Monday, June 30, 2014

Care Beyond Hospitals

Fish say, they have their
streams and ponds;
But is there anything beyond.

Rupert Brooke (1887-1915), English Poet

Currently hospitals have their revenue streams and their surgical ponds for collecting that revenue.

But for hospitals what lies beyond?

ObamaCare is cracking down on hospital Medicare and Medicaid revenues, penalizing hospitals for unsafe care, and imposing new more costly regulations.

But due to improved technologies and increased managerial efficiencies, specialists throughout the land are pulling out of hospital surgical units to create their own surgical ambulatory surgical centers in a variety of fields – ophthalmology, orthopedics, gastroenterology, general surgery, cosmetic procedures, orthodontics, podiatry , cosmetic procedures, orthodontics, podiatry.

You name the surgical specialty, and somewhere there is an ambulatory surgery center for it.

It is apparent specialists can perform many surgical procedures more safely, more cost efficiently, more effectively, more quickly, less bureaucratically, and more profitably outside of hospitals, rather than hospitals.

These factors are obvious to specialists, and they are moving fast to set up and to own their own surgical centers.

Consider this story in the June 30 Utica Consumer-Dispatch.

In part, it reads

“Ophthalmologist Dr. Patrick Costello removes cataracts, performs laser eye surgery and does cosmetic eyelid procedures at the free-standing Griffiss Eye Surgery Center in Rome.”

“He said the center, which opened about three years ago, offers patients cheaper, faster and more convenient care than a hospital.”

“Everyone is highly specialized,” he explained. “Typically, I can do two-and-a-half times as many cases at the surgery center in the same amount of time. And I’m not operating any faster. It’s the turnover of the room and the efficiency.”

“His center is not alone. Two more local ambulatory surgery centers are in the works: an orthopedic, plastic and pain surgery center in Westmoreland and another for pain management in either Utica or Kirkland.”

“The facilities are just the latest step in a decades-old march of services moving away from hospitals into community settings, whether that be an X-ray machine in an orthopedic surgeon’s office, chemotherapy in a doctor’s office or stitches in an urgent care center.”

The availability of so many services in the community raises the question: Do we still need hospitals?” Maybe not, pundits predict more than half of hospitals may close in the next decade.

But of course, we need hospitals – for major procedures, for serious diseases and complications, for trauma, for treatment of burns, for emergency care, for pediatric care, for all sorts of psychiatric treatments.

“The major difference between a medical office and a hospital is access,” said Dennis Whalen, president of the Hospital Association of New York State. “The hospital is open 24/7, 365 days a year. Anybody who walks into a hospital is required under the law to be treated, regardless of their ability to pay.”

Hospitals are reacting by cutting back on inpatient beds, expanding outpatient services and creating health systems that offer care outside hospital walls. and closing.

These trends will continue. And a new phenomenon, independent free-standing emergency rooms, is cropping up.

Health-care reform is reshaping the mission of hospitals. Gone are the days when hospitals’ major profits were in surgical procedures.
Now hospitals must find ways to replace lost surgical revenues – with joint ventures with specialists, with ownership of outpatient surgery centers, with hiring of specialists, or be declaring themselves as center to prevent disease and restore health to their communities, while making these ventures profitable, or in some cases, closing their inpatient doors.

Sunday, June 29, 2014

Transforming Power of #Hashtags

Power only exists in the form of organized particulars.


In scanning today’s news I came across 3 stories that showed the power of instant information, social media, and #hashtags to transform commerce and world events.

One was the collapse of shopping malls confronted with online shopping.

Two was the rise of ISIS (Islamic State of Iraq and Syria) triggered by use of #hashtags to mobilize Islamic militants.

Three was the use of the Internet by a large health care organization in Pittsburgh to define its customer base and to keep its hospitals profitable.

These stories got me to thinking how hashtags are changing the world.

According to Wikipedia,

“A hashtag is a word or an unspaced phrase prefixed with the number sign ("#"). It is a form of metadata tag. Words in messages on microblogging and social networking services such as Twitter, Facebook, Google+ or Instagram may be tagged by putting "#" before them, either as they appear in a sentence, (e.g., "New artists announced for #SXSW2014MusicFestival")or appended to it.”

“Hashtags make it possible to group such messages, since one can search for the hashtag and get the set of messages that contain it. A hashtag is only connected to a specific medium and can therefore not be linked and connected to pictures or messages from different platforms.”

“Because of its widespread use, the word was added to the Oxford English Dictionary in June 2014,[defined as: hashtag n. (on social media web sites and applications) a word or phrase preceded by a hash and used to identify messages relating to a specific topic; (also) the hash symbol itself, when used in this way.”

This definition got me to thinking how the Internet and the social media, using the power of #hashtags, has transformed health care.
Centralized institutions – government and big health organizations in the medical industrial complex like hospitals – have recognized that the Internet and the social media, using hashtags are a powerful way of adjusting to the waves of centralization and decentralization occurring everywhere in societies and nations across the globe.

