Stanley Feld M.D.,FACP,MACE

Democrats are cheerful on this beautiful spring morning. They are happy because congress finally passed this partisan healthcare reform bill. Many are going to try to represent the vote to the traditional media as a great duty to the American people. I also believe they have no idea of the unintended consequence of President Obama’s healthcare reform bill.

The high level goals of the healthcare reform bill are commendable. The bill’s solutions will end in disaster for taxpayers, the government, and patients who need medical care.

I received a comment from a lawyer this morning.

I can’t imagine what is going to happen with this new healthcare bill.  Decrease payment to doctors, increase number of patients… hmmm.

Also, can you imagine how happy you are if you are a plaintiff’s lawyer?  Less time per patient means more chances of mistake. And just more folks in the system filing bogus claims, too. Total win for the lawyers.

It is also a big win for the healthcare insurance industry, and big pharma . I predict their stock prices will increase in the next weeks.

President Obama’s healthcare reform bill is a big loss for taxpayers and people who are ill and people who are not ill.

The details of the bill are a killer of innovation, jobs creation, and freedom of choice. The bill will increase taxes and decrease quality of medical care. Many of the bill’s benefits will not start until 2014. The increase in taxes will start this year,2010.

President Obama has said: Any one making under $200,000 per year will not pay a penny in increased taxes.

The Joint Committee on Taxation analysis contradicts President Obama’s assertion. Either the congress or the President does not believe the Joint Committee on Taxation or has chosen to ignore it.

The healthcare reform bill will increase Medicaid roles. This will increase burdens on State budgets. Most States have budget deficits. They are required to have balanced budgets.

The Medicaid expansion might be meaningless because of the level of income required for coverage.

“If you’re low-income: The law significantly expands Medicaid, the federal-state health program for the poor, making it available to an estimated 16 million more people with incomes up to 133% of the federal poverty level.”

The poverty level was defined in 1955. In Texas poverty is defined as earning less than $950 per month or $11,400 per year. The increase will raise the level to $15,162 per year. How can a person making $20,000 dollars a year afford a $15,000 dollar healthcare policy even if the government subsides 50% of it? A tax credit is meaningless because they do not pay taxes.

This is an example of one of the many non starters in the healthcare reform bill. On the increased taxes side I believe the healthcare reform bill will inhibit investment and economic growth.

A new 3.8% Medicare tax will be levied on investment income including interest, dividends and capital gains that exceed those thresholds.

President Obama’s strategy is to increase taxes. Americans might notice the increased tax burden shortly. The increased taxes could be significant to a moderate earner’s lifestyle and standard of living.

• If you itemize deductions for income tax: Starting in 2013, medical expenses have to reach 10% of your adjusted gross income to qualify for a tax deduction, as opposed to today’s 7.5% standard. But seniors age 65 and older would be able to claim an itemized deduction at 7.5% of income through 2016.

There is much talk about the Cadillac tax. There is little understanding of the rules. If the average healthcare insurance policy for an individual is going to rise as the healthcare insurance industry predicts, how is anyone going to be able to afford the insurance much less the excise tax?

This will precipitate the Public Option. What effect will the Public Option have on the bogus deficit reduction calculations?

• If you have high-cost health insurance: A so-called Cadillac tax of 40% on plan administrators offering the richest job-based health benefits will take effect in the next few years and apply to the amount of annual premiums exceeding $10,200 for individuals or $27,500 for families. The thresholds are higher for retirees and workers in certain high-risk jobs.

Willie Sutton’s advice is to go where the money is. President Obama is not going where the money is.

The money is in:

1. Creating a system that puts consumers in control of their healthcare dollars and their health.

2. Rewarding consumers for good health.

3. Promoting self-responsibility for their health and healthcare dollars.

4. Creating a system that decreases defensive medicine.

5. Instituting effective and significant Tort Reform to decrease the need for defensive medicine

6. Creating a system that decreases the cost of adopting functional electronic medical records. An ideal medical record should be available to all at minimal monthly cost based on utilization.

7. Providing effective patient educational tutorials using the internet that is a physician approved extension of his care. Patients with chronic diseases must become professors of their disease. If they do not the complications of the chronic disease will occur and consume 80% of the healthcare dollars.

8. Creating systems of care that will prevent and reduce complications of chronic disease.

President Obama’s healthcare reform bill does not deal with any of these cost saving ideas effectively.

Americans love their country. We also know our government has done some stupid things in the past. The healthcare reform bill’s mistakes have been driven by politics, by ideology, by the influence of vested interests, and by the desire for power and fame .

President Obama’s healthcare reform bill is a stupid bill. America will suffer economically from the unintended consequences in the years to come.

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

Stanley Feld M.D.,FACP,MACE

The traditional media is not discussing the economic consequences of President Obama’s healthcare reform program.

In these final days the traditional media is describing the horse race to the finish line for a deemed vote (“Slaughter rule”) vs. a partisan up and down vote on the Senate bill. The horse race is a distraction to avoid discussing the unintended consequences of the bill.

Congressman Paul Ryan is the Ranking Member of the House Budget Committee and senior member of the House Ways and Means Committee. His focus has been to bring fiscal discipline to federal spending. The House Ways and Means committee’s jurisdiction is tax policy, Social Security and healthcare. He has been addressing America’s long-term fiscal crisis and the dangers of explosive entitlement spending.

