Stanley Feld M.D.,FACP,MACE

President Obama still enjoys a high approval rating. During the election he represented hope for change to the American people. We need hope because many of our systems are abused and broken. The divide between the rich and the poor is increasing and is at the most dangerous point in our history.

Our systems are abused and broken because Congress has been influenced by vested interests. Congress has been gridlocked on energy, environment, healthcare, education and many other vital issues. The systems need to be fixed to stimulate vigor in our economy and the spirit of innovative.

President Obama represented this hope. He has a fresh face and the right words. When we look beyond the words and analyze his style we find we are confronted with the same old double talk. He has the right words but the wrong solutions. He is telling us he will fix the broken and abused systems. However, he is demonstrating that the Democrats want to control the systems.

The result of the proposed legislation will be to control our personal decision making and our lives. I believe Americans will react negatively to this when they discover what has been done to them.

In order to accomplish this control over the healthcare system Congress is going to have to increase spending. The result of increased spending higher taxes.

President Obama wants to add a surtax on incomes over $250,000 plus and addition 4% income tax. The surtax will be on incomes from any source. In addition there are indirect tax increases on all citizens.

Medicare and Medicaid are entitlement programs. This is a fact. Medicare and Medicaid are in serious financial difficulty. Medicare Part B is funded by general revenues. The Medicare Board of Trustee’s responsibility is to warn Congress if more than 45% of Medicare expenditures are projected to come from general revenues. If they issue a warning in two consecutive years, Congress and the President must act to reform Medicare. The warning has been issued in the last 4 consecutive years. Congress has not acted.

The best way to quiet an agency is to eliminate it. This is exactly what the House bill does on page 836 of the 1081 page.

Rather than deal with Medicare’s situation directly, the President and his allies promise to "bend the curve" to achieve savings across the health care spectrum — including Medicare. 

If this is true, why then would page 836 (Section 1901) of the House bill repeal the "Medicare trigger" that is intended to force legislative action when Medicare’s finances worsen?

• The Medicare Modernization Act of 2003 had mandated that if more than 45 percent of Medicare expenditures were projected to come from general revenues (as opposed to dedicated revenues, such as payroll taxes and beneficiary premiums) within a seven-year period, the trustees would issue a warning.
• Two consecutive years of this warning would require the President to offer reform legislation and Congress to give that legislation expedited consideration.

This warning has been triggered four consecutive years — the last three of which would have required legislative action.  Yet the Democratic Congress has regularly passed rules suspending their responsibility to address Medicare’s unsustainability.  Now, the House health care bill would repeal the trigger altogether.”

President Obama has stated on numerous occasions that his health care reform bill will save money. It will not create a larger deficit. It is easy to save money when you eliminate the findings of the agency that reports the overspending.

“President Obama has repeatedly claimed that his health care reforms represents entitlement reform. He has stated that he will not sign a healthcare reform bill that is not budget neutral.”

Meanwhile, the Congressional Budget Office has scored the healthcare reform measures increasing the budget deficit by 1.5 trillion dollars in the next ten years. This finding is not budget neutral.

Even if President Obama gets everything in the house bill passed he will not solve the problem of the healthcare system.

The major problems in healthcare are being ignored. Malpractice reform, the cost for the healthcare insurance industry’s administrative services, and patients’ responsibility for their own health and their own healthcare dollars are major issues that must be addressed and solved innovatively in order to repair the healthcare system.

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

Stanley Feld M.D.,FACP,MACE

In the last six President Obama has pushed through congress much legislation. Legislation that will increase the budget deficit to at least $3.4 trillion dollars. Republicans have been unable to express effective opposition because of President Obama’s political tactics.

Much of government spending in the past is has been riddled with inefficiency and unintended consequences. The intent might have been to help the little guy but has consistently created an advantage for large corporations.

How does President Obama do it? Jonthan Chait of the New Republic, a liberal periodical, described the process.

“The thing that people haven’t figured out about President Obama’s conduct of foreign policy is that it’s the same as his conduct of domestic policy. Obama believes in the power of negotiation and public dialogue to split his adversaries–Republicans at home, Islamists abroad–and strengthen his own position.

President Obama begins by finding common ground with his enemies. He then expresses respect for their core beliefs. He follows with profuse hope for cooperation.

