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The Future State Business Model For Repairing the Healthcare System

October 21, 2012

inHealth Savings Accounts vs Medical Savings Accounts, Medicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

Obamacare is going to lead to the demise of both the healthcare system and the medical care system in the United States. America is at a critical turn in 2012. The evidence for the collapse is presented in the following links.

The business model for a successful repair of both the healthcre system and the medical care system are outline on the next slide.

A consumer driven healthcare system is critcal to a successful repair of the healthcare system. Read this link to understand the full meaning and implications of a consumer driven healthcare system.

Consumers must drive the systems by being responsible for their own healthcare decisions and own their healthcare dollars even if they are subsidized by the government.

Another critcal element in business model for the future state is effective tort reform. Ideally defensive medical testing has to be eliminated completely. Defensive medical costs the healthcare system between $300-500 billion dollars a year

A summary of the misalign insentives must be understood and examine . There is a way to align all the primary and secondary stakeholders incentives. It must be agreed too that consumers are the primary stakeholders and physicians are next. Most of the control and power in the system has shifted to the secondary stakeholder namely the government, the hospital systems and mostly the healthcare insurance industry.

The government must understand that the only way to reduce cost is to shift the responsibility of controlling costs from the government to consumers.

Consumer must be the leader of their healthcare team.

Consumers must be responsible for health and healthcare dollars.

Consumers must have effective financial incentives to become medically responsible to themselves. It is clear with the incidence of obesity, the increases in smoking and drug addictions, hearth attacks, and strokes from high blood pressure that the need to attain good health is not enough incentive.

My ideal Medical Saving Accounts are an excellent way of providing financial incentives to achieve good health in a consumer driven system. The achievement of good health will drive down the costs to the healthcare system. The incidence of costly complications of disease will be reduced.

My ideal Electronic Medical Record is an important innovation. It is inexpensive to physicians. The data belongs to patients and their physicians and set up in a way that it is not punitive to physicians. It should be a fully functional EMR.

All physicians know that medical care decisions making and judging the quality of medical care by electronic data is faulty. All the EMR's are expensive. They also put physicians in a vulnerable position to be judged by faulty data. My Ideal EMR helps physicians track their patients and improve their medical communications and care.

It is important that consumer become responsible for their own Personal Medical Record. The ideal EMR permits patients to download their records with their tests to their own computer or flash drive. Consumers should carry their medical records at all times in case of emergency.

Social Networking is the key to a consumer driven healthcare system. The possibilities are compelling.

Improved communication between patients and physicians will be driven by a consumer driven healthcare system connected to social networking. The motivations is financial when consumers own their healthcare dollars.

Education via the Internet must be an extension of physician care.

Government's Educational Responsibility:

Teach consumers to become intelligent healthcare consumers

Government must develop a program to effectively combat obesity. There must be a change in the food industry and farm policy.

Price Transparency

Price Controls Do Not Work.

Eliminate Medical Monopolies

Patient must learn to be and educated and responsible healthcare consumer.

There must be a decrease in medical entitlement programs. Consumers must have skin in the game in order to be educated and responsible consumers. Consumers need to be a financial risk.

This is the outline of the future state business model. The readers should click on each link to read the details of each bullet point.

This business model will enable America to have an affordable healthcare system for all which will become sustainable.

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

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Here Comes The Defective Judge (CMS)!

July 29, 2012

inDefective scientific studies, Medicine: Healthcare System

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Stanley Feld M.D., FACP, MACE

President Obama’s goal is to have the government be the single party payer for the entire healthcare system.

There is no doubt in my mind that the government as the single party payer will not work for patients or physicians.

President Obama cannot control CMS’s misuse of it assignments because bureaucratic complexity. One area of abuse and misuse of the department’s power is its attempt to eliminate fraud and abuse in Medicare and Medicaid.

There is no question that some healthcare providers abuse the Medicare and Medicaid payment system.

No one ever asks the critical question. Should the payment system used in Medicare and Medicaid be changed to prevent fraud and abuse?

Never the less President Obama is expanding the old punitive system. He thinks he is going to stop abuse with his expansion.

“ Stepping up their game against health care fraud, the Obama administration and major insurers announced Thursday they will share raw data to try to shut off billions of dollars in questionable payments.”

I don’t know how many times I have shown that claims data to determine quality of care or fraud and abuse is defective.

"Fraud is estimated by the administration to cost Medicare about $60 billion a year, and the Obama administration has beefed up the government's efforts to stop it, bringing in record settlements with drug companies for marketing violations as well as using new powers in the health care law to pursue low-level fraudsters with greater zeal."

This is a small amount compared to the $2.5 trillion dollar healthcare system cost when one considers the government’s investigative costs and the hardship these errors impose on many innocent physicians and patients investigated.

The hardships are enough to destroy physicians’ trust in the government and their desire to deal with the government.

It also serves to destroy the physician patient relationship.

Physician patient relationships are essential to the therapeutic success of a treatment regime.

Physicians have complained about this bureaucratic abuse to their congressmen. Congress has looked into this abuse. CMS’s approach has been to criminalize physicians using questionable data and decisions by unqualified judges.

Chairman Charlie Gonzalez of the House Small Business Committee outlines the problems brought to his attention several years ago. His hearings did not receive much attention.

Opening statement by Chairman Charlie Gonzalez

http://www.youtube.com/watch?v=0SmKmLMPu-s&feature=relmfu

Dr. Karen Smith a former President of the North Carolina chapter the American Association of Family Practitioners describes her encounter with CMS’s subcontractor for investigating fraud and abuse. CMS’s assignment is to discover Medicare and Medicaid underpayment or overpayment as well as fraud and abuse.

http://www.youtube.com/watch?v=3v4Sq7oDCgo&feature=player_embedded

I believe it is important for anyone who is interested in what is happening to the healthcare system to view the several You Tubes I am including in this blog.

