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

The $2.1 billion is at the low end of a 1000 bed hospital’s total revenue. Bed fees are even higher than the $12,000/day average for cardiac patients with complications. This is called DRG creep. The hospitals have also managed to get the patients out of the hospital under the DRG cap. If not, they seem to find a way to extend the DRG cap. The cap means that certain illnesses are paid a flat fee and given number of hospital days. Let us say a DRG for an illness payment is $24,000 ($6,000/day for 4 day hospital stay). If the patient is in the hospital for six days the hospital gets the same $24,000. If the patient is in for three days they get $24,000. You can see why the hospital’s motto is get them out fast.

We are unable to know the hospital’s actual overhead. If we did, we could to find out what the hospital’s actual costs are. We could then calculate the hospital’s profit. These numbers are totally opaque.

Most hospitals are non profit hospitals. They can not post a profit at the end of the year? Therefore, they have to pour the extra money into something. Executive salaries and capital expenditures are a prime avenue for getting rid of their profit. A key question is how is the hospital’s overhead calculated? Maybe reducing costs to the consumer would be a good idea?
If a hospital makes capital expenditures with the capital they have to spend each year they receive added cash incentives. If a hospital has a house staff or nursing school there is sizable bonus received from Medicare for the professional training programs.

I received this comment from a knowledgeable follower of my blog

“Stan

Richard Dickey M.D. ,FACE”

If you would suddenly became ill and have to go to an emergency room, because you need help immediately, you can not shop for a hospital on the internet. You are stuck. Shouldn’t there be some rules that reflect the cost and value of the hospital service? If your life is saved, the fee charged is priceless if you had some way of paying for it.

The solution is not price controls or a single party payer. The solution is price transparency, and the creation of a price competitive environment among hospitals.

President Bush’s approval rating is at an all time low because of the Iraq war. However, his medical advisors understand the healthcare systems problems. He has called for price transparency. Congress, under the influence of vested interests, stopped him. He called for DRG reform on the basis of hospitals’ cost and not charges. Again congressional outcry influenced by vested interest stopped the process. I have a feeling Mark McClellan M.D., Director of CMS, quit because of the delay in DRG reform.

President Bush has been able to get through some insurance reform. The deductible limit on a Health Savings Accounts have been raised for an individual is now $5250 and 10,500 for a family. However, the HSAs are constructed in favor of the insurance industry and not the patient. They still do not have a community rating system in place. The insurance industry fought with 4 years of lobbying to stop a Medical Saving Account in favor of the patient.

This year President Bush proposed tax deduction of up to $15,000 per family to by insurance. Yesterday he told hospitals not to press their luck about prices and charges.

I know the President and his people know all the issues necessary for true reform and the repair of the healthcare system. They simply can not accomplish true reform piecemeal. The piecemeal approach to the entire needs for effective healthcare reform to occur is inot understandable to the goal of reform to the public, media or congress. Piecemeal reform will also get distorted by the vested interests (facilitator stakeholders) during the legislative delays.

Medicare has not hesitated to reduce physician fees. They will be reduced 5% again this year. Medicare is presently regulating the price it is paying the physicians. The government’s tactic seems to be to beat up the guy you can beat up the easiest.

Congressman Pete Stark has said all physicians game the system. They have to be stopped. Congressman Stark’s view is far from correct. However, if you instinctively know you have a product or service that is needed, and other stakeholders are taking undo advantage of a dysfunctional system, some feel they might as well try to get their share.

However, when Mark McCellan M.D. discovered that 90% of the healthcare dollar was spent on the complications of chronic disease. His goal was to improve chronic disease management to reduce complications.

The government declared in the Federal Register it was going to reduce the payment for Bone Mineral Density by 70% over the next four years. The medical profession made a feeble attempt to stop the reduction. A Bone Mineral Density can diagnose early osteoporosis. Early treatment can prevent future osteoporotic fractures.

When the government tried to change the DRG system to reflect the actual hospital cost of service as opposed to charges, Congressman came out the woodwork to delay and stop the process.

How come? The political system has nothing to do with common sense and logic. It is driven by the most effective vested interests.

Who should have the most important vested interests? We are supposed to have a government run by the people for the people and not the best lobbying group. People need to step up and speak out!! Eventually, the wisdom of the democratic process and the peoples’ interest will prevail. We do not have the time to wait. We must speak up now!

Stanley Feld MD,FACP,MACE

Kinky Friedman, are you listening?

The fees paid to all physicians and hospitals for services and procedures should be published on the Internet by an impartial body. Alongside the multiple wholesale fees should be the providers’ retail fee schedule. This would create a system of complete fee transparency. Insurance companies negotiate fees with each provider. The fees of one provider might be different than the fees of another vendor. The posting of these prices on the internet could be required by each State Insurance Board before an insurance company could obtain a license to sell health insurance in each state for each insurance product. This would result in a transparent range of fees from retail to wholesale per insurance company and per provider. Justification for the range of fees could be explained on the web site. Only then would the prices and fees be transparent to the consumer. The consumer (patient) would have adequate information to make a decision to pick the provider of his choice.

Medicare has published fees on the Internet. Price Transparency in Medicare is the goal. However, it has to be simplified. The fees are difficult to figure out.

This is a simple process. It would create competitive pricing among insurance carriers, and providers. The format could be the same as C/Net for electronics purchases. Patients could also add their critique of their care. In High Noon, J.F. Rischard suggests we are merely at the onset of solving problems through the use of the internet. The patients (consumer), along with a little help from the government, can precipitate this change.

Even if the governor of each state required this posting of the insurance industry, it would have little impact on the uninsured. However, Price Transparency is essential if Consumer Driven Healthcare is going to fulfill its promise. It would be a very important step in Repairing the Healthcare System. It would get patient participation in decision making about their care.

Dr. Westbrock mentioned that the insurance industry has subverted the HSA concept. He is correct. The Health Saving Account concept in its original form was called Medical Savings Accounts (MSA). The original concept was designed to motivate the patients to be a price conscious of their medical care purchases. Price Transparency would be the vehicle they would use to choose. More of this is the future.

Please consider Price Transparency in light of my earlier statements. Presently, the healthcare system is broken because all of the stakeholders’ incentives are misaligned. Everyone has adjusted to protect his own vested interest at the expense of the patient, the most important stakeholder. Everyone is in pain at the present time because of the systems dysfunction. Everyone can adjust if the heat goes up slowly. The price simply goes up. Everyone will talk about the problems but no one seems to fix them as they should be fixed. The goal of this blog is to inform the patients and future patients of the problems and empower the patients and future patients to act through their local and state governments to create the necessary alignment. The goal is to serve all of the stakeholders’ vested interest. However, the patients and future patients have to get a good deal rather than a raw deal.

Price transparency should be on an impartial web site. The web site should be available for everyone who chose to subscribe free of charge. The patient should have the ability to judge the services of the insurance company and physicians. Physicians, insurances companies and other stakeholders should have the ability to reply if they chose to. A web site such as CNet would be great for this endeavor. The technology is available.

This is not rocket science. Insurance companies, physicians and hospitals have a data base they could download to the impartial site. They could be compelled to participate by each state. It is time to level the playing field for the patient and physician.

Kinky Freidman could make one tenet of his healthcare policy. He would be wildly applauded. As the new governor of the State of Texas he could require the Texas State Board of Insurance to demand this data. The action is neither a Democratic Party nor Republican Party action. It is a common sense action

Kinky’s claim is he is not owned by anyone except common sense. This seems like common sense to me.

Go for it Kinky!

Remember Price Transparency is only going to solve part of the problem. The rest of the solutions to Repairing the Healthcare System will follow.