“This rhetoric removes the locus of debate from the realm of tribal conflict– red state versus blue state, Islam versus America–and puts it onto specific questions–Is the American health care system fair? Is terrorism justified?– where Obama believes he can win support from soft adherents of the opposing camp.”

He keeps the agreement general as he moves the process along. However, the devil is in the details. The common ground in healthcare does not solve the healthcare system’s problems.

Universal healthcare, affordable cost and increased quality are the common ground.He then leaves it up to the congress to write the law. The underlying strategy is to throw money at the problem even if the strategy will fail. The leaders from both parties are starting to see through this tactic.

“In January 2008, Obama told a newspaper editorial board that Ronald Reagan provided a "sense of dynamism and entrepreneurship that had been missing." Paul Krugman complained, "Where in his remarks was the clear declaration that Reaganomics failed?"

Most Democrats believe Reagonomics failed. They are angered at how President Obama could applaud Reagonomics. I believe it was a less than sincere attempt to stand on common ground with Republicans. He removes the debate from the realm of tribal conflicts. He avoids fighting with Republican over Reagan. The populous applauds because they believe he is on their side. He is then free to craft any policy he pleases. He promotes his policy using the new media (internet). He stays on the high ground and avoids discussing details or detail consequences.

“Obama’s method entails small acts of intellectual dishonesty in the pursuit of common ground.”

Greg Scandlen exposed President Obama’s healthcare whiz kids and their attempts to shape public opinion.

“ The Obama administration kids are Peter Orszag, Ezekiel Emanuel (Rahm’s brother), and outside advisors like David Cutler and Atul Gawande. They are convinced of their own genius. They think they can create the data driven management systems to eliminate $700 billion of wasted care in the American health care system. They are dismissive of any skeptics. Their very hubris causes them to overlook essential factors that may impede their plans.”

The key to fulfillment is to maintain Americans’ anger at the old way and desperation for change.

President Obama stays in a position to spin his story and paralyze the opposition. (Rope a Dope). He used Dr. Atul Gawande’s (an advisor) June 1 article in the New Yorker to demonize physicians. I pointed out that the article was a masterpiece of disinformation.

“ Dr. Gawande ,an advisor on President Obama’s healthcare team, had an article published in the New Yorker about a month ago that laid out in great detail what he viewed as the inadequacies of the health care system in McAllen, Texas.”

He pointed out that Medicare and Medicaid patients cost twice as much in McAllen as in El Paso. He compared the costs in McAllen to the cost of Medicare patients at the Mayo Clinic.

“He concluded that we needed to replicate the management systems (not-for-profit, salaried employees, team approaches to service delivery) of the Mayo Clinic in places like McAllen, and indeed, throughout the United States. Voila! Problem solved.”

Dr Gawande omitted a few important data points. Mayo Clinic does not care for indigent,Medicare or Medicaid patients long term. He ignored the fact that Medicare has the machinery to discover and deal with cost outliers and impose heavy fines.
The Texas Medical Association checked on some of the data Dr. Gawande used and ignored. He overlooked the following in exposing McAllen’s physicians.

• “Its population is the poorest in the entire United States.
• It has the fewest physicians per capita in the entire United States.
• It has the second highest uninsured rate in a state that is the Uninsured Capital of the United States.
• It is heavily reliant on Medicaid and Medicare payments to finance its entire health care system.
• It is plagued by very high rates of obesity, diabetes, lack of exercise, and overall poor health status”(chronic disease demanding long term care).

The TMA article explains the poverty rate in McAllen is nearly three times that of the Mayo Clinic. McAllen’s physician supply is half that of the Mayo Clinic.

"Where there is poor availability of outpatient care, patients are far more likely to seek routine care in hospital emergency rooms, where costs are high and diagnostic testing is more frequent. This is also far more likely to result in costly hospital admissions. The data that Dr. Gawande depended on – but did not report – show just this. McAllen has a pattern of unusually high inpatient costs, while outpatient costs are close to average."

Many intelligent people reading the New Yorker article believed physicians in private practice are crooks. This is the point of the disinformation. It is typical of President Obama’s method of winning public support.

If President Obama’s tactics succeed in crafting his healthcare policy the nation is facing a $1.5-3.5 trillion dollar deficit with zero improvement in our healthcare system.