Dr. Michael Schweitz, Vice President of The Coalition of State Rheumatology Organizations in West Palm Beach, FL discusses the defects in the RAC system and the need to change.

http://www.youtube.com/watch?v=E5K8iPqsmjY&feature=relmfu

Dr. Schweitz states that administrative costs in dealing with the government is overwhelming to physician practices. The stress imposed on physicians detracts from their ability to deliver quality medical care to their patients.

Most important is the government’s attitude toward the physicians and their practices. The physicians are guilty until they prove themselves innocent. Government’s subcontractors use claims data to prove the physicians guilt

Another problem is the more the outsourced company collects from physicians, the larger the commission it collects from CMS.

Mr. Timothy B. Hill is Chief Financial Officer, Director of the Office of Financial Management, Centers for Medicare & Medicaid Services. He answers questions from Chairman Charlie Gonzalez

http://www.youtube.com/watch?v=FBpXubSY8O8&feature=relmfu

The questions continue to Mr. Hill. He says CMS recognizes its abuse of physicians. He hopes to improve.

Since Obamacare has expanded physicians’ complaints have increased.

http://www.youtube.com/watch?NR=1&feature=endscreen&v=uRX1M31T8LA

Can anyone believe this testimony given by Mr. Hill? I hope his message is not believed by congress. Mr. Hill does not document his department policy changes

“ This week White House officials said a "trusted third party" would comb through data from Medicare, Medicaid and private health plans and turn questionable billing over to insurers or government investigators. That third party organization has yet to be selected.”

With the impending a thirty percent reduction in Medicare payments on January 1, 2013 physicians will not be able to afford care for Medicare and Medicaid patients.

Mr. Joseph A. Schraad, MHA Chief Executive Officer Oklahoma Allergy and Asthma Clinic, in Oklahoma City, describes the challenges that the practice he manages face. Less and less providers are going to accept Medicare.

http://www.youtube.com/watch?v=cINHOZmo_wA&feature=relmfu

Dr. Forrest in his direct care payment model for patients describes the formula he uses to avoid the government’s interference with his practice of medicine. He talk is riveting.

http://www.youtube.com/watch?v=dUX4P7XfY8o

Other formulas can be used. The You Tubes presented here demonstrate that the Judge (CMS) is using the wrong formula. The CMS cannot control their outsourced venders who have inappropriate incentives.

The are driving physician away from accepting Medicare and Medicaid payments. In the process patients lose

The way to solve fraud and abuse is to have patients police the healthcare system. Patients can uncover fraud and abuse if they own their healthcare dollar and have financial incentives to save unspent money in a retirement fund.

Education and financial incentives will make consumers productive consumers.

The way to approach physicians is not to assume they are criminals and subject them to the stress and expense to defend them in a defective evaluation system.

Physicians must be educated on how to improve coding efficiency and the government’s system of measurement must be made more accurate and less complex. ICD 10 is a big mistake. It makes coding complicated.

The best formula, in my opinion, is to empower and educate patients.

Government and employers must provide patients with financial incentives to become educated buyers of medical care services. Patients must be given the opportunity to own their healthcare dollars and be responsible for their own health and healthcare.

My ideal medical savings account provides patients with that opportunity.

Physicians collect only 10% of the healthcare dollars spent.

The real question is who collects the remainder of the 2.5 trillion dollars spent?

America should not depend on increased bureaucracy and bureaucratic staff to administer medical care with increased and confusing rules.

Everyone knows this will only result in increased inefficiency and higher costs.

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

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Another Big Mistake!

July 18, 2012

inMedicine: Healthcare System

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Stanley Feld M.D.,FACP,MACE

On July 1, with great fanfare, CMS announced that 89 organizations have been chosen to serve the healthcare needs of some 1.2 million Medicare beneficiaries in CMS’ Accountable Care Organizations (ACO) program.

Many of the premier integrated health systems, such as Mayo Clinic, Cleveland Clinic, Geisinger Health System, and Intermountain Healthcare had rejected an invitation to participate in the program in June 2011.

Among the reasons for rejecting the government’s offer to be a participant were the complex, contradictory and burdensome rules, the risk in shared savings, and the need for participating patients to be included in oversight boards.

Leaders of all four organizations praised the ACO concept but criticized the proposed implementation. Geisenger Health System said “

“It seems to be very prescriptive and restrictive with a fair amount of administrative and regulatory oversight."

The recent CMS press release makes it sound as if the ACO program is off to a good start.

Totally false!

There are 35 million seniors and disabled persons presently on Medicare. The program will include 1.2 million Medicare patients.

1.2 million Medicare enrollees represent less than 3.4% of patients on Medicare.
The number of organizations enrolled does not represent validation of the acceptance of the ACO process by the medical community.
It does not represent validation of the contention that routing Medicare patients through ACO’s will save money.

The growth in the cost of care’s baseline, on which an ACO organization will be measured, is not defined. The participating ACO organization cannot possibly know what the downside risk is.

It looks like CMS waived the downside risk temporarily for 84 of the 89 ACO’s who signed up. The waiver will not last forever. When it ends it will be too late for these ACO’s to get out.

CMS delayed the original start date from January 1,2012 to July 1,2012. This was an ominous sign. As far as I can tell no one has any idea how many of the groups signed up are integrated care groups.

SUMMARIES OF ACOS SELECTED FOR JULY 1, 2012 START DATE[1]

http://www.cms.gov/apps/media/press/factsheet.asp?Counter=4405&intNumPerPage=10&checkDate=&checkKey=&srchType=1&numDays=3500&srchOpt=0&srchData=&keywordType=All&chkNewsType=6&intPage=&showAll=&pYear=&year=&desc=&cboOrder=date

I have written several articles explaining why I believe ACO’s will be a gigantic waste of government money, which will add to America’s deficit.