With health reform in the U.S. and no doubt elsewhere, it is now recognized that people, i.e., health care customers, prefer to treated in outpatient ambulatory settings away from institutions with inpatient populations, hence the rise of decentralized ambulatory care diagnostic and surgical centers, more home care and outpatient hospices, the movement towards more direct care in physicians offices, the acquisition of decentralized physician practices, and the emergence of free-standing emergency rooms.

The irony of this is that it takes centralized power - organizational and management and marketing skills - to make decentralization work effectively and efficiently. In a sense, many acquired physician practices have become hospital and large organizational franchises.

On the other side of the coin, independent physician practices and organization need centralized guidance and support to remain independent.

I discuss the importance and inevitability of this interdependence of centralized and decentralization in my new E-book , Direct Medical and Surgical Care, which will soon be available on Amazon and Nook, and in 3 books I am now writing which will be called the ObamaCare Triology. This triology will be published after the November midterm elections. These elections will likely determine the shape and fate of ObamaCare.

Friday, June 27, 2014

ObamaCare Premium Hikes Inevitable

There is no good arguing with the inevitable. The only argument available with the east wind is to put on your overcoat.

James Russell Lowell (1891-1891), American poet, critic, author, and diplomat, Democracy

With health exchanges plans and with health plans in general, premium hikes are inevitable.

Sick people require higher rates, and health insurers with investors have to stay in business.

More sick people are going to sign up for federal subsidies than well people.

That is precisely what is happening with the health exchanges. That is why premium rates are going up. And that is why the ObamaCare prognosis is grim.

Obama promised family premiums would go down $2500. Instead a $5000 swing has occurred with rates going up at least $2500.

The inevitable premium increases are one reason why, among other dismal economic factors, such as the 2.9% contraction of the GDP last quarter, why Americans may vote for a Republican Senate in November. This contraction may be due to the Winter of Economic Discontent, but there are other reasons as well.

It was inevitable that more sick people would sign up for the exchanges. They need the care.

It was inevitable that 27% of those signing up would have serious medical conditions like diabetes, cancer, health conditions, and other ailments, more than double the number of those who choose to hang on to their existing plans.

It will be inevitable that insurers will have to raise premiums to catch up with insurers’ expenses of caring for the sick.

It will be inevitable that government will have to “bail out” insurers for their losses through “risk corridors.”

All of this is inevitable when government mandates that private insurers have to cover all those with “pre-existing conditions;“

when insurers cannot ask what those conditions are;

when government itself must relegate coverage to others because it does not have the expertise to manage coverage;

when data is not available or is not yet forthcoming to judge what coverage costs will be;

when one-size-fits-all government policies require that everybody must pay for conditions that may occur with others but not themselves;

and when the entitlement state engulfs us all.

So put on your economic overcoats. It's inevitable it will be cold outside and political condition frigid inside for some time to come.

Wednesday, June 25, 2014

Self-Analysis of ObamaCare

All writing is communication…It is the Self escaping into the Open.

E.B. White (1899-1985), The Elements of Style

Q: Hello, Self. What do think about ObamaCare and the State of Union?

A: Both are in trouble.

Q: Why?

A: With ObamaCare, costs and premiums continue to rise, promises to keep your doctor and health plan are in shambles, and average of public polls indicate only 38% approve while 51% disapprove.

The State of the Union is equally bad. The economy shrank 2.9% in the last quarter, Obama's job approval as dropped to as low as 40% (CBS/WSJ), 54% disapprove of Obama's handling of the economy, 55% think economy is getting worse, 63% of the people say the country is headed in the wrong direction, effective unemployment is around 13%, only 27% approve of Obama’s handling of foreign affairs, and news of the so-called scandals at the IRS and the VA, defeats in Iraq, and the Benghazi affair dominate the headlines. It will be difficult for the Obama administration to turn all of these negatives into a positive.

Q: Why do think ObamaCare is in such turmoil?

A: Seven reasons, especially when placed in context of the negatives above.

• Its partisan passage without a single GOP vote.

• Its broken promises.

• Its failure to contain premiums.

• Its one-size-fits-all philosophy.

• Its negative effect on the middle class.

• Its negative impact on doctors.

• Its coercive mandates infringing upon American’s freedoms of choice and individual liberties.

Q: Explain.

A: Its partisan passage was arrogant, poisoned the political environment, and rendered compromise nearly impossible.

Its broken promises – you can keep your doctor and health plan are self-evident- are politically toxic because the administration knew about them beforehand.

It has not contained premiums which are rising faster than before ObamaCare, at unpredictable rates, but fastest in the individual and small group markets.

Its one-size-fits-all philosophy, namely that all federally-sanctioned plans must contain 10 essential benefits, whether you need them or not, makes no sense to those who do not need these benefits, and raises premiums for everybody, especially the young who see themselves paying to support others.

