Stanley Feld M.D.,FACP,MACE

The solutions I have proposed are all directed to a patient centered, patient driven, and patient advantaged system. I will review the proposed solutions in the next two blogs.

• Price transparency is an essential beginning. No only must the retail price be published but all of the discounted prices must be transparent as well. Somehow, the government has to enact legislation so that the providers and the insurance companies post their range of prices. The government has to empower the patient with negotiating power to get the best price. There are many different prices paid for a service depending on the negotiating power of the purchaser. The net effect of this total price transparency will be lower the prices and decrease cost of health insurance. The consumer must demand real price transparency. Aetna’s declaration of price transparency last year was a rouse. The hospital associations of Wisconsin and now Texas have developed web sites to provide hospital retail prices. We have little idea how much the government or insurance companies pay for these services. I assure you the discount is very deep and the hospitals are satisfied with the payments. The automobile industry has figured out how to deal with total price transparency and the internet publication of the MSRP, the invoice prices and the average prices paid for an individual automobile. We should demand that the healthcare system does the same. The system should be set up where the patient can negotiate price pre or post treatment. Sometimes the patients need a care emergently and are not in a position to negotiate in an emergency room.

• Elimination of a two tier payment system with hospital clinics receiving more money for procedures than outpatient physician clinics for the same procedures. Eliminate the restricting of payment to the physicians’ office clinics as long as there is proof of equal quality and qualifications to do the procedures in the physicians’ office. This can serve to increase price competition for services. Price competition is a vital element on the repair of the healthcare system.

•Expand consumer driven healthcare using the ideal Medical Savings Accounts and not the present Health Savings Accounts. I have made clear the difference between the two. The ideal Medical Savings Account would be to the patients’ advantage and not the insurance industries advantage. The ideal MSA would serve to motivate the patient to shop price and quality because they are spending their own money. It would also encourage adherence to treatment for the same reason.

• Create a level tax exempt playing field for the self employed and uninsured
so they can buy insurance with pretax dollars. Provide those who qualify for subsidy with a subsidy to pay for their Medical Saving Account. If they use the healthcare system appropriately or they do not have to use the system they should be rewarded with a lifetime tax exempt saving account. Incentives on all levels drive our system of free enterprise.

• Administrative waste in hospitals should be penalized and not rewarded. The system of payment presently is very opaque. For example payment for some chemotherapy is 10 time the cost of the drug. Yet the oncologist is not permitted to administer the drug in his office for one and one half times the cost. It is estimated that $150 billion dollar are wasted on administrative costs in the hospital and in the insurance industry. These costs add not value to the treatment of patients. The administrative waste is absorbed by increased executive salaries and increasing construction of enlarging hospital facilities. The brick and motor expansion of hospitals should be over since much can be done on an outpatient basis.

These are some of the solutions necessary to repair the healthcare system. The solutions have to be instituted as a total plan and not introduced piecemeal. Each of the pieces of the solution is dependent on each other in order to have a positive effect on repairing the healthcare system. Next time I will review the other elements of a plan I have proposed that will solve the dilemma expressed by the questions that need to be addressed to Repair the Healthcare System.

Stanley Feld M.D., FACP, MACE

The solution should be pretty clear to all following my blog. I advocate the American way! I believe a consumer market driven system with government making rules for the benefit of all members of the society. When one stakeholder takes advantage of another stakeholder to the harm of the other stakeholder the government has to intercede.

Richard Swersey Columbia College Class of 1959 has a college degree in the ability to think! He also has a post graduate mining degree and masters of business administration. He wrote “You referenced Adam Smith in your blog on dirty coal plants. People need to be reminded that: (1) there is a large section of “Wealth of Nations” entitled “The Role of the Sovereign”. Even Adam Smith recognized that the market can’t do everything; and (2) there has never been a time in recorded history where commerce (or markets, or industry) was totally free of government intervention.”

I made the same point in the blog on the TXU proposed dirty coal plants. Adam Smith’s treatise also applies to the healthcare system. The function of government is to promote civility (civil right) for the benefit of all and not to build bureaucracies that can not possibly work effectively.

Dick is absolutely correct. The function of government in a democracy should be to function for the people by the people. The operative words are for the people and not to the disadvantage of the people.

