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All items for November, 2006


“They are Killing Us!”

Stanley Feld M.D.,FACP,MACE

Dirty Coal Power Plants are bad for the health of the nation. A major electric company (TXU) and our state government are fast tracking permits to construct 11 such power plants past unsuspecting citizens without regard for the health consequences. The issue of health care costs is a big issue. The healthcare costs are out of control. The incidence of illness is also increasing.

Governor Rick Perry of Texas has made his position clear on his web site. In his healthcare platform he “strives to make healthcare an efficient expenditure of taxpayer dollars, by focusing on health education and disease prevention.” This is an empty promise when he has encouraged the development of Dirty Coal Power Plants all over Texas. These plants will affect the health of all Texans’. The Clean Air Act proposed by Jefford’s will avoid 300 deaths per year in Dallas and 1176 deaths per year in Texas by 2020.

I have choosen a few paragraphs from Rick Perry’s current web site. It is clear he promises us one thing and does the opposite. The take home point is Governor Rick Perry knows what is right and tells us he is going to do the right thing for us. He then does just the opposite. He has it in his power to immediately stop these Dirty Coal Burning Plants that he opposes online.

Below are some of his pronouncements to the citizens of Texas.

Health Care

Access to affordable professional medical care is important to all Texans. To this end Governor Perry consistently supported new professional medical schools to meet the growing health needs of Texans, led efforts to keep doctors and nurses from having to fight frivolous lawsuits in court instead of delivering health care, and promoted options for small employers to more easily offer private insurance coverage to employees. Because Texas spends almost $20 billion dollars a year on health programs Governor Perry strives to make health care an efficient expenditure of taxpayer dollars. By focusing on health education and disease prevention though programs such as child immunization, nutritional education, and personal fitness, Texas saves tax dollars and helps people lead healthier lives.

Protecting our Air and Water

To protect the Texas environment for future generations, Governor Perry require tougher standards for older power plants, provide incentives for local governments to implement cleaner technologies, and helped established pilot programs that monitor air and water pollution levels in near real-time so local officials can take corrective action before public safety is endangered.

The Texas Emissions Reduction Plan

Governor Perry signed legislation creating and extending the nationally recognized Texas Emissions Reduction Plan until 2010. This plan continues to help clean the air by replacing old polluting equipment with newer, cleaner technology. The governor helped triple the amount of plan funding spent on research and development so Texas can become a national leader in developing, verifying, and implementing clean air control technologies.

Promoting Clean Coal Technology

Governor Perry signed legislation providing expedited permitting and financial incentives to attract the U.S. Department of Energy’s (futureGen) zero-emission coal power plant. In addition to generating clean power, the futureGen project is expected to create over 11,000 jobs, and result in over $1.2 billion in total economic benefit if Texas is chosen.

How about that? In light of the eleven proposed TXU power plants this represents quite a contradiction doesn’t it? These plants will make us sicker, cost the state and federal government more medical care dollars and do nothing to clean up our air.
Today I received the following comment for yesterdays post “Our Sound Bite Society”:

You hit the nail on the head here, Stan. Well done.

It is all about having the technology to solve the problem but letting lobbyists and costs to those not at risk (the energy producers) rather than costs to those at risk (the public) dictate the policy. But who will be able to change a system where we have given the power not to the victims but to the assaulters?



I am optimistic. I believe we the people are going to have to take charge and change the system with the very technology that is solving other problems. The moochers are anachronisms in the new society.

Look at what Compact Disks did to Vinyl Records and Steve Jobs did to the CD industry. Innovation has the power to turn legacy system on its ear. Politicians and Lobbyist are going to have to watch out. Someone is going to come along and leave them in the dust. It is going to take a prepared mind with innovative spirit. The people will be there to cheer them on.

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Our Sound Bite Society !

Stanley Feld M.D.,FACP,MACE

We have highly developed short attention span. I believe it is a result of our sound bite society. Our information is fed to us in sound bites and grabbers. Little information is in depth. On the five minute “News Summary” all the news is bad news sound bites. It is time we shake this somnolence and act on the facts and not on the sound bites!!