“The more I study ACOs the worse they look. Dr. Berwick’s goal is redistribution of wealth. This is exactly what ACOs are going to do. Patients, taxpayers and physicians are going to get the short end of the distribution.

Hospital systems are spending a ton of money trying to form ACOs. They are going to lose big. I have concentrated on the obvious defects and difficulties in forming ACOs in the past. Here are some more traps.”

"Dr. Don Berwick and his associates have a naïve view of the ability of organizations to form and execute Accountable Care Organizations (ACOs). ACOs fit well into President Obama’s worldview of government controlling our healthcare system."

There are three major problems:

The government is broke. It does not have the money to pay for a government takeover of the healthcare system.
New systems need participant cooperation to succeed.
Creating a fully integrated healthcare system is difficult to nearly impossible unless the system has salaried physicians and a fully transparent hospital/physician provider organization. This will not happen soon in the current hospital and physician cultural milieu.

“President Obama and Dr. Don Berwick have overestimated the abilities of the healthcare system to respond to their hubristic assumptions.”

“The ACO program is based on the hubristic assumption that the federal government can design the best organizational structure for the delivery of care, foster its development, and control its operation for the entire country."

Physicians and hospital system will not cooperate because:

Physicians and hospitals have little experience or control in managing risk.
Physicians and hospital systems experience with HMO’s in the 1980’s proved their inability to manage risk.
It was a painful financial experience for both.
Most physicians and hospital systems are not very interested in assuming this risk again.

The risk of ACOs has been sugar coated by the administration.

Patients are the only stakeholders who can control their healthcare risk. All health policy wonks ignore the role of the patients in controlling and managing their healthcare risk.

Dr. Berwick thinks hospitals and physicians will be motivated to control patients’ healthcare risk with ACOs.

He is wrong. I predicted participation would be minimal.

Physicians take on enormous risk taking care of patients presently. The risk increases when patients do not follow physicians’ treatment recommendations.

Physicians are in no mood to take on financial responsibility and malpractice risk for actions that might fail because of patients’ non-adherence. Patients have to be motivated with health and financial incentives to comply.

Those physicians and hospital systems participating in the ACO program will lose financially and professionally.

There are several other key points for the lack of success of the ACO program

" Obamacare uses Medicare reimbursement as an incentive to create accountable care organizations (ACOs), which the federal government has decided are the way to deliver quality care at lower cost.
Proposed regulations by the Centers for Medicare and Medicaid Services (CMS) are largely confusing, impenetrable, and inconsistent.
They give CMS detailed control over ACOs and the providers who participate in them, including censorship of ACO communications with Medicare beneficiaries.
Medicare beneficiaries are assigned to ACOs without their knowledge or consent.
Membership, in reality, is a retrospective bookkeeping entry relevant only to financial dealings between CMS and the ACO. ACOs may even have to pay money back to Medicare if they do not meet CMS goals for savings.
The incentives offered to ACOs are diffuse and speculative, entailing intrusive regulation of ACOs and providers.
ACOs as defined by Obamacare are fatally flawed and cannot be fixed by merely changing the proposed regulations."

This is neither a Democrat nor Republican issue. It is an issue of developing a healthcare system that will work. The cost of developing this government controlled healthcare system that is doomed to fail is enormous.

The Mayo Clinic, Cleveland Clinic, Kiesinger Health System, and Intermountain Healthcare are probably the most integrated healthcare systems existing in America. They visualized the lack of potential for success in ACO’s present structure.

Thirty-six organizations signed up for the Pioneer Demonstrations ACO 6 months ago. The list and details can be found on the CMS fact sheet. The details of the deal they made are not easily available.

innovations.cms.gov/Files/fact…/Pioneer–ACO-General-Fact-Sheet.pd

It is worth studying all of the organizations that were selected for the Pioneer ACO program. These organization must believe they are in a no lose situations. They will find out that they will lose and it will be too late to get out.

All of the organizations represent a very small percentage of practicing physicians. These physicians take care of a very small portion of Medicare patients.

It will take several years and much money to decide the ACO’s will fail. The only healthcare system that will align all the stakeholders’ incentives is my Ideal Medical Savings Account.

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

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A Real Marketplace For Healthcare.

May 2, 2012

inHealth Savings Accounts vs Medical Savings Accounts, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Reform Act is all about government control of 19% of the U.S. economy.

The media has publicized ridiculously high charges for cardiac bypass and other complicated procedures. It ought to find out what the actual contracted reimbursement fee is.

All the stakeholders are at fault for the lack of transparency, misinformation, administrative waste, misuse of taxpayers’ dollars and the manipulation of the media.

It is important for the government and the healthcare industry to continue to blame physicians for being the villain in our dysfunctional healthcare system.

Remember physician receive only 10% of the healthcare dollars spent in our healthcare system. Who receives the other 90%? What value do the other recipient add to medical care?

The medias quoted prices are a scare tactic to keep government’s control of the healthcare system advancing.

What is going to happen after Obamacare is repealed?

There will still be millions uninsured.

There will still be millions who cannot buy insurance because of pre-existing conditions.

There will still be millions who choose not to purchase coverage.

There will still be inefficiency and waste in the healthcare system.

Stakeholders are adjusting to the potential restrictions of Obamacare. They are finding new ways to game the healthcare system.

Healthcare costs will rise and inefficiency in the healthcare system will increase whether we have Obamacare or not.

President Obama is trying to set rules and create regulations to eliminate potential solutions to our healthcare system’s problems.