Entrepreneurship and obtaining a competitive advantage is the engine that drives innovation in America. Our problem in medicine right now is some the facilitator stakeholders have large vested interests they need to protect. They are very busy protecting their vested interest by various political means. Unfortunately government is not acting for the benefit of the people. The advantaged stakeholders are so short sighted that they can not see that the system they are protecting is falling apart right in front of their eyes. In fact, it is about to blow up. We, the primary stakeholders (patients and physicians) can not see what does not hurt us. We are waiting for the Katrina effect. The mentality of what we can not see can not hurt us has to stop. We have to act know and demand change.

In my view price transparency and the consumer (patient) being in control of their own healthcare dollar can go a long way to transform medical services into a competitive market place.
Some of the insurance companies are talking a good game. Aetna has feigned price transparency in Cincinnati. They published only the price of the top thirty procedures for customers that bought HSAs. This is good start but never expanded to my knowledge. I called this blog Another Smoke Screen.

Wal-Mart made an innovative advance with its generic drug initiative. They are charging $4 for a thirty day supply of generic drugs. They have 340 drugs in the formulary. Physicians feel comfortable using some generic drugs. They also want to help their patients. Patients can also demand generic drugs. Most physicians will use generic drugs if there is not a clear cut difference between the generic and brand name medication.

Wal-Mart can not keep the drugs in stock. They also can not keep people out of the store. Wal-Mart is not losing money on the drugs either. The result will be an increase in net profit to Wal-Mart and a consumer driven market benefit for the patient. It will also force brand name drugs to come down in price. Wal-Mat’s initiative will created a clear market driven economy for buying drugs.

Who needs Medicare Part D and its $10 co pay along with its ominous $2200 doughnut? Wal-Mart is also setting up competitive price wars among CVS, Walgreens Rite Aid. Wal-Mart has good chance of winning because it has the mentality to engage in these kinds of innovative programs. The CVSs will get there as it works its way through their hierarchical bureaucracy. The end result will probably be too little too late for CVS.

The most of the uninsured who could buy insurance have had no choice but to not buy insurance.
They have chosen take their chances. When they get sick someone has to pay or not get paid. This is the point. It gets painful and costly for all the stakeholders. The Canadian model of Universal Health Care with a single party payer does not work. The costs rise, access to care is restricted and patients die.

The main question is how do we fix the problems. We have to exercise some common sense. We need to be equitable. The vested interest empires (facilitator stakeholders) have to start to understand that our most precious possession is our health and not their profit. A healthy nation is a strong the nation. They have to stop fight the Repair of the Healthcare System.

Price transparency, reform DRG on cost and not charges are very important. We must stop the bonus to hospitals or insurance companies for supposed cost overruns at the end of the year. We must provide incentive for disease management training to all patients with chronic disease. We must make the patient responsible for their healthcare and healthcare dollar in a price transparent environment. We must motivate the patient to care for their chronic disease by rewarding prevention of complications of disease.

We must eliminate hospital and insurance company administrative waste. We must neutralize defensive medical practice by malpractice reform. We must revolutionize the adjudication of claims system to a system of instant payment.

We must provide and institute an EHR universally that can measure outcomes. The outcomes we must measure are the medical outcomes. The medical outcomes must be relational to the financial outcomes and patient and physician input as to the value of the outcome.

We need to start getting serious about all of these issues in unison. We have to concentrate on the cost of complications of chronic disease. We must create financial incentives for preventative services. We have to teach the patient the “Professor of their Chronic Disease”.
http://stanleyfeldmdmace.typepad.com/repairing_the_healthcare_/2006/06/do_complication.html

We must motivate the patients to be responsible for their chronic care. If they are not they will have a financial loss as well as a medical loss. We must put the patients in control of their healthcare dollar. I believe if we did all of this our healthcare system would not be in trouble. All of this can be accomplished with the Ideal Medical Savings Account. The structure of the current HSA system will not accomplish all of these key initiatives

If the government wanted to subsidize something it would be the purchase of the ideal medical savings accounts for all the uninsured who could not afford to buy insurance. This would eliminate all the waste in Medicaid. The concept of universal healthcare with the government as a single party payer is a sham because it does not address any of these important initiatives.

Stanley Feld M.D.,FACP,MACE

United Healthcare and HCA settled their contract negotiations for the 850,000 patients in the Denver area. The contract is a long term contract lasting until 2011. Additionally, HCA reached a long contract settlement with United Healthcare throughout the country. None of the terms of the contract were transparent nor can we expect a reduction in insurance costs.

We have discussed the outrageous salaries of the United Healthcare Company’s executives under previous contracts as they continue to raise insurance rates. We have also discussed the leveraged buyout by KKR and partners.