There is perhaps no greater State of Denial in modern life than sticking a plug into an electric outlet. No thinking person can eat a hamburger without knowing it was once a cow, or drink water from the tap without recognizing, at least dimly, that its journey began in some distant reservoir. Electricity is different. Fully sanitized of any hint of its origins, it pours out of the socket almost like magic.”

Where does electricity come from? It turns out 50% of the electricity in America is produced from burning coal.

Coal is a dirty fuel emitting carbon dioxide, nitrogen oxides and sulfur dioxide along with Particulate Matter and Mercury. The combinations of substances cause chronic diseases and the complications of these diseases. Coal is an abundant energy resource in America. Today, we have the technology to clean up the coal emissions and make it a safe source of energy for electricity generation. However, electric companies are doing their best to avoid the use of this new technology and use old cheaper technology in their new Coal Power Plants.

Why is this important to Repairing the Healthcare System? If our government did not permit industry to pollute our environment, there would be fewer people with chronic diseases and the complications of the chronic diseases generated by coal burning power plants throughout the country.

President Bush’s Clean Air Act for coal is the least stringent of the bills on the table. The estimate is his modest restrictions will cost the healthcare system $34 billion a year and save the power plant companies 4.7 billion dollars.

The $34 billion dollars per year is a recurring cost. It is a waste of money on diseases that are totally preventable by newer coal plant technology. The new technology reduces coal emissions 90%.

With new technology we could prevent at least 21,850 hospital admissions per year nationally. There were 26,000 Emergency room visits for asthma alone last year. Asthma is the No. 1 cause of kids ending up in the Emergency Room. Dirty Coal Burning Power Plants cause 554,000 asthmatic attacks, 16,200 attacks of chronic bronchitis, 38,200 heart attacks and 23,600 deaths per year. One can only guess at the staggering increases the 11 proposed plants will have in Texas.

I have emphasized that preventing chronic disease and its complications is the key to reducing our healthcare costs. Eighty percent of our healthcare dollar is spent on the complications of chronic disease. Ninety percent of the Medicare dollars are spent on the complication of chronic disease. The emissions from Dirty Coal Power Plants cause chronic disease and the complications of chronic disease. The diseases can be prevented by decreasing emissions with the new technology available.

Texas Governor Rich Perry acted irresponsibly when he issued an executive order to fast track new power generation plants that use “Texas Natural Resources” for “energy diversity”.

Rather than protecting the people from environmental pollution, he has acted to expose as many of us as he can to pollution. The Governor and state legislature could finally start helping us utilize solar power and wind power. We have plenty of these “natural resources” in Texas. These clean, renewable natural resources will not hurt anyone.

At the same time, TXU “our electric company” applied for permits for 11 new, giant, “dirty” coal plants in Texas. Where is the coal coming from? It is coming from Wyoming via very long noisy freight trains riding through our beautiful North Texas countryside.

One of the coal plants proposed is on the border of Fannin and Grayson County in North Central Texas. One Dirty Coal Burning Plant is within 10 miles of my farm in Bells, Texas. The proposed plant is within one and one half miles from the new public elementary school, middle school and high school in Bells, Texas. The forty story smokestack will be belching soot, mercury, sulfur dioxide and nitrogen oxides and ozone at children all day long contributing to the early onset of chronic lung illness in these children. These compounds do not stay in the local area. They spread for miles. Dallas, Texas presently has a large air quality problem. This proposed plant will add to Dallas’ air quality problem.

TXU defense has been lame at best and arrogant at worst. They say they are going to reduce emissions by 20% over present operating coal power plant emissions. The pollutants can be reduced by 90% with new technology. TXU says the pollution is exaggerated. Carbon dioxide is not a regulated pollutant. The Federal Environment Protection Agency (EPA) disputes this statement with many good scientific studies. TXU also says it is good for the local economy. However it is obvious that a polluted environment will drive people away from the area and drag down the local economy. We need to immediately stop tolerating sound bites.