He has accused President Obama of being dishonest to the American public about the costs of his healthcare bill.

I can understand the emotional appeal of President Obama’s healthcare reform plan. His solution will not repair the healthcare system. It will increase the price of care, decrease access to care and decrease many freedoms.

President Obama has said repeatedly, “I will not sign a plan that adds one dime to our deficits either now or in the future.”

If passed by this phony congressional “Slaughter maneuver” it will simply make the healthcare reform bill’s failure to solve our healthcare system’s problems even more grotesque. I predict the bill will cripple Americans’ ability to maintain their present standard of living.

I am sure Paul Ryan is frustrated that his remarks to President Obama at President Obama’s Healthcare Summit would be thought of as disrespectful by Democrats.

No one has refuted Paul Ryan’s accusations.

President Obama continues to recite his unsound sound bites about his healthcare plan. He claims it will save Medicare, provide coverage for 30 million more Americans and reduce the deficit.

I believe that anyone who votes for this terrible bill should not be reelected. They are doing a disservice to Americans.

Congressman Paul Ryan of Wisconsin made the following points before President Obama at the Healthcare Summit.

1. Medicare, right now, has a $38 trillion unfunded liability. That’s $38 trillion in empty promises to my parents’ generation, our generation, our kids’ generation
2. Medicaid’s growing at 21 percent each year. It’s suffocating states’ budgets. It’s adding trillions in obligations that we have no means to pay for . . .

He then went on to say that the Congressional Budget Office scores bills with the premises and assumptions it is given. If the premises and assumptions are incorrect the score will be incorrect.

1. “And what has been placed in front of them is a bill that is full of gimmicks and smoke-and-mirrors.”

He continued by saying;

“And if you take a look at the CBO analysis—analysis from your chief actuary—I think it’s very revealing.”

1. “ This bill does not control costs. This bill does not reduce deficits. Instead, this bill adds a new health-care entitlement at a time when we have no idea how to pay for the entitlements we already have.”

The CBO letter to Harry Reid on March 11, 2010 states the bill will not decrease the deficit as President Obama claims, but it increases the deficit even as it increases costs.

“March 11, 2010

Honorable Harry Reid

Majority Leader

United States Senate

Washington, DC 20510

Dear Mr. Leader:

The Congressional Budget Office (CBO) and the staff of the Joint Committee onTaxation (JCT) have estimated the direct spending and revenue.

“Under the legislation, federal outlays for health care would increase during the

2010–2019 period, as would the federal budgetary commitment to health care.6

CBO now estimates that the federal commitment would increase by about

$210 billion over that period, rather than by $200 billion as previously estimated.”

If anyone is concerned about our budget increased deficit and increasing taxes for a bill that will not repair the healthcare system, understanding the numbers is important.

Paul Ryan dug into the details at the Healthcare Summitt;

1. “The bill has 10 years of tax increases, about half a trillion dollars, with 10 years of Medicare cuts, about half a trillion dollars, to pay for six years of spending.”

“Therefore the true 10-year cost of this bill in 10 years? That’s $2.3 trillion.”

1. “It takes $52 billion in higher Social Security tax revenues and counts them as offsets. But that’s really reserved for Social Security. So either we’re double-counting them or we don’t intend on paying those Social Security benefits.”
2. “It takes $72 billion and claims money from the CLASS Act. That’s the long-term care insurance program. It takes the money from premiums that are designed for that benefit and instead counts them as offsets.”

Kent Conrad (D) Senate Budget Committee chairman said that this is a Ponzi scheme that would make Bernie Madoff proud.

Five hundred million dollars is taken out of Medicare to fund the healthcare reform bill. This is not shoring up Medicare solvency. It is paying to expand the program.

Paul Ryan did not stop there. He kept pounding away at the smoke and mirrors that the traditional media is not even analyzing much less mentioning.

1. “You can’t say that you’re using this money to either extend Medicare solvency and also offset the cost of this new program. That’s double counting.”
2. “According to the chief actuary of Medicare as much as 20 percent of Medicare’s providers will either go out of business or will have to stop seeing Medicare beneficiaries”.
3. “When you strip out the double-counting and what I would call these gimmicks, the full 10-year cost of the bill has a $460 billion deficit. The second 10-year cost of this bill has a $1.4 trillion deficit.”
4. “Probably the most cynical gimmick in this bill is something that we all probably agree on. We don’t think we should cut doctors [annual federal reimbursements] 21 percent this year and next. We’ve stopped those cuts from occurring every year for the last seven years”.

The “doctor fix” was supposed to go into effect January 1^st. It was delayed until March 1^st. Now it is delayed until October 1^st. It was taken out of the Healthcare Reform Bill and
placed in a separate bill because it added $371 billion dollars to the healthcare reform bill’s deficit.

President Obama’s Healthcare Reform Bill ignores and in actually hides these costs. Hiding these costs does not take the costs off the backs of taxpayers, the deficit, or future tax payers.

12.” I’ll finish with the cost curve. Are we bending the cost curve down or are we bending the cost curve up?”