Its negative effect on the white middle class who view themselves as financing Obama’s dream of equal outcomes for all based on economic class, rather than equal opportunities for all based on skills, talents, entrepreneurship, and economic growth. ObamaCare has slowed economic growth. The U.S. 43% corporate tax harms economic growth and undermines the idea that a rising tide lifts all boats.

Doctors are disillusioned with ObamaCare. It cuts their reimbursement and burdens them with bureaucratic paperwork. It blames them for rising costs, and in effect, drives them out of private practice into hospital employment or retirement or into direct pay/concierge medicine, all of which aggravates the doctor shortage.

The coercive impact is largely ideological and stems from the individual and employer mandates which say you must knuckle under to the government or pay economic penalties. This impact has created a partisan divide among Democrats and Republicans over ObamaCare. The latest Kaiser tracking poll, dated June 19, indicates the following. Among Democrats, 20% say ObamaCare helped their healthcare, 65% said it had no impact, and a mere 8% said it harmed their care; among Republicans, 5% said it helped, 54% said it had no impact, and a whopping 37% said it harmed their ability to get or to pay for care.

Q: So what do you conclude?

A: I conclude ObamaCare is unworkable or harmful for many, particularly the white middle class who tend to turn out for midtwerm elections. Among the 8 million who signed up on the exchanges, most were in poor health or were uninsured. That is good. Its future is uncertain. I believe its fate hangs in the hands of voters in November. Perhaps, as Mark Twain (1835-1910) said of Richard Wagner's music, " It's not as bad as it sounds."

Tuesday, June 24, 2014

Big Questions on Health Care for Middle Class

Not all big questions are answerable.


For many questions, there are not two sides;there may be a score of valid shades of opinion.

Bergen Evans (1904-1978), lexicographer and educator

Please indicate if you think questions are answerable.

• Are you better off economically than you were 5 years ago?

• Do you think redistribution of health care benefits from the haves to the have-nots is a good idea?

• Are your health care premiums and deductibles more affordable than they were 5 years ago?

• Have you had problems finding a primary care doctor to care for you?

• Do you think it is government’s responsibility to provide affordable health care for all citizens?

• Has your health plan been cancelled recently?

• Is your doctor now in the network of your insurance plan?

• Do you think all health plans ought to cover all essential health benefits or just the ones that apply to you?

• Do you believe in a single payer system such as Medicare for the middle class, Medicaid for the poor, or government subsidies for those making $46,000 or less?

• Do you prefer government-controlled-and-directed care or market-based care based on personal choice?

• Who do you trust most – government or markets?

• Do you think that your personal health care data should be accessible to employers or government or health plans?

• Should doctors, hospitals, or other health care providers be free to charge cash for their services?

• Should government require you to have a health plan or pay a penalty?

• Should all employers be required to offer health plans for workers?

• Should all health expenses for individuals be deductible?

• Should you be able to shop across state lines for health insurance?

• Do you trust doctors to do the right thing for you and your family?

• Do you think health savings accounts, sometimes medical savings account, which require you to pay cash for routine primary care services or routine surgeries, but with a lid for more expensive or catastrophic services, are the righ the thing to do?

• Should first dollar coverage for all health care services be the law of the land?

• Is health care a right or a privilege?

• Do you approve or disapprove of the Accountable Care Act (ObamaCare) law as written?

• Should the malpractice laws be reformed or rewritten?

• Do doctors make too much money?

Monday, June 23, 2014

Obamacare Alphabet Soup- 4 R’s and 2 C’s

Politics is a game of alphabet soup.

Senator Tom Coburn, (R. Oklahoma) , says Republicans ought to change their ObamaCare strategy from the old 2 R’s (Repeal and Replace to the new 2R'sRescue and Recovery).

In Coburn’s words:

“Now that the Affordable Care Act's subsidies have kicked in and millions have supposedly enrolled in exchanges, much is being said about Republicans backing away from repeal and replace. I would propose a more honest and accurate phrase about what comes next: rescue and recovery.”

Here is what Coburn suggests for the “rescue and reform” effort.

“The plan I recently introduced with Sens. Richard Burr, R-N.C., and Orrin Hatch, R-Utah, called the Patient CARE Act, will do everything ObamaCare promised to do with less cost and better outcomes. A few key provisions:

“• Individual Americans have the freedom to shop for their own health care through a means-tested tax credit that helps lower-income people the most.”

“• The plan adopts policies that will make the market more transparent, competitive and responsive to consumer demands. Our society trusts the market in every area except health care and education. That needs to change.”

“• Health savings accounts will be expanded, allowing consumers to keep more of their dollars for their health care needs.”

“• States have greater responsibility and accountability for designing Medicaid solutions that work for their own state without blowing a hole in the budget.”

“• The plan puts the brakes on the practice of defensive medicine — another driver of health care costs — by suggesting medical liability reforms.”