The people who should be worked up by the proposal are the local people but they seem to be believing TXU’s sound bites. Laura Miller, the Mayor of Dallas, and the Mayor of Houston are forming a coalition to fight TXU’s application. I hope it works. I hope Governor Rick Perry wakes up and stops his irresponsible action.

Everyone throughout the United States should be on alert. The use of Dirty Coal Power Plants represents 50 year blight on the health of our nation.

What do these pollutants do to our health?

Sulfur Dioxide: Sulfur Dioxide is formed when coal on burning releases sulfur that reacts in air to form sulfuric acid. Sulfuric acid causes wheezing, coughing, nasal congestion, and cardiac irregularities. It also causes low birth weight and increases the risk of sudden infant death syndrome (SIDS). The most vulnerable people are children and adults with asthma or other respiratory diseases.

Nitrogen Oxides (NxO): Nitrogen dioxide and nitrogen oxide are formed when coal is burned and Nitrogen is released from the coal. These compounds react with air in the presence of sunlight and form ozone.

Ozone: Ozone is a corrosive gas that causes rapid shallow breathing, airway irritation, and coughing, wheezing, shortness of breath and intensifies asthma. It is related to premature births, cardiac birth defects, low birth weights and stunted lung growth in children. It affects outdoor breathing in adults, worsens asthma and respiratory diseases.

Particulate Matter: Particulate matter complexes with the gases formed and are toxic to lung tissues precipitating asthma, inflammation of the cardiac system and premature death. It is also related to premature birth, chronic airway obstruction, and sudden death syndrome in infants.

Mercury: Mercury is a metal in coal. It is released when coal is burned. It pollutes our water supply and causes defects in our nervous system and our ability to learn. In adults it affects blood pressure. In pregnant women it represents a great risk to the fetus.

Carbon Dioxide: Carbon Dioxide results in climate change as well and ecological environment. It is connected to the spread of West Nile virus and extinction of many helpful insects.

Dioxins: Dioxin is an endocrine disruptor that can cause hypogonadism in both males and females. It is also a precancerous irritant.

You do not need further explanation to realize our public health is at stake. Corporations have to be required to exercise reasonable social responsibility. Government has a responsibility to set the rules. When something is obvious the government must act for the good of the people and not the good of industry.

This is a case for Erin Brockovitch. Whoever is going to issue the permit should be notified of their liability before all these people get sick, and not after they get sick. The officials’ should also be liable for the 34 billion dollars the result of the pollution is going to cost the healthcare system. Maybe this will get TXU to think twice before completing their application process?

The devil is in the details. Let us start thinking about the details and not fall for the sound bites of irresponsible corporations and sound bites of our irresponsible elected officials.

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Medical Savings Accounts and the Problem of the Uninsured

Stanley Feld M.D.,FACP,MACE

We have experienced an increased number of uninsured patients for the past 16 years as insurance premiums have escalated and employers have been reducing and eliminating medical insurance benefits as part of the employment package. In 1990, 34.4 million Americans were uninsured. At that time, 85% of the uninsured patients were members of a family with a working adult.

Today, that number is 46.6 million, according to a new Census Bureau report. This represents 15.9% of our population up from 15.6% of our population in 2004 representing an increase of 1.3 million in the last 2 years. The number of workers with no health insurance rose from 26.5 million to 27.3 million. Nearly all the increase in uninsured was among working adults.

Do you think we need a creative innovative solution to ensure that all Americans have affordable and comprehensive health insurance coverage? You bet!

Congress has so far failed to reach a consensus on how to even approach the problem.
Our difficulty is we have an elected Congress that professes to support the publics’ vested interest but in reality is swayed by vested interests’ political contributions. This is the reason they are in a State of Denial about everything including medical care of our population. America does great when the crisis is overwhelming. When the crisis subsides we resort to our highly developed short attention span and ignore our problems. We leave ourselves vulnerable to be taken advantage of by stakeholders who are protecting their vested interests.