“If you look at your own chief actuary at Medicare, we’re bending it up. He’s claiming that we’re going up $222 billion, adding more to the unsustainable fiscal situation we have. “

13. “We don’t think the government should control our healthcare system. We want people to be in control. And that, at the end of the day, is the big difference.”

14. “ I’ve got to tell you, the American people are engaged. And if you think they want a government takeover of health care, I would respectfully submit you’re not listening to them.”

President Obama ignored Paul Ryan’s comments. He is ignoring the will of Americans. He is ignoring the fiscal consequences of a bill he is ramming through congress at the expense of the American people for something that will not work.

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

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Stanley Feld M.D.,FACP,MACE

The healthcare insurance industry is blaming physicians for the industry’s need to raise insurance premiums. Aetna has been assigned to replace Wellpoint as the bad guy this week.

All of the stakeholders are to be blamed for our dysfunctional healthcare system. However, the healthcare insurance industry is the biggest villain.

Why is Aetna attacking physicians?

Physicians are easy to attack. They are the least organized and least effectively represented. They are also primary stakeholders along with patients. If secondary stakeholders can successfully attack primary stakeholders they think they enhance their value to the healthcare system. They are really decreasing the effectiveness of the patient physician relationship thereby decreasing the quality of care. The result is an increase in the cost of care.

“How much do you think doctors charge for a routine colonoscopy in the San Francisco Bay Area? Anywhere from $1,250 to $7,300, a range of more than $6,000, according to Mark Bertolini, president of health-insurance giant Aetna.”

This is a bogus. Aetna’s President knows it does not matter what physicians charge. Physicians only receive the allowable fee. Aetna’s CEO is setting up the public to defend the healthcare insurance industry’s unjustified premium increases. He is also developing the case for healthcare insurance mandates.

It is clear that the healthcare insurance industry a has well coordinated strategy.

“Most people don’t know how variable health-care costs are across the country and how that plays into the problems plaguing the system”, he said in a wide-ranging interview Monday, the same day President Obama turned up the heat on insurers in a bid to push his year-long quest for comprehensive health reform across the finish line.”

Physicians behave like indentured servants. They are treated as they behave. Some physicians believe the behavior is in their vested interest.

Where is the physicians’ or consumers’ leadership? Who is pointing out the game the healthcare insurance industry is playing with the healthcare system in order to increase its profit?

No one is challenging the healthcare industry’s return on investment of over 20% a year. President Obama is accepting the published profit of 2% per year and permits the industry to raise premiums.

Who is challenging the healthcare industry’s faulty accounting regulations that permit these premium increases? No one! Neither President Obama, Congress, nor state insurance regulators.

The healthcare insurance industry does not allow consumers to purchase healthcare insurance across state lines for two reasons.

In many states one or two companies have control of 90% of the market. In some states the healthcare insurance industry has complete control of the State Insurance Boards. They raise healthcare insurance premiums at will. The healthcare insurance industry dominates State Insurance Boards.

I am not in favor of federal control over the healthcare insurance industry. Lobbyist control the federal government’s regulations and decision making. Consumers have a better chance of putting pressure on the State Insurance Boards than a Federal Insurance Board.

I am also opposed to abrogation of states’ rights in favor of federal control.

President Obama must change accounting regulations to reflect the true medical loss ratio. If this was done the healthcare insurance industry would be required to lower premiums immediately.

Instead the administration makes this weak appeal to healthcare insurance executives.

“At the March 10, 2010 Health and Human Services Secretary Kathleen Sebelius, at a health insurance industry meeting on Wednesday, pressed insurers to "give up some short-term profits" for the good of the country and assist congressional Democrats struggling to move toward votes on a health care overhaul measure.”

Can you believe that? Remember the good cop, bad cop routine I have outlined. President Obama and the healthcare insurance industry are playing a trick on us. Rather than getting to the root of the healthcare’s system problems the changes will increase costs and decrease access to care.

“Sebelius, President Obama and other administration officials seeking to build public support for the overhaul have repeatedly attacked the health insurance industry for proposed double-digit premium increases in the individual market, such as a 39 percent hike proposed by Anthem Blue Cross Blue Shield for its California customers.”

This is the ploy.

Insurers defend the premium increases as the product of skyrocketing medical costs they can’t control, and they’ve strongly objected to what they contend is a vilification of their business. “

The healthcare insurance industry wants a mandate. President Obama wants a mandate. This is the goal.

“I think the individual mandate as currently structured is incredibly weak,” Bertolini said. “The result is it’s going to exacerbate the current problems in the individual and micro-group markets,” he said, referring to coverage for groups with fewer than 10 people in them.

Much is riding on how much latitude the federal government gives states to enforce such a mandate, he said. “That could put this whole bill in the balance as to whether it will be successful.”

Kathleen Sebelius pleaded with the healthcare insurance industry executives at their March 10th meeting.

"So there’s a choice on the table. You continue the opposition to reform," said Sebelius. "If you do and reform fails . . . by next March, when you’re meeting again, premiums will take even a bigger bite out of Americans’ wages, your market will shrink even further, more Americans will lose their employer-sponsored insurance and we will have a situation where the market is unsustainable."

The people do not want a mandate. They want fair healthcare coverage. They want leadership that makes sense.