He is trying to regulate and eliminate high deductible insurance plans and Health Savings Accounts. Under Obamacare it will be much cheaper for employers to pay the penalty than provide healthcare insurance for their employees.

Employees will be forced to buy insurance from President Obama’s health insurance exchange (Public Option). There will be no other options. At that point the government has full control of healthcare.

It wouldn’t be a bad thing if the government could afford another potentially inefficient entitlement program. President Obama is clearly trying to squeeze complete government control of healthcare through the back door.

It will not work!

What should be done?

The government must create a real marketplace for healthcare insurance. A marketplace constructed for the benefit of consumers and not secondary stakeholders’ vested interests. Stakeholders would adjust because of their competitive compulsion to get customers. They will compete for consumer business by lowering healthcare costs.

The mindset must change to a consumer driven system not a government driven system.

My Ideal Medical Saving Account would be an excellent way to provide full first dollar healthcare insurance coverage for unplanned medical expenses. It would also provide financial incentive for consumers to be responsible for their health and healthcare dollars.

These are some of the rules that government should have.

1. Healthcare insurance policies should be “guaranteed renewable.”

2. Healthcare policies should include a right to purchase insurance in the future regardless of pre-existing illness.

3. Healthcare insurance policies should follow you from job to job regardless of a move across state lines.

4. Individual healthcare insurance policies should have the same tax-deductible status as employer provided healthcare insurance policies.

The government could form a successful individual insurance market place with these simple rules or regulations.

“Most pathologies in the current system are creatures of previous laws and regulations.”

“ Solicitor General Donald Verrilli explained as much in his opening statement to the Supreme Court: “The individual market does not provide affordable health insurance,” he noted, “because the multibillion dollar subsidies that are available” for the “employer market are not available in the individual market.”

My Ideal Medical Savings Account could apply to Medicare and Medicaid. It provides incentives and real healthcare insurance coverage. It allows the consumer to choose. It encourages consumers to be knowledgeable shoppers for healthcare.

The main argument for a mandate before the Supreme Court was that people of modest means can fail to buy insurance, and then rely on charity care in emergency rooms, shifting the cost to the rest of us.

The government is spending that money already. The mandate will not stop the emergency room use.

A consumer driven healthcare system using My Ideal Medical Saving Accounts would provide incentives for the indigent or those of modest means to try to save money for them by taking care of their health. The government provides those educational resources already. This might encourage its use.

The emergency room treatment expenses for indigent and uninsured are not the central reason for rising healthcare costs. Costs are rising because people, who do have insurance, and their doctors, overuse health services and don’t shop on price.

The Ideal Medical Savings Accounts should be fully tax deductible to both individual and groups. The healthcare system would then become consumer driven. Consumers would become price sensitive because of financial incentives. A competitive healthcare market would then be created. The result would be a decrease in the cost of healthcare. It certainly would be cheaper than the artificial, bizarre, government controlled healthcare market for we have today.

Enlarging government control would make the healthcare market more expensive and less efficient than the unsustainable government controlled healthcare system that exists.

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

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How Could A Social Networking Company Make Money In Healthcare?

February 22, 2012

inChronic Disese Management, Consumer Driven Health Care, Medicine: Healthcare System

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Stanley Feld M.D.,FACP, MACE

My last blog about individual healthcare insurance policies generated a lot of comments from young people starting up a business and individuals operating their own business at home. I also received several from entrepreneurs looking to start a business.

One person wrote,

"Dear Dr. Feld

So we have now learned that high deductible plans are what people should be purchasing. We also learned that they should be self insuring for $10,000 which is the highest deductible insurance at the lowest price.

Over $10,000 is where are at the greatest financial risk. True insurance should cover our greatest risk.

I would like to know where is the business opportunity is for an Internet company that runs social networks?

Sincerely

I said the world belongs to young people 20-50 years old. They also understand the power and mechanics of social networking.

If there was a social network dedicated to describing the advantages and disadvantages of the healthcare insurance options available to the unemployed, self- employed and under insured there would be many members. If those members had the ability to have input it would grow even larger with appropriate marketing.

I have not figured out how social networking sites make money except through advertising. I imagine many companies would like to get the attention of these consumers who are seeking healthcare insurance advice.

It has been reported that people change their job up to 8 times during their career. More and more people are in start-up businesses and need healthcare insurance for their employees. Many people are becoming consultants and are self-employed. They all need healthcare insurance for their family.

President Obama’s answer to the problem is the government will provide the healthcare insurance for you. Healthcare insurance is a right as an American.

There are several problems with this statement. The government cannot afford to provide adequate healthcare insurance for the entire population.

Britain has proved it. They are reverting back to a pay for service system. The socialist democrats in Europe have proved that. Each country is going bankrupt.

The business opportunity would be to teach the people who are self-insured or uninsured about the rip off of the healthcare insurance industry and to teach them how to save money.

How many start up companies do you guess are uninsured or under insured or not insured for catastrophic illness because they cannot afford the healthcare insurance premiums?

The chances are many start up employees will not get sick. True healthcare insurance should be a hedge against catastrophic illness.

If someone gets sick in a company, the company could pay the employee for the amount he spent before they reached the full deduction.

The high deductible individual policy is not tax deductible. If it were made tax deductible by citizen demand to congress through social networking the voice of the individual could be heard. Congress might be forced to act.

Start up companies and other companies would save money. These companies would be placed on the same playing field as companies who pay for employee insurance with pre tax dollars. The social network could even form an association of self-employed companies and enjoy the tax benefits and purchasing power of large corporations.

This would represent a threat to the healthcare insurance industry. They would do everything to stop. So would the government.

If you do the math for the government, the government would be saving much more money than it would collecting taxes.