What should we be focusing on?

1. As the price of insurance has increased and out of pocket payment for the employed has increased, the price of coverage has exceeded the price the employers can afford.

2. People working and not covered by employer provided health insurance have to pay for health care premiums with after tax dollar, while their employers pay for employee health insurance with pre tax dollars.

3. Evolving tax laws and employee benefit laws are causing employers to act in ways that cause the employer to provide fewer benefits to the employee. The biggest impact is felt by moderate to low income families. They are priced out of the market. If they get sick, they figure they can get medical care paid for by their community. The result is an increase in economic pressure on the individual and the community.

In light of this the facilitator stakeholders try to protect their envisioned vested interests at the expense of the patients and society. Policy makers have proposed to force everyone to buy insurance. The goal is to force the employer to buy insurance for the employee, or force the uninsured to buy insurance or go on Medicaid. The State of Massachusetts just passed a law mandating insurance and guarantying insurance for all.

It seems to me all of these proposals ignore real reason people do not buy insurance on their own in the first place.

They cannot buy reasonably priced insurance on a before tax basis. The patient is disadvantaged by an expensive and defective third party payer insurance system that does not permit them to control their healthcare dollar.

A Medical Saving Account system in a Price Transparent environment cures all these defects. Real insurance would be sold to individuals using after tax dollars in a freely competitive environment. The competitive environment would not be price manipulated by the insurance industry as the Medicare Part D benefit is. People would have an economic motivation to purchase insurance and keep themselves healthy. If someone had a chronic illness and if they avoided the complications of disease they could be rewarded economically.

Families on Medicaid could be motivated in the same way with the government providing the same or similar subsidies. The cost of care to State governments would be less than it is today. However, we would be empowering to the Medicaid family to make independent decisions rather than demoralizing these families in the present system of care rationing.

Americans yearn to be free and make free choices. We are not a dumb people even though our education system is crumbling. We need enlightened leadership not imprisoned by our hierarchical bureaucracy. I believe it is going to be up to the population of 40-50 year olds to step forward and say “we are sick and tired of this and we do not want to take it anymore.

  • R. Carrillo

    In the past 30 years, the costs of healthcare have soared in the United States. Due to rapidly escalating healthcare costs, Americans in ever increasing numbers have begun to search for alternatives that could reduce their personal out-of-pocket medical expenses. In the last few years, hundreds of thousands of Americans have chosen to become Medical Tourists.
    Cost of medical and surgical procedures in Mexico is very low compared to what is paid in the United States. In most cases, the savings from their medical treatment can give people extra money for vacation. Indeed, a patient and his/her family can take a luxury vacation in a Mexican resort and pay for the trip with the savings they receive on getting their procedures in Mexico. Medical Tourism in the city of Guadalajara can certainly be a win-win proposition. While taking care of health needs at big discounts, shopping sprees, sight-seeing, cultural pursuits, and trips to nearby beaches and spas can all be arranged around a medical appointment schedule.
    For more information contact

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State of Denial

Stanley Feld M.D.,FACP,MACE

I have just finished Bob Woodward’s new book “State of Denial” and feel devastated. State of Denial of describes the facts and information denied by our government about Iraq. I am convinced neither the people running the executive branch or legislative branches of our government are stupid. The dumb part is how information is gathered, reported, scrubbed and then presented to leaders to make decisions. The problem seems to me to be independent free standing information systems that do not communicate with each other. Additionally, everyone presenting the information wants to look good or hide for their mistakes. The longer the mistakes are covered the worse situation gets. The mistakes are the result of the hierarchical structure of a bureaucratic government. Clearly the government needs to be tightly networked.

Bob Woodward has had the ability to survive the Washington bubble for some 40 years without being destroyed by the political machinery. I believe his book may have helped the Democrats win both houses of Congress last week. It may help change the course of the war in Iraq as well as the geopolitics in the Middle East forever. He accomplished his goal, to unseat the Republicans. However, he did not fix anything that is wrong with our government’s decision making process, the defense department, nor the relationship of the administration to congress.