Effective healthcare reform would be instituting an ideal medical savings account. Consumers must own their healthcare dollar in order to decrease the cost of healthcare. The result would be lower healthcare costs and a simple self regulating system.

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

Stanley Feld M.D.,FACP,MACE Several curious coincidences occurred in the last two weeks as President Obama plans to ram his healthcare bill into law through reconciliation. The substance of the bill has not been discussed. The chief benefactor of the bill has not been named. President Obama keeps saying we need this bill to protect the American people from the evil healthcare insurance industry. I agree that the healthcare insurance industry has been increasing premiums, limiting access to care and not reimbursing providers adequately and appropriately. President Obama’s healthcare reform plan is not going to protect the American people from the evil insurance industry. The healthcare reform plan is going to enhance the healthcare insurance industry’s profit by increasing the healthcare insurance industry’s customer pool. President Obama’s healthcare bill should fail because the provisions in the bill will increase taxes, increase the federal deficit, decrease access to care, ration care and not provide universal care. It is a terrible bill for all the reasons I outlined previously. How are Americans being set up? The initial step was Wellpoint saying it is going to raise rates in California. Other States followed. The states and the federal government protested. Congressional hearings and meetings at the White House accomplished nothing. The President and the healthcare insurance industry wants the public to be more angry at the healthcare insurance industry. It will make it easier for President Obama to pass this terrible healthcare reform bill.   Why? Just as the Democrats are afraid to take on the trial lawyers as Howard Dean explained they are just as afraid to take on the healthcare insurance industry. The government is dependent on the healthcare insurance industry to provide administrative services for the government insurance plans. In order to control the healthcare industry all the government would have to do is change the industry’s accounting rules. This would eliminate all the non value added expenses included in the industry’s calculation to justify its increase in premiums. This will not happen because many elected officials are funded by the healthcare insurance industry. Additionally, without the healthcare insurance industry providing administrative services the government could not run Medicare or Medicaid. Ann Braly CEO of Wellpoint said it clearly in her Wall Street Journal article. "We’ve been a heavily regulated industry for as long as I’ve been part of health care," she continues. Frankly, health care and politics are "inextricably intertwined." Mrs. Braly notes, too, that the government on its own is largely incapable of "navigating through the health-care system, coordinating the very uncoordinated parts of the health-care system." “In fact, Medicare hired WellPoint to run some $97 billion in traditional fee-for-service benefits in 2008, or more than a fifth of the program’s total budget that year.” President Obama is running around the country to garner support for reconciliation. He is telling everyone his healthcare reform bill is the only way to control the premiums of the healthcare insurance industry. Sure. President Obama’s plan will create healthcare insurance exchanges. The government will subsidize the healthcare insurance industry’s premium. Who pays? The taxpayer pays and the healthcare insurance industry keep the profit. It reminds me of a comment sent to me by a reader about the cash for clunkers program. President Obama said we had to do it because it would decrease greenhouse gases. Three billion dollars is not a large amount of money in the greater scheme of things. Neither party nor the traditional press were agitated. The cash for clunkers bill passed easily. President Obama declared a spectacular victory. It took a blogger to do the math and calculate how tax payers were ripped off. Oilfield Math: Working in the oilfield with others such as myself and a wealth of combined experience we understand the accuracy of the following: A clunker that travels 12,000 miles a year at 15 mpg uses 800 gallons of gas a year. A vehicle that travels 12,000 miles a year at 25 mpg uses 480 gallons a year. So, the average Cash for Clunkers transaction will reduce US gasoline consumption by 320 gallons per year. They claim 700,000 vehicles so that’s 224 million gallons saved per year. That equates to a bit over 5 million barrels of oil. 5 million barrels is about 5 hours worth of US consumption. More importantly, 5 million barrels of oil at $70 per barrel costs about $350 million dollars. So, the government paid $3 billion of our tax dollars to save $350 million. We spent $8.57 for every dollar we saved. I’m pretty sure they will do a great job with our health care, though

This cash for clunkers arithmetic is similar to the arithmetic used by President Obama for healthcare reform. The difference is healthcare reform will cost much more and add more significantly to the deficit.

The American taxpayer is being set up to pay more taxes. The deficit will not be reduced. Access to medical care will be decreased. Out of pocket expenses will be increased. Rationing of care will be increased. State deficits and state taxes will be increased. America will not have achieved affordable universal coverage.

I believe the healthcare reform bill will create an additional $2 trillion dollars deficit by 2020 rather than reduce the deficit by $135 billion dollars. It all depends on the assumptions made in doing the math.

Americans are being faked out by President Obama and the healthcare insurance industry.

Consumers, you must be in charge of your healthcare dollars. Not the government.

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

Stanley Feld M.D., FACP,MACE

The tale of two States demonstrates the difference between doing healthcare reform incorrectly and correctly.

Obamacare is fashioned after the Massachusetts healthcare reform plan. It leaves the administrative services in the hands of the healthcare insurance industry.

Indiana empowers consumers to control their healthcare dollars.

Therein lies the difference between ineffective and effective healthcare reform.

President Obama has even given the State of Massachusetts $8 billion dollars in bailout money to support the failed healthcare reform plan.