An appropriate social network could stop the healthcare insurance industry's grotesque business model in its tracks.

It could save billions of dollars. It could create incentive for people to take better care of themselves.

Many large and small companies are self-insured. The law lets these companies deduct their healthcare insurance with pre tax dollars. These companies could offer my ideal medical saving account with a $7,500 trust account. They could then reinsure employees for over $7,500 with a reinsurance company.

Employees would obtain first dollar coverage after the deductible is reached.

In the worst case the company would save $6,000 per employee. In the best case it would save $13,000 per employee.

http://www.lijit.com/search?uri=http%3A%2F%2Fwww.lijit.com%2Fusers%2Fstanleyfeld&start_time=&p=g&blog_uri=http%3A%2F%2Fstanleyfeldmdmace.typepad.com%2F&blog_platform=&view_id=&link_id=7386&flavor=&q=ideal+medical+savings+accounts&x=0&y=0

I suspect even the traditional insurance companies would provide the re-insurance. These healthcare companies have already negotiated fees with physicians, hospitals and drug companies.

If the healthcare insurance industry did not provide re-insurance its negotiated fees could be obtained easily.

A bank or a mutual fund could adjudicate the claims instantly.

The large corporations, who are self-insured, all have HR officers. The HR officers I have met either do not seem to have the bandwidth to investigate the possibility of the ideal medical saving account structure or they are trapped into outsourcing the details of the corporation’s self-insured healthcare plans to middlemen. I have a feeling the commitments of some with middlemen are long term.

If all this could happen it would be an important first step in the development of social networking in healthcare and medical care.

Consumers need education for the care of their chronic disease such as diabetes, asthma, chronic lung disease, heart disease and chronic gastrointestinal diseases. Many of these diseases are a result of obesity.

If social networking could discourage the ever-increasing incidence of obesity, society would decrease healthcare costs dramatically.

If patients learned how to manage their own disease the cost of medical care would decrease precipitously.

Why?

Because 80% of the healthcare dollars spent on direct patient care are spent on the complications of chronic diseases that are not well managed by patients.

Many drug companies and medical device companies would advertise on these social networking sites.

Consumers must drive the healthcare system in order for the healthcare system to be repaired. Not government or the healthcare insurance industry.

Consumers feel powerless at present. Empowering consumers through social networking will disrupt the entire healthcare systems supply chain for the better.

Consumers are up against a government that wants to tell them what they have to do. They are up against healthcare insurance companies that charge obscene premiums. They are up against hospitals, physicians and emergency rooms that have exorbitant charges.

Consumers are up against diseases such as obesity which precipitates many chronic diseases.

Consumers are frustrated and need leadership and guidance.

The phenomenal growth in social networking can give consumers the tool they need to control their health and drive the healthcare system.

Social networking is the only way to start a consumer driven healthcare movement. It has to happen before the medical care system is destroyed.

The young people expert (20-50 years old) in social networking have to become engaged.

Those young people have to understand physician mentality and the importance of the patient physician relationship.

I will be happy to help in any way I can.

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

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It Is All about How You Look At Things

February 1, 2012

inConsumer Driven Health Care, Information Technology in Healthcare, Medicine: Healthcare System

• Leave a comment

Stanley Feld M.D.,FACP,MACE

My son Brad Feld wrote in response to my blog“How Software Innovation Can Cause Creative Transformation Of The Dysfunctional Healthcare System”,

Outstanding blog post dad.

And I think your punchline is completely correct – the healthcare software innovators should focus 100% of their energy on the patient and the physician (their customer). That would quickly transform everything in the healthcare supply chain.

Can you imagine what would happen if the government subsidized Borders and Barnes & Noble? Yup – pretty easy to see that they'd be doing fine and "bookstores would be classified as a public good." What nonsense.”

Healthcare policy makers are trying to reform healthcare using a defective business model.

The business model of 1945 to 1965 was a model that put the patient and physicians in the center of care.

Post Medicare in 1965 the business model changed because lots of government money came into the healthcare system. The secondary stakeholder began to devise ways of taking that money out of the system before and after the money was spent on direct patient care.

The relationships between patients and physicians became distorted. A giant hairball of vested interests by secondary stakeholders came between the patient physician relationships.

Well-intended policy makers tried to fix the system by making revisions and updates to a broken business model.

These revisions only made the healthcare system more expensive and less effective in the care of patients.

The 2011 business model is a jumble. The secondary stakeholders control the healthcare system and interfere with the patient physician relationship.

President Obama’s healthcare reform law is making the healthcare system worse. It is pasting regulations and restrictions on top of a failed business model.

It does not consider a way to get back to the effective business model of 1945-1965 for the 21^st century.

It reminds me of Microsoft and Windows. Microsoft is pasting revisions on top of the DOS operating system of the 1980s rather than revising the operating system.

Obamacare has added complexity to the system. There are many bad ideas such as Accountable Care Organizations and pay for performance rules to name just two. It does not deal with tort reform or patient responsibility for their own care and their own healthcare dollars.

Rather than pushing the secondary stakeholders to the edges of the healthcare system, Obamacare gives these stakeholders increased control over patients and physicians and destroys the patient physician relationship.

The critical turn is necessary now.

The 2020 business model of Obamacare will increase the velocity of healthcare system collapse. The result will be an increased budget deficit. Healthcare spending can escalate beyond GDP in 40 years.

At this critical turn we must go in a sustainable future state direction. The business plan must be exchanged with a completely new business model. The new business model must be unrestrained by the present business model.

This is where software innovation comes in. Software must be built that redirects the model to a consumer driven healthcare system.

It has been a disaster for the government, healthcare insurance industry and hospital systems to control the healthcare system.