President Obama’s tactics are becoming transparent. Everyone is getting tired of false hope. Policy and plans are ill conceived and destined to fail. However the cost will be dear to tax payers.

Wake up Americans!!!.

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

Stanley Feld M.D.,FACP,MACE

What is the problem with President Obama’s public option? It guarantees insurability to all Americans of any age with any pre-existing condition. Providing basic healthcare insurance to everyone might guarantee protection from financial disaster from healthcare expenses.

An actuary would say the public option is actuarially unsound.

At the heart of President Barack Obama’s health-care plan is a healthcare insurance program funded by taxpayers, administered by Washington, and open to everyone. The healthcare plan is modeled on Medicare.

The Medicare model has two important problems. The existing Medicare entitlement is unaffordable. It will have to be funded in the future by taxpayers with some kind of income tax increase.

If enacted, “the public option" will soon become the single dominant healthcare plan. This would represent an expansion of the Medicare entitlement program.

“Republicans and Democrats agree that the government’s Medicare scheme for compensating doctors is deeply flawed. Yet Mr. Obama’s plan for a centrally managed government insurance program exacerbates Medicare’s problems by redistributing even more income away from lower-paid primary care providers and misaligning doctors’ financial incentives.”

The defects in President Obama’s public option are multiple. The unintended consequences are exponential. President Obama’s healthcare team is not analyzing the public option’s defects and its effects on the healthcare system. The public option goal is to provide healthcare insurance coverage for the uninsured.

The government would charge employees a monthly premium for healthcare coverage. The premium would probably be the same or more than Medicare. The premium would be means tested. It would be calculated from all income reported to the IRS.

It will be cheaper for employers to discontinue healthcare coverage for employees and pay a penalty than provide private healthcare insurance.

“Like Medicare, the "public option" will control spending by using its purchasing clout and political leverage to dictate low prices to doctors. (Medicare pays doctors 20% to 30% less than private plans, on average.)”

The Lewin Group, a health-care policy research and consulting firm, predicts enrollment in the public option will reach 131 million. It will be open to everyone. The premium will be similar to Medicare premium rates which are not cheap.

“Fully two-thirds of the privately insured will move out of or lose coverage as patients shift to a lower-paying government plan”

Medicare plans to lower physician reimbursement by 20% in 2010. Primary care physician are having difficulty financially with overhead increasing and revenue decreasing. It will only get worse under the public option. The primary care physicians’ only option would be to seek other sources of income.

“Physician income declines will be accompanied by regulations that will make practicing medicine more costly, creating a double whammy of lower revenue and higher practice costs, especially for primary-care doctors who generally operate busy practices and work on thinner margins.”

Physicians’ overhead will increase under President Obama’s healthcare reform plan. Electronic prescriptions and Electronic medical records (EMR) are mandated. The government is going to subsidize some qualified medical practices. The subsidy for the EMR is estimated, at the maximum, to be $40,000 per physician. A functional EMR costs $65,000 per physician plus a sizable yearly maintenance fee. This subsidy will still be out of reach for most self employed physicians.

“Doctors will face expenses to deploy pricey electronic prescribing tools and computerized health records that are mandated under the Obama plan.”

The government must create regulations and compliance rules in order to control potential abuse. Physicians will need to increased full time employees and documentation experts in order to comply with the new rules. The government promises a crackdown on fraud and abuse and severe penalties.

Sixty percent (60%) of physicians are self-employed. Some of those physicians will be driven into large groups or hospital owned practices to spread their overhead. Some of these newly formed groups are having problems. Some physicians will accept a salary and allow hospitals to deal with the government. The trend will further serve to commoditize medical care. It will destroy the therapeutic benefit of the patient physician relationship.

The primary care physicians who stay self employed will be driven to cram more patients into their schedule in order to increase their net profit. This will further decrease their ability to relate positively to patients and their illness.

The existing trends will increase wait times already high (18 days) for an appointment to see a Family Practitioner and 30 days for specialists. It will also decrease the length of time the physician can spend with patients. The result will be to drive patients into expensive emergency rooms.

Physicians will be forced to close their practices to Medicaid and Medicare (public option) patients when they discover government reimbursement is less than their expenses. This has already happened with Medicaid patients.

Some physicians will opt out of public insurance and only accept cash. The next step is obvious. The government will outlaw the private practice of medicine. This action would be a challenge to the Bill of Rights and the constitution.