“MASSACHUSETTS HAS been lauded for its healthcare reform, but the program is a failure. Created solely to achieve universal insurance coverage, the plan does not even begin to address the other essential components of a successful healthcare system.”

President Obama’s healthcare reform plans goals mimic the goals of the Institute of Medicine. His goals are coverage should be universal, not tied to a job, affordable for individuals and families, affordable for society, and it should provide access to high-quality care for everyone.

No one would disagree with these goals. Massachusetts’ healthcare reform plan had these goals

“The state’s plan flunks on all counts.”

“First, it has not achieved universal healthcare, although the reform has been a boon to the private insurance industry. The state has more than 200,000 without coverage, and the count can only go up with rising unemployment.

Second, the reform does not address the problem of insurance being connected to jobs. For individuals, this means their insurance is not continuous if they change or lose jobs. For employers, especially small businesses, health insurance is an expense they can ill afford.

Third, the program is not affordable for many individuals and families. For middle-income people not qualifying for state-subsidized health insurance, costs are too high for even skimpy coverage. For an individual earning $31,213, the cheapest plan can cost $9,872 in premiums and out-of-pocket payments. Low-income residents, previously eligible for free care, have insurance policies requiring unaffordable copayments for office visits and medications.

Fourth, the costs of the reform for the state have been formidable. Spending for the Commonwealth Care subsidized program has doubled, from $630 million in 2007 to an estimated $1.3 billion for 2009, which is not sustainable.

Fifth, reform does not assure access to care.”

The Governor of Massachusetts in now threatening to institute price controls. Price controls never work.

There is little hope it will work now. Former Governor Mitt Romney sold this plan as a way to control spending. The new entitlement has failed to control costs. For fiscal 2010 the cost over budget is $47 million and in fiscal 2011 the cost is estimated at $913 million. The original estimated cost was two thirds less.

The plan could never work because the health insurance industry had control over the healthcare dollars and kept raising premium prices.

“Last month, Democratic Governor Deval Patrick landed a neutron bomb, proposing hard price controls across almost all Massachusetts health care. State regulators already have the power to cap insurance premiums, which Mr. Patrick is activating. He also filed a bill that would give state regulators the power to review the rates of hospitals, physician groups and some specialty providers. Those that are deemed too high "shall be presumptively disapproved."

The Massachusetts healthcare reform plan is not beyond price controls.

On the other hand the State of Indiana has conducted a different experiment. They have instituted a system using Healthcare Savings Accounts (HSA). It has been very successful.

The healthcare reform was set up as a healthcare insurance option for State s. In the first year only 4 percent of State employees signed up for the HSA option.

In the second year over 70 percent of Indiana’s 30,000 state workers chose the HSA option.

“The HSA option has proven highly popular, says Mitch Daniels, Indiana’s governor, by far the highest in public-sector America.”

This is how it works;

• In Indiana’s HSA, the state deposits $2,750 per year into an account controlled by the employee. The employee pays all his health bills controlling his first healthcare dollars. The State of Indiana pays the premium for the plan.
• The intent is that participants will become more cost-conscious and careful about overpayment or overutilization.
• It turned out that a very small number of employees (about 6 percent last year) used their entire $2,750 account balance.
• The unused funds in the account (to date some $30 million or about $2,000 per employee) are the State employee’s permanent property.
• The State shares further health costs up to an out-of-pocket maximum of $8,000, after which the employee is completely protected.

The State found that individually owned and directed health-care coverage has a startlingly positive effect on costs for both employees and the state.” State employees enrolled in the consumer-driven plan will save more than $8 million in 2010 compared to their coworkers in the old-fashioned preferred provider organization (PPO) alternative.

Mitch Daniels says the state is saving, too.

“In a time of severe budgetary stress, Indiana will save at least $20 million in 2010 because of high HSA enrollment.”

“Mercer, a healthcare consultant calculates the state’s total costs are being reduced by 11 percent due solely to the HSA option.” 

The contrasts between the financial results of the two states are obvious. Obamacare is similar to the Massachusetts plan with added infringements on freedom to choose. It will fail.

The Indiana healthcare reform plan can be improved upon using the ideal Medical Savings Account.

There is no reason not to try a plan similar to the Indiana plan in most States. States are required to have a balanced budget. The Senate bill has marginalized health savings accounts. President Obama has refused to understand the merits of giving consumers the freedom to be responsible for their healthcare dollars.

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

Stanley Feld M.D.,FACP,MACE

President Obama’s Healthcare Summit demonstrated a lack of understanding of the important problems that need to be fixed in the healthcare system.

The critical problem is rising costs. The government cannot afford Medicare or Medicaid in its present form. Corporations cannot afford to provide healthcare insurance for its employees. Individuals cannot afford to buy healthcare insurance.

President Obama’s goal is to “provide? (offer?)” affordable healthcare insurance to all (universal care) and to increase the quality of care. His goals are admirable. His route will fail. He cannot expanded entitlements. He must motivate and increase consumer responsibility for their health and healthcare.

At the onset of his Healthcare Summit he refused to drop the House and Senate bills and start all over again.

I have written several articles outlining why the House and Senate bills are terrible bills. These bills will not solve the healthcare systems problems. They will increase the deficit and decrease access to care for seniors and non seniors. Both seniors and not seniors will experience much greater out of pocket expenses with decreased access to care.