United Healthcare decided, rather than playing a role in changing the paradigm of the structure of healthcare insurance by promoting price transparency and Medical Savings Accounts, it would be prudent for them to remained in total control of the potential patients’ medical care and their healthcare dollars.

The Denver Post reported “Some United members sought care at hospitals outside the HCA-HealthOne network, leaving hospital beds unfilled.”

The unaddressed point was how many hospital beds were left unfilled? How much money was lost by HCA in the last few months of the dispute? The contract dispute permitted patients to choose because their own money is involved.

“United had faced the possibility of losing corporate and individual policy-holders to other insurers during the open-enrollment season.”

United Healthcare rather being innovative, probably concluded that it was “too dangerous” and costly to lead the way toward insurance reform.

“More and more insurers and hospitals are looking to sign longer-term deals, given that the insurance premiums they can charge are increasing at relatively modest, single-digit rates.”

I think hospitals and insurers decided that the enemy to their outrageous profits is the major stakeholders, the patients and the physicians and not each other. I suspect United will offer employers long term contracts in order to keep patients in the ossified healthcare system that has lead to uncontrolled costs, excessive waste, and the vast number of uninsured.

“It’s a case of two very large health- care companies that truly needed each other,” said Paul Newsome, a financial analyst with A.G. Edwards in St. Louis. “It works both ways.”

“United had claimed that HCA-HealthOne demanded a 35 percent reimbursement rate increase over four years in Colorado. HCA-HealthOne countered that its requested increase would translate into a 1.6 percent premium increase per year for employers and individuals.”

Neither side disclosed terms of the local or national deal.

Leadership for change is what is needed now! It is going to take a bright innovative company with the knowledge and capability to use information technology techniques for the benefit of the patients and the physicians to create a paradigm shift. We must remember without patients or physicians there is no need for a healthcare industry.

Stanley Feld M.D.,FACP,MACE

Our little neighborhood in Far North Dallas Texas has spoken!! We have spoken through the use of “People Power”. Far North Dallas is divided into many neighborhoods. Each neighborhood has a Neighborhood Association. All the members in my neighborhood are connected via e-mail. The definition of community in America is being changed by the internet. We are informed about vandalism, robberies, gathering, elected official meetings as well as births and deaths by our neighborhood association’s V.P. of Communications.

Our neighborhood Communictions V.P. is doing a terrific job. She informs and educates us. A few weeks ago the Dallas Area Rapid Transit Authority had a public meeting. Dallas has struggled to have an effective Rapid Transit System. DART has been minimally to moderately effective.
Recently, the DART staff made a decision to build a ground level line using diesel trains on the defunct Cotton Belt tracks. The decision was opposed by neighborhood representatives and the Dallas City Counsel. The Dallas City Council proposed an alternate plan. The plan was a less disruptive below surface electric train line. The Dallas City Council decision is the first unanimous decision I can recall in the 38 years we have lived in the city. The long unused Cotton Belt line touches the back yards of some of the houses in the Far North Dallas area. Over 1000 people from the North Dallas neighborhoods came to a Town Meeting to protest the DART staff’s unilateral decision. The DART staff was overwhelmed by the turn out and our protest.

Below is the e-mail we received today. Cecelia and I have rescheduled our return to Dallas to attend the meeting. We want to be heard. I have a feeling the DART board of trustees will change their plan for the train line. We support a below ground level electric car rail system proposed by the Dallas City Council.

Our local virtual community is a perfect example of “People Power”. Politicians are supposed represent our wishes. They will represent our wished if we know what we want and demand our wishes be expressed. This process requires awareness on the part of the neighbors and education on the part of the leaders. Multiple North Dallas neighborhoods connected by the internet allowed our community to understand the issue, and demand that our interest be represented.

The mobilization of common goals is the future of freedom in America. Networked communities will supersede hierarchical bureaucracy as the representative form of policy making in the future. We are expressing this desire for freedom and choice in our neighborhood.

The healthcare system can be fixed by this type of virtual community. A networked community armed with a logical plan to meet the needs of the people is needed to repair the broken healthcare system.
Effective uncontaminated Medical Savings Accounts is a system that is logical and promotes freedom to manage our own money and permits choice. Once communities of people understand the Medical savings Account system “People Power” by the uses of RSS, and email can demand and affect repair of the healthcare system rapidly.

I believe it is as simple as the methodology of change expressed by our virtual community leader below. We the people have to chance the healthcare system with “People Power”. We can not leave it to the politicians or the next guy any more. Enough is enough!