We continually hear criticism of what is wrong. Somehow it seems the government hardly ever does it is right. However, I believe that the intention of all branches of government is to do what is right. The government’s problem is similar to the problem many industries in our country have.

The automotive industry is in almost in a melt down. Why can’t GM or Ford build a better car than Toyota or Honda? I do not think it is because GM and Ford spend $1500 a car for healthcare. I think the smart people running GM and Ford are ossified by the same bureaucratic structure that has ossified our military, intelligence organizations, our energy department, social security administration, the medical care administration, and department of education. The structure of organizations has evolved to inhibit innovation and marginalize creativity.

Michael Mandelbaum, the author of “The Case for Goliath.’ remarked “We’re not just in a ‘state of denial’ about Iraq,” We’re also in a state of denial about the budget deficit, health care, energy and Social Security.”

Thomas Friedman wrote in his column of November 4 “If I had one wish” that he hoped each house of congress was won by the Democrats by one vote. Then the Republicans and Democrats would have to work together in order to get anything done.

The administration is not the only one in a state of denial. Both the House and Senate are in a state of denial. They are all impotent to do anything constructive about the war, the budget, health care, energy and Social Security. It seems pretty to me that if the government really wanted to do something for the people (you and me) it takes more than begging for our vote the last week before elections. They should do sensible, logical and innovative things to fix our problems without protecting the vested interests of those who can afford the best lobbyists. It looks like a football game to me. If one lobbyist is better than the next, the better lobbyist will win. The government ends up doing the wrong thing rather than the right thing for the majority of the people.

Thomas Friedman also said, “The reason that Mr. Bush’s call a year ago to end our oil addiction has been a total flop has to do with a struggle in his administration between foolish market worshipers led by Dick Cheney—who insist markets will take care of everything—and wiser, nuanced policy makers who understand that government’s job is to set broad goals and standards, and then let the market reach them.”

We, the people, are also in a state of denial. About twenty years ago, I had a patient to whom I complained about the state of the world. He had done consultation work for many Presidents. He said to me that we get what we deserve. We have been programmed to have a short attention span, and have been manipulated by the media. The details of our problems and real issues are not compelling enough to command our attention.

I have also recently been impressed by the book Fooled by Randomness. We are information junkies that buy not the best information but the smoothest sounding information. The best Public Relations firms craft the messages that win in our society. We should demand accurate information from our government.

With medical care we should demand free choice to buy the best insurance product on a level playing field under government set broad goals and standards. Then let the consumer driven marketplace decide the winner. We would be surprised how powerful this would be.

Nancy Pelosi’s call for government negotiation of drug prices is another complicated mistake. We need to understand the cost of production of drugs, eliminated waste in the drug companies and let the drug companies compete for our business. Price controls never work.

I spent a lot of time on the DRG fiasco. The final rules have just been published by the government. The point is the hospitals won. The physicians lost. There is no movement to fix the DRG system. Hospital payment was neutral. Physician reimbursement was decreased by 6%. There are no incentives to decrease the complications of chronic diseases. Remember, the complications of chronic disease cost the government 90% of the healthcare dollar. The beneficiary of that money is the hospitals. Guess who has the best lobbyists. Who is in a State of Denial? The government!

Remember the real role of government is to set broad goals and standards for the patient, and let the market reach them. Saying it another way is to set the rules for true price transparency and give patients an opportunity to buy real insurance in the form of the ideal Medical Savings Account. With the incentive to shop for savings and quality, the consumer will force reduced profits. Then we can see if the market place will determine the winner. From past experiences it will work.

  • P-Air

    Let me add a more pedestrian perspective which suggests that those from the Red States that previously voted in all Republican card, were doing so sadly on the basis of two policy issues which Republicans understood well; gay marriage and abortions. Even were their economic interests were not being served by administration’s economic policies (Red Staters will tell you how bad Walmart is for their local economies). Fortunately, the Iraq war has finally reached the pitch that Vietnam did and every one is fed up, but that shoul have been the case two years ago as well.