It must be controlled by consumer choice, responsibility and actions with consumers owning their healthcare dollars. Legislation must be written to provide consumers with choice, responsibility, and incentives for compliance.

Consumers are the only ones that can demand this option. Consumers changed the course of SOPA and PIPA. Consumers can change the course of healthcare.

The secondary stakeholders will not give up their power easily. It will only come as a result of the Internet and innovative software that teaches consumers about their power.

Steve Jobs did it with iTunes, iPods, iPhones and iPads. Apple is about to do it with TV. Jeff Bezo did it with Amazon and the publishing industry.

The 2020 business model in the future state must have the following advocates, software developers, healthcare policy wonks, CEO’s of large corporations and small businesses. Most importantly, people 20-50 years old who are ell must start becoming engaged now so they can have a viable healthcare system when they get older. All these groups must think about the future state without present government restrictions. Steve Jobs did it for Apple. It can be done for healthcare.

The components of the future state should be,

The Ideal Medical Savings accounts,
The Ideal Electronic Medical Record,
Patient Responsibility for their care and healthcare dollars,
Patient education as an extension of physicians care
A team approach to chronic disease management with the patient becoming a professor of their disease, the team leader and the physician the coach with his healthcare team assistant coaches,
Tort Reform
Integration of specialty care.

All of these components must be executed at the same time. Consumers must be taught to drive the system.

Skeptics who are try to hold on to power and protect the validity of past policies will fight hard just as the music industry, the publishing industry and the movie industry have.

In the end the skeptics will realize the virtues of Pareto efficency. All the healthcare industry secondary stakeholders will thrive, as the patient physician relationship once again will be revitalized.

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

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Economic Incentives Motivate!

June 22, 2011

inConsumer Driven Health Care, Health Savings Accounts vs Medical Savings Accounts, Medicine: Healthcare System, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

The use of economic incentives to motivate behavior is neither a Democratic or Republican idea. It is human nature to be motivated by economic incentives. The concept of individual responsibility is an American idea. It has been tarnished in recent years.

There is no question in my mind that government has the responsibility to be compassionate and help the needy. It is my view that government should help individuals help themselves.

The costs associated with Medicare and traditional healthcare insurance are rising. Every stakeholder points a finger at the other stakeholders as the cause.

President Obama’s Healthcare Reform Act is raising costs higher in anticipation of cuts in the future. He is in the process of forcing individuals to be more dependent on the government rather than promoting individual responsibility.

Obamacare will fail to control costs.

All anyone has to do is look at a Rand Corp. study of 29 years ago to see what works and what doesn’t work. After all that is said what matters are results in decreasing costs, not your political ideology.

The Rand Corp’s political leanings are more left of center than right of center. The Rand Corp tries not to be biased by these leanings in its scientific studies. Its conclusions from its own data are sometimes skewed to the left ignoring its own evidence.

The Rand Health Insurance Experiment looked at consumers’ healthcare consumption in healthcare plans with different deductibles as well as an HMO. It monitored the results and reported its findings in 1982.

The findings were:

Patients are responsive to out-of-pocket costs (the more they have to pay, the less health care they buy).
Changes in the amount of spending have no apparent impact on health care outcomes in most cases.
Judging from the difference in behavior between HMO doctors and fee-for-service doctors, physicians are also very responsive to economic incentives.
Consumers with high deductibles were as likely to cut back on useful health services, as they were to cut back on unnecessary care.
The critics of the consumer driven model have used this last point as proof that consumer driven healthcare doesn’t work. They claim that these consumers will not get appropriate care if they have a high deductible and try to save money.

If health care was free, spending soared with no improvement in health status. In the government controlled model government has to limit individual choice of care and access to care in order to keep consumption of care down.

The 1982 RAND study proved to me that consumer driven healthcare can work. Healthcare consumption is driven by the economic incentives the healthcare system offers consumers, physicians, hospital systems, pharmaceutical companies and healthcare insurers. Consumer driven healthcare patients used services they felt were essential to them and did not spend money on services they felt were not essential.

A consumer driven healthcare system would stimulate the growth of full-service diabetes centers that would force physicians into competing for diabetic patients because patients would be managing their own healthcare dollars. CDHC could energize the chronic disease healthcare market. It would create specialized centers competing for the care of patients with chronic diseases. Preventing the complications of chronic disease with education about self-management is in the interest of patients with the disease as well as society. The medical care of the complications of chronic diseases consume 80% of all healthcare dollars. Consumers and physicians respond to economic incentives. The healthcare social contract is really between consumers and physicians not government and hospital systems.

A 2011 Rand study of more than 800,000 families from across the United States found when people shifted into health insurance plans with high deductibles their healthcare spending dropped an average of 14 percent compared to families in health plans with lower deductibles.

In October 2010 Cigna released a report covering 5 years of real-world experience with 897,000 plan members, about half in “traditional” coverage plan and the rest in consumer-driven plans.

All of the results show that CDHPs are working beyond anyone’s expectations.

CDHPs save 15 percent in the first year, 18 percent in year two, 21 percent in year three, 24 percent in year four, and 26 percent in year five.
All this while individual out-of-pocket exposure is about the same (17 percent) in both types of plans.
Using Cigna’s quality measurements (which are wrong), there is 8 percent to 10 percent higher use of preventive services in the CDHPs.
CDHP enrollees are 9 percent more likely to get evidence-based treatment in the first year and 14 percent more likely in the second year of enrollment.
CDHP enrollees are five times more likely to complete a health risk assessment.
CDHP enrollees are19 percent more likely to work with a health advocate.
CDHP enrollees are 40 percent more likely to use on-line cost and quality tools when making decisions.
CDHP enrollees have a 13 percent decrease in the use of emergency rooms.
CDHP enrollees are 9 percent more likely to switch to generic drugs.
CDHP enrollees have a 14 percent lower prescription costs.
CDHP enrollees are 21 percent more likely to participate in a disease management program.
CDHP reduce their costs by 21 percent for joint disease, 8 percent for diabetes, and 7 percent for hypertension.
CDHP enrollees are slightly more satisfied with their plans than people in traditional approaches (83 percent versus 82 percent).