I have described some of the unintended consequences of very good goals. The goals are universal healthcare coverage at an affordable cost, with improved quality. I agree with these goals. President Obama is going about accomplishing these goals the wrong way.

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

Stanley Feld M.D.,FACP,MACE

Medicare is partially funded through payroll taxes of the workforce for the benefit of seniors. The unfunded liability of the government for seniors is enormous. It gets bigger each year. As baby boomers reach Medicare age the government unfunded liability is going to escalate more rapidly.

President Obama and the Democratic controlled congress are ignoring the Medicare trustee annual report of Medicare’s unfunded liabilities. They keep promising us the public option will provide the same insurance the congress receives under Medicare Part C. The only way to fix the unfunded liabilities is to decrease services or increase taxes or both. These reports are public information.

Medicare is funded by a combination of dedicated revenues (payroll taxes, beneficiary premiums, and state payments) and general revenues.

“Medicare’s Hospital Insurance (HI) trust fund, (Medicare Part A) financed by payroll taxes, is currently running a deficit and is projected to be exhausted by 2019” according to the 2005 Medicare trustee report.

“Conversely, the Supplementary Medical Insurance (SMI) trust funds’( Medicare Part B and Part D ) which cover outpatient services and prescription drugs, never face a deficit nor become exhausted, because annual adjustments are made each year—mainly drawing more from general revenues—to match expected costs.”

Nevertheless, with projected increases in demands on the Medicare program by retiring baby boomers and rising health costs, growth in program expenditures, which are already heavily reliant on general revenues, will soon require additional taxpayer funding.

The projection in unfunded liability in the next 75 years increased from $12.7 trillion in 2005 Medicare Trustee report to $34.2 trillion in 2007. The 2008 report estimated the unfunded liabilities will increase to $100 trillion in 75 years. These numbers are estimates for seniors only. If President Obama extends Americans covered under the public option the unfunded liability will be higher. The only way to cover these costs is to increase taxes, decrease coverage or both.

In 2006, total Medicare expenditures were $408 billion, or approximately 3.1 percent of GDP. But as a share of GDP, Medicare expenditures are projected to double to 6.5 percent by 2030 and nearly quadruple to 11.3 percent by 2081.

This was a 2007 estimate. In 2008 the estimate doubled. President Obama’s healthcare reform plan will knock the ball out of the park. $1 or $2 trillion dollars is a lot of money. $100 trillion dollars is unimaginable.

“The Medicare Trustees report shows that Medicare poses the single greatest challenge to taxpayers of all government programs.”

In 2005 Senator Judd Gregg R-NH, President Obama’s choice for Secretary of Commerce expressed the need for fiscal responsibility while the U.S. Comptroller General could not express the urgency in more graphic terms.

[W]e as a Congress has an obligation to try to fix [those entitlement programs] today so that they don’t end up bank­rupting our children and our children’s children tomorrow.

—Senator Judd Gregg (R–NH)[1]

There is no way we are going to deliver all the Medicare promises that have been made. No way.

—David M. Walker, U.S. Comptroller General[2]

Now we are hearing from President Obama that we cannot afford not to spend the money. The common invective about the Democratic Party is they are the tax and spend party. President Obama is turning the invective around. He plans to spend and then tax.

The administration is not testing reality. Government estimates are usually notoriously underestimated. In recent weeks the CBO estimated a $1 trillion dollar increase in the next ten years if the government adopts Ted Kennedy’s plan. $1trillion dollars is a big number. I believe the Congressional Budget Office is being kind to Ted Kennedy’s bill and the estimate of costs of the public option.

The Centers for Medicare and Medicaid Services (CMS), the agency that runs the Medicare program, gen­erated its own estimate in 2003 and has continued to do so every year since the bill’s enactment. Though not made public until 2004, the CMS’s 2003 estimate was $534 billion dollars in unfunded liabilities for the period 2004 to 2013. In CMS’s February 2005 estimate, the 10-year price tag of the drug provision is $724 billion dollars for the period 2006 to 2015.

Americans are being numbed by the numbers. A trillion here, several trillion dollars there and everything will be alright. Today the Medicare estimated unfunded liability will increase by $2 trillion in just one year without President Obama’s healthcare reform.

If the government really wanted to reform the healthcare system, be able to afford universal care and increase the quality of care to increase the health of the nation he would focus on the real problems in the healthcare system as I have outlined them.