“• Solve the pre-existing condition problem by creating a new continuous-coverage consumer protection that allows people with coverage to move onto a new plan without being medically underwritten for a new plan.”

And here are Coburn’s thoughts about the 2 C’s:

“Simply put, our Patient CARE Act highlights the real choice: the one between the ACA's government-centered coercion and the individual patient's personal choice and freedom.”

“Markets aren't perfect, but history shows that nothing distributes scarce resources more fairly and efficiently. We've tried the government-centered approach. It isn't working -- just look at the Department of Veterans Affairs. It's long past time to put patients in control and let freedom work.”


The Democrat rejoinder to Coburn’s remarks would surely be “R” stands for patients’ Rights, as guaranteed by government. To which Republicans would reply, yes, and “R” stands for Rationing too , a characteristic of government-run systems, as exemplified by the Va’s long waiting lists.

Source: Tom Coburn, MD., “Why Freedom Is the Best Health Care Alternative, “ Washington Examiner, June 20, 2014

Sunday, June 22, 2014

Computer Use to Bring Order Out of Health Care Chaos

The purpose of computers is to bring order out of chaos.


This week I escorted a patient to a surgical ambulatory care center.

Everywhere we stopped or went , there was a computer - at the reception desk, at the vital sign and weigh-in station, at the prep room, at the waiting room for visitors, in the operating room, in the recovery room, at the check-out room, in the parking lot, even after we returned home.

Everything was wired – before, during, after surgery, and even after return home. Everything was anticipated every step of the way. Everything was followed. Everybody seemed comfortable with the computer. I was impressed.

The computer brought order to what could have been chaos. The ambulatory surgical center did 50 procedures that day – everything from parathyroid adenoma removals, to thyroidectomies, to endoscopic cholecystectomies, to exploratory laparotomies, to cystectomies, to ophthmalmogical to urological to orthopedic to cosmetic procedures.

I knew the whole idea behind this widespread computer entry and tracking system was to bring order out of chaos. I knewthe other idea was to broaden the ambulatory care surgical care knowledge base. I knew a third idea was to avoid any mis-identification of patients and to avoid malpractice problems later. I knew you needed a computer to record charges for what was done and by whom.

I knew computers sometimes disrupted work routines, and slowed the pace of work. But I saw none of that. Everybody seemed well trained and at ease with digital technologies.

Computers are here to stay. You can’t live without them. And sometimes, as is the case with endless glitches and with Lois Lerner’s two years of lost emails, and computer hacking and identify-theft, the world knowing everything about you under the sun, and doctors’ time wasted making endless computer entries, it’s hard to live with them.

But all that aside, computers are great for organizing work flow, for accumulating mountains of data, for advancing and broadening your knowledge base, for having improving care by measuring it and having a base to improve upon, for defining patterns of care and outcomes individual can’t, and lately, for manipulating and storing information “in the cloud” in data storage servers outside your personal computer, laptop, or cell phone, or computers at work, and for selling your services on the Internet.

Computers are a mixed blessing. You need them to measure how well you’re doing and to improve upon your work. You need them to find information quickly. You need them to find if a patient is qualified to pay for your services. You need them to track a patient’s vital signs or changes in laboratory or physiological tests. You need them to look up things about a disease or the efficacy of a procedure.

At the same time, if you’re a doctor, computers can be a curse. The money spent to install them in your office and to train your staff drive up overhead. The time required to make data entries is time spend away from patients. . The effort expended to find just the right code is a nuisance Setting aside time to answer all those emails is a pain. Figuring out how to work your way around or through a program obstacle you don’t understand is annoying. Finding just the right electronic health record to fit your particular needs or specialty or type of practice (direct pay practices that are insurance free require much simple systems) takes more time and expertise you may not have.

Someday some aspiring or savvy writer will write a best seller Of Time and the Computer. It won’t be me. I don’t have the time. Still, thank goodness, there will be computer that tracks your royalties.
Arnold Relman, MD, Outspoken Medical Editor, Dies at 91

His nature is too noble for the world…His heart’s his mouth; What is breast forges, that his tongue must vent.

Shakespeare (1564-1616), Coriolanus

In its obituary today, the New York Times characterized Dr. Arnold as “outspoken.”

Outspoken he was. When I interviewed him 26 years ago, he struck me as an academic medicine professor turned preacher and evangelist for progressive causes. The interview appeared in a 1988 issue of Minnesota Medicine and was entitled “Arnold Relman’s Thoughts on The Journal and Medicine’s Future.” The Journal, of course, was The New England Journal of Medicine, of which he was editor from 1977 to 2000.

His driving cause was eliminating for-profit medicine:

Single-payer medicine. In the words of The Times, “His prescription was a single taxpayer-supported insurance system, like Medicare, to replace hundreds of private, high-overhead insurance companies, which he called ‘parasites’ .To control costs, he advocated that doctors be paid a salary rather than a fee for each service performed.”