Finally according to the Employee Benefit Research Institute(EBRI), 22 million people are enrolled in consumer-driven and high-deductible health plans.

In 2010 EBRI conducted “Consumer Engagement in Health Care Survey” (CEHCS) analyzing the behavior and attitudes of 4,509 adults ages 21–64 with private health insurance coverage.

The findings were;

People who enroll in these plans are more cost-conscious than those who have traditional health insurance policies.
53 percent routinely check to see whether their plan would cover specific care, compared with 47 percent of traditional policyholders.
More than 50 percent check if a generic drug is available, compared with 44 percent in traditional plans.
CDHP enrollees were more likely than traditional plan enrollees to choose doctors based on their use of health information technology.
CDHPs enrollees also were more likely to exercise and less likely to be obese compared with traditional health plan enrollees.

President Obama’s Healthcare Reform Act will eliminate consumer driven health care plans. I believe this is ill advised. CDHPs have decreased the cost of healthcare by motivating consumers to drive their healthcare decisions. A government directed system will not achieve this goal.

The results above were gotten with Health Savings Accounts. The use of my Ideal Medical Savings Account increases the economic incentives for consumers.

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

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Health Care and Federal and State Deficits

February 13, 2011

inMedicaid, Medicare, Medicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP

Published: December 11, 2010

The basic truth is Federal and State deficits cannot be fixed unless spending for Medicare and Medicaid is decreased. President Obama’s Healthcare Reform Act‘s bureaucratic complexity of will increase the cost of the healthcare system without increasing the quality of healthcare.

New schemes such as Accountable Care Organizations will fail as did the Health Maintenance Organizations of the 1980’s and 1990’s.

None of our political leaders are interested in facing the real reasons for the escalating healthcare costs.

This year Medicare, Medicaid and SCHIP will account for more than 20 percent of all federal spending. These entitlements cost more than Social Security or National Defense.

The entitlements are being expanded inefficiently by President Obama’s healthcare reform act.

By 2035 federal health care spending is projected to account for almost 40 percent of the federal budget. At the current rate of increase in Medicare eligible aging population, a rising Medicaid population and the rising healthcare costs the federal government will collapse under its own weight.

“Two bipartisan commissions have issued recommendations to sharply reduce annual deficits, in part through bold changes — some sound, others dubious — in the way health care is paid for.”

The White House commission, headed by Erskine Bowles and Alan Simpson, proposes ways to decrease entitlement spending for Medicare and Medicaid by nearly $400 billion dollars between 2012 and 2020.

A second commission, an independent panel headed by Pete Domenici and Alice Rivlin, has suggested savings of $137 billion dollars by 2020 by Medicare cost-sharing.

Both commissions have some good suggestions. Many of the ideas of both commissions are wrong.

The real reasons for escalating healthcare costs are;

The grotesque profits of the healthcare insurance industry as a result of the federal government outsourcing the administrative services for Medicare and Medicaid. (See 40 billion dollar per year growth)
The lack of states limiting premium rate increases for the healthcare insurance industry.
The absence of promoting rate competition among healthcare insurance companies.
The extremely high cost (estimated 300 billion to 750 billion dollars a year) for defensive medicine as a result of President Obama’s refusal to deal with effective tort reform.
The lack of incentives for consumers to maintain their health. The obesity epidemic represents one example where incentives are lacking.
The lack of effective public education that would teach people the principles of health maintenance.
Discourage confusing media coverage of clinical research studies. The media is interested in the sensational contradictions inherent in serious clinical research.
These contradictions are supported by the publication of shabby clinical research in medical journals and other publications.
The lack of effective public service announcements about health.
The lack of consumer incentives for maintaining good health and utilizing medical services wisely.
The ideal Medical Savings Account would solve many of these problems instantly.
Few healthcare policy makers think consumers are smart enough to understand how to use the ideal Medical Saving Account effectively. Therefore health policy “experts” dismiss Medical Saving Accounts.
Medical Savings Accounts are different than President Obama’s restricted health savings account.

Both commissions are promoting the same ideas of redistribution of wealth and cost shifting. Both increase the cost to those that can afford it. Neither commission deals with consumer incentives.

President Obama’s healthcare reform act does not deal with consumer incentives. It deals with government control and consumer dependence on regulations.

All of the ideas of the commissions are cost containment ideas, not health promoting ideas.

Both commissions shift much of the burden of insurance coverage from the federal budget to individuals or to the states.

The commissions’ recommendations are the typical political shell game. They produce no real reduction in the cost of health care. They are a political ploy because they make the federal deficit look better while not doing a thing to repair the healthcare system..

One suggestion is to require wealthier older people to pay more for Medicare coverage and more of the cost for their own health care. Medicare already uses means testing to set the Medicare premium. The means testing is calculated using IRS tax returns. The distributions of IRA funds are taxed twice. Medicare costs more in after-tax dollars than ordinary group insurance for many seniors.

The problem is that means testing doesn’t work to reduce the deficit. Half of all Medicare beneficiaries live on low incomes and pay minimal premiums. Cost-shifting will undermine the health or financial security of senior Americans of modest means. Beneficiaries might have to pay hundreds or even thousands of dollars in additional out of pocket expenses.