Below is the recent email to all members of our Virtual North Dallas Community

Thank You! …
To everyone who attended the September 25th public meeting in Addison to protest DART’s plan for diesel trains on the Cotton Belt. Approximately 900-1200 of us burst the seams of Addison Center.
There’s nothing new about citizens protesting changes to their neighborhoods, but the protest we staged in Addison last month has created quite a stir! The feedback we’re getting is that DART and the cities involved have never seen anything like our demonstration of opposition to the DART plan. Our collective efforts are having a positive effect, but OUR WORK IS NOT YET DONE – We cannot claim victory until DART votes to abandon its plan for diesel trains on the Cotton Belt and adopt the Natinsky plan for more sensible light rail instead. THE VOTE TAKES PLACE OCTOBER 24TH.
Ron Natinsky, District 12 Councilman, and Linda Koop, District 11 Council-woman, have the unanimous support of the Dallas City Council and are working hard in our favor. As citizens, we must support their official efforts by attending the DART Board meeting on October 24th, when the Dart Board votes for the “2030 Plan”. We must fill up the entire meeting room and confront each and every DART Board member, face-to-face, as they cast their votes.
There will be an opportunity for citizens to speak directly to the DART Board members. You may make the same eloquent remarks as you did on September 25. Although your previous speeches are on the public record, they may not have been heard in their entirety by every DART Board member.
October 24 will be an incredible evening, an experience in local democracy that you will not want to miss. It will not be as lengthy as the Addison meeting. Please inform all your concerned neighbors and arrange carpools to drive downtown in groups. Anyone who needs a ride should use the contact info below and we will help you coordinate carpools.
PLEASE MAKE PLANS TO ATTEND THIS CRITICAL MEETING!

Stanley Feld M.D.,FACP,MACE

To me, a true entrepreneur is a person, who can see patterns that others can not see and act on those patterns to create an opportunity that no one thought existed.

KKR has a long history of success is discovering these patterns and investing in them in a leveraged way. A current purchase was Hospital Corporation of America. My guess it is the purchase was not through a process of intensive study of endless data and pilot studies. It is through a process of considering information and then visualizing the trends and patterns of the times. Once visualized, then you act and follow through. It is a no brainer unless there are bumps in the road.

Oceans of good and bad information are available about the healthcare system and its ills. In fact there are many nonsensical rules and regulations that distract physicians from their duty of delivering medical care. The easiest thing to do is for physicians to ignore the obligation we have to try and fix the system. At first glance, with all of the healthcare system’s complexity and all of the suggestions to fix the complexity it seems impossible to generate effective change.

It seems that everything that is done to improve the system ends up harming it even further. The most recent example is the windfall the 1983 DRG method created for hospitals. Now, implementation of a new DRG system based on cost rather than charges is delayed for one year. Dr. Mark McClellan resigned as director of CMS. My guess implementing the new system will be delayed even longer with his departure.

Recent examples are plentiful. One is the Medicare Part D benefit. The benefit was developed to help people of Medicare age. A $2,500 doughnut hole has been inserted to the disadvantage of the patient and the advantage of the pharmacy. The details are of the advantage are madding.

Another governmental error is the conversion of the concepts of Medical Savings Accounts into Health Savings Account by the congress who wants to fix the system. The Health Saving Account is a small deductible of $1000 as opposed to the original Medical Saving Accounts deductible of $6000 which gave the patient incentive to spend his dollar wisely. The Health Saving Account is to the advantage of the insurance company and not the patient. Additionally self employed older people can hardly afford or qualify for insurance if they could qualify. If qualified they would have to buy the insurance with after tax dollars rather the pre-tax dollars the employer pays.

In order to be an educated and wise consumer, one needs to know the price of the item. So far, hospitals, insurance companies, pharmacies, and pharmaceutical companies have refused to reveal the price of their services or payments in a transparent way. The government has published their reimburse schedule but you have to be a coding expert to figure it out. Then you have to know what codes the physicians and hospitals will use. Total opacity remains. It is in the hands of State licensing boards to insist of transparency. So far, not one governor has stepped up to the plate. President Bush has call for transparency but it has generated no action because a deadline has not been set.

The Commonwealth Fund just published a preliminary document advocating the government as the single party payer. We have just listed errors the government has made in the past. Imagine if everyone was insured under Medicare, how difficult and inefficient the system might be. I noticed the Chairman of the Commonwealth Fund study is the CEO of Partners Health in Massachusetts. John Monagan has been awarded a salary of over $2 million dollar for the profitable job he has done for Partners Health. I suspect his success is from his figuring out the reimbursement system from the old DRG system.