His targets of contempt were:

Profit-driven insurance companies, pharmaceutical companies, device manufacturers, hospitals and nursing homes, diagnostic laboratories, home-care services, kidney dialysis centers, and any health care business that made a profit out of healthcare.

One should simply not make money of medicine. It was too noble a profession and too altruistic an undertaking to pursue for the almighty dollar. Profiteering in any form was a no-no. The “medical industrial complex,” as he called it in a 1981 New England Journal of Medicine, was rotten at its core.

As he put it, “The private health care industry is primarily interested in selling services that are profitable, but patients are interested in services that they need.”

Distracters once called he and his wife, Dr. Marcia Angell, a pathologist and later an editor for the New England Journal of Medicine, , “Medical Don Quixotes, completely deluded figures of the landscape,” but admirers looked upon them as “first responders in the battle for the soul of American medicine.”

The couple shared a George Polk Award for 2002 New Republic article documenting how pharmaceutical companies spent more money on advertising and lobbying than research.

In my interview with him, Relman concluded:

“Free market principles simply do not apply to medical care. The practice of medicine is based on the Samaritan tradition. My concern is that when you try to make what is basically a social service and a professional relationship between a doctor and a patient into a business, you have a clash of two incompatible sets of values. In my opinion, that is one of the main problems the American healthcare system is facing today. We can’t decide. We don’t have a clear vision of what we want our health care system to be. Do we want it to be a business, or do we want it be a social service.”

Relman thought any attempt to covert medicine into a market economy was a “complete failure.” In 2012, he said he regarded ObamaCare as partial reform at best, and he said medical profiteering was worse than he originally imagined. A more aggressive solution was needed, and that was single-payer, a common view when seen through the Boston academic-prism.

Relman was a man of strong opinions. He knew where he stood, and where he stood depended on where he sat, at the helm of America’s and perhaps the world’s most prestigious academic medical journal
Stanley Feld, MD, FACO, MACE. Creator of Repairing the Healthcare System Blog and Advocate of Ideal Medical Savings Accounts 
Preface: Dr. Stanley Feld and I go back a long ways. We have spoken to each
other about health reform for 25 years. We started our blogs the same year
2006– his, Repairing the Healthcare System, and mine, Medinnovation and
Health Reform. Given America’s current system and its consumer-driven culture,
we share skepticism about Obamacare. 

Stanley, if I may quote a cliché, has clinically “been there and done that.” He
is a retired endocrinologist, was President of the American Association of
Clinical Endocrinologists, and the American College of Endocrinology. 

He founded and grew a large endocrinology practice in Dallas. His particular
interest is diabetes and preventing its complications. In his practice, patients
signed a patient/physician contract describing the physician’s
responsibility to the patient and the patient’s responsibility for
his/her disease. He handed out “In Control” T-shirts to thousands of loyal
patients. His patients had 1/6 the complication and hospitalization rates of the
diabetic population as a whole. 

Stanley, a native New Yorker, is now an avid Texan of 45 years. He once
told me, “Texans are the smartest people I ever met. They understand freedom
and choice.” The economic performance of Texas, the nation’s leading employer
and the number one destination of businesses, workers, and physicians across the
land, affirm his judgment. 

President of American Association of Clinical Endocrinologists 

“In 1994 I became the third president of the American Association of Clinical
Endocrinologists. My mission was to put clinical endocrinologists on
the medical care map and to save patients and physicians from the
Washington induced bureaucratic destruction of medicine and
medical care. Physicians do not invest in lobbyists like other stakeholders in
the healthcare system.” 

“We tend to be polite. We are not aggressive. We don’t get our patients or our
best interests represented. Our interests in our patients and our profession
become distorted.” 

“As President of AACE among other things, I launched a “Patients First”
campaign. Putting patients first is not only logical it is essential to effective
medical outcomes in a healthcare system. With Obamacare, logic has not
prevailed and patients are not first.” 

Who The Customer Is? 

“Government does not know who the customer is. Neither do
insurance or pharmaceutical companies. No one knows who the customer is. I
do. The customer or consumer is the patient. I advocate a consumer-driven
healthcare system. I met Regina Herzlinger, a professor at Harvard Business
School in 1994. She subsequently wrote two books on consumer-driven care
– Market Driven Care (1997) and Who Killed Health Care (2007). 

Central Theme of My Blog – Consumer-Driven Care 

“The central theme of my blog is consumer-driven health care. 

Somehow Regina Herzlinger read diabetic guidelines I chaired for
AACE called a “System of Intensive Diabetes Self-Management. She
contacted me and said,” This is exactly what I am talking about
when I talk about consumer driven healthcare and focused factories.
A focused factory in medicine is a medical practice that is a one stop
shopping facility using a team approach to a disease (diabetic care)
with the patient at the head of the team where the physician is the
managers and the rest of the healthcare team are the coaches.”
 “Consumers driving the health care system in focused-factories are
the key to better medical outcomes by reducing the complication
rates of chronic diseases.” 