The Domenici-Rivlin commission is advocating ending employer pre-tax exemption for healthcare coverage. This will increase federal revenue and lower the deficit. It will also increase taxes and decrease discretionary income. The result will be a decrease in consumer spending. A decrease in consumer spending will hurt the economy. Ultimately it will increase the federal deficit and decrease our standard of living.

It is time for common senses and sound economic thinking to Repair the Healthcare System.

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

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One Size Doesn’t Fit All

February 2, 2011

inMedicine: Healthcare System, Politicians,Healthcare and Vested Interests, Stakeholder Abuse of the Healthcare System, Stakeholder Mistrust

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Stanley Feld M.D.,FACP,MACE

Prior to the passage of his healthcare reform act President Obama removed a provision dealing with reimbursing physicians for end of life counseling. There had been a great public uproar over this provision.

It was viewed at a first step toward end of life rationing of care. It was really a signal that most care would be rationed.

When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system.

Sarah Palin called it death panels.” A government panel would decide whether Medicare would pay for the treatment of patients deemed hopeless regardless of the patient’s will.

Sarah Palin’s use of “death panels” was sensationalistic. In our sound bite society this was an effective sound bite.

The words “death panel” illustrated the truth about a world of finite resources and infinite entitlements.

The government cannot afford entitlements much longer. Yet President Obama’s healthcare reform act is going to expand the Medicare and Medicaid entitlements.

President Obama plans to control entitlement spending by defining what he will pay for. The result will be rationing of care.

There are other ways out of the mess. President Obama is not attacking the root of the problem. One way is a consumer driven healthcare model using ideal medical savings accounts. It would place the responsibility on patients and their family. Patients would be in a position to choose rather than having the third party (the federal government) choose their medical care. Patients and their family might decide to limit hopeless care when they are spending their own money..

A system of sensible tort reform would decrease the large cost of defensive medicine. The result would be lower healthcare costs. President Obama has ignored tort reform.

These two changes can help attack a few of the root causes of the increasing healthcare costs.

I have objected to President Obama’s healthcare reform act. It places all the decision making power in the executive branch and out of the hands of congressional oversight.

The Obama administration has the power to effect change through regulation rather than legislation . An example is Dr. Donald Berwick, chief of CMS, instituting the same policy by regulation that was removed from the bill by legislation. The new regulations go into effect January 1 2011.

At a stroke, Medicare chief Donald Berwick has revived the "death panel" debate from two summers ago.

CMS will enact the same policy removed from the bill through regulation. Congress has had no input. There will be a never ending series of steps to give government control over both patients’ and physicians’ freedom to make medical decisions. Some regulations seem benign on the surface. President Obama has been given complete control over the healthcare system by his healthcare reform act.

It is the reason there is such an outcry to repeal his healthcare reform act. President Obama has tried to hide the new regulations from stakeholders involved.

“The office of Oregon Democrat Earl Blumenauer, the author of the original rider who then lobbied Medicare to cover the service, sent an email to supporters cheering this "victory" but asked that they not tell anyone for fear of perpetuating "the ‘death panel’ myth." The email added that "Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch."

President Obama has used a number of tricks to achieve his goal. He appointed Dr. Berwick during congressional recess without congressional hearing after he withheld the request for a congressional hearing and approval for 3 months.

Dr. Berwick now slips through a regulation about reimbursement that Congress explicitly rejected. The email slipped out illustrating the scheming with his political patrons to duck any public scrutiny.

“Expect many more such nontransparent improvisations under the vast powers ObamaCare handed the executive branch.”

Administrative spokesmen, when challenged, immediately declared “the rule-making is not coercive and gives seniors more autonomy, not less.” Nothing could be further from the truth.

The facts are a panel of medical experts decide on treatments or service that are worthy of reimbursement. They then tell the administrators what to pay for. Some treatment won’t be paid for it even if it is in the best interests of patients.

Can a panel of medical experts be wrong? They certainly can. The experts judgments might be correct. However, their opinion and exceptions to the regulations cannot be incorporated into the healthcare system by inflexible bureaucratic machinery.

The bureaucrats put the experts’ decisions into a rules based computer program. Reimbursement is driven by this inflexible system , not by medical circumstances or medical judgment.

Last month a group of Clinical Endocrinologists received a Medicare denial code 151 stating;

“Payment adjusted because the payer deems the information submitted does

not support this many/frequency of services.”

This had not happened to this group in 20 years of endocrine practice. It concerned serially measuring thyroid function to regulate thyroid replacement therapy after patients are rendered hypothyroid with radioactive iodine of surgery. Initially patients have to be followed with thyroid function testing every month or two.

“Medicare allowed payment for the first laboratory service, then denied the next three tests as “too frequently.”

CMS also describes in its National Coverage Determination (NCD).

Thyroid testing may be covered up to two times a year in clinically stable

patients; more frequent testing may be reasonable and necessary for patients

whose thyroid therapy has been altered or in whom symptoms or signs of hyperthyroidism

or hypothyroidism are noted.

The “medical experts” got the exceptions correct but did not define the frequency of testing to permit the CMS to incorporate into the reimbursement system..

An endocrine practice can submit for redetermination within 120 days. If redetermination fails physicians have 80 days to file for reconsideration.Reconsiderations are the second level in the appeal process and are conducted by the Qualified Independent Contractors (QICs). If physicians receive an unfavorable reply at the reconsideration level, there are three more levels of the appeal process, the Administrative Law Judge (ALJ) Hearing, Appeals Council Review and the Judicial Review in U.S. District Court.

Imagine all the costs involved on both sides in order to adjudicate treatment that is evidence based and totally indicated. Imagine the frustration of physicians treating patients. .

From past experience these hassles will increase as the government gets more and more control over the healthcare system. Patients’ medical care is not first. Federal rules and regulations are first.

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