I truly believe the government wants to help the people. What is the pattern that creates these misfired initiatives? They misfire because of the inefficiency in hierarchical bureaucracy. The hierarchical bureaucracy is imbedded in all of our government agencies and in the body politic. Decisions are influenced by vested interests lobbying and not by common sense.

In the book High Noon, J Rischard points the way of coming to reasonable decisions for all the vested interests. Everyone needs to participate in the decision making process. It is by network problem solving for the common good and not hierarchical bureaucracy influenced by vested interests.

We, the people, can overcome this archaic structure. A system can be repaired that will cost less money. It would be is a system by the people for the people. There are lots of very smart people in America, who can figure out lots innovative solutions.

We, the people, have to be angry enough in order to have the will to act.

Stanley Feld M.D.,FACP,MACE

• The patient is the most important stakeholder in the healthcare system. The physician is next. They are the primary stakeholders.
• There would be no need for a healthcare system without patients and physicians. 
• The government, the insurance industry, the employer, and the hospital are facilitator stakeholders. They are the administrators of the patients’ healthcare dollars. They are the secondary or facilitator stakeholders
• Patients should be the administrator of their healthcare dollars.

It is easy to notice that most of the discussion in the media is about the facilitator stakeholders:

• HCA going private.
• HCA fighting with United Healthcare.             
• Government changing DRG system to reflect hospital cost rather than hospital charges.
• Insurance industry raising fees on health insurance.
• Insurance industry restricting health insurance on self employed sick patients.
• Hospitals have multiple tier fee schedules with uninsured charged the most.
• Hospitals and medical device companies fighting off the government price reductions.
• The government lowering physician payments.
• The government mandating electronic medical records.
• The government developing a pay for performance plan.

Unfortunately, we have been programmed to be information junkies. The media feeds scandals to us. We hunger for media reports. This media circus keeps us in a constant state of fear and anxiety. States of fear and anxiety are bad for our health. We also miss the essential questions:

• How do we reduce the cost of medical care?
• How do we provide affordable insurance for the 45 million people uninsured?
• How to we provide affordable medical care coverage so that all the patients can have access to medical care?
• How do we align all stakeholder incentives?
• How do we construct a system so that all the stakeholders make a reasonable return on investment?
• How do we close the holes in the system to eliminate abuse by stakeholders?
• How do we restore trust between stakeholders?
• How do we restore trust between the patient and physician?
• How do we stop secondary facilitator stakeholders from continuously destroying the patient physician relationship?

I have suggested some solutions in the past few months. I will cover these solutions in greater detail shortly. Developing methods to achieve the solutions are in themselves business opportunities that can help society. The appropriate use of information technology can help greatly. These solutions have to be coordinated and introduced simultaneously. Unfortunately, the government with its present administrative structure and political influences will find it difficult. The solutions have to be market driven by the customer (the patient) in order to be accomplished. The patients have the power to drive the solutions with the government’s help:

• Price transparency is an essential beginning. No only must the retail price be published but all of the discounted prices. The net effect of this complete transparency will be lower the prices paid on some services. I can visualize debate going on for several years with no resolution under the present systems. The voters must say we want real Price Transparency
• Elimination of a two tier payment system with hospitals receiving more for procedures than outpatient physician office payments for the same procedure.
• Consumer driven healthcare using Medical Savings Accounts and not Health Savings Accounts.
• Develop Centers of Excellenceand Focused Factories both Hospital based and Outpatient Clinic based. Payment for service for hospital and outpatient clinic should be the same for educational services.
• Payment for early evaluation and recognition of chronic disease
• A sophisticated information system connecting the cost of medical care with financial outcomes and not simple incorrect algorithms to measure procedures needed for quality of care to be accomplished. 
• Disease management to lower the complication rate for chronic disease and reduce the cost to the healthcare system by more than 45%.

These solutions have to be instituted with authority and leadership.

Responsibility for follow up care and compliance must be in the hands of the patient. The physicians are the teachers educating patients to be experts in their disease self- management. If patients do not comply there should to be a monetary as well as a quality of life penalty. The patient has to;

·         Be responsible for the purchase of care.

·         Have ready access to care.

·         Be responsible for the appropriate compliance for care and medication regime given by the physicians

If this is accomplished, and it can be, with the appropriate leadership and will of the public, we can turn this ship around.

Stanley Feld MD,FACP,MACE

Kinky Friedman, are you listening?

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

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

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

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

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

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

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

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

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

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

Go for it Kinky!

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