During the Healthcare Reform Summit, President Obama demonstrated his lack of understanding of the Malpractice Reform issue. Howard Dean told us a few months ago the Democrats do not want Tort Reform because they did not want to take on the trial lawyers. Shortly after that Howard Dean disappeared from the national scene.

The evidence for trial lawyers influence appeared in a Washington Examiner editorial on December 21,2009. The Examiner published the following chart.

Senator Dick Durbin of Illinois, formally a plaintiff’s attorney, explained the trial attorneys’ position below.

I have always told my students to beware of the man with one case. His speech was delivered as plaintiff’s attorney.

The value of a life or an injury is priceless. The point is our society cannot afford the present malpractice system’s structure and the structures effect on the healthcare system’s costs and the behavior of the labor force (physicians).

President Obama’s summarized his view on malpractice reform in his concluding remarks at the Healthcare Summit starting at five minutes and fifteen seconds of this clip.

I think President Obama should check his facts.

The only good study estimating cost of the malpractice system that I am aware of is the Massachusetts Medical Society study.

Cost is in Billions Per Year:  Sethi and Aseltine estimated the costs of the tests to be $281 million for the eight specialties surveyed, based on Medicare reimbursements rates in Massachusetts for 2005-2006. In addition, the cost of unnecessary hospital admissions was estimated to be $1.1 billion, for a combined total estimate of nearly $1.4 billion. The authors said the dollar estimates do not include tests and diagnostic procedures ordered by physicians in other specialties, observation admissions to hospitals, specialty referrals and consultations, or unnecessary prescriptions. The eight specialties represented in the survey account for only 46 percent of the physicians in the state.

If you add the additional 54% of Massachusetts physicians the total cost estimate for Massachusetts would be $3.04 billion dollars per year spent on defensive medicine. If you assume Massachusetts is an average state and multiply by the remaining 49 states the estimate for defensive medicine is $149 billion dollars a year.

“Physicians practice defensive medicine because they don’t trust the medical liability system. This survey should provide a strong impetus for legislative, business, and health care industry initiatives promoting fundamental liability reform. Reducing defensive medicine in Massachusetts could dramatically reduce costs and at the same time improve patient safety, access to care, and quality of care.” 

This estimate does not include the cost of the cost litigation, malpractice judgments or the wear and tear on patients and physicians. It does not include the loss of physician practice time.

During the Healthcare Summit the Democrats and Preside
nt Obama quoted the CBO publishing a cost of $24 billion a year spent on malpractice. The CBO reported that it only cost 2% of the total healthcare costs. The CBO’s article was published in January 2004 and uses earlier data. He said that cost was less than 1% of our $2 trillion dollar healthcare system. He feels it is an insignificant cost and should be ignored.

This article only reflected the cost of malpractice judgments. It does not reflect the cost of defensive medicine.

“Savings of that magnitude would not have a significant impact on total health care costs, however. Malpractice costs amounted to an estimated $24 billion in 2002, but that figure represents less than 2 percent of overall health care spending.⁽¹²⁾ Thus, even a reduction of 25 percent to 30 percent in malpractice costs would lower health care costs by only about 0.4 percent to 0.5 percent, and the likely effect on health insurance premiums would be comparably small.⁽¹³⁾ “

This year the CBO report revised its 2008 estimate of defensive medicine from $5.6 billion dollars a year to $54 billion dollars.

“The CBO estimate of tort reform’s potential to reduce the deficit is roughly 10 times greater than what it projected last December (a reduction of $54 billion instead of $5.6 billion). At that time, the agency said that evidence about the extent of defensive medicine — and how tort reform could reduce it — was murky. However, more recent research suggests that "lowering the cost of medical malpractice tends to reduce the use of health care services," according to the latest CBO report.”

It does not seem to be an exact estimate by the CBO by its own admission. Why doesn’t President Obama advocate significant Tort Reform over the next few years and see if it works rather than piddling with pilot studies?

“Although the CBO now believes that tort reform would significantly curb defensive medicine and its cost, the agency’s numbers are still far short of the savings claimed by some advocates for tort reform. For example, a 2007 study by the National Center for Policy Analysis, a conservative think tank, put the annual cost of defensive medicine in 2005 between $100 billion and $178 billion. In contrast, the CBO priced defensive medicine in 2009 at $6.6 billion.”

If the Massachusetts Medical Society and the National Center for Policy Analysis studies are correct the cost of healthcare would be significantly reduced.

Small poorly designed pilot studies will produce variable results and take many years. Evaluating the studies by combining them for meta-analysis will not demonstrate the true impact of tort reform even if it is positive.

President Obama, please understand the real issue involved in Tort Reform and ignore the vested interests.

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

Stanley Feld M.D.,FACP,MACE

I had hoped President Obama wanted to sit down and have an open “bipartisan” discussion with both the Democratic and Republican leadership after his stunning losses in Virginia, Pennsylvania and Massachusetts.

I hoped the meeting would be a breakthrough because the nation desperately needs effective healthcare reform.

The Healthcare Summit was riveting television because live unrehearsed television can reveal much about people and their attitudes.