“Eighty percent of the cost of direct medical care is the result of
complications of chronic diseases.” 

“The end result would reduce medical costs. Policy makers are
finally coming around to the notion of consumer driven healthcare

It is because most of the things being done with Obamacare are not
working. As Winston Churchill said, “ You can always trust the
Americans. In the end, they will do the right thing after they have
tried everything else.” 

Obamacare is a top-down central controlly system. America is a
bottom-up society where consumers want to have the freedom to do
what they want. “ 

Dr. Regina Herzlinger invited me to talk to her class at Harvard Business
School. We’ve been friends ever since. We both have ideas of how to make
consumer-driven health care happen. 

My son, Brad Feld, a venture capital and author of Venture Deals, suggested I
write a blog to “express my ideas” in 2006.” I have been at it ever since. 

“Physicians are so busy they haven’t paid attention to what’s going on. They
simply don’t have enough bandwidth to deal with the complexity
bureaucrats have built into the healthcare system. The same is true
for patients. Obamacare is too complicated and too abstract to grasp
its deficiency at a glance. Few people pay attention to what is happening
politically, economically and socially to them until it affects them
personally. It might be too late by that time.” 

Six Letters to Obama 

“Six years ago, I wrote six letters to then soon-to-be President Obama about what
he had to do if he wanted transformational change in healthcare. 

His ideology and the ideologues he was listening to held a different view. I tried
to point out that his agenda would lead to a system of increased dysfunction
because his agenda was not focused on the patient. 

I told him he had to align all the stakeholders' incentives. Consumers
are the only ones that can align their incentives. They are the
But he didn’t and hasn’t listened. “ 

Hospitals, Health Plans, and Physicians 

“ With the advent of managed care, health plans and hospitals figured out
how to maintain and increase their profits. Health plans and hospital systems
were organized. Physicians were too busy or didn’t know how to organize to
protect themselves and their patients. “ 

“Mistrust developed between hospitals and physicians. Physicians
began to set up outpatient surgical and diagnostic centers, and hospitals began to
hire unhappy doctors they thought they could control.” 

“First dollar coverage increased demand. Insurance premiums and healthcare
costs rose. Reimbursement for physicians was lowered by the
insurance companies to blunt the rise of premiums for patients while
increasing the insurance companies’ profits. 

What wasn’t decreased was physicians’ practice overhead. The more
regulations and more administrative complications, the more paperwork, the
more people physicians had to hire. Hence an increase in overhead.” 

Indictment of Doctors 

“Patients began to complain the doctor didn’t spend enough time with
them, didn’t let them complete a sentence, just gave them something to fix
them. Consumers’ complaints were widely publicized in the media. Complaints
sell newspapers.” 

This was viewed an indictment of doctors, but it was really an indictment of the
healthcare system that was evolving.” 

“The media began to destroy the patient’s trust in the doctor because it was a
good story that would sell newspapers. 

The media reported that Physicians do this, they do that, they over-test,
they under-diagnose, and they make mistakes. They are interested only in
money. This barrage of unsubstantiated talk diminished the physician/
patient relationship.” The physician/patient relationship is paramount to
the effectiveness of medical treatment. 

The Role of Physicians 

“But when physicians have time to teach the patient about the disease, the
patient has less anxiety about the disease and less distrust of the doctor. When
patients follow the physicians’ instructions they control their disease
better. Complication rates go down, and costs go down. 

The bottom-line is that patients listen to physicians they trust, and
physicians listen to patients who question them when the patients are
in control of their healthcare dollars. Both physicians and patients
benefit from the listening. So does the health system. 

“Organized medicine didn’t effectively explain to physicians what
was going on and failed to help doctors maintain the physician-patient
relationship. Things got worse for patients, things got worse for the doctors, and
now things are getting worse for all the stakeholders as the government
tries to take over the healthcare system. 

It’s getting worse for the insurance companies although they worked out a deal
with the government to be bailed out if they don’t make enough money by
their definition. Hospitals systems are complaining even as they build more
and bigger buildings.”

Getting It Right 

“Nobody has gotten it right. What will get it right is when consumers are
responsible for their health and their healthcare dollars, and are rewarded
financially for taking care of themselves. If the healthcare system would
permit the consumer to be a true consumer the cost of healthcare
would decrease dramatically. The technological tools to help consumers
figure out the best value at the best price could be made available on
the Internet.” 

Ideal Medical Savings Account 

“What is needed an ideal medical savings accounts. Health savings accounts are
the fastest growing healthcare insurance product despite the Obama
administration’s attempt to eliminate them. 

The trouble with Health Savings Accounts is that they keep the money in play
for the insurance company rather than the patient owning the money
not spent in a separate retirement trust.” 