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

Stanley Feld M.D.,FACP,MACE

Many people believe Medicare works well. Many people have said all we need to do to repair the healthcare system is lower the eligibility age from 65 to newborns.

America would then achieve a. universal care, b. affordable costs c. improved quality care. The healthcare system would be fixed. The statement is simplistic but popular.

Medicare coverage does work well for seniors if they have both adequate supplemental coverage and Medicare Part D to cover the Medicare gaps in coverage and drugs.

Medicare Part D( drug coverage) was poorly constructed. It was built to the advantage of the healthcare insurance industry not seniors. If seniors do not have supplemental Medicare insurance (Medigap) they could be bankrupted because of the Medicare deductibles and co-pays. .

Medicare does protect the senior from the retail price of medical care. It does guarantee insurability at a price not determined by pre-existing illness. It does permit choice of provider providing the provider sees Medicare patients.

Fewer and fewer physicians are accepting Medicare patients. Medicare reimbursement and coverage decline with each passing year. In many cases physician reimbursement is lower than the physician’s cost to provide the service.

This has been a constant battle for physicians since the government cost savings program was mandated in the 1980’s. Another 20% reduction in reimbursement is scheduled for 2010.

Seniors can still go to physicians who do not accept Medicare. However, seniors will be responsible to pay the retail price for the service. Seniors will collect directly from Medicare 80% of Medicare’s acceptable fee after they submit the bill to Medicare.

For example, if a medical bill is $200 and Medicare’s allowable fee is $80, Medicare will pay you 80% of the allowable fee or $64. The senior has already paid the physician $200. The senior’s out of pocket expense is $135 . If the physician honors Medicare $120 of his $200 fee is disallowed.

Medicare will pay the physician $64. The senior is liable for $16. If the senior has supplemental insurance (Medigap) the supplemental insurance will pay the remaining $16. .

The Medicare premium paid by seniors monthly is not cheap. The base assessment is $99 per month per senior. This assessment might not be affordable to many who are on a fixed income.

The Medicare Part D helped pay for prescription drugs. Many seniors cannot afford to buy the medication they need. Medication needed to stay well and out of the hospital.

1. Medicare has recently imposed an added assessment to the basic Medicare premium. It is called the Modified Adjusted Income Calculation. The IRS supplies Medicare with a senior’s previous year income tax returns. Capital gains, dividends, tax free dividends, and salaries are including in the Modified Adjusted Income calculation.

2. A married couple with a joint return and income from all sources is going to have an additional assessment of between $51.60 and $284 dollars per person per month depending on their combined Modified Adjusted Income calculation assessment.

3. The assessment starts at $160,000/yr and ends at $410,000 per year. A widow with dividends, capital gains, an annuity and rental income of $164,000 per year is assessed an additional $103.30 per month or $1239.60 per year.

4. This assessment is paid with pre tax dollars. It gets deducted from the Social Security payment. If a person has earned income in addition to passive income the person is also paying additional tax on his Social Security check.

5. The deductible of 20% of the allowable fee and the initial $992.00 deductible for a hospital admission becomes expensive quickly.

6. In order for the Medicare recipient to have full coverage for the deductibles they have to buy Medigap insurance. There are seven Medigap insurance policies. The best and most complete is the Medigap Part F. Several private healthcare insurance companies sell this coverage. For persons under 70 years the cost of the policy is $140 dollars per person per month in after tax dollars. The effective post tax cost per month is $200 per person or $400 per couple. The yearly after tax dollar cost is $4800 per year.

7. If you add Medicare Part D for prescription drug coverage, it adds another $24 per person or $34.28 dollars in after tax dollars per month per person or $822 dollars per couple per year. This cost does not consider the extra cost of the infamous doughnut hole.

8. The total premium for adequate Medicare insurance is $2244 plus $4800 plus $822 or $7866 per year. This calculation excludes the modified adjusted gross income. The modified adjusted income can add $619.20 to $3408 per couple per year to the premium. The MAGI creates a means adjusted premium. The maximum means adjusted premium is $11,274. per year per couple in 2008.

It should be clear that Medicare has its benefits. However it also has limitations because despite these premiums and deductibles the government’s unfunded liabilities for Medicare is escalating to unsustainable levels.

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