I did not realize that President Obama was so arrogant and condescending. My impression was he is self confident and mildly cocky. I think those are good traits. Arrogance and condescension are not good traits. Those traits can be harmful when a person wants to influence the public positively. Peggy Noonan summed it up perfectly.

“Mr. Obama will not have helped himself by his manner. The summit highlighted, even showcased, something unappealing and unhelpful there, a tendency to attempt to show dominance and command by patronizing, even subtly bullying, even trimming.

All people in public life have moments like this—most people do, in whatever walk of life—but you’re not supposed to have them when you’re trying to sway minds, reach out and build support.”

Peggy Noonan goes on with a few specific examples.

“The way the meeting was arranged, the president was the teacher, the lecturer. Arrayed before him were the bright if occasionally unruly students.

He was keen to establish that it was his meeting—he decides who speaks next and who should wrap up, he decides what is and is not "a legitimate point."

He was Mr. President, they were John and Lamar. He wielded a shiny pen like an anchorman eager to show depth and ease.

He even said, "There was an imbalance in the opening statements because—I’m the president." Grace shows strength, accommodation shows security. This showed—well, not strength.

When Rep. Eric Cantor attempted to make a sharp point, the president took the camera off him by calling for his aides and conferring with them as Mr. Cantor spoke.”

President Obama said he came to listen but he spoke one third of the time, the Democrats spoke one third of the time and the Republicans the other third. I do not think he was there to listen. He was there to set up his trick play to get his healthcare reform bill passed. He wanted get the American public behind him and pass his healthcare reform bill in the Senate with 51 votes rather than 60 votes.

I think he failed.

I was most impressed by observing President Obama’s lack of interest in the effect of his healthcare reform plan will have on the budget deficit, our economic growth and the increased tax burden those of all income levels.

He kept referring to the CBO’s scoring about budget surpluses. The CBO has said repeatedly that it scores a bill on the assumptions it is given. Those assumptions have been roundly criticized.

President Obama recently proposed his 2011 budget with $1.3 trillion dollar deficit. The budget does not include the $750 billion dollar increase over the next ten years for his healthcare reform.

Many of the reforms will not go into effect for 5 years while the proposed tax increases will go into effect immediately. The plan incorporates a mixture of the many tax increases proposed by the House and Senate, increasing taxes by almost $750 billion over ten years.

The $750 billion dollars does not included the increases in consumer out of pocket expenses and expenses included in other budgets. (The economic recovery act and others).

I do not think the American people are fooled by all the President’s rhetoric anymore.

I assume President Obama’s thinking is raising taxes will raise revenue. In normal times that might be true. However, raising taxes can cause an increase in unemployment and a decrease in revenue.

He should be focused on decreasing the defects in the systems government has created and the defects in the healthcare system. These defects lead to inefficiency and stakeholder abuse which in turn lead to increased budget deficits.

I would refer President Obama to my brother Charlie Feld’s book “The Blind Spot” if he wants to fix the government and the healthcare system. His book outlines how he has helped some corporations decrease its inefficient systems through the use of information technology as an extension of business planning. Information technology should not be an inefficient tool of business operations.

If all of the American public was aware of the various taxes hidden in healthcare reform more than 70% would want the President to scrap the bill and start over. America must reduce escalating healthcare costs. You do not reduce escalating costs by increasing taxes. You do it by fixing what’s broken. Let us discuss the taxes in the Senate and House bills.

a. Medicare Part A is funded by payroll taxes. The payroll tax will be increased beyond the current limit to pay for the new health care entitlement. The Senate bill includes a tax on investment income for Medicare Part A.

b. Higher taxes on dividends, interest and business income increases the cost of capital. It will depress investment. Job creation will decrease. President Obama said our economy needs to create jobs by stimulating investment.

The effect of an increase in Medicare Part A tax on dividends and capital gains will have a devastating effect on retired seniors because their investment income is a major supplement to their pensions and Social Security checks. Raising the Medicare Part A tax on income and capital gains reduces seniors ability to buy goods and services in an economy that is dependent of consumer spending.

One has to wonder why President Obama has not figured this out. The American people have.

c. Raising the taxes on capital income and capital gains will lower asset values. Thirty percent of all stocks are held in retirement savings plans. The seniors that rely on the income from these plans for their livelihood are not rich investors that have been the target of other tax increases.

They are people that spent their working years saving money for their own retirement in mutual funds, 401(k)s, IRAs and other savings vehicles; this would just punish them for a lifetime of careful planning and saving.

A third level of taxes is an excise tax on medical device manufacturers and brand name pharmaceuticals. There will also be a tax on the healthcare insurance industry.

Who do you think these increased costs will be passed down to?

Answer: Consumers.

Will these taxes stimulate jobs formation, create incentives for innovative solutions, reduce total healthcare costs to consumers, and provide high quality healthcare coverage at a lower cost?

No

We get it President Obama. You cannot charm us anymore.

Stanley Feld M.D.,FACP,MACE

Ann Braly’s (CEO of WellPoint), article in the Wall Street Journal on February 7, 2007 and the announcement of a 37% increase in healthcare insurance premiums by California’s Anthem Blue Cross(a WellPoint affiliate) illustrates several points.