“With the ideal medical savings account, the employers would give employees
$6000 in a trust account to be spent at their choosing for legitimate
medical care. The employer would also provide first dollar coverage
after the $6000 was spent to buy reinsurance. The total package
would be less than the yearly package spent the previous year.
If the employee takes care of his health and healthcare dollars the
remainder not spent goes into his personal trust account tax free to
be used and taxed at retirement. The remaining money is not carried
over for future medical expenses. 

This would provide the financial incentive for consumers to take care
of themselves and their healthcare dollars. 

Employers are willing to pay $12,000 per person for insurance. 

“The medical savings account would give the consumer $6000 in a trust
account. The remaining $6000 would be used to pay for first dollar

The payment interface ought to be between the consumer and the
physician rather than the insurance company. Prices would be
transparent. The consumer could be taught to know what he is
buying. Claims could be adjudicated immediately. Physician overhead
and insurance overhead would decrease immediately. The cost of
healthcare would decrease immediately. 

“An example of how patients spending their money directly decreases cost is
Oklahoma City, where the Oklahoma Surgery Center charges patients directly
and transparently. The Surgery Center’s fees are posted on their web
site. Consumers know what they are buying. They pay at the point of

The Surgery Center’s administrative expenses are low because they
do not accept insurance payments. The cost of a surgical procedure is
one quarter to one half the cost of the same procedure in an overhead
bloated hospital system.” 

“ With an ideal medical savings account, if the patient spends $1000 for
medical and surgical care in one year, that patient would have $5000 put
into his tax trust fund at the end of the year. It does not have to be
spent on medical care in the future.” 

“Patients would have more incentives 1) to take care of themselves; and 2) to be
cautious about spending their health care dollar.” 

“The medical savings account would put the consumer, not the insurance
company, in charge. Suppose a patient has diabetes mellitus and it cost
about $3000 a year to control the disease and avoid acute and chronic
complications. If that person took of himself, controlled his blood
sugar and did not have to go to the ER, the employer could afford to
give that employee a $1000 bonus because that patient did not have to
use the reinsurance coverage. If the employee used the reinsurance
coverage the price of the reinsurance would increase the following
year. These systems could be set up so the consumer with diabetes mellitus is
rewarded for taking care of himself.” 

“The ideal medical saving account could apply to every age group. The
average cost to the government for direct medical care for Medicare
patients is $6700 a year. The average includes Medicare patients with
end of life care in ICUs. 

The low-end Medicare Part B per patient is $1500 tax-free dollars per
person plus an additional non-tax free $3200 per couple if Medicare
Part F is purchased to cover hospital and physician deductibles.
Medicare Part D is n additional $1800 per couple per year. Patients
still have to deal with Part D drug deductibles. 

Premiums at the high end because of means testing can cost up to
$16000 in pre and post tax dollars per year.” 

It’s not generally known, but the insurance company, which is in the middle of all
of this, takes 40% of your health care dollar off the top.” 

“This is the reason Medicare is unsustainable. It is not because
physicians keep raising prices. In fact physicians have not had a
reimbursement increase in 10 years. Reimbursement goes down each

The ideal medical savings account would reduce costs because
there would be not insurance claims and little administrative costs.
Physicians would be paid immediately upon patients’ request.
Consumers would force the healthcare system to be transparent. 

Free Market Economics 

“Healthcare would become a true marketplace.” 

“The healthcare insurance industry, government, hospitals
and physicians have already negotiated prices. Retail prices are
meaningless. “ 

“Consumers would be in a position to decide if they wanted to
pay for certain services and tests, not the insurance companies or

“Medicare and Medicaid patients should have the same access to
medical savings accounts and the same decision making power as

“Most Medicare and Medicaid patients are smart enough to handle this kind of
decision making. “ 

 “I don’t think people are stupid when it comes to money. For any
other commodity or service, people figure out how to get what they
want at the price they are willing to pay. They can figure out what to
do and what to buy, especially when it is their own money.” 

The Trouble with Entitlements 

“ The intentions of food stamps and other entitlements are good.
The problem exists when the design of the entitlement encourages
dependence on the entitlement rather than providing the incentive
to become independent of the entitlement. Entitlements put power
in the hands of the central government, not the individual. The
individual becomes the slave to the entitlement. Entitlements do not
work. Incentives will work.” 

“Physicians would be relieved if free-market principles were applied.
The armies of hospital administrators and health plan managers
would be eliminated. Buildings full of claims people would be
eliminated with medical savings accounts. These high salary and low
salary people all add to health care costs. It doesn’t work. It makes
healthcare costs unsustainable.” 

“The only way to make it work is by putting the patient in charge with
appropriate education and appropriate protections so no one can game the
system. The key is getting rid of the administrative cost. 

At the Oklahoma Surgery Center, Dr. Keith Smith has found his center can
perform surgeries at one fourth (1⁄4) to one half (1⁄2) the cost hospitals
charge by simply eliminating administrative costs. The same is true of insurance
companies. Once you end the long-drawn out process of adjudicating claims, you
save health care dollars.” 

