicians would flock to adopt the system. However, most demonstrations of EMRs are a disaster. The implementation of EMRs by most EMR companies has been worse. The purchase of an EMR to many physicians has simply been money down the drain. A few practices have been lucky and very successful.

The investment the physician must make is at minimum $50,000 per physician. In an environment of decreasing insurance and Medicare payments, $50,000 is a huge investment. In addition there is usually an annual maintenance fee as well as yearly service fee. Many software companies produce EMRs. Choosing the correct EMR seems impossible to most. Many physicians have been stung by the software company going out of business within two years, making their investment worthless.

In the January 2007 issue of Health Data Management there appeared a Newsline article “Hawaii Blues to Docs: We’ll Help with EMRs.

“A $50 million program from the Hawaii Medical Service Association, under which the Blues plan, would give providers substantial financial help to purchase electronic medical records systems, could wire up most physicians in the state.”

Why would the physicians want to be wired up? What does wired up mean?

“Honolulu-based HSMA also thinks the program will foster the longer-term goal of establishing regional health information organizations.”We’re making this investment to move the community along to wider adoption of I.T. so we can be ready for RHIO activity,” says Cliff Cisco, senior vice president. “There’s a lot of RHIO talk, but we’re a ways off from implementing a network. We want to prepare for that and give motivation.”

One should note that a RHIO is a network of information of all the patients’ charts in a regional and anyone can get patient information and physician care activity instantaneously with proper authorization. This would be great if we lived in an environment of total trust. It could work if everyone would keep this information private and would not use the data gathered against the patient or physician. Remember the social contract in medical care is between the patient and the physician.

“Under the three-year HMSA Initiative for Innovation and Quality the plan has committed $20 million toward the purchase of EMRs for physician practices. It will contribute up to half the cost of an EMR, capped at $20,000 per physician, for about 1,000 physicians.’

The physician would still have to pay $30,000 for something he does not want and he does not perceive will increase the quality of his care. It is viewed as a tool that will be used to punish him.

Cisco believes a “significant” amount of funds under the hospital program will go toward I.T., but the overall goal is to reduce practice variances and improve safety. Details of the program remain under development. “We’ve made the commitment and now are talking to hospitals,” he adds.”

Please notice the implication is the system is going to tell the physician what he should do to practice “good” medicine as defined by the insurance companies and hospital administrators. This seems like a way to generate more mistrust between physicians and the insurance industry.

“The program to help pay for EMRs is open to any physician who doesn’t have EMR software. But the focus will be on small and rural practices where adoption rates are low. HMSA hopes it will get most of these practices to take up its offer, Cisco says. “This is an effort to bring on slower adopters of the technology.”

My response is good luck!

The EMRs also will have to be certified by the Certification Commission for Healthcare Information Technology. HMSA is expected to have a list of acceptable EMRs available by the end of 2006.

If this program was perceived by the physicians as a good idea it would have to be a single uniform software program with measurable data points available to the physician for his proving an improvement in his quality of care to the patient. Multiple software vendors will increase the costs and decrease the mobility of the data collected. I will devote more time to describing the ideal EMR in the ideal MSA system. The system would greatly benefit the patient and the physician. The benefit to the facilitator stakeholders would be secondary and not punitive to the patient or the physician.

“Heavy penetration of EMRs in Hawaii could support more comprehensive pay-for-performance programs. HMSA for five years has had a pay-for-performance program that gives physicians and hospitals “modest” payments for meeting certain quality standards, Cisco says. The new initiative is much larger than existing P4P programs, he notes. “Our board thought we’d ramp this up a bit, put out this $50 million commitment and see what it achieved.”

Does anyone out there know the potential punishing effects to the healthcare system that pay for performance will inflict. In my view pay for performance is not well thought through presently. Many physicians are totally opposed to the notion because the decisions of performance are going to be made by the same insurance company administrators that used incorrect data to produce the failed punitive report card system.

This ambitious program is going in the opposite direction of the concept of the ideal Medical Saving Account. It is not empowering to the patient or physician. P4P in the present form does not provide incentive to the patients or the physicians to improve their performance. It is an administrative mechanism devised to dictate physician behavior, undo patient privacy and reduce payment.
It is sure to fail at best and generate more distrust and waste at worst. The healthcare system does not have three years to waste on this folly. The endeavor is bizarre to me. It is a waste of $50 million. I predict the $50 million loss will be passed on to the patients in the form of increased premiums
The $50 million could go a long way to create the ideal EMR in an ideal insurance system (MSA). Some smart entrepreneurial company will figure it out some day. I hope sooner rather than later.