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An Example of Published Administrative Waste

Stanley Feld M.D.,FACP,MACE

After posting today’s blog on administrative waste I came across this article in the Buffalo News. You will also recall that much power to regulate abuse in the system lies with the State Boards of Insurance, Hospitals, and Physicians.

Today, Buffalo News published actions by the New York State Insurance Board fining 21 companies $310,000 for withholding claims payment and violating New York’s Prompt Pay Law. The Prompt Pay Law requires insurance companies to pay uncontested claims within 45 day or face fines.

“Health insurers in New York were fined $310,000 over a six-month period for failing to pay claims on time, according to the state insurance department.”

One might think $310,000 is an insignificant amount money. However, I suspect it represents just a glimpse of the abuse payments for claims not made by the insurance companies. It is often to costly to refer these abuses to the Insurance board. The publicity might motivate physicians and hospitals to report their unpaid claims

We have to understand delays in payment simply add to the administrative costs of healthcare system. These unnecessary administrative costs add no medical care value to the healthcare system. One can easily visual these abuses occurring daily and adding to the inefficiency of the system throughout the system. The Medical Saving Account system of instant adjudication of claims would eliminate all this waste and permit decreasing cost of insurance premiums.

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Administrative Costs: Difference between the Medical Savings Account System and the Present System

Stanley Feld M.D.,FACP,MACE

In my view none of the published estimates of administrative costs to the healthcare system are correct. The latest estimate of administrative costs to the healthcare system was $150 billion dollars. I bet this estimate is only half of the administrative costs. The estimate represents only the costs the insurance companies add on to their insurance premium calculation. It does not represent the cost to the physicians to process each claim.

My estimate for the administrative cost to the physician for each office visit is $35- $40. The physicians’ administrative costs include the cost of physicians’ time to complete the paper work for each encounter as well as the cost of back office personnel for processing each claim to completion. Many claims are adjusted by the insurance company and disputed by the providers. The claims are then resubmitted for another round of non medical value added costs. The total cost to the system could represent $300 billion dollars. Three hundred billion dollar savings can go a long way to reducing insurance premiums to manageable and affordable levels. I could also go a long way toward increasing accessibility to care.

A few weeks ago I wrote about economists declaring that we can afford the cost of our excellent healthcare system. I blasted the concept as ridiculous. The economists ignore the inefficiencies and not medical value added cost to the system.

This week an article appeared titled “Running on Empty: Healthcare As the Engine of the Economy by Brian Kleeper and Alian Enthoven.
“Healthcare insiders know that the industry’s rosy prospects can continue only if its funding remains stable. Most also acknowledge that the dollars are not likely to flow as they have in the past.
The reality into the foreseeable future is that healthcare–at least beyond a narrow definition of “basic care”–will remain a voluntary buy. In fact, there’s every indication that group purchasers are quietly abandoning the market. A wealth of recent data shows that healthcare cost growth is pricing corporate and governmental purchasers out of the market for coverage.
Reports from the Kaiser Family Foundation and the Department of Commerce’s Bureau of Economic Analysis show that, between 1999 and 2004, premiums–the point where costs converge from throughout the healthcare continuum–grew 5.5 times general inflation, 4.0 times workers earnings and 2.3 times the growth of business income.”

Please recall that much of the increase also results from a faulty DRG system. The present system reimburses on hospital charges and not hospital costs. The DRG system contributes to the engine of the inflationary medical costs.

“The numbers are spectacular. And purchasers are responding. In September 2006, another Kaiser report on employer health benefits showed that, between 2001 and 2006, the percentage of employers offering coverage plummeted from 68 percent to 61 percent, a 10.3 percent drop over five years or a 2.1 percent annual erosion rate. During the same period, the percentage of employees with coverage dropped from 65 percent to 59 percent. Data from other sources show that certain workers–those in the private sector, service workers, retail employees–were particularly vulnerable to losing coverage.
Meanwhile, Florida’s Office of Insurance Regulation released data showing that, between 1996 and 2004, 132,000 small employers (with 50 or fewer employees) stopped offering health coverage. This represents a 53 percent drop, while enrollees in small group plans fell by 760,000 individuals (42 percent, or 5.25 percent annually). The state’s population grew by three million during this period.”