A Princely Profession 

“My view is that medicine is a princely profession. Unfortunately, physicians
are feeling they are so enslaved and criticized by the others in
the healthcare system that they do not want to participate. This
feeling accounts for the evolution and growth of the concierge/direct pay

Concierge medicine is attractive to patients because feel their
physician care about them. They have someone to talk to. They are not
some number or abstract commodity.“ 

“The healthcare system’s problems will not be solved by electronic
health records or clinical guidelines or other management or
monitoring tools."

“The only way to make health care more effective, efficient, and
affordable to consumers is to set up the system so consumers can
drive the healthcare system.” 

“ The government’s role should be teach consumers the best way to
drive the healthcare system and not to tell them what care they can
and cannot get.” 

Consumers and Doctors as Boiled Frogs 

“Patients and doctors are feeling like the frog in that story of how to cook a
frog. If you turn up the heat slowly, one degree at a time, the frog won’t know
he is being cooked until he is dead. By then, it is too late. This is what’s
happening in healthcare today to consumers and doctors. It’s gotten so
hot consumers and patients feel they can’t move.” 

 “You don’t have a health system unless you have patients and physicians. Policy
makers think you can replace physicians with managers or with non-doctors with
some medical knowledge."

"They are wrong. The system needs patients and physicians who talk and listen to
one another.” 

“In order to deliver cost effective medical care America’s healthcare
system most maintain a patient /physician relationship with
consumers being at the head of the healthcare team controlling their
health and healthcare dollars and the physician being the manager of
the team with physician extenders as his coaching assistants.” 

“This can be accomplished with medical savings accounts.” 

“Medical care is not a commodity! Attempts to make it a commodity
will fail at a great cost to society”

Friday, June 20, 2014

ObamaCare Exchanges – A Good News, Bad News Story

The bad news is the good news is wrong.


In 1984, Ben Wattenberg (born 1933) , an author,  columnist, and speechwriter and consultant to Lyndon Johnson and Hubert Humphrey,  wrote  The Good News is the Bad News is Wrong(Simon and Shuster).

In his book, Wattenberg insisted things were not really as bad as they seemed despite the doomsday rhetoric of the day.

Sound familiar?   In the case of ObamaCare critics, the title might be changed to read   The Bad News Is The Good News Is Wrong.

The good news, says the Obama administration and its supporters, is that things are going swimmingly  for the ObamaCare health exchanges. (See MSNBC,  “Everything Is Coming Up Aces for the ACA,” and New York Times, “Good Progress for Affordable Health Care.”

The good news story goes:
Eighty seven percent of people signing up for the exchanges are actually paying their premiums;   85% are receiving government subsidies; more insurance companies are joining the exchanges’ consumers are having more choices than originally planned; large government subsidies are helping low-income Americans get coverage;  the exchanges encouraged  millions of  more Americans to  join the Medicaid rolls;  and a benevolent government is paying  for 76% of it all, especially for the poor and uninsured. 

But alas, not so fast.  Insurance analyst Bob Laswewki notes,” It would appear the lowest income people are the most often signing up for coverage.  That explains the average consumer is to high an average net cost is so low.”

The good news is that 8 million signed up for the exchanges and 3 million joined Medicaid.

The bad news?  What about the 310 million who did not sign up and the 60% to 70% of Americans who will not qualify for subsidies because their incomes exceed $46,000 ?   

And what about those Americans are priced out of the market because of an average  of 30%  higher premiums and $6000 deductibles? 
Says Laswewski, “ObamaCare looks to be on its way to crating a chronically  uninsured class.”

ObamaCare  has effectively made health care coverage more and more expensive for more of the Middle Class,  whose average income has dropped from $55,000 to $51,000  during his administration and who now must pay higher  premium and meet  $6000 deductibles .

As one such Middle Class person, commented,” It’s like having no insurance at all.”   

What if the Middle Class,  or even if the insured,  are unable to pay the premiums or to find a doctor who will accept those in ObamaCare plans to pay for care up to the deductible when they need the care?   
Some will go on Medicaid,  some will try to qualify for subsidies, some will go to direct pay physicians who  offer affordable retainers,  some will ask for cash discounts.     

And in many cases,  hospitals and doctors will take a financial hit because they are legally or morally obligated to provide care for those who need it.

Not to worry, says the New York Times,  “Americans are finding very affordable care and a wide choice on the plans operated by the federal government.”  

But what about those with no plans or those not operated by the federal government?    

And what about those false promises that under ObamaCare health care would “be better for everyone,” would cut the average family premium by $2500 when the reverse is true, and what about the promise that ObamaCare would “bend the cost curve” for the “average person”?  

The answers will depend on voter opinions, as expressed in the polls in November 2014 and November 2016, and on what “average person” means and upon  what those persons think  who are not content to be “average.”