1. The healthcare insurance industry wants Obamacare’s mandated insurance so it can service more enrollees.
2. It is easier to hate the healthcare insurance industry more than Obamacare
3. President Obama is able to ride in on his white horse and save Americans from the evil healthcare insurance industry.

Who wins?

1. The healthcare insurance industry.
2. The President and his goal to increase government. control over our lives and freedom.

Who losses? American citizens

1. Increasing government control over one-sixth of our economy

2. Increasing taxes in different ways.

3. Decreasing freedom to choose.

4. Restricting access to care.

5. Rationing medical care.

6. Infringement on our constitutional rights.

The healthcare insurance industry controls the healthcare system. It sets insurance premiums using defective accounting systems to determine an exaggerated overhead.

The States and their State Insurance Board control licenses to sell insurance. State Insurance Boards have not acted in the citizens’ interest in many states.

All the California State Insurance Board has to do is refuse Anthem Blue Cross a license to sell insurance in California. Anthem Blue Cross would lose 800,000 enrollees.

The healthcare insurance industry is the administrative service vendor for Medicare and Medicaid. The fees government pays to the healthcare industry are excessive.

The healthcare industry believes it adds value to medical care of patients.

“The reason costs are rising so fast, Mrs. Braly says, is because the way the health-care market is structured doesn’t give providers reason to control costs. The solution is to "reintroduce the consumer to the health-care equation," and on that front, she believes, insurers "are actually the part of the health-care delivery system that is there to create the value."

This is an important statement. Medical care is the relationship between patients and physicians. All the other stakeholders are secondary stakeholders. In Repairing the Healthcare System the most important issue to be resolved is how do you provide incentives to patients and physicians to control costs?

The solution is that consumers have to drive the healthcare system not healthcare insurance industry.

Government control of the healthcare system will not control costs. Programs that penalize physicians and patients will not control costs.

Patients can control costs and quality with the appropriate educational infrastructure. At present most patients choose their physician by word of mouth.

Healthcare costs can be controlled by consumers controlling their healthcare dollars. .

“Mrs. Braly thinks patients will make more cost-conscious decisions if they have the incentives and the tools—namely, the information about cost and quality that is the basis of any ordinary market. "Data just sitting there is not helpful, and its got to be meaningful, provided to the doctor and the patient in a meaningful way," she says. Far from simply being a bill-paying outfit or a hedge against risk, she sees WellPoint’s fundamental role as making "the health dollar more valuable, less wasteful, more efficient."

Mrs. Braly knows her company owns the healthcare dollar. She wants patients and physicians to be directed by her company to be more efficient. If they are they will be more valuable to her company’s bottom line.

I do not think she will reduce premiums. . I think increased efficiency will result in greater profits for WellPoint. Consumers have to be incentivized to be responsible for their health and healthcare. This is the only way you will reduce costs and decrease premiums. The government trying to force cost reductions will fail.

I do not think President Obama realizes he is being set up by the healthcare insurance industry. He believes he is setting the healthcare insurance industry up.

He has refused the Republican offer for a bipartisan effort at healthcare reform. It is almost as if he and the healthcare insurance industry are playing bad cop, good cop at the expense of the American people.

President Obama published Obamacare 5.0 on Monday four days before his so called bipartisan healthcare summit. His proposal is almost a duplicate of the Senate bill.

Michael Connelly, a retired constitutional lawyer, wrote a dynamite review of President Obama’s proposal which he dubbed Obamacare 5.0.

“After much anticipation, at least by the so-called mainstream media, the White House has released the new and improved version of Obamacare.

Since I have already had to read two previous versions of these monstrosities in the House and two more in the Senate, I call this version Obamacare 5.0 and it is actually an easy read.

It is not hundreds or thousands of pages long and it doesn’t take long for people to realize that it really changes very little.”

The President’s proposal makes the bill more palatable to the American public because he camouflages the implications.

“Some members of Congress have grown increasingly more concerned about the implications that these proposals have for freedom in this country. In that regard the proposal fails miserably.

This is all an attempt to hide the fact that the bill is still blatantly unconstitutional.”

Michael Connelly points out that President Obama’s proposal exceeds the authority granted to Congress in Article 1 Section 8 of the Constitution. It also violates the 9^th and 10^th amendments that protect the rights of people and the states.

His article is clear and precise. The critical details should be a wakeup call to all Americans. It is a must read.

I believe that President Obama’s proposal is in fact a ruse. It is designed to lure us into believing that the health care bill is actually about affordable health care when it is really about taking control of our lives and limiting our freedoms.

It is a cover for the fact that the Senate will try to pass this bill as a “budget reconciliation act” that will only require a simple majority in the Senate instead of the usual 60 votes.

We must act now to let our representatives in the House and Senate know that we are not buying
into these deceptions and that they will pay a price in November at the polls if this is forced on us.

During Nancy Pelosi’s call to action, she said if necessary they would parachute in and pass the bill.

President Obama’s proposal is a way to get a healthcare bill passed. If it passes it will cost Americans dearly. At this point he wants to pass any bill for the sake of saying he passed a healthcare reform bill.

His present proposal is the same as the terrible Senate bill. He will fail because he makes no attempt to be bipartisan.

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