As fewer and fewer people have health insurance coverage there is less and less premium dollars in the system. At present we have 46.7 million uninsured in America, 80% of whom would buy affordable insurance if they could.

Jon Lowder’s blog entry of November 10, 2006 nailed the problem. There are precipitous enrollment drops and an increasing uninsured population.

“These precipitous enrollment drops make sense, particularly when you compare the scale of healthcare cost to earnings. The actuarial firm Milliman calculated that the total coverage costs for a family of four averaged $12,214 in 2005. But one-quarter of the nation’s workers made less than $18,800, and one-third of its families made less than $35,000. How can mainstream Americans stay in a game that’s stacked like this?”

“Most people understand the healthcare crisis in terms of its human costs: more uninsured people and underinsured people and more frequent cases of personal bankruptcy. But an equally daunting problem is that losses in coverage translate to reductions in the system’s financial inputs. This means fewer dollars are available to buy healthcare services and products.”

The situation is ominous. Nonprofit hospitals may be able to finesse shrinking revenues through cutbacks in staff, equipment or programs. But for publicly traded companies like Pfizer, United Healthcare, Medtronic or HCA, the drops in funding must negatively impact margin, stock price, market capitalization and credit.”

Worse, healthcare is 1/7th of the economy and 1/11th of its job market. If this sector develops a large demand-resource mismatch and becomes financially unstable, the disruptions could cascade to and destabilize others sectors, threatening the national economic security.

Many people who follow the healthcare crisis know all of this. Unfortunately the public is not aware of much of it. We only realize that health insurance cost more and more. We have discussed much of this previously.
However, no leader has the courage to step forward and do something about it. I have emphasized much of the leadership can be exerted at the state level by state boards that license the insurance industry,hospitals and physicians. No one has organized the people to protest. The excuse is that the healthcare system can not be fixed. It is impossible to control physicians. I believe all these excuses are smoke to cloud the solution. The facilitator stakeholders are simply holding on to what they falsely perceive is their vested interest.

“A theory of limits applies here. In a voluntary market, healthcare purchasers–employers or taxpayers–will tolerate only so much cost growth. Then they’ll recede. It is preposterous to believe the well won’t run dry.”

All of these pricing mismatches and excess non medical value added costs can be eliminated by permitting the patient to be in control of their healthcare dollar and selling pure insurance that is fairly priced. The ideal Medical Saving Accounts system represent pure insurance in the form of high deducible health insurance and motivation for the patient to become an informed consumer.

The cost of processing claim could be eliminated completely. The service claims could be adjudicated instantly with a credit card. Thousands of diverse businesses adjudicate claims on purchases instantly daily at a low cost. The use of credit cards to pay for Medical Savings Accounts could provide an instant savings of 150 billion dollars to costs in the healthcare system. The losers will be the non competitive insurance company. The winner will be the bright flexible company that puts the system in place.

  • Jon Lowder

    Dr. Feld,
    Thanks for the mention and also thanks for your continuing coverage of this issue.
    The average yearly cost per family that you quote, $12,214 caught my eye because that’s very close to what we spent last year. If we don’t find an alternative then the premium increase we’ve been informed are in store for ’07 will cause our yearly expense to probably be closer to $14-$15,000. That’s just nuts.
    I agree that something’s gotta give, and sooner rather than later.

  • supra for kids

    I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

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United Healthcare and HCA Win: Patients Lose

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.”

“HCA-HealthOne saw an immediate loss of business after it terminated its contract with United Sept. 1, said Jim Hertel, publisher of the Colorado Managed Care newsletter.”

“I don’t think that United was being impacted to the extent that HCA was,” said Hertel. “I would think the settlement was closer to United’s requirements than to HCA’s based on the timing.”

“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.

So there you have it. It is the same old, same old.

If anyone thinks the insurance industry is going to fix the system you are wrong!

If anyone thinks the hospital industry is going to fix the system you are wrong again!

I do not see any government or state officials standing up to help. I do not see organized medicine capable of fixing the system.

It is going to be up to the patients to fix the system. The doctors will follow the patients, not the hospital or the insurance company as we saw in this HCA/United Healthcare episode. Once the patients demand change, the hospitals and insurance companies will change.

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.

  • Ricahrd A Dickey, MD

    Hopefully, not only you but your blog’s readers are beginning to get it and respond.
    This one-minded, sound-bite attack on our health and environment is and has always been about money. If there is any hope of changing things it will be only through others getting the strong messages you are sending about the consequences for our environment and health. Eventually, the costs of those consequences, which are cumulative and progressive, could speak more loudly and effectively than the profits from the acts which assault our lives and our world.

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The Difference in Philosophy Between Medical Savings Account and the Present System

Stanley Feld M.D.,FACE,MACE

Let us assume that everyone wants the best Healthcare System possible. I have proposed an effective Medical Savings Account system as the backbone to repairing the healthcare system. Many stakeholders would disagree. Their vested interest would be disrupted by a change in the system. However, the system has to change to a self repairing system because the existing system is so dysfunctional. It hardly works anymore for the most important stakeholder the patient.

The difference between the MSA and the present managed care fee for service model is both philosophical and technical. The philosophy difference deals with respect for the consumers (patients) ability to make wise medical choices. The technical component is the ineffective manner information technology is used presently and should be used in the future.

Presently, to control the costs in the system we pass laws and rules and regulation to limit usage and abuse of the system. In turn, we need larger bureaucratic institutions to administer the new rules and regulations. The result is a tremendous waste and an increase in utilization of non value added resources, resulting in increased cost. The increase in cost leads to an increase in healthcare rationing. The resulting fall out is the increasing number of uninsured patients. The result is a further increase in healthcare costs to society. Rather than controlling the perverse incentives the system creates, the increase bureaucracy stimulates more perverse incentives. Individual self interests continue to spend other peoples’ money, while bureaucratic institutions like the government and the insurance industry continue to make more rules and regulations to block the individuals’ self interests.

The Medical Saving Accounts system creates a system that provides incentive for individuals to become prudent purchaser of health care services in a price transparent environment. Individuals’ having control over their own health care dollar will be prudent and only purchase services that are needed and worth the price. They are spending their own money, or money awarded to them, and not other peoples’ money. The right amount to spend is their choice as long as the prices reflect the real costs of medical services. The government, the employers and the insurance industry would need to negotiate charges from their real costs in a transparent environment.

The result of negotiating charges on the basis of costs creates a need for innovative thinking by insurance companies, hospitals and physicians. The competitive medical market place of consumer driven healthcare forces the hospitals, insurance companies and physicians to realize it is in their vested interest to lower price, improve quality of care and improve communications with the patient in order to survive.

If we develop this system, the healthcare system would become self repairing and cost efficient.

  • ellen

    The doctors and hospitals believe the patient is not spending their own money, but with my years of self insurance I have always felt the money that goes to doctors have always been my own. Even though I pay a high monthly premium, I am so frustrated after visiting a doctor, I feel it was a waste of time.
    I finally went to see a physician after years of not going yesterday, and he was rude, nasty and argumentative. Now I know why
    I stay away. He gave me 10 minutes and wrote nothing down and did not even give me a physical exam.
    My sister had an undiagnosed pituitary tumor for 15 years, She felt hormonal but the internist thought she just needed a good diet. After 1 year from diagnosis she decided to spend whatever years she had remaining not to pursue treatment. She had 17 good years, yet she continued to pay $1400 a month for insurance. When she finally needed some care, as it turned from prolactin secreting to cortisol secreting she was denied care.

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